DEVELOPMENT AND TRENDS IN THE FLOWER AND PLANT MARKET IN 2013 / 2014
Weather Bad - Everything Bad: 2013 an Exceptional Year!
A long winter - a cold and wet spring - a very hot summer: the weather situation affected the sales of plants. It is not yet possible to estimate the effects of the shortfall in sales in Germany as the largest European sales market in 2013 on European production or on the wholesale and retail trades. The weather-induced slump in consumption in Germany as a consumption country is exerting an influence on horticulture in Europe.
Weather Beats Economic Crisis
Snow instead of customers in the retail trade and heating instead of selling in production: Until June 2013, the temperatures were well below the five year annual average of the last years. In the short sales windows, there was a partial lack of regional goods ready for sale. However, this supply bottleneck had hardly any effect on the prices which otherwise usually rise in the event of scarce goods. As from July, the summer heat led to price pressure and deteriorating prices. The prices have not yet recovered to any notable extent. The demand for plants had not picked up by autumn.
However, there is an economic recovery in the Euro region. According to economic experts, the cyclical economic development has reached the trough. The economic performance in 2013 will once more drop by 0.3 % in comparison with the previous year and a growth rate of 1 % in the Euro region is forecasted for 2014 (DIW, 9/2013).
Particularly in Germany, there is a good consumption climate; the German consumers are optimistic. Ifo's cyclical economic forecast dated June 2013 is expecting the GDP to rise by 0.6 % in 2013 and by 1.9 % in 2014. In August and September 2013, the consumption inclination of the population in Germany reached the highest values since December 2006 (GfK, 9/2013).
The fact that the positive consumption climate has not spurred on the sluggish demand activity for flowers and plants is another indication that the economic development has little influence on the demand. Last year, the market description was entitled "The Trade in Flowers and Plants is Resisting the Economic Crisis". Yes, but not the weather situation.
Potted Plant Market Under Pressure
The weather-induced decline in demand is being shown especially in the field of the potted plants. Here, the lack of demand is also exerting a strong effect on the foreign trade. According to Eurostat, the potted plant imports of the EU have fallen substantially in the first half of 2013 compared with the same period in the previous year. (Although the data from Eurostat has not yet been finalised by the subsequent reports, it already portrays the trend.) This development is also reflected in the Dutch export statistics: the Dutch plant exports decreased by 3.7 % in the first half of 2013 and those to Germany as the main export country even by 8.6 %. The negative development had become even stronger by August 2013; for the first time, the monthly export figures for flowers and plants dropped for the sixth time in succession.
When Germany as a consumption country "faltered" in the past years, there were alternative possibilities in the Southern European markets. These no longer exist due to the economic crisis and to the weak demand in Spain, Portugal and Greece and, to a limited extent, in France as well. It is not very easy to compensate for the collapse in the German demand with higher supplies to Scandinavia and England and the continuing opening-up of the market in Eastern Europe. This is all the more applicable because the Dutch supplies to a few Eastern European markets, including Poland, the Czech Republic, Romania and Hungary, also dropped in 2012 and had not recovered by the middle of 2013. In this period, the increase in the exports to Northern European states also turned out to be on a considerably lower level than in the previous year.
The period from January to August 2013 was the first time that even the most important and largest Eastern European destination market for Dutch exports, Russia, did not exhibit any rates of increase in the plant supplies. This development is also certainly being influenced by the announced import stop for outdoorplants.