19 March 2020
Author: Ron van der Ploeg
AALSMEER, Netherlands: Prices for cut flowers, potted plants and bedding plants remain under pressure today with high percentages of unsold products. Meanwhile, Royal FloraHolland has announced further market interventions for next week to help their members through the coronavirus outbreak. In a video message, recorded on Thursday afternoon 19 March, Royal FloraHolland boss Steven van Schilfgaarde addressed all industry professionals about the painful but necessary measures the auction is taking to stop the market’s freefall.
Van Schilfgaarde referenced the package of financial measures which the Dutch government announced last Tuesday. He said that the €20bn bailout package will help the 7,000 horticultural business to pay their bills. However, Van Schilfgaarde was quick to add that the business aid package is not sufficient to rescue a sector which represents an export value of €6.2bn. He therefore calls for an emergency fund for Holland’s ornamental horticulture sector following the flower market’s freefall throughout the entire week.
Meanwhile, the mood among Royal FloraHolland’s buying audience at this morning’s auction remained nervous with the whole range of ornamentals taking a hit. Again prices have been significantly lower than is typical for this time of year, while supplies continue to drop. Significant volumes of flowers and plants not even make it to the auction clock as growers uproot and compost on site.
The famous hub of the global flower trade struggles to adapt to a ‘new normal’ amid bleak sales and ordered its members on Monday 16 March to restrict supplies. In cut flowers, growers are allowed to auction off not more than 30 per cent of the volume supplied on Tuesday last week, in potted plants and garden/bedding plants these percentages are 50 per cent and 75 per cent respectively.
Overall, median prices for all products remain rock bottom. All throughout the week there was market carnage. On Tuesday 17 March, for 23 per cent of cut flowers it resulted impossible to find a buyer, while on Wednesday and Thursday these percentage were 16 per cent and 12 per cent respectively. Unsold product ended up in the landfill.
The restrictions in supply will also apply to tomorrow’s auction when auctioneers will check more thoroughly if every growers respects the new supply rules.
For today’s auction, suppliers of indoor plants and garden plants have largely adhered to the new regulations. On the flower clocks, however, the supply percentages were higher than permitted. The auction fully understands the need of all growers to generate turnover, but is quick to add that this is also a time for cooperative spirit and solidarity.
In order to give growers more opportunity to sell their clock supply before the start of the auction, the maximum percentage for pre-auction sales has been increased to 75%. The auction hopes that this additional measure will allow growers to generate more sales.
In the coming days, Royal FloraHolland wishes to further refine the rules where necessary and in close consultation with the auctioneers. One option is to temporarily suspend quality checks. Another measure which is set to come into effect next week is regarding those growers who mostly sold their products directly without any intervention at the clock. Direct sales have basically come to a complete standstill.
An auction representative stressed that to date a scenario in which the auction clock comes temporarily to a standstill remains undiscussed.
The supply regulating measures will be reviewed from day to day on the basis of the information the auction has at its disposal. Royal FloraHolland says it implementing these new rules with a heavy hart. In the coming days, the auction will assess on a daily basis which additional measures are necessary.