Provided by Union Fleurs – International Flower Trade Association (www.unionfleurs.org)
The combination of Mother’s Day celebrations and the re-opening of sales channels across most destination markets in Europe and beyond offered a breath of fresh air for the international flower supply chain in May. Demand for cut flowers has now recovered to a healthy level in most European countries, but prices and volumes are overall still below average for this time of year. Sales of indoor and outdoor plants have experienced a significant boost in recent weeks across the European market, with people investing time and resources in their home gardens, which has been extremely welcomed by the ornamental plant industry in Europe. With events and large-scale wedding celebrations expected to be suspended over the summer period, some significant segments of flower sales will still be impacted for the weeks and months to come. Mother’s Day in France on 7 June has offered another opportunity to lift demand on the European market before the low-season for cut flowers gets started. The UK market is set to fully re-start on 15 June with the announced reopening of the New Covent Garden Flower market and flower shops across the country. 15–21 June will also mark British Flower Week in the UK, with consumers expected to be encouraged to buy British flowers to support domestic producers. Prospects for the market afterwards are still rather uncertain and the impact of the Covid-19 crisis on the flower industry is expected to continue to unfold.
Flower-supplying countries in Africa, Kenya in particular, are still very impacted by the overall lack of air freight capacity since March. Even though the number of airlines servicing Kenya is on the rise since May, export capacity has not yet restored to required levels as passenger flights are still on hold, resulting in significant losses of belly cargo operations. As long as this situation remains, flower exports from Kenya to destination markets in Europe and beyond will remain under pressure.
See here an overview of the air cargo situation recently published by IATA (ALN News, 2 June).
In the EU, support by the European Commission to the flower and plants sector has remained limited so far to the adoption of Commission Implementing Regulation 2020/594 providing exceptional derogation measures from EU competition rules to the sector under Article 222 of the CMO Regulation (Common Market Regulation). It entered into force on 5 May and will apply for 6 months. No direct financial support from the EU to the sector could yet be secured, despite the European Commission recognising that the flower and plants sector has been the agricultural sector the hardest hit by the Covid-19 crisis.
At national level, a limited number of EU Member States have so far announced financial support to help the sector recover from the crisis:
- The European Commission confirmed on 8 May that the €650 million aid scheme notified by the Dutch Government to compensate companies in the floriculture, specialty horticulture and potato sectors for damage caused by the Covid-19 outbreak is in line with EU State aid rules and can therefore be implemented.
- Under this Dutch Emergency Fund, €600 million will be allocated to compensate companies in the floriculture sector (growers, wholesalers, auctions, road transporters) and in the speciality horticulture sector for the foodservice market, and €50 million to compensate potato growers.
- The compensation to companies will take the form of direct grants and can cover a maximum of 70% of the loss of revenue or additional costs during the period 12 March to 11 June 2020, provided that the required conditions for eligibility are fulfilled by the Dutch companies lodging an application.
- More details on the scheme can be found on the website of the Netherlands Enterprise Agency (RVO) (in Dutch only).
- The European Commission has also approved on 5 May a €10 million scheme notified by the Greek government to support Greek companies in the floriculture sector affected by the coronavirus outbreak.
- The scheme will take the form of direct grants, and aims to ensure that companies experiencing cash difficulties due to the Covid-19 outbreak have sufficient liquidity to maintain their activities during and after the outbreak.
France and Belgium
- The governments of both France and Belgium announced in June that they will each allocate an emergency fund of €25 million to support the ornamental sector in their country. Details on both funds are still to be released.