The limits of flower power

Yunnan, celebrated as China's garden of flowers, is not always a bed of roses

As night falls, a stream of trucks arrives at the Dounan flower market. Workers use torches as they unload roses, lilies and carnations.

Sellers and buyers, some brandishing torches, some with hands buried in cloth bags, haggle on prices. Once a deal is reached, flowers are loaded onto a closed truck bound for the airport, and they end up in a shop somewhere in China.

This scene plays out every night of the week in the small town of Dounan in Kunming, capital of Yunnan province, well-known in China for its important role in the flower trade. Between 500 and 800 tons of fresh flowers are sold in the town each day, 90 percent at this traditional market. Seventy percent of commercially sold flowers in China come from Yunnan, and many of those will have come from Kunming.

In 2012, 5.1 billion flowers from Dounan were sold at home and abroad. About 800,000 farmers in Yunnan grew flowers on 70,000 hectares of land last year, and the industry employed 3.5 million people. Flowers worth 34 billion yuan ($5.5 billion; 3.92 billion euros) were produced last year, 27 percent higher than the year before, the Yunnan Provincial Office of Flowers says.

Millions of those flowers are for export, including to nearby countries such as Russia, South Korea, Japan, and countries in southeast and central Asia. Flowers sold in Dounan went to more than 80 Chinese cities and to 46 countries and regions last year, bringing in $196 million (141 million euros), the office says.

On the advice of experts, the government of Kunming is in the process of setting up a modern trading center that includes a new method of auctioning flowers, which is eventually likely to replace the old market system and to establish more order with pricing.

Kunming is often called spring city because of year-round temperate weather. Altitudes in Dounan, in the city's Chenggong district, range from 1,800 to 2,000 meters, and the average temperature is 15.1 C. The annual average rainfall of about 1,000 millimeters adds to its suitability for growing flowers.

Dounan's flower trade took root 30 years ago, when the first group of flower farmers in Dounan started to trade their products in a make-shift market, covered with plastic sheets held up by bamboo pillars. In the early stages of the reform and opening-up policy, in the late 1970s, farmers' profit from flowers was almost double that for crops such as rice and corn.

Flourishing incomes drew other farmers to the business, and soon dozens of motorized tricycles, once the preserve of farms, were buzzing around the streets carrying their wares.

Fifteen years later, in 1999, Kunming opened Dounan Flower Trading Market, run by the Kunming Dounan Flower Company, and the Ministry of Agriculture designated it a national venue for the flower trade.

Yunnan is one of the three best places in the world to grow flowers, based on climate that keeps costs low and ensures year-round yields, says Zhang Li, general manager of Kunming International Flower Auction Co in Dounan.

"Some provinces have tried to grow flowers, but they need to spend more on protective measures. The climate in Yunnan provides the best temperature in China to grow plants."

Other cities such as Yuxi and Qujing in central Yunnan are also blessed with natural conditions that are favorable to growing flowers, and they have developed into an industrial cluster for the industry. These cities are also close to Kunming airport, Zhang says. The airport connects to 139 Chinese cities and 41 countries, airport authorities say.

"Transport of flowers mainly relies on aircraft because they won't last more than four days from the time they are picked," Zhang says. "If they are not in the consumer's hand in that time they're just trash."

In addition to being a center for the floral trade, Dounan has become a marketplace for agricultural materials, he says.

Dong Rui, deputy president of Dounan Flower Group, says there are more than 50 transport companies in Dounan to move the flowers and 100 companies to make floral products such as dried and decorative flowers.

Even though Yunnan usually basks in its moderately warm climate, the flower industry can be subject to extreme weather changes. Last winter, unusually low temperatures killed many flowers and compromised quality. As a result prices increased, but most farmers' income fell, and wholesalers had to pay 10 yuan ($1.6; 1.2 euros), a high price, for one rose.

In Kunming, yields fell sharply after the heaviest snowfall in 10 years, with temperatures falling below zero, rare for Yunnan. Frost damaged flowers covering 9,330 hectares, about one-sixth of the province's total area, and inflicted direct economic losses of 228 million yuan, the Yunnan Department of Agriculture says.

On Valentine's Day, the best time for selling flowers in the country, the price of roses rose to 12 yuan each. However, the price of other flowers that went on the market in warm spring weather fell by 0.3 yuan each last month.

Li Shuquan, a flower farmer in Qujing, says he and many neighbors built makeshift greenhouses with thin plastic film, but that was not enough to protect the flowers against snow and frost. "The plastic protective film became red after the roses withered and lost color. Two hectares of roses died."

In cities such as Qujing and Pu'er, agricultural technicians helped farmers by watering trees during the day to ease temperature drops at night.

"Some varieties were simply killed by the frost," Zhang says. "At my market, about 2 million flowers are traded each day, and after the snow that number fell 60 percent."

More than 30 companies in Dounan trade flowers with international buyers, including Kunming Qingyi Flower and Gardening Co Ltd. The company's manager, Yang Yanhong, says it started to trade internationally three years ago, dissatisfied with growth in domestic demand.

Last year, more than 80 percent of Qingyi's flowers were exported, the main destinations being Russia, South Korea, Singapore and the Philippines.

"To find out the optimum time for selling flowers in each country, we did research on their important holidays," Yang says. "They're all different. For example, Russians like to present flowers to women on International Women's Day, while Koreans like to present carnations on Mother's Day."

The yield on international sales is at least 10 percent higher than domestic sales, Kunming Qingyi Flower and Gardening Co officials say. Ten carnations can fetch 22 yuan abroad, 5 yuan more than what they would fetch in China. However, as is often the case, there is a balancing act in raising prices to pull in cash but not deterring customers.

"When carnations were sold at 35 yuan a bundle, a record high, last winter, I had to sell the flowers at the original price to my foreign customers to keep them happy," Yang says.

Most of the flowers are grown by individual farmers, making it difficult to keep a pulse on demand and to plan for the next season. In such conditions, output and prices are prone to fluctuate sharply, particularly if there is extreme weather. After damage inflicted by cold weather it can take farmers at least six months to find their feet again, Zhang Li says.

Quality control is another concern. When the province is hit by bad weather, poor quality results in lower yields. "The higher the price, the less money flower traders can make," Yang says. "Farmers are rational: they won't drop any flower in bad times because of high prices, and they will choose the bestsellers to compete with other growers during nice weather."

Flowers on which there has been excessive use of pesticides and fertilizer are liable to be rejected by overseas customs authorities, and Yang and his colleagues often visit farms to ensure that not too much is being used.

Yang says he invites new customers to closely inspect the areas from which they are buying flowers.

Last winter, with the help of reports from Chinese media such as China Central Television, his overseas customers could see for themselves that quality was poor compared with the year before, he says. But essentially "business is a matter of trust", and quality speaks for itself, he says.

Usually, Singapore and the Philippines have lower standards for flowers, he says. South Korea, Japan and Hong Kong are much stricter.

To maintain standards, Yunnan has set up a special department, the Yunnan Provincial Office of Flowers, to oversee the industry, with policies to encourage technological innovation.

The shortcomings revealed by the winter cold last year and the inability of vendors to forecast demand and plan appropriately underline the need for new technologies and better management, Dong says.

Farmers usually keep flower stems at about 70 cm, 50 cm longer than what consumers would see in the shop, because of a lack of cold storage.

"Farmers need to keep stems longer to sustain nutrition for buds during transport that may take days," Dong says.

They also need to pay patent fees for imported seeds, further eating into profits, he says.

The Netherlands creates 500 to 800 new flowers a year, but Yunnan has registered only about 400 new breeds in 30 years, so the Yunnan government and businesses must do more in that regard he says.

Zhang Li echoes Dong, saying most greenhouses are built with iron bars and plastic protective film, and cannot withstand storms and freezing air.

Outdated infrastructure is one reason for the poor yield in Yunnan, about 2,250 to 3,750 flowers a hectare for one yield, compared with up to 7,500 flowers a hectare in Kenya and the Netherlands, Dong says.

A lack of more effective pesticides is also critical, he says. Twenty-five percent of commercially grown carnations will not make it to market, whereas losses in Europe and Kenya can be as little as 5 percent, Dong says, pointing to the fact that with more investment, farmers could earn more.

Dong says that he and his colleagues were astonished when they visited one agricultural company in Kunming. The roses were exactly the same length and weight as those cultivated in plastic bowls that promote nutrition. As a result, Zhang suggested that farmers lease land from neighbors and use machinery to plant flowers. They would thus have the same nutrition and grow at the same pace.

Dong's company is building a computer system in which the finances of and demand in the flower industry could be analyzed, a project sponsored by the Ministry of Agriculture.

"When the platform is completed, we hope the traditional market will supplement auctions and that Yunnan has more say in pricing," Dong says.

Li Yingqing and Guo Anfei contributed to the story.

huyongqi@chinadaily.com.cn

(China Daily Africa Weekly 05/02/2014 page16)