Sie sind auf Seite 1von 15

LATIN

AMERICA
NEWS
MARCH 2020

COLOMBIA

ECONOMIC DEVELOPMENTS
The incoming figures for early 2020 are mixed, with downside risks mounting amid the spread of the
coronavirus pandemic and the oil price shock have caused the peso to plunge to record lows and could
pressure external and fiscal revenues. In light of th the government announced measures to alleviate the
tourism and aviation sectors, including a COP 250 billion credit line subsidized by the government, while the
Central Bank increased market liquidity by, among other measures, expanding the quota of auctions to USD
4.4 billion.

CORONAVIRUS ATTACKS THE LUNG OF COLOMBIAN ECONOMY

The Covid-29 pandemic is producing great uncertainty and strong economic shocks, the effects of which are
still difficult to quantify. The coronavirus began by affecting supply rather than demand. Demand has also
been affected. Virus containment policies curb household spending. Most likely, it will lead to a global
recession.

1
Adding to this global phenomenon is the effect of the oil price war between Saudi Arabia and Russia, which
has caused the price to drop to levels below US $ 30 per barrel. This is a significant shock in percentage
terms, very similar to that experienced in late 2014 and early 2015, when the price fell in a few months
from US $ 110 to US $ 50 per barrel. Furthermore, the coronavirus makes a rise in this price unfeasible due
to demand factors.

In Colombia so far the greatest effect has been a sharp devaluation of the currency, breaking historical
ceilings. However, this devaluation will not imply an increase in the value of exports, since the price of the
main export product fell and external demand is also falling.

MARCH 2019 TO MARCH 2020

In the short term, policies should be focused on containing the spread of the virus and the negative effects
of these measures. Public policy actions have been taken these days such as closing borders and a
nationwide quarantine until mid April or further notice as the situation continues. Although the economic
cost of these is high, from a public policy point of view they are the best alternative found to reduce
infections.

These measures are socially expensive. That is why the fiscal relief policy announced by President Duque
aimed at reducing costs for the population, especially the most vulnerable. For example, implementing the
VAT refund helps the vulnerable population at this time.

Under monetary policy, such a high exchange rate makes the country more vulnerable. The sharp
devaluation of the currency right now can be complex and undesirable. Although Banco de la República has
taken actions aimed at increasing liquidity in pesos by extending the terms of liquidity operations and has
also increased liquidity in dollars through the use of auctions, it could consider the possibility of using
international reserves to contain the exchange rate, not just to provide liquidity.

2
Decree 486 of the Ministry of Agriculture and Rural Development - March 27, 2020

The National Government will have incentives for more than $ 450,000 million aimed at rural
workers and producers, which will allow continuity of productive activities and guarantee the
operation of the supply system for agricultural products and food security throughout the
national territory.

The measures consist of:

1. Forgiveness of current and delinquent interests, as well as capital quotas.This benefit seeks to alleviate
the burden of financing the workers and producers of the field.
2. Special Lines of Credit to subsidizing the interest rate, cover financial costs and expenses, benefiting
rural workers and producers . With this measure, it will be possible to leverage $ 1.5 trillion in credit and
serve close to 75,000 producers. The LEC will have a budget of $ 172,213 million.
3. The Ministry of Agriculture and Rural Development was authorized to directly contract
logistics and activities with the unions that administer parafiscal resources and with
FIDUAGRARIA, which allow it to guarantee food security and the supply of agricultural
products.

FLOWER SECTOR:

The flower sector situation in Colombia is very difficult on one hand the government declared the state of
emergency due to the Coronavirus pandemic and there is a national quarantine until April 13 that most
probably will be extended.

The orders to more than 100 countries to which Colombia exports have been reduced significantly, at least
95% of the exports to Europe have stop and just a small number of orders are shipped to Holland, Germany,
Rusia and Check Republic. The USA which is the most important destination for Colombia flowers has also
been reducing the volumes progressively, orders to wholesale and florists are not coming as the companies
have been closing their business and there is no demand. The supermarkets which represent at least 60% of
the market are still ordering but we estimate 80% less of their regular volumes. The situation in Asia is
something else as Japan has continue regular shipments and China is slowly ordering again.

The Colombia Flower export association Asocolflores is taking steps to obtain the necessary exceptions that
allow the economic activity to continue operating, although at a slower pace, during quarantine and to
continue harvesting, producing, packing, and exporting Colombian flowers as there is the capacity to export
them abroad via air or sea.

The sector is not optimistic about mother´s day considering most markets are closed and the demand can
end up to be very low. For now is uncertain until when this situation will continue and growers must get
ready for couple of months to resume activities.

Our growers have decided to stop completely the supply to the auction considering the uncertainty in the
prices they may reach and the risk of not being able to pay for the costs implied in transport and handling.

The local office LA is in close contact with growers to give advice and latest information of RFH activities,
implementation of measures, sales, markets insight and all the support to overcome together this crisis.

3
CUT FLOWER EXPORT FIGURES:

Colombia cut flower export figures from Jan to December 2019 were USD 1.474 million in sales and a volume
of 258 thousand tons. This results show an increase of 1.1% on sales (USD fob) and 0.4% in Kg volume
compared to same period 2018.

The developments in exports by country show the United States is the main destination for Colombian flower
exports with a market share of 77.9% in sales. For this period Jan to Dec exports to the USA market increase
was very limited a 0.9% in sales and same volume compared to 2018. The volume exported increase in
products like Carnations 4%, spray carnations 2.4%. All other products volume export decreased most
important roses -0.7%, Pompons -5.8%, Hydrangea -4.9% and Alstroemeria -0,8%. Price per kg increase 0.9%.

Japan is the second market for Colombian flower exports with a market share of 3.6%. The exports to Japan
had a slight decreased of -1.6% in sales FOB and -1.2% in volume kg compared to 2018. Volume exported
increase on main products to this market like Carnation 3.3% and Spray carnation 2.3%, the Chrysanthemum
showed a good demand increasing 72.7%. Other products with less demand showed a decrease Roses -24.9%
and Alstroemeria -23%. Price per kg decrease –1.6%.

The UK market has been the most important destination in Europe for Colombia flowers and represents a
3.1% market share, during 2019 it showed a positive reaction increasing exports 10.4% in sales and volume
9%. Products that had a volume increase were Pompon 21.7%, Hydrangea 8% , Alstroemeria 14% and
Chrysanthemum 33%. Volume had an important decrease in Rose -18.6%, Carnation -4.7% and Spray
Carnation -7.6%. Prices per kg increase 1.3%.

Canada has a market share of 2.5%, exports to this market decreased -6.7% in sales and -5.9% volume. The
volume exported increased only in carnations 2,2%, all other products decrease like roses -8,7%, pompons -
5,7%, hydrangeas -14,9%, Alstroemeria -15,4% and spray carnations -4,8%.

Holland represents a 2.6% market share and showed upward trend increasing a 9.8% in sales and 10.9%
volume. Main increase took place on February 36%, April 33% and September 38.7%. Volume exported
increase in Carnation 23%, Spray carnation 15,6%, Hydrangea 8%. Rose suffered a decrease -8.4% and
Alstroemeria -0.8%. Price per Kg decreased -1,0%.

Colombia exports to Russia are picking up increasing a 4.3% in sales and 4.5% in Volume. Rose volume
decrease -7.4% and Alstroemeria -3.9% meanwhile Carnation increase 30.9%, spray carnation 3.3% and
Hydrangea 26%. Price per kg decreased -0.2%.
4
Spain sales have recovered in the past years, 2019 shows an increase of 7.7% in sales and 13% in Volume. We
see product volume increase Carnation 14.8%, Alstroemeria 6% and spray carnations 26%. September
increase 60.8% for all saints holiday. Rose volume decrease -0.1%. Price per kg decreased -4.8%.

Poland continues its upward trend increasing 15% in sales and 16% in volume mainly Carnation 15.8%, spray
carns 8% which have the highest demand on this market followed by roses 32.9% and Alstroemeria 32.1%.
Price per Kg decreased -4.4%.

See below the detail exports by month compared to 2018. Good to see the increase for main holidays
valentines, woman´s day, mother´s day, all saints and x mas. August also had a 28.8% more.

PRICES

Below graphic shows the price per Kg monthly trend for 2019 vrs 2018.

5
When we look at price growth for 2019 by product the gerbera had a remarkable increase of 31.7% followed
by Gypso 9.9%. The roses increase a slight 1.7%, pompon 2.4%, spray carnations 0.7%, lilium 4.3%, asters
1.1%. Alstroemeria one of the most important crops decrease -3.9% and Chrysanthemum -2.7%.

If we look at price growth per country the most important market USA increase was a slight 0,9% , the UK
1,3% and other smaller markets like Ukraine 3,8%, Emirates 7,4%, Puerto Rico 10,5% , Panama 9,5% and Chile
6,6%. More important destinations in terms of volume like Japan decreased -1,6% , Spain -4,8% , Poland
-4,4% , Check Republic -15,3% , Holland -1%, France -10% and Germany -3,9%

6
EXPORTS BY CROP:

Total sales and volume figures per product gives an indication of the most important products exported by
Colombian growers comparing 2019 vrs 2018. Roses is the most important crop with a market share in total
sales of 22.4% followed by carnations 16%, Chrysanthemums 10%, Alstroemeria 5.3% and Hydrangeas 4.9%.
Others have an important share of 40.6% and it refers mainly to bouquets. During this period most products
decreased on sales and volume except carnations with an increase in sales of 4.3% as you can see on the
chart below.

SEAFREIGHT DEVELOPMENTS :

The Colombian flower growers keep increasing the exports by sea exceeding the predictions for 2019
especially to the USA market. According to report presented by Asocolflores (Flower Exporters Association),
exports by sea increased 34.8% in value (USD) compared to 2018 and 25% in terms of volume (Tons).

Exports by sea to the USA market have showed an amazing increased 135.2%, being Colombia most
important market this shows how important sea transport has become for growers especially the largest
flower grower groups shipping volumes of bouquets for the Supermarkets.

7
In Europe the UK is showing an interesting recovery of 43.3% increase for this year period January to
December compared to previous years which had a downward trend. Chile has become an important
destination increasing its market share by using sea transport which keep growing 17%. The Netherlands is
not growing and show a decrease of -11.3%. Spain is heavy on container shipments for their main holiday All
Saints, this year an increase of 29.3%. Japan already continuously shipping by container for couple of years
this period shows a decrease of -18.4%.

Exports by container period January to December 2016 to 2019

8
ECUADOR
ECONOMIC DEVELOPMENTS

Turning to the first quarter of this year, the slump in oil prices amid the outbreak of coronavirus both in
Ecuador and globally will be weighing on the oil-dependent economy, especially exports.

The government announced new measures and as of March 27 issued a Decree to defer payment of VAT and
income tax for four business groups. Those companies will be able to pay these assets in six months and not
in April, as planned. These groups include the agricultural sector; and the habitual exporters of goods or
those whose 50% of income comes from the export of goods so the flower sector is included.

In addition, the Ministry of Labor issued on Sunday March 29, 2020 a new Agreement with five benefits to
alleviate the pressure of the payment of wages in the private sector. Among them, the possibility was
opened for employers to reach salary payment agreements with workers who have suspended working hours
during the emergency and to provide their employees with the use of accumulated vacations.

To alleviate the liquidity the Biess (Bank of the Ecuadorian Social Security Institute) began the delivery of
USD 100 million to emerging unsecured up to USD 2,500. With the Reactivate program, mortgages will be
granted in this same entity for 30 years grace.

At last the Government announced banks will differ for 60 days and even 90 days in special cases payments
on financial loans.

MEASURES BY THE GOVERNMENT AGAINTS CORONAVIRUSES

The President of the Republic, Lenín Moreno, decreed the state of emergency in the country and a
nationwide quarantine until mid April to prevent the spread of the COVID coronavirus- 19 in the national
territory. The president announced the radicalization of various measures to slow the advance of the virus in
the country. Ecuador y the second LA country most affected by the virus after Brasil with up to 62 dead
people.

Moreno reported vehicle traffic restriction will apply. The floriculture sector is allowed to transport the
flowers to the airport.

The president announced the suspension of national passenger flights and the circulation of inter-provincial
passenger transport, starting Tuesday 17, for 14 days. Also the arrival of international passenger flights was
paralyzed for a period of 21 days. Cargo flights are allowed to continue operating.

Another of the measures adopted by the Government was the closure of public services, with the exception
of health, safety, and risk services. It was indicated that hospitals, clinics, health centers, neighborhood
stores, markets, supermarkets and financial entities will remain open.

Stay at home: According to the provisions of the National Government all citizens must stay at home and
will only be able to go out to medical appointments, pharmacies, supermarkets or to care for older adults
and sick or for proven emergency reasons.

9
HOW FLORICULTURAL SECTOR IS BEING AFFECTED BY CORONAVIRUS

Floriculture sector reports 95% drop in sales to all markets due to coronavirus effects.

Expoflores Ecuador Flower Export Association , indicated that the sector is in a deep crisis.

The fall in demand in the European, Asian and the US markets due to the expansion of the coronavirus in
recent weeks has impacted dramatically the sales of the Ecuadorian flower sector reducing 3.7tons of flower
exports from March 6 to 29. The losses have been large due to the quarantine measures, trade restrictions
around the world and low demand .

Expoflores regrets this is the second major impact on sales for flower growers in less than six months after
last October the sector also reported losses due to the national strike.

The sector generates 100 thousand jobs that will be in risk due to this crisis.

Expoflores will present a proposal to the government including measures that reduce the pressure on
growers pending accounts and liquidity. The industry is concerned about the government aids since there
are no funds available to support the companies.

The most important sales for growers are Valentines and Mother´s day when they make the profit and
results of the year. 2020 results are uncertain considering growers give 30 to 60 days credit to their
customers so at this moment Valentines orders payments have not been collected and mother´s day may not
have the expected sales.

Our growers have stop supply to the auction already for the last two weeks, farms have decided to stop
sales due to low demand and will decide mid April how to resume if the market is ready. For now the farms
only keep activities to preserve the plants in good condition and this will help to lower the costs.

CUT FLOWER EXPORT FIGURES:

Flower exports sales from January to December 2019 reached USD 874 million in FOB value, registering a
3.5% growth respect to the same period of 2018. Volume evidences an increase of 0.6% in relation to the
same period of the previous year.

10
MARKET SHARE

The flower exports figures for 2019 to the top import countries show the USA has a market share of 45%,
European Union 20% and Russia 15%, the rest distributed in other countries with 20%.

Following graphs show the Ecuador export trends to the USA, EU and Russia markets in FOB USD sales and
volume for years 2015 to 2019.

Exports to the United States had an important increase in 2019 reaching USD 396 million from January to
December; this is 7.1% more over the same period of 2018. Volume exported recorded 68.702 tons an
increase of 6.2% compared to previous year. The price per Kg increase 0.8%.

11
Exports to the EU market represent 20% of total market share from January to December 2019 it grew a
slight 0.5% in FOB value, from USD 176 million to USD 176.9 million this year. Regarding the volume
exported, there is a decrease of -3.2% compared to same period 2018. The price per kg increased 3.8%.

The exports to the Russian market represent a 15% market share. 2019 figures show a decrease of -6.9% in
FOB value, with respect to the same period 2018. At the same time volume registered a fall of -2.6%, from
28.507 tons to 27.776 tons during 2019. Also the price per kg decreased -4.5%.
Main product shipped to Russia are roses and gyp.

12
MARKET SHARE

The Netherlands is the main destination in the UE with a 8.65% of the total exported flowers increasing sales
in 2.0% followed by Italy 3.68% with a decrease in sales of-0.8%, Spain represents a 2.85% in market share
and sales reduce in -1.4%. On the other hand smaller markets increased sales like Ukraine 55.6% compared
to same period 2018. Other markets you can see above.

EXPORTS BY CROP:

13
During 2019 rose exports represented 74% from the total crops exported, followed by summer flowers that
represent 12%, gypsophila 8%, Carnation 2%. Below graph is showing in detail each crop exports in usd fob
sales and volume tons for 2019 vrs 2018.

VARIATION
2018 2019
(2019/2018) PRICE 2019
PRODUCT
USD USD USD
TONS TONS TONS USD/KG
MILES MILES MILES
ROSE 635.694 123.357 649.014 122.831 2,1% -0,43% 5,28
OTHER SUMMER FLOWERS 88.341 14.791 102.371 16.483 15,9% 11,44% 6,21
GYPSOPHILA 63.366 9.982 66.160 10.205 4,41% 2,23% 6,48
CARNATION 18.386 4.067 17.710 3.760 -3,68% -7,55% 4,71
LILIES 9.140 1.356 8.695 1.336 -4,87% -1,47% 6,51
CHRYSANTHEMUM 5.416 1.149 5.122 1.116 -5,43% -2,87% 4,59
ALSTROEMERIA 5.134 1.327 4.950 1.256 -3,58% -5,35% 3,94
AZUCENA 2.046 383 1.977 366 -3,37% -4,44% 5,40
ASTER 1.534 339 1.441 319 -6,06% -5,90% 4,52
GERBERA 542 114 833 135 53,69% 18,42% 6,17
ORCHIS 10 0,95 38 2,27 280,00% 138,95% 16,74
OTHERS 14.893 607 16.042 546 7,72% -10,05% 29,38
TOTAL 844.502 157.473 874.353 158.355 3,53% 0,56% 5,52

Rose exports increased sales on 2.1% and volume had a slight decreased of -0.4%. The price per kg increase
5.2%. The gyp had a sales increase of 4.4% also volume increase 2.2% and price per kg had a good result
increasing 6.4%.
Summer flower area have been growing in the past year as we hear from growers they decided to diversify
and offer market a bigger assortment and also bouquets . Summer flowers show and increase in sales of
15.9% and volume 11.4% compared to 2018.

PRICE DEVELOPMENT

Comparing January to December 2018 vs 2019 we observed that the price per kilo to the United States and
the U.E. increased 0.8% and 3.8%, respectively. On the other hand the price to Russia decreased -4.4% with
respect to 2018.

14
The price per kilo has increased 2.98% compared to the same period of 2018, going from USD 5.36 to USD
5.52.

TO OUR COLLEAGUES AT ROYAL FLORA HOLLAND

Our thoughts go to the MT who make very difficult decisions and have lots of pressure at this time to keep
RFH going. Also our support and consideration to all the teams at RFH that are trying to make the best out
of this difficult times when we must adapt to the situation and support our growers who are also in panic
not knowing how this will result.

Let´s keep together and strong!! Please take care and we hope to see you all very soon.

This is the end of this report and we will be back with 2020 figures as we are able to collect the information
from different sources to make an analysis and aftermath of the actual crisis.

Please feel free to share this report with other colleagues or persons who are interested.

If there are questions you can contact Camila Camacho email: camilacamacho@royalfloraholland.com

15

Das könnte Ihnen auch gefallen