Rebellions have no negative impact on Ethiopian flower supply

This year’s supply of flowers from Ethiopia to FloraHolland, is more or less the same as last year. Despite the fact that companies were attacked by rebels, there was only a slight decrease. But the riots are slowing down the expected growth for the next few years.

by Arie-Frans Middelburg

The figures for the supply of flowers from Ethiopia to FloraHolland – the most important distribution channel for Ethiopian growers – aren’t that different from last year’s up to week 42. Only 1.8% fewer stems than last year arrived at the auction.

Because the average price was one cent higher though, the turnover (€154.4 million) increased by 5%. Rose is still by far the most important Ethiopian product. Followed at some distance by carnation and hypericum.

The recent riots around Bahir Dar and nearby capital Addis Abeba haven’t had a huge impact on the supply to FloraHolland. The two companies that were destroyed, Esmeralda Farms and ET Highland Flora, aren’t FloraHolland members.

Companies that were damaged or experienced delays on the way to the airport, couldn’t deliver any flowers for a short while only. Rinus Bouwman from BSI, which processes flowers from Kenya and Ethiopia in Aalsmeer, noticed some brief problems. “In terms of supply, everything was pretty much the same.”

According to Jan Erik Visscher, International Account Manager Africa at FloraHolland, there were two suppliers who couldn’t deliver for a day. “Not something that would keep people at FloraHolland awake.”

Shipments from the most important growing areas, Ziway and Debre Zeit, were transported to the airport in police-escorted convoys. It led to some slight delays at the most.

There might have been other reasons for the reduced Ethiopian supply to FloraHolland. In certain locations, the weather has been too wet and too cold, which led to a decrease in production. And sales outside FloraHolland may have gone up. But only slightly, according to Bouwman. “Some of the produce goes to the Middle East, but that’s hardly anything.”

Visscher agrees. “Some growers really established themselves; they’re stable, both with regards to quality and supply. Others aren’t as successful at the auction and are starting to do more direct trading.”

What’s still causing problems for Ethiopian growers are the unfavourable exchange rates. Their income has been going down because the euro has been weak against the dollar for a long time.

State of emergency
Things are quite calm in Ethiopia now. That’s because the government has declared a state of emergency. There are a lot of soldiers in the streets and the government is providing nurseries with permanent surveillance, says Bouwman.

There’s a curfew in some regions, there are numerous check-points on the roads and within 25 kilometers of major roads, no one is allowed to carry a gun. The media is censored. Export activities are back to normal.

However, there isn’t a solution yet for the tensions between the government and the Oromo and Amhara people, who feel they’re discriminated against.

“It’s of great importance that the government solves the problems with the dissatisfied parties”, says Marcel van Ruyven. He worked in the Ethiopian flower industry from 2007 until the beginning of this year. He’s currently working in vegetable growing, with Paprikana Agro Solutions in the Southern Nations, Nationalities and Peoples’ Region.

Van Ruyven: “The population doesn’t like the state of emergency. It reminds them of the past, when Ethiopia had a communist regime. In those days, there was also a state of emergency, and soldiers might sometimes take certain liberties.”

Urge to expand
In the long run, the riots do have an impact on Ethiopia’s expected growth. Visscher indicates that there were a few containers, with parts of new nurseries that were going to be built, waiting to be unloaded. And there were also some existing companies that wanted to expand. Those plans are not going through.

The urge to expand has come to a halt. Visscher thinks that’s an awful shame.
Van Ruyven: “People who wanted to invest, are changing their mind. Ethiopia used to be considered stable to African standards, but that idea has to be adjusted now.”

Visscher ends on a positive note. “People have short memories. The state of emergency has a stabilizing effect. Who knows, this storm might blow over and growers might start investing again by the end of 2017, beginning of 2018.”