Exporters say that the Christmas/New Year season won’t be a happy one for the floriculture industry because the margins have been squeezed by an 18% GST levy, a rise in freight rates, and the end of a freight subsidy.
Shrikanth Bolla, President of the Growers Flower Council of India, said that the 18% GST that has been added in the last few months is the biggest problem for a company that exports flowers. From October 1, 2022, the government will no longer exempt air freight from the 18% GST.
Bolla said that since Covid, international freight rates have gone up by about 200%, and there is now a GST tax. Also, the 40% input subsidy that APEDA gave for air freight has been taken away. Bolla, who is also the head of the South India Floriculture Association (SIFA), said that farmers’ margins have been cut by higher freight costs and the Goods and Services Tax (GST), even though flower prices haven’t gone up.
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Not a lot of shipments
For the event-driven floriculture industry, Christmas/New Year is a big times for exports, and Valentine’s Day is when shipments are at their highest.
‘If the international buyers raise the price, the farmers might sell some of their crops abroad.’ If not, it might be hard to sell flowers abroad. There are not many exports going on right now. Compared to past Christmas and New Year’s periods, there aren’t as many shipments this year,’ Bolla said, adding that the current global recession hasn’t had much of an effect, but that rising transportation costs have hurt margins.
Some exporters are shipping the flowers because they can get a better price, but he said that the volume is not there. So, the growers are looking more at the market in their own country. ‘Wedding season has started, and we’ll know more about Valentine’s Day orders by the middle of January,’ he said.
Exports are down 8% in value
According to data from APEDA, the exports of dry flowers and cut flowers from April to October 2022-23 were $55 million, which is 8% less than the $60 million they were a year earlier. In rupees, exports for the period were worth ₹433 crore, which is down 2% from ₹443 crore at the same time last year. During April–October 2022–2023, 13,426 tonnes were shipped, which is 1% more than the 13,253 tonnes shipped during the same time last year.
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Also, the input costs for cut flower growers are going up, and they have to deal with problems like weird weather. ‘Over the past year, the prices of all inputs, like fertilizers, pesticides, polythene sheets, and greenhouses, have gone up by 30–40%, which makes the grower’s job harder. A lot of damage has also been done by the heavy rains, and pest control has been hard for growers this year,’ Bolla said.
India sends a lot of flowers to places like the United Kingdom, the United States, the Netherlands, and the United Arab Emirates.