Flowers, Fruit Start to Run Short as Volcano Disruption Spreads
By Tom Mulier
April 19 (Bloomberg) -- Swiss Migros supermarkets ran out of roses today. Exotic fruit and asparagus from the U.S. may be the next items European shoppers won’t be able to find.
Retailers in Europe are reporting shortages after authorities started grounding airplanes April 15 because of a cloud of ash from Iceland’s Eyjafjallajökull volcano. In the U.K., Waitrose has encountered difficulty stocking shelves with papaya and prepared mango, according to spokeswoman Gill Smith.
The disruption to flights will be more costly for African exporters than it is for European retailers. Agriculture comprises about one-quarter of gross domestic product in Kenya, the provider of 35 percent of the fresh cut flowers sold in Europe. Retailers such as Migros and the U.K.’s Tesco Plc say they ship less than 1 percent of their food items by air.
“It’s certainly a crisis for the flower growers in Kenya, but at this stage the macro impacts on food retailing are very marginal,” said Nick Bubb, an analyst at Arden Partners.
Kenyan Fairtrade roses might run out as soon as tomorrow, said Nicolas Schmied, a spokesman for Coop, Switzerland’s second-largest retailer. Asparagus flown in from the U.S. and pangas fish transported from Vietnam may also become unavailable this week, according to Migros spokeswoman Olivia Luginbuehl.
“The longer that U.K. airspace is closed, the greater the damage, not just to businesses here, but also for farmers in the developing countries,” said Christopher Snelling, an official at the Freight Transport Association, a U.K. trade group. “Their livelihoods are in serious jeopardy.”
Flower Exports
South African flower exports to Europe are at a “standstill” due to the disruption, said Rene Schoenmaker, chairman of the country’s Flower Growers Association.
“We won’t be able to send out anything until the end of the week,” Schoenmaker said by mobile phone today, adding that flower exports are worth about 400 million rand ($53 million) annually. South Africa ships mainly proteas and fynbos to Europe, especially to the Netherlands and the U.K., he said.
Tesco, the U.K.’s largest retailer, is using alternative road and rail routes to supply products such as orchids, chilies and exotic fruit, a spokeswoman said. J Sainsbury Plc, Britain’s third-largest supermarket chain, said in an e-mail that the effect of canceled flights has been “minimal.”
European supermarkets generally fly in only fresh produce such as fish, flowers and fruit.
Roses, Sunflowers
Dutch auctioneers at FloraHolland, the world’s largest flower market, ran out of flowers transported by air today, according to spokeswoman Adrienne Lansbergen.
“The big hit will come tomorrow,” said Marius Dekker, general manager at Aalsmeer, Netherlands-based DGI, which buys flowers and plants at the Dutch flower auction and sells them to retailers in 25 countries, including Metro AG. “For some types of flowers from Africa, like roses, prices will rise.”
The flower varieties most affected by shortages are roses, sunflowers and baby’s breath, said Lansbergen.
About 85 percent of the flowers traded at FloraHolland are sold abroad, with just 5 percent shipped via Amsterdam Airport Schiphol to the U.S., Japan and the Middle East.
A quarter of the flowers traded at the auction are imported. “We miss 15 to 20 percent of that today,” said Lansbergen. Kenyan exporters, who in 2008 accounted for 38 percent of the imports, seek to fly flowers to the south of Spain and transport them by truck to the Netherlands, she said.
Monceau Fleurs
Groupe Monceau Fleurs, which sells flowers in 400 shops in countries such as France, the U.K., Spain and Portugal, declined 12 percent to 9.20 euros in Paris trading today. That’s the steepest percentage drop in almost four months. Monceau Fleurs declined to comment for this article.
Marine Harvest ASA, the world’s biggest salmon farmer, has decided to reduce the amount of fish it harvests for a few days, spokesman Joergen Christiansen said by phone. The Oslo-based company has been seeking alternate transport arrangements such as sending a truckload to Frankfurt to reach the market.
“It’s mainly a lot of hassle in terms of harvest planning and logistics,” Christiansen said. “The real question is how long this will go on.” About 13 percent of Norwegian salmon is exported by air freight, he said.
--With assistance from Jeroen Molenaar and Jurjen von der Pol in Amsterdam, Rudy Ruitenberg in Paris, and Sarah Shannon in London. Editors: Paul Jarvis, Jim Silver.
To contact the reporter on this story: Tom Mulier in Geneva at tmulier@bloomberg.net.
