Market climate threatens Ecuador flower exports
Ecuador's highly profitable fresh flower exports face threats from lack of permanent trade preference agreements with buying countries, namely the United States and European Union, and expensive air cargo transportation, according to a report released by the U.S. Department of Agriculture's Foreign Agricultural Service.
During the past decade, Ecuadorian flower exports globally have increased from $195 million in 2000 to $565 million in 2008.
Since 1991, the U.S. market has offered duty free treatment to Ecuadorian flowers under the Andean Trade Promotion and Drug Eradication Act, which is subject to annual congressional approvals. Before 1991, exports of flowers were charged a tariff of 6.4 percent to 6.8 percent.
In recent years, the USDA's Animal and Plant Health Inspection Service has worked closely with Ecuador's floriculture sector to reduce inspection delays and move the flowers quickly to market.
However, the Foreign Agricultural Service report warned that lack of permanent trade preferences with other countries, including the United States, and a troubled air transport system threatens the future of Ecuador's flower industry.
Dole Fresh Flowers recently closed its 850-employee flower operation in Ecuador, citing both high production and air transportation costs, and the lack of permanent preferential trade access to the U.S. market. The company has since moved its flower production to Colombia, where labor and transportation costs are lower.
'Ecuador is the most expensive country in the region in terms of air shipping rates,' the Foreign Agricultural Service report said. 'There is very little competition in Ecuador's air cargo market in part due to Ecuador's reticence to negotiate open skies agreements for passengers and cargo.'
Market climate threatens Ecuador flower exports
