Russian and Ukrainian markets already owe more than $33 million to Ecuadorian flower growers due to the war

The Ecuadorian floricultural sector joins those already facing the impact of the Russian-Ukrainian conflict due to the paralysis of exports. According to figures presented by Alejandro Martínez, executive president of the National Association of Producers and Exporters of Flowers of Ecuador (Expoflores), until the last week of February, the debt of customers from Russia and Ukraine to Ecuadorian floriculture was $33 million.

“This puts the sector at high risk in the world market and the farms that cannot collect these values,” said Martínez, on his Twitter account.

According to figures from Expoflores, during the months of February and May, for festivities such as Valentine’s Day, Women’s Day (March 8) and Victory Day (May 9), on average the flower sector allocates $70 million to Eurasian countries, equivalent to 40% of its annual sales in these markets.

The Russian market is of vital importance for the country that positioned itself as the first exporter of fresh flowers to this destination in 2021, where it represented approximately 15% of exports.

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Inés Ortiz, general manager of the Quito Inor Flowers company, located in the Pastocalle parish in the province of Cotopaxi, assured that currently the company and many in the sector are unable to charge these customers.

The businesswoman, who is also vice president of the Corporation of Floricultores del Sur, part of Expoflores, classifies the situation as critical and complex, assuring that the dispatches for International Women’s Day were partially completed and that between January and February between 30% and 35% of the total annual turnover is billed because there are two holidays, Valentine’s Day and Women’s Day.

“A part of the clients, since they were already in conflict, left it in the Netherlands because the sales are made weeks in advance,” explained Ortiz, who explained that the shipments for Valentine’s Day are made between January and the first week of February and Women’s Day shipments go out the second and third week of February.

He pointed out that in the case of Ukraine, exports are totally paralyzed and with Russia they are trying to see some option to be able to cope with the economic sanctions that that nation faces, to which is added the devaluation of its currency, the ruble, which takes away purchasing power.

“So, to the extent that flowers are not a staple product because there is a contraction, they obviously stop buying from you,” said Ortiz, who pointed out that approximately between 20% and 30% of flower exports from companies Ecuadorian flowers are sent to Russia, although he explained that there are some that specialize in that market, as in the case of Quito Inor Flowers, which exports between 45% and 48% of its flowers there.

Ortiz lamented that there are no markets that can absorb the flowers so quickly that they are no longer sent to Russia and the Ukraine, which is why they have chosen to get rid of the flowers and that many farms now use them as livestock feed.

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Meanwhile, the logistics industry is also facing challenges.

Byron Torres, general manager of HPL Apollo in Ecuador, a company dedicated to logistics solutions, indicated that the current scenario places the logistics industry at a crucial moment due to the possible closure of Russian border operations where Ecuadorian flowers arrive.

“This, without a doubt, represents a drop in compliance for the coming months, since it is unpredictable to estimate a date for the end of the conflict,” said Torres, who adds to this the million-dollar losses for producers and freight forwarders who already have product and transportation prepaid to arrive the next few days.

For May, according to Torres, due to the Mother’s Day celebrations, an export of at least 30% more than last Valentine’s season is expected.

“From HPL Apollo, it is expected to transport an estimated 1,500 tons of Ecuadorian roses, representing an increase of 50% compared to 2021,” said the manager.

However, Ortiz sees a complicated scenario, as he assured that the same proportion that stopped selling these weeks will stop selling in the future, since he analyzed that the war conflict does not have signs of an immediate solution. (I)