Corona crisis: country updates19 June 2020
Royal FloraHolland keeps a close eye on developments related to the Coronavirus in order to keep our (member) suppliers, buyers, employees and visitors to our locations safe and healthy. In addition, we inform you about the consequences of the corona virus on the Dutch and international horticultural market. This has been supplemented with news from our own sources, colleagues of Royal FloraHolland.
Update Friday 19th June 2020
In this article you will find an update from the Ministry of Agriculture, Nature and Food Quality (LNV), who are involved in the crisis measures surrounding the Coronavirus and informs Royal FloraHolland about the impact of the virus on the export market.
Four organisations representing the different segments of the ornamental horticulture sector in the EU (Union Fleurs, ENA, AREFLH and COPA-COGECA) surveyed their members on the economic impact of the corona crisis. The central question :how much did you miss in the months of March and April 2020? Short answer: 4.12 billion euros, or just under 10% of the total annual turnover. (Source: BP news, 17-06-2020)
The damage caused by the corona crisis to ornamental growers, bulb growers and nursery owners in the European Union amounts to EUR 4.12 billion. This is according to research among their members conducted by the trade organisations Union Fleurs, ENA, AREFLH and COPA COGECA . According to the four European organisations, the floriculture sector and the market have been severely affected and disrupted. The loss incurred by the cut flowers, pot plants, bulbs and trees sub-sectors in 17 EU countries in March and April was EUR 4.12 billion. This represents 10% of the total market value of these sub-sectors in the EU. (Source: The Floristry, 16-06-2020)
The phalaenopsis market was just starting to recover when the Coronavirus got in the way. At the beginning of the crisis, Dutch growers threw away some 1.5 to 1.8 million plants. Prices are now going up again, but there are still concerns about late payments. Nurseries focus on new sales concepts and increase their efficiency. They realize that Covid-19 still makes the market very unstable. What if countries start closing their borders again? Several professionals in the industry say that a lot will depend on pricing in the coming months. (Source: FloriBusiness, 16-06-2020)
The German government has put in place large support packages to stimulate the economy and support entrepreneurs, but this has not prevented the German economy from falling into a deep recession, which will continue for the near future. (Source: Agricultural Attaché Network of the Ministry of Agriculture, Nature and Food Quality, 17-06-2020)
Although for some time there was pressure on the supply of supermarkets for logistical reasons and hoarding by consumers, the food supply in Germany has never been in jeopardy. The border with the Netherlands has been continuously open and transportation of foodstuffs can generally take place unhindered. The Corona crisis has caused extra attention to be paid to areas such as agro-transport, production in one's own country/region, digitisation and online purchasing, consumer purchasing behaviour, availability of migrant workers and specifically their living and working conditions. Both vulnerabilities and opportunities were identified there. (Source: Agricultural Attaché Network of the Ministry of Agriculture, Nature and Food Quality, 17-06-2020)
The corona measures have caused a sharp (temporary) decline in sales opportunities for Dutch entrepreneurs due to the closure of restaurants, canteens, flower shops, events, fairs, etc. in Germany. This will not immediately be at full strength again, as activity is resumed in stages and several entrepreneurs have been forced to stop their business. Companies and organizations that can respond quickly to the new situation, such as offering online activities, setting up delivery services or adapting their product, have a greater chance of survival than less flexible companies, which are less adept at reaching their customers in new ways. (Source: Agricultural Attaché Network of the Ministry of Agriculture, Nature and Food Quality, 17-06-2020)
Looking back over the past few months, disruptions were mainly caused by the disappearance of the domestic foodservice market (the catering industry will reopen on 4th July at the earliest), the compulsory closure of garden centres and florists and capacity shortages due to absenteeism due to illness or lack of seasonal workers. Overall, international trade with the United Kingdom appears to be more limited, helped by the government's open border policy for at least freight transport and ancillary services. Supermarkets have achieved enormous capacity expansions in their delivery services. In floriculture and food horticulture, the Dutch support package was looked at with great jealousy. In the United Kingdom, there is no compensation for these sectors and now there are also reports of Dutch exporters who have been able to fill the gaps in the stocks of British garden centres. (Source: Agricultural Attaché Network of the Ministry of Agriculture, Nature and Food Quality, 17-06-2020)
The United Kingdom should withdraw additional Xyella requirements for plant material. The European Commission decided that the UK's (UK) additional Xyella requirements are contrary to the internal market and that the UK should repeal them by 20th June 2020. There are no more trade restrictions. This means that the trade of Lavandula sp., Nerium oleander and Rosmarinus officinalis without a plant passport with PZ code XYLEFA or Xylella fastidiosa is possible again. (Source: BP News, 12-06-2020)
'Sovereignty' is a term that resonates strongly in France following the covid-19 crisis. Sovereignty in the field of public health, but also in the field of agriculture. The crisis has revealed weaknesses and made France realise that it does not want to be dependent on third countries. So the call for autonomy - at both national and European level - is becoming louder and louder.
The French Ministry of Agriculture and Food takes a somewhat
more balanced position and says that in the post-corona era various
agricultural models can and should coexist, from large-scale to
small-scale, from organic to conventional. The Ministry has a
realistic view of the matter: agriculture is an economic activity
that benefits from competitiveness. It is a utopia to think that
France can be 100% autonomous. France will always continue to
import and export.
But the adage 'never waste a good crisis' is also familiar in France: people want to use the crisis to boost the sustainability of the economy and therefore also agriculture. And that may cost a little: France is allocating EUR 500 billion to support measures. President Macron strives to rebuild a strong, sustainable and independent economy. During his speech to the people on 14th June, he spoke of a so-called pacte productif, which means that the French government will want to invest more in digital technology, industry and agriculture (these are the areas he specifically mentioned). The Covid-19 crisis is forcing France to embark on a new phase to "regain full control over our lives, our destiny, in France and in Europe," said President Macron. That will be the priority for the last two years of his presidency.
During her visit to the Netherlands on 15th June, the French Secretary of State for European Affairs, Amélie de Montchalin, also called for a joint European approach: "The European Union must emerge stronger from the crisis. We have to think of all 27 countries as one big block. The Netherlands and France actually agree on everything. We want the EU to invest in climate action, innovation, digitisation and a stronger Europe. We both want to reform". These words are of course part of her plea for a European recovery plan. But these words are also certainly true. The Netherlands and France are facing the same challenges, namely a transition to sustainable, resilient and competitive agriculture. This makes the Netherlands and France strategic partners as well as neighbours. (Source: Agricultural Attaché Network of the Ministry of Agriculture, Nature and Food Quality, 17-06-2020)
Carrément Fleurs expands its network of French producers; given
the current market situation, the buying behaviour of the French is
evolving towards local consumption to support local
Since the launch of this franchise chain in 2012, the brand of artisan florists Carrément Fleurs aims to shorten the chain. Thus, this florist chain is in favour of cooperation with French producers. The network expands further on the basis of this environmentally friendly approach. Carrément Fleurs has added a new French producer from Sarthe of pesticide-free tulips and peonies to its network, supplying its 37 stores with products "made in France". (Source : JAF-info, 17-06-2020)
Gfk garden centre research France - Encouraging signals for the 2020 season; the corona crisis revealed a strong French interest in gardening and a revival of the vegetable garden. Garden Center and DHZ business were in the top 3 during the Lock down. The results of the Gfk study show that the turnover of the garden centre canal collapsed by -85% in the first week of the Lock down and by -96% the following week. Losses were declining thereafter, until week 17 (from 20th to 26th April) when sales returned to normal levels even before the Lock down phase. Since then, the garden market has been catching up week after week with double-digit growth compared to 2019. Of all categories, recreation, decoration and equipment are the most dynamic. The most important take out of the study:
- After a month of -41% in March, turnover in the sector recovered to -10% in April;
- the seed and garden product categories saw sales increase in volume, as well as sales in April;
- the supermarkets benefited from the closure of many other channels, but the garden centres are catching up with a turnover of + 44% over the last 3 weeks of May 2020.
(JAF Info, 16-06-2020)
Rein and Baumgartner open the city garden centre "Tchungle" in the Grand Est region; it is a garden centre suitable for city dwellers. They had already seen this kind of concept stores in Belgium, the Netherlands, Paris, but not yet in Strasbourg. Last December the concept started with a collective pop-up store in the Centre Halles. Tchungle - the little name of their jungle - was to open at the beginning of February. Because of the corona crisis, they adapted and decided to create the online store by means of click & collect. Since May 12th, the shop is also physically open, with the possibility to order via the e-shop. The plants come mainly from Belgium and the Netherlands, "but as soon as possible they deliver products from France: herbal plants from Sonnendrucker'sof the "100% organic, non-hybrid and reproducible" seeds from Alsagarden, in Niederhaslach, are in the spotlight.
In a few weeks they should also be able to take advantage of practical workshops in this urban "Tchungle" to learn how to make terrariums, make a macramé, plant, repot decorative objects. In the long term, children's workshops are also planned. (Source: JAF info, 15-06-2020)
During the corona crisis consumer preference for sustainable food grew and it is expected that this will continue to be the case, to a greater or lesser extent, afterwards. Moreover, the 2019 figures for the consumption of organic products show that there is still margin for further growth, certainly in Flanders. The tendency to give preference to one's own product (National, short chain) has also been reinforced by distortions of the internal market. As a result of the Corona crisis, there is increased attention for sustainability in Flanders in general. Like the Netherlands, Flanders, which has intensive and export-oriented agriculture, has environmental problems in terms of water and air pollution, some of which are attributed to agriculture. Although not so much linked to the Corona crisis but mainly due to three consecutive exceptionally dry years, attention for good soil and water management has increased significantly. The harvest in Flanders has proved to be very dependent on cheap seasonal workers. Given the generally expected trend towards insourcing, there should be market opportunities for further automation techniques. The required level of knowledge is already present among Flemish farmers. (Source: Agricultural Attaché Network of the Ministry of Agriculture, Nature and Food Quality, 17-06-2020)
Hilde Crevits, Flemish Minister of Economy and Agriculture, granted VLAM 300,000 euros as part of the revival of exports. The funds are used to promote the participation of Flemish companies in international agri-food fairs and to develop an incubator for innovative export plans.
The agri-food sector continued to provide food for everyone
during the corona crisis. However, due to the loss of the necessary
international trade, the export of Flemish agriculture and
horticulture was hit hard. Flemish Minister-President Jan Jambon
and Flemish Minister of Economy and Agriculture Hilde Crevits
announced additional measures for the revival of exports on Monday
15th June. In addition, Crevits provides 300,000 euros for VLAM to
strengthen its export activities.
VLAM, which has a lot of experience in the field of export promotion of Flemish agricultural and horticultural products, will deploy the extra resources on two fronts:
- Flemish companies are encouraged through an incentive premium to participate in international agri-food fairs before the end of the year.
- VLAM will set up an 'incubator agri-food' in the coming months. It wants to stimulate Flemish agri-food and floriculture companies or business groups to develop new solutions for foreign market access. VLAM focuses on ideas that have innovation, rapid impact and long-term effects as basic elements. (Source: BPN/VLAM, 17-06-2020)
In Belgium, all kinds of employment measures created for Corona are being extended as the Belgian government has also taken a number of new decisions relevant to floriculture. Such as the possibility for employers to apply for temporary unemployment under relatively flexible conditions for corona-related reasons. This form of temporary unemployment is considered to be a situation of force majeure; for those who become unemployed, the degressivity of unemployment benefits is temporarily halted because it is not easy to find a job on the labour market during this period. (Source: AVBS, 16-06-2020)
The unavailability of flights, reduced demand and negligible exports of fresh cut flowers forced growers to destroy millions of stems in the period March to May, resulting in enormous losses. Growers have had to take serious cost-saving measures in order to survive: salaries and manpower have been reduced, minimal use of pesticides and fertilisers and some plants have been 'halted'. Despite the fact that demand is now picking up again, the Kenyan flower sector still has major challenges. Some cost-saving measures have affected the production cycle and had a serious impact on quality: less manpower resulted in less attention to flowers and minimal use of pesticides and fertilisers make plants vulnerable and prone to pests and diseases. The rainy and wet weather made the situation even worse. There is also a shortage of employees (due to travel restrictions and the national curfew). Flowers are scarce compared to current demand; it will take some time before growers will be able to work at full capacity. (Source: Floral Daily, 17-06-2020)
Air France KLM Martinair Cargo launches 'Kickcharter', a new collaboration platform for charter flights. Global freight capacity has changed significantly in recent months. Although capacity is now growing, it is still scarce and not all destinations are served via the Air France KLM Martinair Cargo scheduled network. Gaps in the network are filled by charter services, but not all shipments justify a full-freighter solution. The solution for this is a collaborative platform (Kickcharter), where customers can jointly participate in charter solutions for destinations that are currently not served. As soon as there is sufficient cargo to such a destination, the charter will be executed. (Source: Floral Daily, 17-06-2020)
Growers in Naivasha recalled more than 90 percent of their employees when exports to various European markets increased last month. According to the growers, exports have risen from 15% to 60% because the demand for flowers continues to rise. However, production is still not at the same level, given the enormous losses that have been incurred. CEO Joseph Kariuki of the Lake Naivasha Growers Group (LNGG), said there is hope for the sector after a difficult period as the EU market opens up. "Currently, our exports are 60 per cent despite challenges such as high flight costs, as many airlines are not operational, and we hope that this will change over time. (Source: The Star, 11-06-2020)
The flower sector in Ethiopia, the second largest exporter to Europe, is facing increasing demand after the easing in some European market countries. Last month income from roses and summer flowers amounted to 32.8 million dollars. (Source: Addisfortune, 14-06-2020)
These days the official dialogue is ongoing with all relevant and interested stakeholders in a so-called 'Stati Generali', mainly intended to create national support for the structural reform plans for the use of the European 172 billion euros from the Recovery Fund. The many proposals for the Master Plan for the relaunch of the Italian economy should eventually lead to a strong, sustainable and modern Italy with a central position for the agribusiness, according to Minister of Agriculture Bellanova. The agricultural and agri-food sector accounts for 14% of GNP and can play an important role in the post-covid ecological transition to a green future for the country. Quality, food safety, protection of rural areas, natural resources such as soil, air and water are important issues on the way to a circular economy and a new model of society, where inclusiveness, competitiveness and cooperation must become everyday practice.
The 9 'chapters' in the Master Plan for the relaunch of the economy and the specific agro-interest: Digitization (including ultra-fast internet in rural areas for the development of 'agriculture 4. 0'); Infrastructure (including water modernisation and a dyke construction plan, bonuses for private green space in the city); Sustainability (economy and environment, circular economy, green economy, land improvement and counteracting hydrogeological risks); Business and Employment; Production chains (including agriculture and fisheries and agro-tourism development); Public authorities (less bureaucracy and more digitisation); Education and research (cooperation between the two, applied research, digitisation, attention to the environment); Equality and Inclusion (attention/support/financing for families, young people, female entrepreneurship, Southern Italy plan 2030, etc. (Source: Agricultural Attaché Network of the Ministry of Agriculture, Nature and Food Quality, 17-06-2020)
The Polish horticultural sector seemed to be recovering after the dramatically low sales in March. Polish producers of cut flowers were most affected, as most of the sales began in March and this year fell by 95%. Exports from the Netherlands to Poland (6th export destination) fell by 25% in the same month. Producers engaged only in this type of production (bulbs for cut flowers) recorded significant profit losses and could even change the profile of their activities to e.g. vegetable growing. On the other hand, all the nurseries are having the best season in years, as most Poles decided to stay at home and are interested in ornamental plants for their gardens and balconies. These developments will change the export market for Dutch companies in the coming period. The vegetable growers already started production after the closure and hardly felt the difference with previous years. (Source: Agricultural Attaché Network of the Ministry of Agriculture, Nature and Food Quality, 17-06-2020)
Ikea will return the government's crisis aid to 9 countries. Furniture giant Ikea has said that it will return subsidies it received from eight European countries and the US at the height of the coronavirus crisis, because the financial situation has not hit as hard as initially expected. Ikea said to have received support from Belgium, Croatia, the Czech Republic, Ireland, Portugal, Romania, Serbia, Spain and the United States. (Source: The Local.se, 18-06-2020)
Messe Tulln, Austria's largest trade fair organiser, is optimistic that the Horticultural Fair can start the season at the beginning of September. Due to the corona crisis, the stock exchanges throughout the country have been postponed since mid-March. However, it is assumed that the Tulln Horticultural Fair can open at the beginning of September. In order to meet the safety requirements and also create an attractive event that can be set up quickly, the concept of the Horticultural Fair has changed slightly. The experience gained at Boot Tulln has been taken into account in the planning of the horticultural fair. In addition, due to the almost two hectares large area and the extensive halls there is sufficient safety distance. The Tulln Horticultural Fair will be the first fair in Austria to take place since the lockdown. For the first time this year, the Tulln Horticultural Fair, Europe's largest flower show, will take place in the new Danube Hall. (Source: Noe.orf.at, 13-06-2020)
Spain has been hit very hard. Both in terms of the number of victims, i.e. more than 244,000 infections and more than 27,000 deaths, and looking at the economic figures. The flower sector is also one of the hardest hit sectors in Spain with more than 440 million damage. The call for digitisation in agriculture is also beginning to grow. How can Spain remain a top exporter in horticulture in the face of increasing drought and temperatures? (Source: Agricultural Attaché Network of the Ministry of Agriculture, Nature and Food Quality, 17-06-2020)
More related news
- 12 June 2020
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