A world of flowers: Dutch flower auctions and the market for cut flowers

Abstract: This paper gives an overview of international flower production, consumption and trade, focusing on the Dutch flower auctions in Aalsmeer, the world's leading flower trading centre. Data on prices and traded volumes for three important species of cut flowers (roses, chrysanthemums and carnations) for the period 1993-2008 are analyzed. Flower prices and traded volumes are extremely volatile. Although part of this volatility is predictable, because of regular seasonal variations in demand, a large proportion of the observed volatility is due to sudden shifts in supply. The real prices of cut flowers declined during this period, and there was a clear shift in consumer preferences toward roses and away from carnations. In addition, consumption of roses and carnations shifted from clearly seasonal toward more year-round consumption, while consumption of chrysanthemums followed consistent seasonal cycles throughout the period. During this period, non-European producers increased their market shares. This development can be traced to a significant decrease in cut flower prices relative to energy prices, especially after 2003.