We recently had two lovely weekends. Two weeks ago, we all went ice skating in a winter wonderland of snow, ice and blue skies. Something we’d been waiting for for a long time. The following weekend was warm and sunny, so we all went out again, this time to enjoy the spring feeling!
Completely different weather conditions from one week to the next. It reminded me of our market situation, which can also go from one extreme to another. We’ve recently seen enormous pressure on the demand for flowers, because of the high supermarket sales, I think. Everyone’s trying to get what they can from the growers, and market prices are high. An additional challenge is that the East African rose production has been lower than normal.
Since the beginning of the year, there’s been an extremely high demand for tulips, leading to high market prices for the short-term trade. Growers agreed to contracts early on, selling large volumes against low prices (below the cost price in some cases), partially motivated or caused by fears related to the first lockdown last year. Many growers missed out on their tulip sales last spring.
Who is now willing to pay growers these higher prices for a few extra stems? Some supermarket chains are selling almost twice as much as last year. Traders who only fixed part of their volume seem to be disadvantaged now. The growers certainly want to supply, but they’re struggling to find any additional stems or forced to buy extra at high prices.
Another difficulty in some regions, like southern Italy, is a shortage of staff due to Covid-19. Some growers even asked us if perhaps we at Xpol could mix and package the products ourselves, as they couldn’t get the staff locally. Unbelievable.
The supermarket orders just keep coming; I wonder what’s going to happen to this segment increase once the pandemic is over. Will consumers be used to buying plants and flowers from the supermarket and therefore continue to do so? Or will they partially return to their old purchasing habits? Staying with the weather forecast theme, let’s see how changeable it’s going to be in the coming time.
Managing director Xpol
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