With brightly-coloured round buds, and long, thick, vertical stems, Ecuadorian roses have a reputation for unmatched quality. And more Ecuadorian roses than ever could soon be available in Europe with the end of its trade preferences with the US and plans for a new airport outside the capital city, Quito.
Located on the north-west coast of South America, Ecuador has three distinct national regions - the Andes, the Amazon, and the Pacific coast, which generate microclimates that lend their characteristics to flower production. The climatic conditions in Ecuador are unique, and well-suited to producing flowers, according to Juan Jose Crespo at filler-flower-producer Flores del Valle, in Cuenca. “The growing conditions in Ecuador are perfect for the production of the highest-quality product,” he says. “The healthy volcanic soil and direct sunlight produce some of the best flowers in the world.”
Quito and the surrounding area, where the equator meets the Andes, hosts the majority of Ecuadorian flower production. Pablo Ceballos, technical manager at rose producer Rosadex in nearby Cayambe, says producing flowers at high altitudes is the secret to the quality of Ecuadorian product. “The highlands around Quito are ideal for growing roses,” he says. “The landscape is a blessing for producers. The cooler temperatures, the quality of the air and good soil, make perfect conditions. The lowlands produce more roses per metre square, with shorter stems and smaller heads. But highland production takes longer so that better-quality roses are produced, with larger heads and longer stems.”
Margarita Vallejo Moreno, development executive at Rosadex, adds that the quality of the sun at the equator gives Ecuadorian flower producers another advantage. “The number of sun hours and the quality of the light are an important factor in producing quality flowers, and roses must absorb energy from the sun to grow healthy and look attractive,” she says. “The light is strong on the equator, and it shines straight down, unlike anywhere else in the world.”
Rosadex, a 13-year old family business that grows 40 rose varieties on 15 hectares, produces more than 11 million roses annually, with 95 per cent of production earmarked for export. The rainbow of rose varieties produced by the company includes red Classy, pink Engagement, green Limbo, yellow Aalsmeer Gold, and orange Movie Star.
Flores del Valle owns 80ha at altitudes of 2,200 metres and 1,500 metres, with plans to expand the planted area by 30 per cent this year. The gypsophila Million Stars variety makes up 80 per cent of its exports. Other products include tinted Million Stars, available in a range of colours, and popular fillers such as Hypericum Excellent Flair and Pinky Flair.
Ecuador is the world’s third-largest exporter of flowers, and grows a broad variety of roses. Popular export products also include carnations and chrysanthemums.
Producers are now looking for alternative export markets to the US, according to Vallejo Moreno. Rosadex started out by sending 90 per cent of its roses to the US, a proportion that has since shrunk to 70 per cent. The remaining product is sold to Europe and Russia. But the producers are aiming for a 60:40 ratio. “Our plan is to visit more clients in Europe with the product that we offer, and continue to build on the relationships,” says Vallejo Moreno.
This strategy could be more commonplace by December, when trade preferences with the US are due to come to an end. Ecuador has benefited from duty-free entry for exports to the US under the Andean Trade Preferences Act (ATPA) for the last 10 years, and received additional trade benefits under the Andean Trade Promotion and Drug Eradication Act (ATPDEA) in 2002. But this deal will expire at the end of the year - and Ecuadorian producers know that this will have a huge impact on the market.
“The free negotiations with the US are collapsing, and the flower market will suffer,” says Vallejo Moreno. “Colombia has signed a treaty with the US, and Ecuador has not. This will give our main competitor the advantage. The only way that the Ecuadorian flower trade can try to make up for this is to focus on new markets and reinforce existing trade relationships.”
Ecuador’s Ministry of Foreign Affairs and the Export and Investment Promotion Corporation (CORPEI) have focused on opening new markets. “Europe is the first alternative market to the US,” says Gabriel Malo, investment promotion co-ordinator at CORPEI. “But the UK has a very specialised market, focused on high quality, which means that it is not an easy market to get into. Ecuadorian companies will have to work hard to reach acceptable standards in the UK, and this will add costs, but it has to be done.”
Vallejo Morena says the UK market is an important goal for Ecuadorian producers, as it is the second-highest European importer of flowers after Germany. “But we have to keep track of what clients are looking for, which colours and sizes, and whether they value fragrance,” she adds.
Crespo says the switch to supplying the European market has already become apparent. “The trend to supply more and more to the European community will grow, as not every Ecuadorian producer can meet European standards, and also because the ATPA agreements with the US will stop at the end of the year, increasing the cost of importing flowers in the US by seven to eight per cent,” he says.
The participation of supermarkets and multiple retailers in the British flower market, which has driven down prices, has deterred Ecuadorian producers from linking up with the UK in the past, according to Crespo. “UK supermarkets keep prices low, which explains why, in general, the flower quality in the UK is lower than the rest of Europe,” he says. “The returns for producers are also very low.”
But CORPEI vice president Richard Hall González-Rubio says cracking the UK market could open up a multitude of opportunities for Ecuadorian producers. “If we can penetrate the UK market, we can go anywhere in the world and trade successfully,” he says.
The creation of a national brand for Ecuadorian flowers could raise awareness about the quality of the product on offer and grow the market for exports, according to Vallejo Moreno. Producers can already work toward a Flower of Ecuador accreditation designed to provide a banner under which to market products, she adds. “But there is still no real unity among Ecuadorian producers, and we don’t conglomerate to use our joint force,” says Crespo. “This is what we need to work on.”
Crespo supports the idea of Ecuadorian branding as it would allow product to stand out in a global market. “Everyone in the flower industry knows that the concept of having a brand for Ecuador is the way forward, and the process has already started,” he says. “But now we have to get the message out to consumers as the force behind demand.”
The wants and needs of consumers vary across Europe, and Ecuadorian producers are working to satisfy requirements, according to Ceballos. He says the rose head wanted by the majority of European countries is small and closed, with short, 50cm stems, in contrast to the medium-sized roses favoured in the US, and the Russian preference for open blooms on 90cm stems. “UK consumers are used to seeing small roses,” says Andres Isch, sales executive at Rosadex. “But the market has started to accept larger heads and thicker stems.”
The popularity of different colours and varieties depends on the market, and the time of year, says Ceballos. “People want red and white roses at Christmas and Mother’s Day, Easter is a good time to produce lavender or yellow roses, and white varieties are popular at summer weddings,” he says.
The market for premium flowers across Europe, and in the UK in particular, has also presented Ecuadorian producers with a wealth of possibilities, according to Vallejo Moreno. “The quality niche market is the main target for Ecuadorian producers,” she says. “Other countries, such as Colombia and Kenya, produce the bulk of supply, mass-producing roses and growing more than 230 heads per ha. But Ecuadorian growers focus on exclusivity, and quality.”
The commitment to quality is essential for Ecuadorian companies exporting to the UK, according to Crespo. Flores del Valle already ships 60 per cent of its product to Europe, and has two quality-control teams that monitor product both in the field and the packhouse.
Vallejo Moreno says that the European market is very open to new products, and that is what European suppliers are looking for. “This gives us an incentive to develop new varieties,” she says. “But it can take breeders up to six years to develop one variety, and we have to pay royalties to grow new products.” Rosadex stays ahead of the competitive domestic market with 10 per cent of annual production dedicated to new varieties, and the constant renewal of plants that do not sell.
But major obstacles facing Ecuadorian flower growers include the costs associated with production and oscillating market prices, says Ceballos. Production costs are very high, reaching in $200,000 (£105,600) per ha each year, according to Vallejo Moreno. “The production of roses is very labour intensive and this adds to our expenses,” she says.
The supply chain for flower exports, which relies on airfreight for its speed, has proved one of the highest expenses, adds Crespo. “The high freight tariff on Ecuadorian airlines compared to other countries, and also the scarcity of available freight space, has added significantly to production costs,” he says.
The market price for flowers fluctuates in response to a volatile global supply and demand situation, putting an additional strain on producers, according to Vallejo Moreno. A single rose for the Russian market will sell for up to 90 cents, and shorter-stemmed varieties from the European markets are priced from 25-30 cents a head.
This season European market prices are up 10 per cent on last year, while prices on the US market dropped 15-20 per cent, according to Crespo. “But the difference is that in the US market, the price difference is for the entire industry, but in Europe it varies according to the country and company,” he says.
Transport costs also add to the outgoings of Ecuadorian flower producers, according to Ceballos. “The minute the flower is picked it enters its agony stage, and the product needs to be packed and despatched as quickly as possible,” says Crespo. But the product can take up to six days to reach suppliers in Europe through Amsterdam, and up to 12 days on the road to Russia.
Plans to build a new $430m (£226.3m) international airport outside Quito within two years are already under way - and this could make a huge impact on the Ecuadorian export market, as part of a strategic plan for the years up to 2025. “The building of the new international airport is part of the masterplan for Ecuador,” says the Mayor of Quito, Paco Moncayo. “This will create a dry port that will benefit the export market for Quito and the rest of the country, particularly northern areas.”
Other developments will include a tax-free zone around the airport, proposed further tax reductions and the simplification of the paperwork required to export products. “Quito has the potential to become a productive and competitive city,” says Moncayo.
The Ecuadorian flower industry, which relies on airfreight to export product quickly, will stand to benefit from the Quito strategic plan, according to the Mayor. “Ecuador is an important exporter of roses, and the flower industry will make up a significant part of the trade that will use the new airport facilities,” says Moncayo. He adds that the market for asparagus, broccoli and tomatoes - all grown in and around Quito - is also growing abroad, and the new airport will be able to facilitate this expansion.
The improvements under way to modernise the transport infrastructure are intended to increase trade when they reach completion, says Moncayo. He adds that the need for direct flights to Europe bypassing Miami is a priority, as the connection adds additional costs to transportation. Plans for a new highway that will connect the capital with export hub Guayaquil and port Manta will also improve the transport infrastructure in Ecuador to ease trade and export, he says.
The new Quito airport facilities and the trade incentives detailed in the strategic plan for the area will be welcomed by the Ecuadorian rose industry, according to Vallejo Moreno. “The new airport will improve the export situation 100 per cent,” she says. “The industry will have access to bigger planes and a better service, and this will allow more Ecuadorian roses to be sent around the world.”
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