rose export and marketing channels

8/3/2019 Rose Export and Marketing Channels

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A PROJECT REPORT ON ROSE EXPORT AND MARKETING

CHANNELS OF ROSE..

SUBMITED BY NAVNATH NAIK


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INRODUCTION

Government of India has identified Floriculture as the sunrise industry

and accorded it 100% export oriented status. Owing to steady increase in

demand of flowers, Floriculture has become one of the important commercialtrades in Agriculture. Hence Commercial Floriculture has emerged as a Hi-Tech

activity, taking place under controlled climatic conditions inside Greenhouse.

Floriculture in India is being viewed as high growth Industry. Commercial

Floriculture is becoming important from the export angle. The liberalization of

industrial and trade policies paved the way for the development of export

oriented production of cut flowers. The new seed policy has already made it

feasible to import planting material of international varieties. It has been found

that Commercial Floriculture has higher potential per unit area than most of the

field crops and therefore a lucrative business. Indian Floriculture Industry has

shifting from traditional flowers to cut flowers for export purposes. The

liberalized economy has given an impetus to Indian Entrepreneurs for

establishing export oriented floriculture units under controlled climatic

conditions. Agricultural and Processed Food Products Export Development

Authority (APEDA), is responsible for export promotion of Floriculture in

India.

Maharashtra State Agriculture Marketing Board has setup an

International Horticulture Training Centre (ISO 9001:2001 certified) at

Talegaon near Pune, for training the farmers about the cultivation practices of

cut flowers under controlled climatic conditions in Greenhouse. An Integrated

Floriculture Park is setup having tie-up with Maharashtra Industrial

Development Corporation (MIDC) near Talegaon having more than 50 hectares

of land and more than 40 growers, it is the only such project in all over India.

MIDC has given the land for the Floriculture Park on lease for 32 years. The

flowers mainly grown in the Floriculture Park are Rose, Carnation and Gerbera.

Rose is the major cro p taken here. The export quality flowers are produced bymajority of the growers. Some of the Greenhouses are even been given on rent

by the owners who are not able to utilize the perfect climatic and transport

conditions at Talegaon. The cultivation of the cut flowers under controlled

climatic conditions is restricted to certain areas of Pune, Sangli and Nashik

districts only.

Though the prices of flowers are falling from past few years the pricing


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has not hampered the growth in Floriculture Industry. The area under the cut

flower production under controlled climatic conditions is increasing. Farmers

having small land holdings are not yet ready to take up the cultivation of cut

flowers due to high initial investment and also the pricing is heavily dependent

on demand-supply ratio.


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Present Status ofMarketing in

Floriculture Industry


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PRESENT STATUS OF MARKETING IN FLORICULTURE INDUSTRY:

Marketing of cut flowers is still at the early stage of growth or

development. Marketing of Agriculture as well as Horticulture produce has

always been an issue of concern in India. Floriculture in India is being viewed

as a high growth Industry. Commercial Floriculture has gained importance over

the years.

According to a report of the National Horticulture Board (NHB), the total

area under flower crops in 2007-08 was estimated around 160.7 thousand

hectares which is second largest in the world and only next to China though

under cut flowers it is only 600 hectares. Production of flowers was estimated to

be 870.4 MT of loose flowers and 43417.5 million (numbers) of cut flowers in

2007-08. Fresh and Dried cut flowers dominate Floriculture exports from India.

Roses, Marigold, Tuberose, Orchids and Chrysanthemums are the main cut

flowers exported from India.

Indias total export of Floriculture produce over the years is

shown below:2006-07 2007-08 2008-09

Quantity Value Quantity Value Quantity Value

42545.28 65269.73 36240.71 34014.42 30798.34 36881.41

Note-Quantity in MT and Value in Lakhs. Source: - DGCIS Annual Report.

From the above table it can be clearly seen that there is approximately 8.43%growth in the export of the floriculture produce from 2007-08 to 2008-09 and

the cumulative average growth rate of 24.22 from 2004-2009. Though having a

sharp decrease in the export in the 2007-08 there is a marginal growth in 2008-

09. There were more than 300 export oriented units in India. More than 50% of

the floriculture units are based in south zone mainly in Karnataka, Andhra

Pradesh and Tamil Nadu. Also states like Bengal, Maharashtra and Rajasthan

have large area under floriculture. The domestic flower production goes on

increasing annually. Technical collaboration has been approved for India, inorder to increase the total share of India in world trade.


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Indian Floriculture Industry is been shifting from traditional flowers to

cut flowers for export purpose. The liberalized economy has given an impetus

to the Indian Entrepreneurs for establishing export oriented Floriculture units

under controlled climatic conditions. In India, Maharashtra, Karnataka, Andhra

Pradesh and Haryana have emerged as major Floriculture units in recent times.

There are six Agriculture Export Zones set up for floricultural produce in the

states of Sikkim, Tamil Nadu, Uttaranchal, Karnataka and Maharashtra. Main

export destinations for Indian floricultural products are United States of

America (USA), The Netherlands, United Kingdom (UK), Germany and Japan.

Under the Foreign Trade Policy for the period from 2009-2014

following steps have been taken to strengthen the Horticulture as well

Floriculture Industry in India:-

The incentive available under Focus Market Scheme (FMS) has been

raised fromn2.5% to 3%. The incentive available under Focus Product Scheme (FPS) has been

raised from 1.25% to 2%.

To reduce transaction and handling costs, a Single Window System to

facilitate export of perishable Floriculture produce has been introduced.

The system will involve creation of multi-functional Nodal agencies

which will be accredited by APEDA.


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MARKETING

CHANNELSOF ROSE


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MARKETING CHANNELS OF ROSE:

Rose is the main export oriented cut flower of India as well

as has a high share in the domestic market. The Marketing Channel of Rose is

mainly divided in two types;

Domestic Market.

Export/ International Market.

DOMASTIC MARKET:

The cultivation of Rose is majorly in open field conditions. The area under

the open field conditions is large as compared to the cultivation under controlledconditions, thus Rose is mainly sold in Local/ Domestic Market. Nearly 90%

Rose is sold in Domestic Market including the Roses grown in open field

conditions as well as the Roses which dont satisfy the export norms grown

under the controlled conditions. The price of these Roses is less as compared to

the export oriented Roses.

THE FOLLOWING LINES EXIST IN THE DOMESTIC MARKETING

CHANNEL: -

TYPE 1:--

PRODUCER/ FARMER:-

Producer or Farmer is a person who grows the Roses. The Roses are

generally taken at the rate of 80paise-2rupees per flower. The prices may

increase with decrease in supply and decrease with increase in supply. The

Roses are transported to the local market by the grower himself or are

transported by the commission agent.

COMMISSION AGENT:-


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Commission agent is one who collects the Roses from various growers and

sells them to the florists. He takes nearly 10% commissions over the total

flowers he sells and returns the remaining 90% to the grower. Some of the

renowned Commission Agents in Mumbai are Thakur Flowers, RaksheFlowers, Vivek Flora (all at Dadar), Bacche Flowers (Bhuleshwar).

FLORISTS: -

Florists are one who purchase the flowers from commission agent and

sells it to the end consumer. The florist generally gets the flowers for 5-6

rupees per flower and sells them for 10 rupees.

CONSUMER: -

Consumer is one who purchases the flowers from the florists.

TYPE 2:--

This type of Marketing Channel is similar to Type 1 but only difference is that

the Commission agent himself acts as a Florist to increase his profit margin by

taking the flowers for 80paise- 2rupees/flower and sell them for 8-10 rupees.

TYPE 3:--


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This type of the marketing channel is proposed one. In this type the

grower can directly send his flowers to the Auction Hall which will be regulated

by the Government. Such National Auction Hall is established at Noida, Uttar

Pradesh but is yet to open for trading though it has been successfully tested, due

the political influence. Similar Auction Hall has been established in Goregaon,Mumbai for growers from Maharashtra but it is also not yet functional. The

Karnataka Government has set up an Auction Hall in Bangalore which is still

not 100% functional. The main purpose of these Auction Halls is to give proper

prices for the growers and thus encourage more and more farmers take up

floriculture.

Export/ International Market


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The Roses grown only under the controlled climatic conditions are

exported. The Roses have to go through various certifications before export.

Only 10% of the Roses are exported out of the total production. Roses aremainly exported to USA, Japan, The Netherlands, UK, Australia, etc. Roses

contribute more than 60% of the total floriculture produce exported and also

similar percentage of export returns. Also area under Rose cultivation is

highest amongst all the flowers grown under controlled climatic conditions.

The following lines exist in the Export/ International market: -

TYPE 1:--

In this type of Marketing Channel the flowers are sent to the International

Auction Halls. Roses from India are mainly sent to VBN Auction Hall situated

in The Netherlands. This type contributes nearly 90% of the overall export/international Marketing channel. Wholesalers from all over the world

participate in the Auction.

TYPE 2:--

DOMESTIC MARKET OF CUT FLOWERS:--

The Domestic Market of Cut flowers comprises of mainly the four Metro

Politian cities viz. Delhi, Mumbai, Kolkata, Chennai and also other major cities

like Pune, Bangalore, Hyderabad, Nagpur and Indore. Delhi is the biggest

domestic market for cut flowers. Though having great potential and favourable

climatic and geographical conditions the growth of this market is sluggish. The

area under cultivation is high but the quality is not up to the mark. The domestic

market is not regulated and has many loopholes they are as follows: -


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No proper pricing of the cut flowers

High commission from the middle man

Pricing heavily dependent on Demand-Supply ratio

No proper information regarding pricing of the cut lowers to the growers

by the commission agent Cut flowers are mainly grown in Manually Operated Greenhouses so the

quality of the flowers does not remain unique.

The auction halls which are setup for the betterment of the Floriculture

Industry are not functional though crore of rupees are invested on them. For the

namesake the politicians have not yet allowed to open the Auction Hall situated

at Noida, Uttar Pradesh, though it has been successfully tested and has state-of-

the-art facilities.

Though having these many drawbacks Indian Floriculture Industry is

growing.

The consumption of the cut flowers is growing at the rate of 30%. Farmers have

shifted from traditional cultivation to cultivation under controlled conditions.

But there is long path ahead and many revolutionary steps to be taken to have

proper utilization of this Industry. Consumer Behaviour has also changed first

consumer use to buy the cut flowers for religious purposes only but now due to

influence of the western culture, flowers are used largely in grand weddings, on

valentine day, birthdays, Mothers Day. Greeting with flowers to the guest is

becoming etiquette in the corporate world. The positioning of the cut flowers

has been proper over the decade. The number of florists is been increasing.

Indias Domestic flower market which is currently valued at over Rs. 1000

crore has potentiality to grow to Rs. 10,000 crore in the next five years, it would

provide millions of job particularly to the women. The domestic demand for the

cut flowers would increase with the expansion of organized retail and super

market chains, coupled with the rising income of the middle class. If the

domestic growers miss this opportunity, India may be flooded with imported

flowers

An International Flora Expo is been organized annually since 2005 which

depicts the rise of the Indian Floriculture Industry on the World stage. The

growth in the Domestic market will give a fillip for the growers to grow exportquality flowers and thus increasing the foreign revenue.


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INTERNATIONAL MARKET OF CUT

FLOWERS :

The International market for Indian Floriculture Industry is mainly The

Netherlands, Japan, UK, Australia, Gulf Countries, etc. Cut flowers are the most

widely traded floriculture product and the consumption is increasing world-

wide. Indias share in the global market is negligible. The cut flower market is

dominated by The Netherlands, which has six International Auction Halls. The

Netherlands is the largest retailer of the cut flowers. But now the developing

countries are posing a serious threat to The Netherlands. The cut flowers from

Kenya, Ethiopia, and Ecuador are on a boom, compared to these countries India

has to go long a way.


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The major growers in Kenya and other African countries are the NRIs

who have set up large farms in these countries due to the less land cost and

perfect climatic conditions. Due to the high altitude the quality of flowers from

these countries is best in the world. The bud size and the stem length is eye

catching.These growers hire supervisors from India not because they are cheap but they

are hard working and are involved in all the activities. This has created an job

opportunity to the BSc (Horticulture) graduates to have career in the

Floriculture industry.

In spite of an abundant and varied production base, Indias export is not

encouraging but is catching up. Indias share in international cut flowers market

is negligible at 0.19%. But with several entrepreneurs establishing export-oriented floriculture units under controlled climatic conditions. India is

definitely making an impact in the international market mainly cantered The

Netherlands.

Many export agencies have been set up for the export of the cutflowers.

TOP 20 EXPORTERS (FLORICULTURE)

RAMESH FLOWERS (P) LTD.

VAC INTERNATIONAL

TRISTARR

SHRIVARDHAN BIO-TECH

L.J. INTERNATIONAL LTD.

BANGALORE HORTI TECH

SOEX FLORA PVT. LTD.

PROFESSIONAL AGROTECH PVT.LTD

IRIS BIOTECH PRIVATE LIMITED

FLOWERS VALLEY PVT. LTD.

P.P.M.THANGAIAH NADAR


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JAGDISH DRESSES

ESSAR AGROTECH LTD.

RAVI DUGAR

DECCAN FLORABASE LIMITED

VISHAL BHALOTIA

ARCHANA SARAF

INDO BLOOM LTD.

VINAYAKA AGRITECH LIMITED

JAIRAMDASS KHUSHIRAM

Thus there is huge scope in exploiting the opportunities inthe Floriculture Industry due to the wide open flower market, especially cutflowers.

IMPROVISATION OF THE PRESENT STATUS OF THE

FLOWER:--

Some of the strategies for the improvisation on the present status of the cut

flower industry are as follows:

The first and foremost thing is to start the Auction halls as soon as

possible and regulate the cut flower market with strict norms on pricing.

Adoption of advanced technologies in production system and post-harvest

handling of the cut flowers.

Strengthening the cold chain system including insulated refrigerated

transportation from place of production to the destination of the export.

Enhancing growers awareness and involvement in maintaining quality

standards and matching with International standards.

Research institutions should develop standard quality planting materials

and economically viable cold storage facilities with private sector

involvement.

Creating necessary infrastructure for pre-cooling at greenhouse level anddomestic transfers.


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Innovation in supply chain management.

Attracting Foreign Direct Investment (FDI) from Asian as well as

European countries for creation of cold chain infrastructure and quality

testing in the Greenhouse.

Improvement in domestic market channels to increase efficiency in theprocess of market transactions and help maintain quality.

Joint efforts by growers, wholesalers, exporters would help improving

efficiency in the marketing channels and reduce the cost substantially.

Involvement of growers in the export promotion.

Strengthening the role of Agri Export Zones (AEZ) in tandem with

market requirements especially to give specific thrust on the quality and

supply chain requirements of the target markets.

Repositioning the cut flower industry in manner to attract more and moreconsumers.

Changes in excise and import duty structure, reduction in the import duty

of the planting material and the equipments.

Air Freight should be reduced at the reasonable level, sufficient cargo

space should be provided in the airlines.

Establishment of model nurseries to supply genuine planting material.

Cooperative florists organization should be established at regional level.

Training centres for diploma course on the pattern of Industrial Training

Institute (ITI) for training the personnel in floriculture should be setup.

Last but not the least the mindset of the farmers to take up floriculture

should be changed.

Implementation of these and many such strategies will bring revolution in

the Floriculture industry.


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CONCLUSION :

Indian Floriculture Market is growing despite of no government

regulations in the pricing and exports. Thus if the Floriculture market is

regulated it will grow at a faster pace than the present growth rate. The growers

in India are hard working but dont take risk to invest in Floriculture Industry as

the pricing is not regulated. High initial investment and high bank interest rates

are the main reason for the reluctance of Indian farmer to take on Floriculture.

The Auction halls which are still not functional are the matter of concern. It is

necessary to exploit the potential in this industry.

If the industry is regulated many more favourable regions for cultivation

of flowers will be identified. The big names in the corporate world will also

invest in this industry knowing its potential. Many big companies are

diversifying in the agriculture sector, thus Floriculture will be there best bet due

to huge global market. Marketing of the floriculture produce should be done.

Finally government intervention in pricing policy is the key the success of the

Indian Floriculture Industry.


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rose export and marketing channels

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