AALSMEER, Netherlands: We all know the rule of trading etiquette – don’t talk politics (and lately also Covid-19) in business because these hot topics usually result in heated arguments instead of general agreement. Ignoring the elephant in the room was easy until Russia’s long-feared attack on Ukraine became a reality today (24 February).
Naturally, the question is how a Ukraine-Russia war would impact the global economy and, what a full-scale invasion of Europe’s second-largest country could mean for us working in the floral industry.
But, to be perfectly honest, it feels incredibly uncomfortable talking about flowers and plants, while in a country less than a two-hour flight away from my home country The Netherlands a war is raging with all the atrocities, casualties, fear, and despair happening to humankind.
In a phone call, Matthijs Mesken, managing director of VGB, the Dutch Association of Wholesalers in Floricultural Products agrees it feels awkward to talk shop when Ukraine is under siege. But he cannot deny there are reasons for concern. European natural gas prices are especially susceptible to today’s news, because Russia provides more than a third of Europe’s supply, with some of it running through pipelines in Ukraine.
Eventually, this situation will lead to an even higher energy bill for greenhouse growers and subsequently higher flower and plant prices for exporters. Getting paid on time is also a concern for all exporters trading with Ukraine and Russia. And waiting for your payment can put a strain on the exporter’s cash flow.
Mesken urges to see things from the proper perspective. Russia is an important trading partner for the Netherlands. Still, when it comes to flowers and plants it is the Netherlands’ ninth export market, with Dutch exports to Russia – through (administrative) direct and indirect trade flows – worth €186 million and a 2.5 per cent market share in total Dutch export value. Dutch exports of flowers and plants to Ukraine are worth €27 million, representing a 0.4 per cent market share in total Dutch exports. Combined, Russia and Ukraine represent an annual export value of €213 million, a 2.9 per cent market share in total Dutch exports.
Right now Russia and Ukraine are gearing up for their most important floral holiday: International Women’s Day on 8 March. According to Mesken there haven’t been any significant delays in flower and plant deliveries to the Ukraine and Russia, adding that the situation can change instantly. Most of the ornamental plants for Women’s Day have already arrived at their final point of destination while the exports of cut flowers are more or less smooth sailing so far.