17 January 2022
With fertile lava soils, a tropical climate on the coasts, a temperate climate in the highlands, and abundant rainwater, Central America’s largest economy Guatemala has enviable natural advantages for farming the land to produce food, flowers, and ornamental plants. This article was first published in FloraCulture International, October 2021.
Guatemala has an astonishing natural beauty with a dotted landscape with fewer than 24 volcanoes (three active). But as a result of its geography and geology, the 17.6 million inhabitants are also exposed to natural hazards such as earthquakes, volcano eruptions and sometimes tropical storms, resulting in torrential rains and overflowing rivers.
A Worldbank study found that Guatemala ranks ninth in the world for level risk to the effects of climate change.
The country’s two coastlines are along the Pacific Ocean and the Caribbean Sea, marked by several good harbours. Dividing two oceans and bridging North and South America, Guatemala has become a crossroads of world trade.
In Guatemala, as is the case in other parts of the world, the countryside is being depopulated, with 4.5 million people living in Guatemala City, which is also the country’s political centre.
The government stimulates the use of more than 20 officially known indigenous languages. The majority of people, however, speak Spanish. The primary religion is Roman Catholicism. The country national currency is the quetzal: 1quetzal = 100 centavos and 1$ = Q7.53 or 1€ = Q8.18
Geographically close, the giant Mexican and North American market offers an abundance of opportunities for Guatemalan flower and plant exporters (starter plants and cut flowers finished plants).
Reporting on Guatemala’s domestic ornamentals production, including figures, is not easy as reliable data is limited and not always readily available. That is why FCI is happy to have teamed up with the country’s leading exporters association AGEXPORT, a private non-profit entity established in 1982; that represents, promotes and develops exports of Guatemalan companies.
Its Ornamental Plants, Foliage and Flowers Commission represents 70 producing and exporting companies, having more than 500 species and 3,000 varieties. Cash crops include yucca stems and starting material of beaucarnia, ficus, dracaena, dianthus cariophillus, crotton, schefflera, hedera and aloe. Occupying pride of place is the country’s thriving cut foliage sector boosting a sizeable production of flagship products such as arachniodus adiantiflormis (leather leaf).
Ornamental horticulture in Guatemala is a significant employer with an estimated 15,000 people directly employed on a full-time equivalent (FTE) basis. The nation’s growing flower industry yielded $120,614,923 million in export sales in 2019, up from $ 95,000,000 million in 2009.
In providing some key facts and figures in terms of export values, export volumes and export destinations, AGEXPORT outlines that the leading markets in terms of value are the Netherlands (49 per cent), United States (32 per cent), Germany (eight per cent), and Italy (three per cent).
The Guatemalan economy -the largest in Central America – grew 3.3 per cent on average from 2015-2018 (Source: Worldbank). Its floral sub-sector has shown sustained growth in recent years ranging between 8 – 12 per cent per year.
The country hosts five large-scale cut flower, cut foliage and young plant nurseries spanning 20 hectares or more.
According to AGEXPORT data, in 2020, the area of cut flower and plant production in Guatemala was 3,600 hectares, making it the first country with the largest production area dedicated to ornamentals in Central America.
Of this area, around 40 per cent are protected (shade halls and poly greenhouses) cut flower and plant production; the rest is in the open.
Whilst every industry in the country has been affected by Covid-19, tourism and ornamentals in Guatemala took the most sizeable hit. By the end of March 2020, Guatemala’s ornamentals sector nearly halted as countries introduced lockdowns and mandatory border checks, which resulted in widespread disruption in the logistics chain. At the same time, the global air freight market faced capacity constraints from the loss of available belly cargo space as passenger aircraft remained parked. Initially, there were a lot of concerns regarding the global bedding plant business, with governments worldwide urging garden centres and flower shops to close their business.
A Worldbank study found that overall, the pandemic affected the Guatemalan economy ornamentals sector considerably, contracting its GDP by 1.8 per cent in 2020. The country’s ornamentals sector identified six economic risks: failing to pay suppliers, lack of availability of raw materials, not being able to pay salaries, having to consider dismissals and even temporarily having to close businesses. AGEXPORT awaits official data from the Guatemalan Central Bank to evaluate the behaviour of its exports during the emergency period.
Now, 18 months after China reported the first Covid-19 case, the market is buoyant as never before. It sounds like a good problem to have. Demand for all kinds of plants – but particularly houseplants – was already on the rise worldwide before the Covid pandemic, with its lockdowns and stay-at-home policies, sent it outstripping supply by a wide margin.
“Our industry was seeing a 25 per cent increase in the first quarter this year compared to last; our own business saw a 60 per cent increase,” says Joseph Roberts, CEO of USA and Guatemala based young plant supplier ForemostCo, at an AIPH webinar on the global houseplant business in July this year.
Guatemala is a mainly agricultural country with 14% of its Gross Domestic Income (GDI) based on agriculture (Transport 11% of GDI). It has hardly any minerals (urging growers to import their fertilisers) but some gold-digging. Tourism, manufacturing, trade and services represent 46 per cent of the GDI. The unemployment rate is officially 15 per cent. But there is also a part of the economy that is never taxed or monitored. This informal or grey economy encompasses street vendors, shoe shiners, workers on short contracts and people who grow their food in rural areas.
Foreign visitors are warned of organised crime and drug-related violence, as Guatemala is a transit country for drug shipments from South America to Mexico and the USA. But let’s face it: you have to be careful in every corner of the world.
Guatemala is not a member of the World Intellectual Property Organisation (WIPO). As a result, the country lacks a protective breeder’s proper law. A WTA member, Guatemala has the intention of also becoming a member of the WIPO.
To learn more about this country’s “blooming” sector, visit the AGEXPORT YouTube channel.