Sensing great opportunities in the blooming $80 billion global flower market, Indian companies involved in growing and exporting roses have gone on the fast track to acquire farms in African and Latin American countries.
Of the $80 billion market, the major chunk is contributed by roses, accounting for $60 billion. Despite having great the potential, India accounts for just one per cent of global exports. To enhance India's share in the burgeoning market, Indian flower manufacturers and exporters, hit hard by increasing transport costs and spurious farm inputs, are looking to acquire rose farms overseas.
Developing countries in Africa and Latin America come through as the best option for the Indian firms as they offer good climate, cheap farmland and labour costs, and advantages in trading with the US and the EU, the primary markets for roses in the world.
African countries need not pay any duty for exporting roses to Europe, while Indian exporters have to pay ten per cent levy. Latin American countries have the advantage of FTA.
Explaining the move, former South India Floriculturists' Association President Ramakrishna Karuturi, whose Karuturi Networks is one among the top five rose exporters in the world, told UNI here that it would be more profitable to export roses from Africa or Latin America.
"We are looking for acquisitions in these two places as it costs much less both to produce and export. We are in talks with a Dutch firm, which owns a large tract of land in Kenya. The deal is yet to fructify. We will soon be in Kenya."
"We are also talking with some other US and Europe-based owners who own farms in Kenya, Ethiopia, Equador and Colombia. I would like to do this in India. But due to high fuel costs, it costs 40 per cent more for us to transport flowers, compared to Africa or Latam countries, I am looking elsewhere," he said.
Karuturi said Karuturi Networks, which produces 110 million rose stems per annum, has targeted to emerge as the world's largest rose producer by achieving production of one billion rose stems per annum.
"Our acquisition of farm land in Kenya will take our production to 600 million and in two years we want to reach the one billion mark." Some pockets in the Southern hemisphere have the conducive atmosphere to grow roses, which needs moderate climate with sunny day time and cool nights.
Bangalore Rural district, a major producer of roses in the country, is well known for its variety of flowers mainly due to this type of climate. The Red roses grown in this area remain unparalleled and command great demand world over.
Karnataka has remained the leader in floriculture in the country, with its roses accounting for 90 per cent of exports to countries like the United States, Germany, Italy, the United Kingdom, Australia, Italy and the Middle East.
The State's roses dominate the market with export earnings upwards of 60 per cent. The rose farms in Bangalore Rural district contribute a lion's share in rose production. While Karnataka produced 60 per cent of roses grown in the country, Bangalore alone accounts for 80 per cent of the state's exports.
Belgaum and Hospet districts are emerging as growth centres in the state of late. The other rose producers include Tamil Nadu and Punjab.
While the market growth remained slow in India at 12 to 13 per cent with an estimated size of Rs 1,000 crore (Rs 10 billion), the Connaught Place flower market in Delhi alone accounts for Rs 200 crore (Rs 2 billion) trade in export bound flowers per annum.
Karuturi said India has great potential to emerge as a major producer of roses as it has large land mass, ideal agro climate, excellent soil and availability of water.
"However, we have to evolve a profitable agricultural model. Indian agriculture is being restrained by unsuitable farm policies," he said.
