Dutch flower exports wilt amid world economic downturn

The Netherlands, the world's biggest flower exporter, has seen its bloom trade wilt as luxury items get passed over for essentials amid the global economic downturn.

"When people have less money to spend, they tend to buy bread instead of flowers," sighs Mike Lansbergen, sales manager for a major Dutch producer of Barberton Daisies in Pijnacker-Nootdorp in the eastern Netherlands.

Flower exports to Britain, a major Dutch market, fell by almost a fifth in September, losing 19 percent from the same month in 2007, according to figures published this week by industry body HBAG.

Since the beginning of the year, exports to Britain have dropped by 84 million euros.

Globally, Dutch flower exports showed an annual two-percent decline in the first nine months of the year. To the United States, sales slumped by 18 percent.

A Barberton Daisy sold for an average 12 euro cents in 2007, compared to 10 cents now.

"Battered consumer confidence has curbed sales of luxury products like flowers and plants" in the Netherlands' three main export clients: Britain, Germany and France, said the HBAG.

Dutch growers and exporters "should be worried", added Richard Caldwell, a product developer at Canadian flower distributor Sierra.

"Nobody in the sector knows what will happen. People are spending less money on non-essentials," he told AFP at a recent flower fair in Amsterdam.

"Our clients are delaying their decisions (on new purchases and investments). It is not easy," complained Bart Sneek, a Dutch flower grower who exports to Colombia, Latin America and Japan.

"Previously, one always had to deal with one or two countries where consumer confidence was down, but now it is the entire world."

Lansbergen, whose company sells a million Barberton Daisies a week, said the global economic downturn was the second shock in a row for an industry still battling to recover from fast rising energy prices eating into budgets for transport and powering greenhouses.

"Production costs increased by 20 percent (over the past year) and sales fell by 20 percent, leaving a 40 percent hole in our revenues," he said.

What started as an obsession with the humble tulip, imported from Turkey in the 16th century, saw the Netherlands blossom into a world leader in flower cultivation and trade.

The Dutch tulip mania of the early 1600s is often said to have been the world's first recorded speculative economic bubble.

Four-hundred years after the devastating burst of the tulip bubble -- at the height of which single bulbs were worth several times people's annual incomes and were being traded for land, livestock and houses -- Dutch flower exports now fetch billions of euros a year.

Today, flowers, bulbs and trees contribute 35 percent to the Netherlands' trade surplus, according to data from the economic ministry.

Last year, exports of flowers and related items amounted to 5.5 billion euros. Some 6,821 Dutch companies make a living producing cut flowers and potted plants, and greenhouses cover an area of more than 60 square kilometres. A billion tulip bulbs are exported every year.

The Netherlands is not only the largest exporter and importer of cut flowers and potted plants, but also houses the world's main auction centre for both.

The FloraHolland auction company has 4,700 employees and recorded sales of over four billion euros in 2007. It sells 43.2 million flowers every day.

But in another worrying sign for the sector, FloraHolland has recently cut back its projected trade figures for 2008.

Having recorded turnover growth of 4.4 percent last year, it expects no increase in sales for this year, and a mere one percent growth for 2009.

"The credit crisis will have a bigger and bigger impact on the real economy," said FloraHolland spokeswoman Adrienne Lansbergen.

"Our suppliers and customers are being prudent in their investments. We expect the market to recover by 2010 at the earliest."