Los power outages What Ecuador is experiencing since the end of September 2024 has forced industries to readjust their operations; he floriculture sector has not been exempt to this reality.
Eduardo Letort, president of the Board of Directors of the National Association of Flower Producers and Exporters of Ecuador (Expoflores), explains to FIRST FRUITS that, although large farms have electric generatorsin general, They are destined for cold rooms, where the flowers are kept before being exported.
But, for the irrigation and fertilizationcompanies depend on the schedules in which they do have energy of the National Interconnected System.
Letort emphasizes that, for this planning, it is necessary that there be precision in compliance with the power outage schedulespreviously announced by the distribution companies.
“So far the effects are minimal, but if the cuts continue to be recurrent, costs will rise due to the amount of diesel we need to keep the generators running. We hope this is resolved as soon as possible,” Letort stressed.
Since October 9, the Power outages lasted in Ecuador for up to 10 hoursin some cases, followed, especially for the business sector, according to the outage schedules released by the distribution companies.
Production affected by climate
The flower sector had a positive first semester, with production increases close to 5%in relation to the same period in 2023, highlights Letort.
However, the union representative fears that this performance will be affected, since the summer was very hard for the flower farms, with very high temperatures and lack of water in certain locations. Flowers in Ecuador are mainly grown in the northern mountains of the country.
Added to this reality, as a consequence of climate change, are the effects of the electrical crisis that crosses Ecuador. “If this continues, it will affect what we have earned in the first semester,” adds the president of the Expoflores Board of Directors.
From October 8 to 10, the floricultural guild held the international fair Expo Flor Ecuador 2024, a private event, with 160 exhibitorsin which the sector planned to receive more than 2,500 potential buyers from 47 countries.
For Letort, the most important message they sought to send to international clients with this event is that, despite the serious crises that the country is going through in security and electrical energythe sector continues working.
Ecuador is the main producer of roses in the world and the third in flowers, in general, with a production of more than 300 varieties.
Growth potential in China
Between January and August 2024, Ecuador exported 117,000 tons of flowers, equivalent to USD 674.6 millionaccording to the Central Bank. In volume, the sector had a drop of 2.8% and in value, an increase of 1.4%, compared to the same period of the previous year.
USA It is the main flower market in Ecuador, with a participation close to 35%according to data from Expoflores, at the end of the first semester.
However, the Ecuadorian roses pay a 7% tariff to be able to be marketed in the country of North America. For this reason, the floricultural union advocates for a trade agreement with that countrywhich is still looming far away.
Meanwhile, the possible approval of the IDEA Law, with which Ecuador would obtain unilateral tariff preferences for different productslike roses, would be the best option. But, in the political moment that the United States is experiencing, with presidential elections scheduled for November, that bill has not made further progress in Congress United States.
“For next year, once the elections are over, we will have to resume all the lobbying that we have been doing,” Letort said.
On the other hand, Asia is also becoming an interesting market, especially for dyed flowers. This market still represents between 2% and 3%, but with the entry into force of the trade agreement with Chinathe sector plans to gain space in the Asian giant.
Exhibition of dyed roses at the Expo Flor Ecuador 2024 fair, in Quito, on October 8, 2024.FIRST FRUITS
Fresh flowers, including roses paid a 10% tariff in Chinabefore the agreement, which will end in five years. And preserved flowers had a tariff of 23% that will reach 0% in 10 years.
Another interesting market for the sector is Canada, which, although small in export volume, could grow with the future approval of a trade agreementwhich is currently under negotiation between the two countries.
Ecuadorian flowers They pay a 10.5% tariff to enter Canadaif the dispatch is direct from Ecuador. If the cargo leaves from Miami, they pay an additional rate of 6.5%, that is, a total of 17%.
