Dutch phalaenopsis under extreme pressure

Mid-prices far below the cost price, companies pulling the plug. Those are the kinds of things you hear from people in the Dutch phalaenopsis market. However, the Orchid Inspiration Days, as well as conversations with traders, auction staff and propagators, provided a more nuanced view and put things into perspective. Price formation isn’t great at the moment, but that’s a fact for more crops. Phalaenopsis will survive this low. That’s the general belief. But will all the growers survive too?

By Hans Neefjes and Cindy van der Zwet

Would you like to rent some of my space, for the propagation of your green plants? That’s the question a grower recently got from a colleague who grows phalaenopsis. He didn’t accept the offer, because his crops probably wouldn’t do very well on the phalaenopsis grower’s rolling benches, considering the different pot sizes and climate requirements.

But the question did surprise him. Are growers of flowering pot plants now going through the same thing that he experienced with his green plants not too long ago? Do those growers need to pull out all the stops now, to make a profit? He’d heard some rumours about poor price formation, but if they no longer wanted to fill their space with phalaenopsis, that was a bad sign. It seems a fact that those signs are there, indeed.

Prices and numbers

During the Orchid Inspiration Days, the latest situation on the phalaenopsis market was an important point of conversation at the fifteen Dutch nurseries that welcomed their relations. “The idea of those Open Days is that you get to talk with suppliers, customers and end customers about trends, quality, sustainability and new market opportunities, but we ended up discussing numbers and prices most of the time. That’s too bad, because it just distracts”, explains account manager Robin Saan of De Vreede Holland.

White and one-stemmed plants are completely out, everything else is mostly sold at ‘cost price plus’. That’s the general trend. The auction clock is hit the worst, and this is explained by the fact that the current supply via the clock is often double or more than double of that in 2017.

With 19%, the total percentage of phalaenopsis clock sales at Dutch auction Royal FloraHolland is a little higher than last year. Only very small batches, which have defects with regards to uniformity, assortment or maturity, are withdrawn.


With so much variation in supply and sales, it’s hard to say anything about profits and mid-prices. Small pot sizes and certain cultivars, qualities and mixes, with or without value added, are still popular. But everyone’s noticing the effects of the low clock prices. It leads to lower mediation prices and traders who wait and shop around.

In their weekly ad, the auction uses the A1-quality, 12-cm pot phalaenopsis with at least 12 flowers, as a reference. It’s a large group. In 2017, around three quarters of those plants were sold for €3 or more. This year that’s only between 50 and 60%, according to growers who receive the auction’s newsletters.

Is €3 enough? The cost price for a double-stemmed plant in a 12-cm pot lies somewhere between €3.25 and €4, is what Royal FloraHolland Product Commission chairman Joost van Adrichem recently said in an interview. But some of the 58 Dutch growers can do it for less.


Propagators are often the first to notice that growers are earning less. The invoices for cuttings aren’t paid as quickly and orders for future deliveries change.

Eric Moor, director of Sion, recently said at the dinner that his company organises during Flower Trials every year: “You want to be positive, but you also know that some people won’t make it.”

Director Ronald van Geest of Floricultura isn’t surprised that some growers are pulling the plug, but he does think that the speed with which they want to, or need to, switch at the moment, is surprisingly high. “I’ve never seen that before. Companies are making very quick decisions about giving up their companies, selling a greenhouse to their neighbour or switching to another crop. It’s like they want to make sure they opt for the best solution, now that they still have the freedom to choose.”

Van Geest estimates that at least 20 ha of all phalaenopsis in the Netherlands, across 8 or 9 different locations, will disappear in a relatively short time. And it won’t be compensated by the expansion plans that some companies have.

Marco van Herk predicts that the Dutch production will shrink at least 10%, but according to Anthura’s director, this will mainly be caused by the fact that growers are going to keep their growing medium dryer. “Dryer cultivation helps against the pot worm. It does reduce the growth rate of the plants, though.”

Van Herk has also noticed that growers are spacing their plants further apart, to improve the quality. “That also reduces the total production.”

Give up 10%

Moor says Sion is lucky, just like some other propagators, that they’re also active in foreign markets, which are still doing quite well. “We can always try selling cancelled plants over there.”

Moor would be happy to give up 10% of his production, to reduce the total supply on the market. As long as everyone would do the same. Including growers. But it’s a free market, so you can’t really make those kinds of agreements.

It always remains to be seen whether such a reduction would have the desired outcome anyway. Perhaps a 6% decrease would be enough, or maybe it needs to go down by as much as 12%. You don’t immediately see it in the supply when growers stop planting, because the entire cultivation process takes about a year.

Traders’ turnover decreased

Ard Wubben, Manager Plants at FleuraMetz, feels the developments around phalaenopsis are very worrisome. Phalaenopsis accounts for a third of their plant turnover. A price drop of about 30% immediately results in a 10% decrease of their total turnover. Green plants, no matter how trendy, will never have the same value as phalaenopsis.

Several salespeople at nurseries indicated that consumers don’t really notice that growers are currently receiving lower prices. Supermarket chains often use a very simple formula: a product costs amount X in the shop, the chain wants a 40% margin, and that’s how you can calculate their purchasing price.

Are exporters receiving a larger margin at the current price level? Judging from what FleuraMetz is saying, that isn’t the case. Growers don’t think that exporters earn more when phalaenopsis is cheap, either. They feel that when there’s a lot of pressure on the market, and supply is larger than demand, exporters are played off against each other just like they are.

Direct trade with retailers is therefore not a priority, not even for De Vreede Holland, who are specialised in the production of large, uniform consignments. “If you go down that route, you’ve got to organise all the logistics and handling too and be willing to wait for your money for 60 to 90 days. Selling to exporters comes with some significant advantages, and if you do it through the auction, you’ll have your money within a week.”

No sudden change

Nobody expects a sudden change. Supply will remain stable for a while, any effects of promotional campaigns won’t be visible for a long time and the summer traditionally isn’t a great time for phalaenopsis sales. The orders for autumn and Christmas 2018 aren’t hopeful, though.

Various growers made the point that especially now, you need to focus even more on the core values of your company and your target distribution markets. If you’re selling through the clock, do it properly. Don’t dump your products there. Meanwhile, you should hold on to your strategy, differentiate yourself and not switch or lapse as soon as things get tough.

Yes, there’s tension in the market and signing forward contracts isn’t as easy as before, but the average company should be able to handle that, especially considering the previous, prosperous years. Those are the main ideas from conversations with growers. Various companies are currently strengthening their management and sales teams.

Heimen Quick is co-owner of CJ Plants & Orchids nursery, which is one of the companies that’s expanding. He adds: “We’ve started our own breeding activities and propagation of tissue culture. If you do that well, you can add value. Phalaenopsis still offers plenty of opportunities.”

Auction figures: According to Royal FloraHolland, the average clock price for the phalaenopsis product group up until week 24 was €2.90, which is 80 cents lower than in 2017. Compared to previous years, the difference isn’t as large. The mid-price of all phalaenopsis traded via the auction (clock + intermediary services) during the same period is €3.58. That’s 40 cents less than in 2017. Out of the 58 million plants that were sold (6% more than in 2017), almost 12 million were sold via the clock. Source Royal FloraHolland.


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