Flower growers hit by dipping exports
A citizen takes a photo of flowers at an international flower festival in Goyang, Gyeonggi Province. There is a growing need to diversify the country’s flower exporting markets amid declining demand for Korean flowers in Japan and Europe. / Yonhap
Diversification of overseas markets is crucial for sustainable growth
By Park Si-soo
GOYANG, Gyeonggi Province ㅡ Countless red, blue and yellow flowers were swaying in the warm spring breeze in this waterfront park on the outskirts of Seoul, Monday. The combination of colorful flowers and the shining surface of the lake played out a typical scene of a pastoral rural town.
Inside a building on the eastern edge of the venue showed a totally different scene. Several meeting rooms were bustling with people chatting loudly. A man with yellowish hair was speaking in an unidentified language inside a room surrounded by mirrors while black haired people sitting on the opposite side of the table were listening with great care. They all looked serious.
“They are negotiating,” a passerby said. “The yellow-haired man is Russian. He came here to buy flowers.”
Nearly 6,000 flower dealers from 32 countries, including Russia, the Netherlands, Ecuador and Taiwan, are visiting here to buy and sell flowers on the sidelines of the international flower festival, which kicked off on April 27 for a 16-day run.
The triennial festival, which started in 1997, has set the stage for the country to boast its growing prowess in the industry and at the same time facilitate exports of home-grown flowers and other plants, according to the festival’s organizing committee.
“The festival has contributed a lot to exporting Korean flowers and related growing techniques,” said Choi Sung, mayor of Goyang City and chairman of the Goyang International Flower Foundation. “The flower industry is the country’s new cash cow. We need to pay more attention to it.”
Foreign dealers signed contracts to purchase domestically grown flowers worth $20 million in the first three days of the event, the committee said, adding the volume is expected to surpass $30 million by the end of the show. On top of this, the hosting city signed an agreement with the Chilean city of Hijuelas to export flower-breeding and harvesting techniques.
Dismal future
The country’s flower exports last year were estimated at $83.9 million, according to the Korea Agro-Fisheries and Food Trade Corporation (aT), a slight drop from $90.5 million in 2011. The volume of flower exports has continued to decline after peaking at $103 million in 2010.
The consecutive contractions were largely blamed on the economic slowdown in Europe and Japan, the two biggest importers of Korean flowers. Penny-pinching consumers there have cut spending on flowers drastically amid the prolonged downturn and it has reduced the demand for imported freesias, roses, lilies and orchids. The four make up more than half of the country’s flower exports, according to aT.
“An economic recovery in Europe and Japan is crucial for a rebound in (flower) exports,” said an official. “But there is no immediate sign of this.”
Adding to the woes is Japan’s monetary policy centered on weakening its currency against the dollar, which has badly affected domestic flower farmers’ bottom line.
“We need to diversify our markets,” a festival spokesman said. “For that reason we tried hard to invite potential buyers from Russia, China and other growing economies.”
Russian flower dealer Natala Rud, who participated in the event for the first time, said he was impressed by the quality of Korean flowers so he was considering importing Korean roses on a regular basis. He currently imports roses grown in Ecuador and Columbia, the world’s two leading flower exporters.
Analysts say the flower industry will face more tough times ahead as the country is set to import quality flowers without tariffs from Colombia. The Latin American country is the world’s second largest flower exporter and a 25 percent tariff imposed on products from the country will be removed in phases over the next seven years under a bilateral free trade agreement that will go into effect in June.
“The situation is very difficult,” said Chung Hwa-young, president of Rosepia, the country’s largest rose exporter, during a meeting of decision-making government officials and business leaders on May 1 with President Park Geun-hye in attendance. “Government help is necessary to survive the tough times.”
Minister Lee Dong-phil of agricultural, food and rural affairs said the government will give full support to keep flower companies afloat.
“We are fully aware of the ordeal you face,” Lee said. “I promise as a minister that the government will come up with all measures available to help, including new insurance policies.”
The minister said the government will increase financial assistance to ensure that local flower makers produce better marketing and promotional campaigns in overseas markets.