Colombia is one of main countries that exports flowers to the World, however this country has problems in her volume of production due to lack of economies of scale. Colombia used to export 15.7% of total flowers in the World market in 2002 but nowadays she shares 13.8%, in terms of volume she sold 203 thousand of tonnes in 2011 when she used to sell 231 thousand of tonnes. Moreover, this market is highly subsided through exchange rate devaluation and direct money through government bodies until point this sector showed an increase in employment from 89,210 places in 2002 to 138,512 places in 2011, therefore this sector shows diseconomies of scale (as they add people to production they produce less!!!). The flowers harvest in Colombia is through whole year but mainly on february, may and july, through these months the volume is about 20 thousand of tonnes per month, one can be tempted to point that Colombia can improve her production to 25 thousand of tonnes per month through whole year if private and government sectors invest to improve flower productivity. If Colombia does not pay attention to this issue, her flowers sector will get same situation of coffee sector, this sector used to pull Colombia economy, nowadays this sector is in deep crisis due to global competitiveness.
Author: Humberto Bernal,
Economist
e-mail: zhumber@gmail.com
Colombia is one of main countries that exports flowers to the world, this country shared 13.8% of total flowers exports in 2011, nevertheless this share showed a decline since 2002 when she used to share 16.3% and 15.7% in 2007 as figure 1 shows. Colombia is on the second place of main exporters of flowers after Netherlands and before Ecuador and Kenya but she can miss this place due to lack of economies of scale. Colombia exported 232 thousand of tonnes in 2007 and 203 thousand of tonnes in 2011, one can be tempted to say that it is due to local currency appreciation but Ecuador and European Union face same issue, therefore it is not the issue.
Figure 1. Flowers exports by country 2001 - 2011
(%)
Source: United Nations Data.
Colombia shows a decline trend of her flowers’ exports in total exports of Colombia, this sector used to share 5.68% in total exports before beginning of 2002 but after this year this sector dropped dramatically as figure 2 shows. By 2002 the employment taken by flowers sector was 89,210 and it increased to 138,512 in 2011 and it is expected to reaches 140,518 in 2012, therefore there is less production and more employees in this sector, one can call this situation diseconomies of scale and a sector that gets huge subsides to be in the market, this subsides are through exchange rate devaluation and direct money through government agencies.
Figure 2. Colombian flowers as a share of total goods exports 1970-2011
(%)
Source: Central Bank Colombia and Bureau of Statistics (DANE and DNP).
Private sector and government have to work hard to get out of this flowers declining production, a target can be invest to improve flowers productivity in order to get economies of scale. This hard work can let lower flowers’ prices, then they can be competitive in this global economy. If Colombia does not pay attention to this issue, Ecuador and Kenya will take her place as it was in the coffee sector with Viet Nam and Germany.
Colombia produce and export flowers mainly on february, may and july as figure 3 shows, the average volume for those months are 20 thousand of tonnes, of course through other months there is flower production but in less amount, it is about 13 thousand tonnes, therefore a competitive business ( economies of scale) can let Colombia export 25 thousand of tonnes per month through whole year and keep employment working to improve production.
Figure 3. Flowers production in Colombia 2000-2012
(monthly data, tonnes)
Source: Bureau of Statistics Colombia (DIAN) and United Nations Data.
Flowers production in Colombia 2000-2012
(yealy tonnes)
Year
|
Volume (tonnes)
|
2000
|
169,640
|
2001
|
178,910
|
2002
|
189,366
|
2003
|
196,231
|
2004
|
192,076
|
2005
|
222,561
|
2006
|
223,347
|
2007
|
231,934
|
2008
|
221,269
|
2009
|
205,400
|
2010
|
220,018
|
2011
|
203,690
|
2012*
|
190,440
|
* Until November.
Source: Bureau of Statistics Colombia (Agronet) and UN.
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