Prices remain under pressure as coronavirus fears grip Europe

Author: Ron van der Ploeg

AALSMEER, Netherlands: Auction prices for cut flowers, potted plants and bedding plants remain under severe pressure although the overall rate of unsold products is significantly lower than last week. However, it should be noted that a sizeable number growers stopped bringing their flowers to the auction, composting blooms in the their greenhouse.  

The auction’s total turnover on Monday 23 March (clock and direct sales) amounted to 6.55 million euros. A decrease of 76.1 per cent compared to last year (compared to Monday 25 March 2019). The daily turnover is approximately at the same level as last Wednesday, Thursday and Friday.

The decrease compared to last year of the direct turnover (-72 per cent is now almost as big as the clock turnover. Last week there was still a big difference between this (-33.8 per cent vs. 85.2 per cent.

The clock turnover was 1.96 million euros. A decrease of 82.3 per cent compared to last year. In total, almost 10.7 million units were supplied for the clock of which 2.6 per cent remained unsold (1.7 per cent for cut flowers, 21.4 per cent for houseplants and 5.3 per cent for garden plants). As such, the overall rate of unsold product is significantly lower  than last week when for 28.2% of products it was impossible to find a buyer.

Again prices have been significantly lower than was typical for this time of year. There was market carnage across all product categories with median prices for cut flowers, potted plants and garden plants 30.7 percentage points, 49.1 percentage points and 33.2 percentage points lower respectively than a year earlier. The level of unsold products in Aalsmeer, Naaldwijk and Rijnsburg was 2.2 per cent, 3.6 per cent and 2.0 per cent respectively.

Meanwhile, Royal FloraHolland has announced further market interventions coming into effect as of today 24 March. 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. The newly-announced regulations include the combination of two, three and even four auctions clocks into one. What’s more, the auction announced a ‘maximum daily volume per product group and per grower’, based on his total supply volumes in 2019 (direct sales and clock sales combined). In this quota system, the auctioneer plays a crucial role as he or she decides on a daily basis what portion of products a grower is allowed to auction off in a specific product group.

In his address, Schilfgaarde referenced the package of financial measures which the Dutch government announced last week. 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 bailout package is not sufficient to rescue a sector which represents an export value of €6.2 billion. He therefore calls for an emergency fund for Holland’s ornamental horticulture sector.

As it is widely accepted that people feel the pain of losing money more than they enjoy gains, emotional reactions to the market decline are perfectly normal. However, Bougainvillea grower Frans van den Bos– serving as a Royal FloraHolland Council Member took to Youtube urging his fellow growers to stay calm use common sense and to be respectful to auction reps as their jobs are equally at risk.