BANGALORE: Despite the appreciation of the rupee vis-a-vis the dollar and a perception that demand could be affected by a slowing down of the US economy, Indian floriculture exporters anticipate a 30-40% rise in volume of sales this winter.
Flower consumption sees a major jump during the winter months which coincide with Christmas and the New Year and last till Valentine’s Day. This season is of vital importance to the Indian floriculture sector as between 40 and 45% of the Indian cut-flower exports happen during this period.
“This year has been good and is definitely better than the last 2-3 years. The domestic market also continues to witness robust offtake. We should be looking at a minimum 30% rise in flower exports though realisations would be impacted because of the rising rupee,” says the Bangalore-based Nadeem Ahmed, a leading floriculture exporter.
In terms of realisations, exporters say the growth could be muted and translate to a 10-15% rise in earnings. Exporters say that despite the subprime crisis in the US, retail demand has been strong. “We had to refuse orders and are completely sold out. Demand is not just restricted to red roses but extends to other flowers,” says Karuturi Ramakrishna, CMD of Karuturi Networks, a global leader in rose production.
Mr Ramakrishna says that with most of his produce being Europe-bound, realisations would not be hit. “Our global expenditure — production costs and air-freight — is in dollars while realisations are in euros. Over the last two years, the euro has depreciated by over 24% against the dollar,” he adds.
Mr Ramakrishna, who primarily sells his produce to UK and Germany, sees no impact of the US subprime crisis on European customers. “The market for Indian flowers is growing. The Middle East should see an 18-20% growth. We are also looking at other Asian markets,“ says another exporter. However, realisations in the Far East are expected to be affected by the 6% appreciation of the yen vis-a-vis the dollar during the last two years.
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