Although there is an appreciation of foreign currencies, particularly the yen and the dollar, against the rupee, the realisation from exports during the 2007-08 has been lower than the previous year, but the industry is looking forward to a turnaround due to the rising demand of Indian flowers abroad.
According to latest figures compiled by the Agricultural and Processed Food Products Export Development Authority (APEDA), the exports of floriculture products has declined by a whopping 48.21% from Rs 652 crore during 2006-07 to Rs 338 crore in the last fiscal (2007-08).
While the rupee has appreciated against major currencies, the domestic market for flowers is growing at 25% annually due to the increasing use of flowers as gifts.
"As part of the growth process, domestic demand and exports are competing with each other," S Jafar Naqvi, president, Indian Flowers and Ornamental Plants Welfare Association (iFlora) told FE. He said that there are buyers in the international market but there are inadequate numbers of growers currently.
India occupies around 0.65% of the $11 billion global flower trade.
Due to India's strategic location, along with the growing number of people entering the flower business, traders feel that the exports would certainly rise significantly next year. "We are bullish about the future as floriculture cultivation is increasing fast in non-traditional states such as Uttaranchal, Himachal Pradesh and Gujarat," Naqvi said.
In fact, trade sources said that in actual terms, the exports earnings have not gone down as there are a large number of non-resident Indian (NRIs) sending flowers to their relatives at home on various occasions, for which payment is made abroad. "Although the flowers do not cross the boundaries, the Indian producers do earn in dollar terms, as last year, close to Rs 300 crore worth of flowers were sent by NRIs home," a flower trader said.
India's domestic flower and plant market is estimated to be around Rs 1,000 crore.
Maharashtra and West Bengal are the traditional flower producing states, where production has stagnated.
According to estimates, more than 1.05 lakh hectare of land is under flower production, while about 1,000 hectare is for cut flowers or under modern green houses. "We need at least 5,000 hectare under green house for enhancing our presence in the international market," Naqvi said.
According to Asit Tripathy, chairman, APEDA, the exports market is extremely dynamic and quality conscious. "So every year, we need to introduce new products for augmenting our presence in the international arena," Tripathy said.
"Due to the geographical presence, we can export to Japan, Australia, as well as Holland, while the African countries depend on the European market," Naqvi said. Interestingly, the demand for flowers in Europe is during the winter season. So when demand from Europe ends then another market opens up in Australia.
However, trade sources said that although the National Horticulture Mission launched during 2005-06 had supported growers in the holistic growth of the flower business, the country still needs a more comprehensive strategy to fight competition mainly from China, particularly in the cut flower business.