Colombian Valentine’s Day Flower Exports Resisting Inflationary Pressures
Many of the fresh flowers like carnations and roses that are sent to the United States and other Western countries during love-centric events such as Valentine’s Day or Mothers’ Day or similar events come from Colombia. For example, this year Colombia-based Avianca Cargo transported 18,000 tons of flowers from Colombia and Ecuador to the United States between January 16 and February 8, up from 16,000 the year before.
The majority of flower exports normally go to the United States, but they also tend to be exported to other countries like the United Kingdom, Japan, Canada, and the Netherlands.
While the flowers that come from Colombian growers are well-regarded for their quality, many problems plague the industry, especially the escalating costs of shipping the products from places like Antioquia and Cundinamarca to North American and European countries, costs that have largely increased due to inflation.
The planning of the logistics to get the flowers from point A to point B includes a massive amount of coordination from multiple actors, who have to transport truckloads of refrigerated flowers to airports safely. The costs have been affected by the higher price of airplane fuel in the market, as well as the added costs of labor and other equipment being affected by inflation.
“In 2022, there was a challenging environment throughout the industry that is believed to continue throughout 2023. This was marked by the rise in the price of aviation fuel, added to the increase in the dollar and inflation. We continue to advance our plan to become more cost-efficient through various initiatives to contain some of the fuel impact,” Avianca Cargo CEO Gabriel Oliva said.
Beyond that are the increasing costs of keeping the operations going in the first place. Augusto Solano, the leader of floral trade association Asocolflores, said that inflation has aggravated the costs of running a flower business, one that has already been suffering from an aging workforce.
“The sector expects to export between 700 and 800 million stems during the season. This year’s consumption could be affected, although we do not know to what extent. Inflation can impact the pocket of consumers. Already in December, we saw a drop in exports. This situation is going to require an additional effort to promote the entire chain,” Solano said.
“Inputs such as fertilizer, the plastics to cover the greenhouses or the meshes for the hoods have increased. In the sector there are practices to hedge against volatility with exchange hedges. Even so, the dollar has been a relief [for these operational costs],” José Antonio Restrepo, manager of the Ayurá farm, said.
Despite these problems, industry analysts like BASF Colombia marketing manager Carlos Sepúlveda continue to be optimistic about the future trade viability, especially as the country’s flower exports stand out from competitors like Ecuador and Kenya.
“In addition to the important contribution in generating foreign exchange for Colombia and the generation of a sector with a high reputation in the world, the cultivation of flowers has a positive impact on economic and social development in the country. In this way, competitiveness is essential, especially to maintain the commercial qualities of the flower, whose market price is determined by its aesthetics at the point of sale and not at harvest,” Sepúlveda said.
Above photo of Medellín’s “Feria de las Flores” (Flower Festival) courtesy of Medellín Convention & Visitors Bureau.