A PROJECT REPORT ON ROSE EXPORT AND MARKETING

CHANNELS OF ROSE..
SUBMITED BY NAVNATH NAIK

INRODUCTION
Government of India has identified Floriculture as the sunrise industry
and accorded it 100% export oriented status. Owing to steady increase in
demand of flowers, Floriculture has become one of the important commercial
trades in Agriculture. Hence Commercial Floriculture has emerged as a Hi-Tech
activity, taking place under controlled climatic conditions inside Greenhouse.
Floriculture in India is being viewed as high growth Industry. Commercial
Floriculture is becoming important from the export angle. The liberalization of
industrial and trade policies paved the way for the development of export
oriented production of cut flowers. The new seed policy has already made it
feasible to import planting material of international varieties. It has been found
that Commercial Floriculture has higher potential per unit area than most of the
field crops and therefore a lucrative business. Indian Floriculture Industry has
shifting from traditional flowers to cut flowers for export purposes. The
liberalized economy has given an impetus to Indian Entrepreneurs for
establishing export oriented floriculture units under controlled climatic
conditions. Agricultural and Processed Food Products Export Development
Authority (APEDA), is responsible for export promotion of Floriculture in
India.
Maharashtra State Agriculture Marketing Board has setup an
International Horticulture Training Centre (ISO 9001:2001 certified) at
Talegaon near Pune, for training the farmers about the cultivation practices of
cut flowers under controlled climatic conditions in Greenhouse. An Integrated
Floriculture Park is setup having tie-up with Maharashtra Industrial
Development Corporation (MIDC) near Talegaon having more than 50 hectares
of land and more than 40 growers, it is the only such project in all over India.
MIDC has given the land for the Floriculture Park on lease for 32 years. The
flowers mainly grown in the Floriculture Park are Rose, Carnation and Gerbera.
Rose is the major cro p taken here. The export quality flowers are produced by
majority of the growers. Some of the Greenhouses are even been given on rent
by the owners who are not able to utilize the perfect climatic and transport
conditions at Talegaon. The cultivation of the cut flowers under controlled
climatic conditions is restricted to certain areas of Pune, Sangli and Nashik
districts only.

Though the prices of flowers are falling from past few years the pricing

has not hampered the growth in Floriculture Industry. The area under the cut
flower production under controlled climatic conditions is increasing. Farmers
having small land holdings are not yet ready to take up the cultivation of cut
flowers due to high initial investment and also the pricing is heavily dependent
on demand-supply ratio.

Present Status of
Marketing in
Floriculture Industry

PRESENT STATUS OF MARKETING IN FLORICULTURE INDUSTRY:

Marketing of cut flowers is still at the early stage of growth or
development. Marketing of Agriculture as well as Horticulture produce has
always been an issue of concern in India. Floriculture in India is being viewed
as a high growth Industry. Commercial Floriculture has gained importance over
the years.
According to a report of the National Horticulture Board (NHB), the total
area under flower crops in 2007-08 was estimated around 160.7 thousand
hectares which is second largest in the world and only next to China though
under cut flowers it is only 600 hectares. Production of flowers was estimated to
be 870.4 MT of loose flowers and 43417.5 million (numbers) of cut flowers in
2007-08. Fresh and Dried cut flowers dominate Floriculture exports from India.
Roses, Marigold, Tuberose, Orchids and Chrysanthemums are the main cut
flowers exported from India.

Indias total export of Floriculture produce over the years is

shown below:
2006-07

2007-08

2008-09

Quantity

Value

Quantity

Value

Quantity

Value

42545.28

65269.73

36240.71

34014.42

30798.34

36881.41

Note- Quantity in MT and Value in Lakhs. Source: - DGCIS Annual Report.

From the above table it can be clearly seen that there is approximately 8.43%
growth in the export of the floriculture produce from 2007-08 to 2008-09 and
the cumulative average growth rate of 24.22 from 2004-2009. Though having a
sharp decrease in the export in the 2007-08 there is a marginal growth in 200809. There were more than 300 export oriented units in India. More than 50% of
the floriculture units are based in south zone mainly in Karnataka, Andhra
Pradesh and Tamil Nadu. Also states like Bengal, Maharashtra and Rajasthan
have large area under floriculture. The domestic flower production goes on
increasing annually. Technical collaboration has been approved for India, in
order to increase the total share of India in world trade.

Indian Floriculture Industry is been shifting from traditional flowers to

cut flowers for export purpose. The liberalized economy has given an impetus
to the Indian Entrepreneurs for establishing export oriented Floriculture units
under controlled climatic conditions. In India, Maharashtra, Karnataka, Andhra
Pradesh and Haryana have emerged as major Floriculture units in recent times.
There are six Agriculture Export Zones set up for floricultural produce in the
states of Sikkim, Tamil Nadu, Uttaranchal, Karnataka and Maharashtra. Main
export destinations for Indian floricultural products are United States of
America (USA), The Netherlands, United Kingdom (UK), Germany and Japan.
Under the Foreign Trade Policy for the period from 2009-2014
following steps have been taken to strengthen the Horticulture as well
Floriculture Industry in India: The incentive available under Focus Market Scheme (FMS) has been
raised fromn2.5% to 3%.
The incentive available under Focus Product Scheme (FPS) has been
raised from 1.25% to 2%.
To reduce transaction and handling costs, a Single Window System to
facilitate export of perishable Floriculture produce has been introduced.
The system will involve creation of multi-functional Nodal agencies
which will be accredited by APEDA.

MARKETING
CHANNELS
OF ROSE

MARKETING CHANNELS OF ROSE:

Rose is the main export oriented cut flower of India as well
as has a high share in the domestic market. The Marketing Channel of Rose is
mainly divided in two types;

Domestic Market.
Export/ International Market.
DOMASTIC MARKET:
The cultivation of Rose is majorly in open field conditions. The area under
the open field conditions is large as compared to the cultivation under controlled
conditions, thus Rose is mainly sold in Local/ Domestic Market. Nearly 90%
Rose is sold in Domestic Market including the Roses grown in open field
conditions as well as the Roses which dont satisfy the export norms grown
under the controlled conditions. The price of these Roses is less as compared to
the export oriented Roses.
THE FOLLOWING LINES EXIST IN THE DOMESTIC MARKETING
CHANNEL: TYPE 1:--

PRODUCER/ FARMER:Producer or Farmer is a person who grows the Roses. The Roses are
generally taken at the rate of 80paise-2rupees per flower. The prices may
increase with decrease in supply and decrease with increase in supply. The
Roses are transported to the local market by the grower himself or are
transported by the commission agent.

COMMISSION AGENT:-

Commission agent is one who collects the Roses from various growers and
sells them to the florists. He takes nearly 10% commissions over the total
flowers he sells and returns the remaining 90% to the grower. Some of the
renowned Commission Agents in Mumbai are Thakur Flowers, Rakshe
Flowers, Vivek Flora (all at Dadar), Bacche Flowers (Bhuleshwar).

FLORISTS: Florists are one who purchase the flowers from commission agent and
sells it to the end consumer. The florist generally gets the flowers for 5-6
rupees per flower and sells them for 10 rupees.

CONSUMER: Consumer is one who purchases the flowers from the florists.

TYPE 2:--

This type of Marketing Channel is similar to Type 1 but only difference is that
the Commission agent himself acts as a Florist to increase his profit margin by
taking the flowers for 80paise- 2rupees/flower and sell them for 8-10 rupees.

TYPE 3:--

This type of the marketing channel is proposed one. In this type the
grower can directly send his flowers to the Auction Hall which will be regulated
by the Government. Such National Auction Hall is established at Noida, Uttar
Pradesh but is yet to open for trading though it has been successfully tested, due
the political influence. Similar Auction Hall has been established in Goregaon,
Mumbai for growers from Maharashtra but it is also not yet functional. The
Karnataka Government has set up an Auction Hall in Bangalore which is still
not 100% functional. The main purpose of these Auction Halls is to give proper
prices for the growers and thus encourage more and more farmers take up
floriculture.

Export/ International Market

The Roses grown only under the controlled climatic conditions are
exported. The Roses have to go through various certifications before export.
Only 10% of the Roses are exported out of the total production. Roses are
mainly exported to USA, Japan, The Netherlands, UK, Australia, etc. Roses
contribute more than 60% of the total floriculture produce exported and also
similar percentage of export returns. Also area under Rose cultivation is
highest amongst all the flowers grown under controlled climatic conditions.

The following lines exist in the Export/ International market: TYPE 1:--

In this type of Marketing Channel the flowers are sent to the International
Auction Halls. Roses from India are mainly sent to VBN Auction Hall situated
in The Netherlands. This type contributes nearly 90% of the overall export/
international Marketing channel. Wholesalers from all over the world
participate in the Auction.

TYPE 2:--

DOMESTIC MARKET OF CUT FLOWERS:-The Domestic Market of Cut flowers comprises of mainly the four Metro
Politian cities viz. Delhi, Mumbai, Kolkata, Chennai and also other major cities
like Pune, Bangalore, Hyderabad, Nagpur and Indore. Delhi is the biggest
domestic market for cut flowers. Though having great potential and favourable
climatic and geographical conditions the growth of this market is sluggish. The
area under cultivation is high but the quality is not up to the mark. The domestic
market is not regulated and has many loopholes they are as follows: -

 No proper pricing of the cut flowers

High commission from the middle man
Pricing heavily dependent on Demand-Supply ratio
No proper information regarding pricing of the cut lowers to the growers
by the commission agent
Cut flowers are mainly grown in Manually Operated Greenhouses so the
quality of the flowers does not remain unique.
The auction halls which are setup for the betterment of the Floriculture
Industry are not functional though crore of rupees are invested on them. For the
namesake the politicians have not yet allowed to open the Auction Hall situated
at Noida, Uttar Pradesh, though it has been successfully tested and has state-ofthe-art facilities.
Though having these many drawbacks Indian Floriculture Industry is
growing.
The consumption of the cut flowers is growing at the rate of 30%. Farmers have
shifted from traditional cultivation to cultivation under controlled conditions.
But there is long path ahead and many revolutionary steps to be taken to have
proper utilization of this Industry. Consumer Behaviour has also changed first
consumer use to buy the cut flowers for religious purposes only but now due to
influence of the western culture, flowers are used largely in grand weddings, on
valentine day, birthdays, Mothers Day. Greeting with flowers to the guest is
becoming etiquette in the corporate world. The positioning of the cut flowers
has been proper over the decade. The number of florists is been increasing.

Indias Domestic flower market which is currently valued at over Rs. 1000
crore has potentiality to grow to Rs. 10,000 crore in the next five years, it would
provide millions of job particularly to the women. The domestic demand for the
cut flowers would increase with the expansion of organized retail and super
market chains, coupled with the rising income of the middle class. If the
domestic growers miss this opportunity, India may be flooded with imported
flowers
An International Flora Expo is been organized annually since 2005 which
depicts the rise of the Indian Floriculture Industry on the World stage. The
growth in the Domestic market will give a fillip for the growers to grow export
quality flowers and thus increasing the foreign revenue.

INTERNATIONAL MARKET OF CUT

FLOWERS:
The International market for Indian Floriculture Industry is mainly The
Netherlands, Japan, UK, Australia, Gulf Countries, etc. Cut flowers are the most
widely traded floriculture product and the consumption is increasing worldwide. Indias share in the global market is negligible. The cut flower market is
dominated by The Netherlands, which has six International Auction Halls. The
Netherlands is the largest retailer of the cut flowers. But now the developing
countries are posing a serious threat to The Netherlands. The cut flowers from
Kenya, Ethiopia, and Ecuador are on a boom, compared to these countries India
has to go long a way.

The major growers in Kenya and other African countries are the NRIs
who have set up large farms in these countries due to the less land cost and
perfect climatic conditions. Due to the high altitude the quality of flowers from
these countries is best in the world. The bud size and the stem length is eye
catching.
These growers hire supervisors from India not because they are cheap but they
are hard working and are involved in all the activities. This has created an job
opportunity to the BSc (Horticulture) graduates to have career in the
Floriculture industry.
In spite of an abundant and varied production base, Indias export is not
encouraging but is catching up. Indias share in international cut flowers market
is negligible at 0.19%. But with several entrepreneurs establishing exportoriented floriculture units under controlled climatic conditions. India is
definitely making an impact in the international market mainly cantered The
Netherlands.

Many export agencies have been set up for the export of the cut
flowers.

TOP 20 EXPORTERS (FLORICULTURE)

RAMESH FLOWERS (P) LTD.
VAC INTERNATIONAL
TRISTARR
SHRIVARDHAN BIO-TECH
L.J. INTERNATIONAL LTD.
BANGALORE HORTI TECH
SOEX FLORA PVT. LTD.
PROFESSIONAL AGROTECH PVT.LTD
IRIS BIOTECH PRIVATE LIMITED
FLOWERS VALLEY PVT. LTD.
P.P.M.THANGAIAH NADAR

 JAGDISH DRESSES
ESSAR AGROTECH LTD.
RAVI DUGAR
DECCAN FLORABASE LIMITED
VISHAL BHALOTIA
ARCHANA SARAF
INDO BLOOM LTD.
VINAYAKA AGRITECH LIMITED
JAIRAMDASS KHUSHIRAM

Thus there is huge scope in exploiting the opportunities in

the Floriculture Industry due to the wide open flower market, especially cut
flowers.

IMPROVISATION OF THE PRESENT STATUS OF THE

FLOWER:-Some of the strategies for the improvisation on the present status of the cut
flower industry are as follows:

The first and foremost thing is to start the Auction halls as soon as
possible and regulate the cut flower market with strict norms on pricing.
Adoption of advanced technologies in production system and post-harvest
handling of the cut flowers.
Strengthening the cold chain system including insulated refrigerated
transportation from place of production to the destination of the export.
Enhancing growers awareness and involvement in maintaining quality
standards and matching with International standards.
Research institutions should develop standard quality planting materials
and economically viable cold storage facilities with private sector
involvement.
Creating necessary infrastructure for pre-cooling at greenhouse level and
domestic transfers.

Innovation in supply chain management.

Attracting Foreign Direct Investment (FDI) from Asian as well as
European countries for creation of cold chain infrastructure and quality
testing in the Greenhouse.
Improvement in domestic market channels to increase efficiency in the
process of market transactions and help maintain quality.
Joint efforts by growers, wholesalers, exporters would help improving
efficiency in the marketing channels and reduce the cost substantially.
Involvement of growers in the export promotion.
Strengthening the role of Agri Export Zones (AEZ) in tandem with
market requirements especially to give specific thrust on the quality and
supply chain requirements of the target markets.
Repositioning the cut flower industry in manner to attract more and more
consumers.

Changes in excise and import duty structure, reduction in the import duty
of the planting material and the equipments.
Air Freight should be reduced at the reasonable level, sufficient cargo
space should be provided in the airlines.
Establishment of model nurseries to supply genuine planting material.
Cooperative florists organization should be established at regional level.
Training centres for diploma course on the pattern of Industrial Training
Institute (ITI) for training the personnel in floriculture should be setup.
Last but not the least the mindset of the farmers to take up floriculture
should be changed.
Implementation of these and many such strategies will bring revolution in
the Floriculture industry.

CONCLUSION:

Indian Floriculture Market is growing despite of no government

regulations in the pricing and exports. Thus if the Floriculture market is
regulated it will grow at a faster pace than the present growth rate. The growers
in India are hard working but dont take risk to invest in Floriculture Industry as
the pricing is not regulated. High initial investment and high bank interest rates
are the main reason for the reluctance of Indian farmer to take on Floriculture.
The Auction halls which are still not functional are the matter of concern. It is
necessary to exploit the potential in this industry.
If the industry is regulated many more favourable regions for cultivation
of flowers will be identified. The big names in the corporate world will also
invest in this industry knowing its potential. Many big companies are
diversifying in the agriculture sector, thus Floriculture will be there best bet due
to huge global market. Marketing of the floriculture produce should be done.
Finally government intervention in pricing policy is the key the success of the
Indian Floriculture Industry.