Floriculture is an age-old farming activity in India, though it is only off late that the sector is getting organized in terms of production, marketing, exports, branding, and so on.
Though India’s share in global floriculture trade may be insignificant it has potential as an important destination to source flowers. In recent years it has emerged as a profitable agribusiness in India and with international practices being introduced in floriculture, the sector is all set to bloom.
The production and trade of floriculture has increased consistently over the last 10 years. In India, the floriculture industry comprises flower trade, production of nursery plants and potted plants, seed and bulb production, micro propagation and extraction of essential oils.
The annual domestic demand for flowers is growing at a rate of over 25 percent. The global floral production value is estimated at US$55 billion; tree nursery – production of trees, shrubs and other hardy plants is worth another US$35 billion.
Worldwide, floriculture products generate nearly $40 billion in sales annually. India’s US$82 million floriculture industry is miniscule but it’s getting a boost lately with growing demand for its roses, lilies, jasmine, anthuriums, tulips, marigold and other scented flowers.
India’s share in international market of flowers is negligible. However, India is having a better scope in the future as there is a shift in trend towards tropical flowers and this can be gainfully exploited by India with high amount of diversity in indigenous flora.
100% export oriented status
After liberalization, the Government made floriculture a sunrise industry and accorded it 100 percent export oriented status. The liberalization of industrial and trade policies paved the way for the development of export oriented production of cut flowers.
The new seed policy has already made it feasible to import planting material of international varieties. Floriculture products mainly consist of cut flowers, pot plants, cut foliage, seeds bulbs, tubers, rooted cuttings and dried flowers or leaves.
The important floricultural crops in the international cut flower trade are roses, carnation, chrysanthemum, gerbera, gladiolus, orchids, anthurium, tulip and lilies. Floriculture produce such as gerberas, carnation, etc. are grown in green houses. The open field crops are chrysanthemum, roses, gaillardia, lilies, marigold, aster, tuberose, etc.
According to Handbook on Horticulture Statistics, the total area under flower crops in 2016-17 was 328 thousand hectares. Total area under floriculture in India is second largest in the world and only next to China. Production of flowers was estimated to be 1695000 MT of loose flowers and 528000 metric tons in 2016-17. Fresh and dried cut flowers dominate floriculture exports from India. Total flower production is 2277 (000MT).
US$82 million exports India exported floriculture products worth over US$82 million in 2014-15. Still its overall share is quite low in the global trade of nearly US$40 billion.
There is a great demand for Indian flowers in Gulf countries. Besides the major cut flowers, the export of traditional flowers such as jasmine and marigold is also gaining momentum in recent times.
Among the states in India, Karnataka is the leader in floriculture with about 29,700 hectares under floriculture cultivation.
Other major flower growing states are Tamil Nadu and Andhra Pradesh in the South, West Bengal in the East, Maharashtra in the West and Rajasthan, Delhi and Haryana in the North.
Surprisingly, the small land-holding pattern, considered a handicap for the country’s agricultural production, comes as an advantage in floriculture due to its ‘low volume high value’ character. Since the sector has huge export potential, a number of small and marginal farmers have started turning towards flower production. The north eastern states of India, especially Mizoram, have also turned towards cultivating flowers of export varieties in a big way.
Though major export destination of Indian cut flowers (flowers harvested in clusters or in single along with their stems) were the USA, UK, Germany, Netherlands and UAE during 2014-15, loose flowers (flowers harvested without stalk) like jasmines and marigold are generally exported to Sri Lanka, Malaysia, Singapore and West Asian countries. China, India and Peru are leading producers and exporters of marigold.
The annual world trade in marigold is currently estimated to be around US$90 million. In recent times, flower importers have been shifting their focus to India and Ethiopia for cheaper flowers in the wake of rising cost of production in Kenya—the world’s largest exporter.
Valentine’s Day, big business
There are many drivers for flower exports, one of the biggest is Valentine’s Day which falls on February 14 every year. Marriages, important religious festivals, and other mega events push sales up.
Bangalore, the state capital of Karnataka, is a major producer of flowers. Nearly five million roses are exported every year from Bangalore which produces the best varieties in India.
C.G. Nagaraju, Managing Director, International Flower Auction Bangalore (IFAB) Ltd., said roses were grown on nearly 250 hectares in and around Bangalore, while the daily production was around 15 lakh stems.
The varieties that are in demand are ‘Taj Mahal’, ‘Grand Gala’ and ‘First Red’. He said while roses did not have a market all round the year, they were in demand on certain days, such as Valentine’s Day and Mother’s Day.
In 2017, due to harsh weather in Europe, the demand for long-stemmed roses increased up to 25% with about 4 million stems imported. Major exports are made to European countries, Gulf countries, Australia, New Zealand, Singapore and Malaysia.
The annual world trade in marigold is currently estimated to be around US$90 million. In recent times, flower importers have been shifting their focus to India and Ethiopia for cheaper flowers in the wake of rising production cost in Kenya—the world’s largest exporter.
The Vice President of the South India Floriculture Association Jhansi Lakshmi said the floriculture industry needs support from both the Central and State governments.
He said there is urgent need for a single window system for exporting flowers, with customs and phytosanitation under single window. It is also seeking subsidies & import duty exemptions.
Emirates Skycargo top performer
International airlines are tapping this market and one of the top freight carriers is Emirates Skycargo which has witnessed encouraging growth in the export of flowers from major Indian hubs in 2017.
Emirates Skycargo airlifted over 550 tons of flowers in 2016 (January to December) from India and in 2017 it hauled over 200 tons, mostly roses. Other exotic flowers which are in demand include Jasmine, Orchids and Carnations from hubs like Bangalore and Mumbai.
The transportation of flowers by airlines is a year-round activity from its hubs such as Bangalore, Mumbai, Chennai and Kolkata. This year, Bangalore and Mumbai already witnessed a record uplift of close to 150 and 80 tons, respectively, in just the first two months of the year.
Keki Patel, Cargo Manager (India & Nepal) at Emirates SkyCargo, said: “Many regions in India have the ideal climate for cultivating flowers all year round, offering excellent growing conditions. We have witnessed a surge in flower demand this year from destinations like Europe who have experienced a harsh winter this year. We have reported strong volumes of flower transport in the weeks leading up to Valentine’s Day this year which will play a substantial part in the total yearly volume recorded for 2017.”
Sophisticated logistics by Emirates SkyCargo ensures quick and reliable air transport of these delicate goods to destinations across its global network. State of the art equipment and facilities help avoid the wilting of flowers.
Roses are hand harvested and then sorted, arranged in bouquets and hand-packed into boxes, which are then loaded on the aircraft. Key destinations Emirates SkyCargo has transported Valentine’s Day flowers are Amsterdam, London, Gulf countries like Kuwait Bahrain and the UAE, US destinations like New York and San Francisco.
Other airlines such as Qatar Airways, Etihad Airways & the Indian Int’l air carriers do carry horticulture and floriculture produce from India to the Middle East & beyond.
2017 is a robust year for both passenger and cargo volumes despite economic and political challenges across the world.
By the end of this year, a record 4 billion people would have traveled in different regions, sprucing up freight belly statistics in the process, analysis points out.
Technological advancements have tremendously contributed to the growth of commercial civil aviation with many passengers taking control of their own itineraries through online bookings, cutting travel agencies in the process to save money and time. Add to that is the emergence of more Low Cost Carriers (LCCs) which give them cheaper fare options as opposed to legacy carriers.
The rise of the social media, which changes the way how airlines and other companies reach out to their target markets, also significantly contribute to this phenomenon.
The Kingdom of Saudi Arabia’s newly-launched budget airline, flyadeal, booked 10,000 seats online within 24 hours without any print ads, its CEO Con Korfiatis announced at the recently concluded Aviation Show MENASA (the Middle East, North Africa and South Asia), a remarkable feat given the reclusive kingdom’s conservative policies on many things digital.
“Digitalization is driving innovation and disruption at an ever-increasing pace in all kinds of industries, and therefore for all users of airfreight. This is putting unprecedented pressure on all of us to redouble and accelerate our efforts to transform, adapt, and streamline processes in concert with regulators.”
– Oliver Evans, former chairman of the International Air Cargo Association
Elsewhere in the Middle East, where more than half of the population are below 25, the digital footprint of online bookers are growing, with many opting online transactions for safety and security reasons.
Opposite Profit Margins
But while passenger volumes are up, the profit margins of airlines are getting thinner for many different reasons.
It’s the reverse, however, for the air freight industry which adjusts prices as demand grows, especially during the holiday season or Valentine’s Day.
Muhammad Al Bakri, regional SVP AME International Air Transport Association (IATA), said at the Arab Air Carriers Association Annual General Membership held last month in Sharjah, one of the emirates in the UAE, aviation remains the beating heart of the Middle East supporting 2.4 million jobs and USD157 billion in economic activity but times are changing.
“As history shows, it is not unusual for freight volumes to continue to rise even after the peak of the growth cycle. Indeed, periods in which freight volumes have fallen typically only occur alongside wider shocks to global economic and trade conditions, such as that seen following the dot-com boom in the early-2000s and after the global financial crisis. In the absence of such a global shock, it seems reasonable to expect that air freight volumes will build on a very strong 2017 with another year of solid growth in 2018.”
– IATA
“Financially, airlines in the region are seeing their profits eroded and margins squeezed. The average profit per passenger globally in 2017 is forecast to reach 7.7 US dollars. In the Middle East, it is only expected to reach 1.8 dollars per passenger,” he noted.
Statistically, Al Bakri said global aviation generates 3.5 percent of the world’s GDP valued at about USD2.7 trillion and supports 62.7 million jobs.
In addition, 35 percent of world trade worth US6.4 trillion is transported by air annually.
With high volumes of gifts sent this holiday season, the air cargo industry is at its busiest with shippers scrambling for space and customers willing to pay more.
Freightos WebCargo data shows air freight prices in certain locations have already risen by over $1 per kilo yet the demand for e-Commerce shipments keeps on rising.
Experts said e-Commerce and pharmaceutical shipments will be an important driver for the growth of the air freight industry now and in the long-term.
Global e-Commerce is projected to grow from USD1.9 trillion in 2016 to $4.5 trillion in 2021 with 19 percent annual compound growth rate over the next five years, according to the leading aviation consultancy firm Air Cargo Management Group.
Allan Hedge, senior director of ACMG, said E-commerce has disrupted retail and is now revolutionizing logistics and the air cargo industry.
In a separate report, Boeing forecast e-Commerce to grow from USD1.7 trillion in 2016 to USD3.6 trillion by 2020, largely fueled by the growth of the middle-class in the Asia-Pacific region, most notably China, the world’s largest e-Commerce market with some USD590 billion goods sold in 2015.
Boeing said the online retail trade will, thereby, push growth in the air cargo industry as consumers prefer fast shipments of goods.
New Pace & Phasess
Though slower than commercial aviation in embracing technological developments, the air cargo industry has undoubtedly adjusted to the times with many companies investing on new software solutions and technology where shipments can easily be placed and tracked, costs calculated in an instant and even options for land connectivity.
In today’s fully globalized world, the need to connect in an instant is paramount in doing business, especially where movement of goods are concerned.
“The ability to electronically exchange air waybills, house bills and status messages enables our customers to further automate and streamline processes, meet expanding carrier electronic communications requirements, increase visibility and improve performance. Customers benefit from simple and fast activation on Descartes’ GLN from CDM Software Solutions’ e-Commerce friendly software platform,” explained Darrell Ortiz, CEO and founder of CDM, on the importance of Descartes’ GLN which also provides users with connectivity to air carriers around the globe to help them meet IATA’s electronic air waybill (e-AWB) initiative.
Nagarjun Peri, Kale Logistics Solutions regional manager for international sales in the Middle East and Africa, said today’s business climate demands speed, efficiency and transparency and all that can only be provided through customized software solutions.
The India-based company has more than 500 clients across the world, including about 200 airlines, which are also linked to air cargo carriers and freight forwarding companies.
Air cargo volumes consistently posted positive growth month-by-month in 2017. In October, shipments were up 5.9 percent and IATA forecast the freight volumes to continue rising in 2018.
“Going in to next year, the cyclical drivers of freight demand appear relatively supportive of continued increases in freight volumes. In fact, factors such as the long-awaited pick-up in investment in Europe, as well as reports of strong growth in international e-commerce flows look set to help underpin freight demand in the near term,” IATA said in its October 2017 analysis report.
“As history shows, it is not unusual for freight volumes to continue to rise even after the peak of the growth cycle. Indeed, periods in which freight volumes have fallen typically only occur alongside wider shocks to global economic and trade conditions, such as that seen following the dot-com boom in the early-2000s and after the global financial crisis. In the absence of such a global shock, it seems reasonable to expect that air freight volumes will build on a very strong 2017 with another year of solid growth in 2018,” it added.
Ethiopian Airlines and Boeing has recently announced an order for four Boeing 777 Freighters – the world’s largest and longest-range twin-engine cargo jet – in a deal valued at more than $1.3 billion at list prices. The deal includes a new order for two freighters. It also includes two freighters the airline announced as a commitment in June that finalized into a firm order and posted on Boeing’s Orders & Deliveries website recently.
“This airplane order will provide Ethiopian’s Cargo & Logistics business with enhanced cargo capacity and better operating economics as we continue to build one of the largest cargo terminals in the world,” said Tewolde GebreMariam, Group CEO of Ethiopian Airlines, who signed for the new airplanes at the 2017 Dubai Airshow.
“Operating high-performance aeroplanes such as the 777 Freighter is a reflection of our commitment to expand and support the growing imports and exports of our country and the African continent.”
With nearly 100 aeroplanes in operation, Ethiopian flies one of the largest and youngest fleets in Africa, including Boeing 737s, 757s, 767s, 777s, and 787s.
“We are honored that Ethiopian Airlines, one of Africa’s leading carriers, has again selected Boeing airplanes to grow its operations, adding to an order book that includes the 737 MAX and 787 Dreamliner,” said Boeing Commercial Airplanes President & CEO Kevin McAllister. “The 777 Freighter has no competitor in its class when it comes to low operating costs, long range, and capacity to carry cargo.”
The 777 Freighter is based on the 777-200LR (Longer Range) passenger jet and can fly 4,900 nautical miles (9,070 kilometers) with a full payload of 112 tons (102 metric tonnes or 102,000 kg).
This order pushes 777 net orders this year to 57 – 37 of them for the current-generation 777 aeroplane – providing further support to a smooth production transition to the new 777X.
Ethiopian Cargo is the largest network cargo operator in Africa with six 777 and two 757 Freighters serving 39 cargo destinations in Africa, the Middle East, Asia and Europe.
Ethiopian Cargo opened a state-of-the-art cargo terminal in June 2017 that gives the carrier an annual capacity of one million tons.
With carrying cargo capacity, new destinations and ever growing fleet, as one of the fastest developing air cargo carrier, Turkish Cargo continues to improve its service quality to customers in 120 countries of the world.
In the past few weeks, as an award of successful performance, chosen the best air cargo carrier of the year in Asia Turkish Cargo has received QEP Accreditation from Envirotainer for two stations (Brussels and Atlanta) as an indication of the quality of its pharmaceutical transportation service.
Turkish Cargo, which will deliver medical products that require cold chain transportation to the world’s largest pharmaceutical companies in eight QEP accredited stations (Bombay, Frankfurt, Hyderabad, Seoul, Istanbul, Tel Aviv, Bruxelles, Atlanta), will also be able to increase the current business potential as well as service to its customer more high quality.
Thanks to its special product it has created for the cargoes containing pharmaceutical and healthcare products, Turkish Cargo has been widening its services to over 300 points covered by its international network. Turkish Cargo has been using the Envirotainer containers since 2015 and bringing its shipment quality together with the biggest pharmaceutical companies in the world.
Technology has made the world smaller and faster.Real time communication with people from all over the world at different time zones through phones and gadgets
