Financial Daily from THE HINDU group of publications
Thursday, Dec 19, 2002
Agri-Biz & Commodities
Industry & Economy - Exports & Imports
Withering orders dry up flower exporters' coffers
BANGALORE, Dec. 18
AS the floriculture industry braces up for a new export season, the bullish sentiment witnessed over the last few years seem to be missing.
While established players paint a rosy export picture, struggling entrepreneurs, many of whom have defaulted on borrowings, are not so optimistic about this seasons' order off-take. Several small stand-alone floriculture units have borrowed heavily since they started operations and currently buckling under massive interest payouts.
Though shipping for the Christmas has already started, the general indication is that there could be a shortfall of nearly 30-40 per cent in volume terms on a conservative basis over last year. An estimated thirty lakh stems were shipped last year during the Christmas and New Year season.
However, Apeda spokesperson maintained that the export trend is satisfactory this year. Floriculture exports for April-September 2002 registered a growth of 52 per cent in rupee terms to Rs 91.02 crore (Rs 59.52 crore last year), while they declined by nearly 30 per cent in dollar terms at $8.66 million in the same period ($12.64 million), Apeda sources said.
Mr Harsh Gupta of Manjushree Plantations, a B.K Birla group company, said the general sentiment was encouraging and "we are seeing a positive trend as there is a slight upsurge in production and market".
Manjushree has already exported close to two lakh stems in the last two weeks and expect to ship another 1.5 lakh stems by December 21, when the shipping ends for the Christmas season.
"We have entered new markets in Germany and London apart from the traditional Japanese and Australian markets and expect an overall growth of 20-30 per cent in volumes this year," Mr Gupta said.
According to Mr Gupta, the prices are quite steady and net export realisations are in the range of Rs 4-4.5 per stem at auctions, while in the domestic market we get about Rs 3-3.5 per stem. Gross prices in the export market are ranging between Rs 10-12 per stem, he said.
Echoing similar sentiment a spokesperson for Sri Vasavi Florex & Industries Ltd, said "We expect an increase of 15-20 per cent in volumes this year. The prices are also good and we are getting about Rs 16-17 per stem as against Rs 14-16 last year'
The number of exporters also seem to have come down from Bangalore this year. A leading exporter said the risk is high in exports as there is hardly any consistent demand mainly due to the sluggishness in global economy. Moreover, Kenya and South Africa have become aggressive in the global market and it is difficult to compete with them. The domestic market has emerged stronger and has turned saviour for several growers, he said.
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