Ecuadorian Growers Eye Economy

The global economic crisis is putting a squeeze on some Latin American nations, including Ecuador, according to Nov. 4 article in The Washington Times. 

"We know we cannot escape the effect of the crisis," Eduardo Egas Pena, Ecuador's deputy minister of foreign relations, commerce and integration, says in the article. "We are not immune."

Ecuador, a country of nearly 14 million people, is in a particular vulnerable position because it is "feeling the twin effects of the dramatic collapse in world oil prices and a drop in market prices of other commodity exports," the reporter notes.

Those commodities hit by a drop in demand include "flowers, shrimp, cacao, bananas," Pena says.

Some growers already are feeling the reverberations. Diego Naranjo, manager at the Nevado flower-growing plantation in Santa Lucia, told The Washington Times his U.S.-bound rose exports have dropped by 5 percent. The U.S. imported more than 676.2 million roses from Ecuador in 2007, compared to 309.1 million stems in 2002. 

Because Ecuador accounts for more than 17 percent of the total dollar value ($832.4 million) of U.S. cut flower imports, the domestic floral industry closely monitors the Andean nation's economy. (The U.S. accounted for 43 percent of Ecuador's total exports in 2007.)

So far, the upheavals haven't rippled to U.S. shores. Silke Peters, managing director of the Flower Label Program, says the negative effects of the economic downturn are limited.

"Yes, the FLP-certified producers suffer from increased production costs," he says. "But ... until now there was no essential impact on the overall economic performance in the flower section."

Rene Streng of Cut Flower Wholesale Inc. recently returned from a trip to Colombia and Ecuador, where he visited 20 farms in one week. The Atlanta-based wholesaler sources about 50 percent of its product from South America. While Streng did notice changes, he says the core strategy of his business remains the same: sell more product.

"It may be the old trick of making up in volume, but that's really something we've been doing for 10 years," he says. "Expenses for all things have been going up for the last 10 years and the only way to stay profitable is to sell more and to help retailers make more money."

Streng also cautions against jumping to conclusions about what an erratic economic situation means.

"What is funny is that when I was visiting growers last week [in Colombia and Ecuador], they were asking me about the economic situation in the United States," he says. "I'm not saying there are no problems in the world, but a lot of this is perception, and the more we think it's getting worse, the worse it will become."