World Horticultural Trade & U.S. Export Opportunities

CIRCULAR SUMMARY: World Horticultural Trade and U.S. Export Opportunities Foreign Agricultural Service, Press Release,
OCTOBER 1996

This report draws on information from USDA's global network of
agricultural attaches and counselors, official statistics of
foreign governments, other foreign source materials, and results
of office analysis.

This report is based on unrounded data; numbers may not add to
totals because of rounding.

Further information may be obtained by writing to the division,
by calling Horticultural and Tropical Products Division, AG Box
1049, Washington, DC 20250-1049.
Telephone: 202-720-6590
Fax: 202-720-3799

The next issue of WORLD HORTICULTURAL TRADE AND U.S. EXPORT
OPPORTUNITIES will be available electronically after 3:30 pm on
November 1, 1996.

WORLD HORTICULTURAL TRADE AND U.S. EXPORT OPPORTUNITIES
FOREIGN AGRICULTURAL SERVICE, OCTOBER 1996

For further information, contact:
U.S. Department of Agriculture
Foreign Agricultural Service
Horticultural and Tropical Products Division
AG Box 1049
Washington, DC 20250-1049

Telephone: 202-720-6590
Fax: 202-720-3799

Frank J. Piason, Director
Robert B. Tisch, Deputy Director for Marketing
Howard R. Wetzel, Deputy Director for Analysis

Export Summary

U.S. exports of horticultural products to all countries in July reached nearly $772 million,
up 6 percent or $45.6 million from the same month a year earlier. Twelve out of 15
categories of horticultural exports registered increases. Categories with the most
significant increases in July were non-citrus fresh fruit (up $14 million or 10 percent);
canned vegetables (up $7 million or 16 percent); fresh vegetables (up $5 million or 6
percent); and miscellaneous items (up $19 million or 14 percent). The categories with the
most significant decreases were fresh citrus (down $12 million or 26 percent) and frozen
vegetables (down $6 million or 16 percent). During the first 10 months (October-July) of
fiscal year (FY) 1996, the total value of U.S. horticultural exports was $7.85 billion -- 2
percent above the same period last year.

EXPORT NEWS AND OPPORTUNITIES

Supplier Credit Guarantee Program announced: $20 million for Mexico

On August 20, the United States Department of Agriculture authorized $20 million in
Supplier Credit Guarantee Program (SCGP) sales to Mexico for fiscal year (FY) 1996.
This new adaptation of the GSM 102 program is unique because it covers short term
financing and may be extended directly by U.S. exporters to foreign buyers for up to 180
days and it only requires that importers obtain a promissory note in case of default on the
Commodity Credit Corporation (CCC) backed payment guarantee. Under this
announcement coverage of up to 50 percent of the principal is offered on credit terms of
15, 20, 30, 45, and 60 days. No interest coverage is offered under this announcement.

Since this initial announcement was made late in the fiscal year 1996 cycle, and
recognizing the benefits of permitting exporters sufficient time to carefully arrange
transactions under this new program without facing the pressures of expiring allocation,
the CCC offers the following options: 1) exporters may apply by September 30 (the end
of FY 1996) provided contractual arrangements call for export no later than November
30, 1996; or 2) exporters may apply after September 30 for any allocation remaining
unutilized if their contractual arrangements call for export no later than December 31,
1996.

SCGP is available for the following horticultural products: tree nuts (almonds, pistachios,
pecans, and walnuts); fresh fruit (apples, grapes, pears, peaches, plums, nectarines,
oranges, lemons, grapefruit, kiwifruit, strawberries, raspberries, and blueberries); dried
fruit (raisins and plums); canned fruit (peaches, pears, and fruit cocktail); potatoes (cut
and frozen for french fries); fresh vegetables (asparagus, carrots, broccoli, lettuce,
and tomatoes); canned vegetables (asparagus, carrots, corn, and tomatoes); frozen
vegetables (beans, broccoli, carrots, and corn); wine and brandy.

GSM-102 Credit Guarantee Program: Allocations for the East Caribbean Region and
Mexico increased by $10 million and $25 million, respectively

Through the GSM-102 Credit Guarantee program, U.S. exporters can be paid by a U.S.
bank immediately upon export if an irrevocable letter of credit is opened by the importer's
bank and financed by a U.S. bank. The importer's bank then has up to three years to repay
the U.S. bank. The following table presents FY 1996 allocations by country by product
through September 18, 1996. A distinctive feature of the FY 1996 GSM-102 is the move
toward more "commodity basket" programs, i.e., one country allocation under which are
listed several commodities and products that may be registered on a first-come, first-serve
basis. This structure provides more flexibility to exporters in registering different sizes of
shipments under the program. Repayment terms vary under the program, from the
standard 3-year to 90-day terms. Cautionary information for use of the accompanying
table: The table reflects only exporter applications for guarantees that have been entered
into the GSM-102 computerized system. At any given time, exporter applications are in
process, and not all of those received have been entered into the system. Moreover, all
applications are initially entered into the system on a provisional basis until the guarantee
fee has been received, and the written guarantee has been issued. Thus, some applications
now in the system may in the future be removed, and the commodity balances
correspondingly increased. For details on terms and authorizations see the footnotes to
the table. Note: applications to include other horticultural commodities and products in
GSM-102 programs will be considered by FAS. (For further information on the GSM-102
program for horticultural commodities, contact Robert Knapp, 202-720-4620.)

U.S. pear exports set another record in 1995/96

According to the U.S. Census Bureau statistics, U.S. pear exports in marketing year
1995/96 (July/June) reached a record $82.6 million, up 14 percent from the previous year's
value. Expanded sales to Canada and Brazil more than offset lower shipments to Mexico.
Sales to Canada, the largest U.S. market, expanded 15 percent to $31.6 million in
1995/96, due to higher per unit prices. Sales to Mexico, the second largest market, fell 35
percent to $14.4 million in 1995/96. Exports to Mexico in the first half of the marketing
year were adversely affected by the December 1994 peso devaluation, but showed signs of
recovery in the second half. Sales to Brazil, the third largest market, more than doubled
to $9.5 million in 1995/96. Market Access Promotion dollars played a pivotal role in the
expanded sales to Brazil. Although limited industry funds had been previously used for
promotion in Brazil, fiscal year 1996 represented the first significant promotion budget for
U.S. pears in Brazil. This budget allowed for in-store promotions to be held for the first
time in Brazilian supermarkets. Also, a recent potentially trade-disrupting development
involving Brazil's phytosanitary import requirements for pears has been favorably resolved.
The resulting agreement will help to ensure continued, uninterrupted access to this
important market.

U.S. frozen french fry exports continue to sizzle

The export value of U.S. frozen french fries in marketing year 1995/96 (July-June) was
$256.3 million, up 6 percent over the previous year and more than double the level of 5
years ago. Marketing year 1995/96 marks the 12th consecutive year of increasing value
for U.S. french fry exports. Export volume in 1995/96 reached a record 349,937 metric
tons, a 7-percent rise over a year ago and more than double the level of 5 years ago.
Rising incomes, on-going Market Access Program activities, and increased demand from
the food service sectors in East Asia and Latin America continue to boost U.S. shipments.
Shipments to Japan in 1995/96, the leading U.S. customer, jumped 16 percent to $183.8
million. The next four largest markets consisted of South Korea, Hong Kong, the
Philippines, and Taiwan, which together increased 21 percent to $50.3 million.

Korea announces tender for fresh onions and garlic

On September 16, 1996, the Korean Agricultural and Fishery Marketing Corporation
(AFMC) announced a tender for 3,000 metric tons of garlic. The tender was open for
public competitive bidding to be delivered at the ports of Pusan, Incheon or Kunsan by
October 15, 1996.

On September 17, 1996, AFMC announced a tender for 13,000 metric tons of onions.
This tender was also open for public competitive bidding to be delivered at the ports of
Incheon, Pusan or Kunsan as follows: 3,000 tons by October 10, 1996; 4,000 tons by
October 15, 1996; and 6,000 tons by November 5, 1996. Korea will require an estimated
50,000 tons of onion imports this year, because of a dramatic shortfall in its domestic
onion crop in 1996.

WORLD TRADE SITUATION AND POLICY UPDATES

Thailand's duty cuts for imported nuts and raisins expected to boost U.S. sales

Thailand has sharply reduced import duties on imported tree nuts and raisins, according to
a recent report from the U.S. Agricultural Counselor in Bangkok. This action responded
to FAS's April 1995 proposal to the Thai Ministry of Finance to reduce duties on a variety
of horticultural products and Deputy Secretary Rominger's meeting with Thailand's
Minister of Finance in September 1995. Specifically, Thailand has reduced the applied
duties on a range of tree nuts, including almonds, pistachios, walnuts, and hazelnuts, from
about 56 percent to 10 percent ad valorem. The tariff on raisins was lowered from 57
percent to 30 percent. U.S. exports to date of the affected commodities have been
relatively modest - a combined $1.2 million for the period August 1995 - July 1996 -
largely because of the trade-restrictive duty levels. With these lower duties, particularly
for tree nuts, it is anticipated that trade will increase significantly. Thailand is a growing
market for U.S. horticultural products. For the 12-month period ending July 1996, U.S.
horticultural exports to Thailand totaled $50.4 million, an increase of 20 percent from the
comparable period in the preceding year. Apples, which are among the few items to be
assessed the low duty rate of 10 percent, accounted for nearly 40 percent of the total value
of U.S. horticultural exports to Thailand over the period August 1995 - July 1996.

Indonesian fruit import requirement rumors continue; Indonesian team coming to the
United States

Reports persist that the Government of Indonesia (GOI) may soon impose new import
requirements on fruit. The U.S. Department of Agriculture has conveyed its concerns
over these reports to various Indonesian government officials in Jakarta, Washington, and
Geneva.

Meanwhile, a team of Indonesian officials is scheduled to visit the United States in
mid-October to assess U.S. quarantine, inspection, and food safety systems. While the
visit is largely focused on addressing problems that Indonesia is encountering with its
exports to the United States, the visit provides an opportunity for the U.S. Government to
discuss this issue with Indonesian officials. For the 12 month period ending June 1996,
U.S. fresh fruit exports to Indonesia reached $43 million, an increase of 33 percent from
the comparable period of a year earlier. The key U.S. export items include apples
(accounting for three-fourths of the total), grapes, and oranges.

Guatemala announces new, larger apple import quota

Effective September 9, 1996, the Government of Guatemala (GOG) established a tariff
rate quota (TRQ) of 5,000 metric tons for the importation of apples, far surpassing its
previous WTO commitment of 157 tons for apples and pears, according to a report from
the U.S. Agricultural Attache in Guatemala city. The new import law also reduced the
apple import tariff from its 20 percent level to an in-quota tariff of 12 percent. The
out-of-quota tariff was set at 25 percent. The new policy also eliminates Guatemala's
import licensing requirement for apples and allows for imports year round. The GOG had
not been fully applying its Uruguay Round (UR) provisions the past two years, which had
enabled trade to occur at levels above the minimum levels specified in the UR agreement.
As the primary supplier of imported apples, the United States is expected to benefit most
from the new policy. Guatemala has become an important market for U.S. apple
exporters in recent years. U.S. apple exports to Guatemala in marketing year (July-June)
1995/96 totaled 5,402 tons, valued at $3.2 million. These figures compared to 197 tons,
valued at $133,078, exported in the 1991/92 season.

Japan opens market to Canadian and Australian tomatoes; access for U.S. tomatoes
pending

Japan has approved imports of tomatoes from both Canada and Australia (Tasmania)
during the month of September, according to recent reports from the U.S. Agricultural
Minister-Counselor's Office in Tokyo. Japan's government determined in both cases that
the products meet the country's phytosanitary import requirements. Meanwhile, the
technical review and approval process to allow imports of U.S. tomatoes continues. It is
hoped the Government of Japan will complete its internal review and hold the requisite
public hearing on the issue within the next several months. This could clear the way for
U.S. exporters to commence shipments to this promising market by early next year.

WALNUT SITUATION AND OUTLOOK

Walnut exports from selected countries in marketing year 1996/97 are forecast to increase
5 percent to a record 189,100 metric tons as Chinese exports are forecast to rise 45
percent. However, China's 1996/97 export potential may be tempered by domestic
demand and the quality of the new crop. China's walnut exports fell 20 percent in 1995/96
due to strong domestic demand and a limited supply of high quality walnuts. Although the
quantity of U.S. exports in 1995/96 approximated the previous year's level, the value rose
18 percent to $181 million, due to strong international prices. Japan accounted for the
sharpest rise in sales. U.S. exports in 1996/97 are expected to decline about 6 percent,
due to the expected smaller harvest and increased competition from China.

Walnut production in selected countries in 1996/97 is forecast at a record 601,600 tons
(inshell basis), up 3 percent from the previous record set last season. An expected
13-percent gain in Chinese output more than offsets production declines in Chile, Italy,
and the United States.

Selected country walnut exports in 1996/97 are forecast at a record 189,100 tons, 5
percent above the previous season's revised export estimate. An expected sharp increase
in Chinese exports is expected to more than offset a likely reduction in U.S. shipments.
The United States and China account for about 75 percent of the world's walnut exports.

United States

The 1996/97 U.S. walnut crop is estimated at 199,580 tons, down 6 percent from last
year. During the most recent tree survey, average nut set per tree was estimated down 8
percent from last year. In addition, heavy drop was reported as a result of last winter's
low chilling hours and the significant rain received during May. The final estimate of the
1995/96 harvest is 212,280 tons, up slightly from 1994/95.

The United States exports about half of the walnuts it produces and is the world's largest
exporter. In 1995/96, U.S. walnut exports increased 2 percent. Five main markets
accounted for 93 percent of total U.S. 1994/95 inshell exports: the European Union
(EU), Canada, Brazil, Israel, and Japan. Retail consumers in these countries often serve
inshell walnuts as a snack during various holiday seasons. Meanwhile, food manufacturers
in these countries frequently incorporate U.S. shelled walnuts as an ingredient in baked
goods, breakfast cereal, confectionary products, and ice cream.

U.S. walnut exports are forecast to decline 6 percent in 1996/97. An expected smaller
U.S. crop and competition from likely higher Chinese exports are expected to reduce U.S.
exports.

U.S. domestic consumption of walnuts in 1996/97 is forecast at 116,000 tons, 10 percent
above the previous season's level. An increase in consumption is likely due in part to the
smaller U.S. pecan crop.

China

China's 1996/97 walnut crop is forecast at a record 260,000 tons, up 13 percent from last
year's revised estimate of 231,000 tons. This upward trend in China's walnut production is
expected to continue. Walnut prices have been favorable and growers are recognizing the
relationship between higher prices and high quality walnuts, so they are increasing inputs
and planting better quality varieties. Because of their resistance to hot, dry weather,
walnut trees are being planted in areas that are not suitable for other crops and on
less-than-optimal land. Walnut production is spread across China with the provinces of
Yunnan, Shanxi, and Shaanxi playing leading roles. Planting of new trees is beginning to
slow and growers are instead focusing on improving orchard care and using more and
better inputs.

In 1996/97, Chinese exports of walnuts are forecast to increase 45 percent to 45,000 tons
based on the expected larger harvest. Some sources forecast exports to double.
However, the quality of the new crop and domestic demand will play an important role in
determining how much exports will increase. Exports in 1995/96 were down for the third
year in a row because of the strong domestic market and the limited supply of high quality
walnuts. The walnut quality in most areas of China last year was average to below
average because of adverse weather conditions.

Low production costs have permitted the Chinese to compete in the international market.
Shelled walnuts continue to comprise the majority of international sales while walnuts in
shell are primarily sold domestically. Five markets accounted for 85 percent of China's
shipments of shelled walnuts in 1995/96: the European Union, Japan, Hong Kong,
Australia, and Canada. Approximately 87 percent of China's inshell walnut exports were
purchased by the European Union, Lebanon, North Korea, the United Arab Emirates, and
Hong Kong.

Domestic consumption increased sharply in 1995/96 because of strong domestic demand
plus the difficulty in exporting lower-quality walnuts. Walnuts are a popular snack among
Chinese and many Chinese think walnuts help maintain good health.

Turkey

Production in 1996/97 is forecast at 66,000 tons, up slightly from last year's crop which
was revised downward because of adverse weather. The number of bearing trees is
forecast up 3 percent in 1996/97, to 3.5 million, revealing a gradual increase. The
Horticultural Research Institute in Turkey has been leading walnut research into improved
varieties. Thus far, only a few varieties with higher yields have been planted commercially
and are bearing nuts. These seedlings are reportedly in high demand. Because of this,
future output is expected to increase steadily as higher yielding varieties are planted and
reach bearing age.

Most of the walnuts produced in Turkey are consumed domestically. Official data are not
available for total domestic consumption. However, most observers believe that per
capita consumption is relatively stable, with much of the increase in aggregate
consumption resulting from rising population. Trade sources estimate that growers use
about 50 percent of the crop at home with the remainder sold for commercial
consumption. Most walnuts are marketed in- shell.

India

Walnut production in 1996/97 is forecast to expand 16 percent to a record 29,000 tons as
a result of favorable weather and a slight increase in the number of bearing trees. Walnuts
are produced in the state of Jammu and Kashmir. Since the late-1980's area has expanded
to some non-traditional producing areas in the one state where climatic conditions are
similar to those in traditional growing areas. Trees in these areas are maturing which is
helping to push production higher. Planted area in 1996/97 is forecast at 36,400 hectares,
up slightly from 1995/96. The 1995/96 Indian walnut crop decreased 11 percent due to
unfavorable weather and the alternate bearing cycle of walnut trees.

In 1996/97, exports of walnuts are forecast to increase 9 percent to 19,000 tons as Indian
walnuts could compete more vigorously with Chinese walnuts if quality continues to be a
problem for China. Exports in 1995/96 increased 13 percent to 17,500 tons due primarily
to improvements in nut quality and packaging for export. A least 90 percent of walnut
exports move in vacuum packs with the remainder in cardboard cartons.

Indian walnut consumption in 1996/97 is forecast to increase slightly to 11,000 tons.
Ample supplies, anticipated lower retail prices, and the post-harvest onset of the festival
season should spur consumption. In India, walnuts are cheaper than other tree nuts. The
Indian confectionery and ice cream industries, which have increasing levels of foreign
investment, are using more walnuts.

France

Production of walnuts in 1996/97 is forecast at 27,000 tons, up 4 percent from 1995/96.
The increase is attributed to slightly better weather conditions during the spring blossom
and nut set. However, the relatively hot, dry summer limited nut growth. Area planted is
estimated at 18,700 hectares, up slightly from last year, and may be the first time in 6
years that plantings have slowed. Production should continue to increase for the next 5
years as older plantings mature and nut production increases. Exports remain important to
the French walnut industry. In 1995/96, walnut exports from France grew 5 percent to
13,900 tons. Walnut exports in 1996/97 are also forecast to increase 4 percent.

Italy

Preliminary assessments indicate that Italy will harvest 10,000 tons of walnuts in 1996/97,
down 37 percent from 1995/96's relatively large crop. In addition to an off-year in the
bearing cycle, wide temperature variations in the spring hampered 1996/97 crop
development. Planted and harvested areas, estimated at 4,800 and 4,000 hectares,
respectively, continue to decline as trees age and little replanting is done.

Exports play a small role in the Italian walnut industry with imports being far more
important. Imports of walnuts in 1996/97 are expected to increase 50 percent to 18,000
tons because of the expected smaller harvest.

The United States supplied 90 percent of Italy's inshell walnuts imports from September
1995 to March 1996. During the same period, Italy imported 26 percent of its shelled
walnuts from the United States.

(For further information on supply, distribution, and trade, contact William Janis at
202-720-0897. For further information on U.S. marketing opportunities, contact Stacey
Peckins at 202-720-5330. For further information on production, contact Kelly Kirby
Strzelecki at 202-720-6791.)

HAZELNUT SITUATION AND OUTLOOK

Hazelnut production in four countries in 1996/97 is forecast to decline 4 percent to
568,144 metric tons, due to sharply reduced harvests in Turkey and the United States.
Total exports from the selected countries in 1996/97 are forecast to fall 5 percent to
361,000 tons. A sharp decrease in Turkish exports will likely more than offset a doubling
of Italian exports. Strong international demand for high quality U.S. hazelnuts should
maintain U.S. exports in 1996/97 close to the previous year's level despite the expected
sharp decrease in production, as domestic consumption declines to free up exports.

Preliminary assessments put 1996/97 hazelnut production in the four countries surveyed at
568,144 metric tons (inshell basis), down 4 percent from 1995/96. The downturn reflects
significant declines in Turkey (the world's largest producer) and the United States, which
more than offset a 53 percent increase in Italian output. Turkey's hazelnut crop is forecast
to decrease 10 percent and the U.S. harvest by 49 percent.

Exports from selected countries in 1996/97 are forecast to decrease 5 percent to 361,000
tons from 1995/96 because of lower production in Turkey. Italian exports could double
to 50,000 tons. U.S. exports are expected to approximate last year's level, despite a sharp
fall in production, due to strong demand for high quality U.S. hazelnuts, primarily in
Germany.

Ending stocks for selected countries in 1996/97 are expected to drop 7 percent. Turkey
accounts for the bulk of the decline in stocks. Turkey holds more than 50 percent of the
selected country stocks.

United States

U.S. production of hazelnuts in 1996/97 is forecast at 18,144 tons, 49 percent below the
previous year's output. If realized, this hazelnut crop would be the smallest since 1989. A
severe December wind storm (which considerably damaged many limbs), freezing weather
in February, and flooding adversely affected the crop. Also, cool, wet weather during
pollination limited nut set.

In 1995/96, total exports of U.S. hazelnuts decreased 3 percent to 11,381 tons (inshell
basis). The European Union (EU) is the major customer of U.S. hazelnuts, accounting for
67 percent of total 1995/96 sales. Canada bought 8 percent of U.S. inshell hazelnuts,
Brazil 6 percent, and Israel and Egypt 3 percent each. The EU, Canada, and Israel have
modern food manufacturing industries, which can process shelled hazelnuts into finished
ingredients.

U.S. exports of hazelnuts in 1996/97 are forecast to drop 12 percent to 10,000 tons due to
the sharply reduced U.S. harvest and heightened competition from likely higher Italian
exports. Italian hazelnuts are of quality comparable to U.S. hazelnuts and therefore can
easily enter traditional U.S. markets in the EU. Turkey supplied almost all U.S. imports of
hazelnuts, primarily shelled product.

The U.S. bakery, breakfast cereal, and confectionery industries use domestic U.S. and
imported hazelnuts. Companies in these sectors often convert shelled hazelnuts to paste
for use as an ingredient.

U.S. per capita consumption of hazelnuts has fluctuated according to the product's
availability. With higher U.S. hazelnut prices likely because of the short 1996/97 crop,
domestic consumption could fall significantly.

Turkey

Turkey's 1996/97 hazelnut harvest is forecast at 410,000 tons, 10 percent below the
previous season's output. Weather was normal for most of the early growing season.
However, hot, dry weather during June and July adversely affected the crop, reducing
yields.

Turkey is by far the world's leading producer of hazelnuts, accounting for about 70
percent of world supply. Hazelnut production is concentrated mainly along Turkey's
Black Sea coast. About 60 percent of the crop is produced in the eastern Black Sea
region, 15 percent is produced in the central region, and the remaining 25 percent in the
western Black Sea region.

The support price for the 1996/97 crop announced by the Government of Turkey is TL
166,000 per kilogram (U.S.$1.84), up 110 percent in terms of Turkish Lira and up 18
percent in terms of U.S. dollars. While the announced support price is viewed as
attractive, it is unknown whether FISKOBIRLIK--the quasi-governmental hazelnut
cooperative--will be provided with adequate funds to buy significant quantities of
hazelnuts. Earlier government plans to reform grower cooperatives, including
FISKOBIRLIK, along more market oriented lines are uncertain because of a recent
change in political leadership in Turkey.

Turkey accounts for more than 80 percent of world hazelnut trade. Turkey's hazelnut
exports in 1996/97 are forecast to decline for the second year in a row based on the
expected smaller harvest. The export tax on hazelnuts continues to be U.S. $10 per 100
kilograms despite earlier speculation that it might be removed.

Europe is the major market for Turkish hazelnuts. The Hazelnut Exporters Union
continues to examine the possibility of expanding exports to new markets in the Far East,
North America, including the United States, and countries of the former Soviet Union.

About four-fifths of Turkey's hazelnut exports are comprised of raw kernels and the
remaining one-fifth consists of processed kernels, including roasted, sliced, chopped,
paste, meal, and flour. Very little is exported as finished consumer confectionary items.
The trend, however, is to move from raw exports to processed and finished products to
capture added value. One constraint to increasing exports of hazelnut confectionary items
is the relatively low quality of Turkish chocolate (an important base for hazelnut products)
compared to European chocolates.

The 1994/95 export estimate was revised upward sharply to a record 432,890 tons based
on official statistics. As a result, end-of-year stocks were drawn down significantly. With
a tighter market situation, FISKOBIRLIK did not crush hazelnuts for oil in 1995/96,
thereby significantly reducing domestic consumption for that year.

Italy

Hazelnut production in 1996/97 is forecast at 130,000 tons, up 53 percent from the
weather-reduced crop in 1995/96, and considered an average output for an on-year in the
production cycle. Italian hazelnut area is expected to be stable in the near future, while
production will depend mostly on weather developments, as well as the cylclical
fluctuations of the trees. The hazelnut industry is concentrated in four regions with
Campania comprising approximatley 50 percent of 1996/97 production, Latium, 33
percent, and the remaining output in Piedmont and Sicily.

In 1996/97, exports of hazelnuts from Italy are forecast to double to 50,000 tons based on
the expected recovery in production. If prices are competitive, Italian exports are expected
to displace Turkish and U.S. sales elsewhere in the European Union.

Italy's hazelnut exports in 1995/96 dropped 34 percent to 25,000 tons due to the smaller
harvest. Prices of Italian hazelnuts during 1995/96 were low, due mainly to strong
competition from Turkish imports and increased competition in the export market. Prices
of shelled hazelnuts averaged about 5,500 lire or U.S. $3.60 per kilogram. Preliminary
expectations of the new crop prices are in line with these levels.

Spain

The 1996/97 Spanish hazelnut crop is forecast at 10,000 tons, down 32 percent from the
frost-reduced 1995/96 crop. Catalonia, the major Spanish hazelnut producing region,
received excess rains and colder-than-normal weather during the growing season, which
adversely affected nut set. The current crop is reportedly of poor quality and small nut
sizes. There are indications that many farmers will not harvest their crops due to the low
quality, small size of nuts, and competition from imports of Turkish hazelnuts.

The bulk of the hazelnut crop is consumed in shelled form. The confectionery and
chocolate industries use about 60 to 70 percent of domestic supplies. Hazelnuts are also
used for snacks, and are often marketed in the form of snack packs. Hazelnuts are
domestically marketed throughout the year in competition with almonds, peanuts and
other snack foods. In years when almond prices are high, hazelnut demand in the
confectionery industry increases. Exports of hazelnuts from Spain are diminishing, while
imports are rising. In 1996/97, Spanish hazelnut exports are forecast at 1,000 tons, down
81 percent from the previous year's shipments. Imports are expected to reach 10,000 tons
in 1996/97, up 5 percent from the previous year.

ALMOND SITUATION AND OUTLOOK

Almond production in six selected countries in 1996/97 is forecast to increase 34 percent
to 351,400 metric tons, due to large production upturns in Spain and the United States,
the world's two largest producing countries. Selected country exports in 1996/97 are
consequently forecast to rise 6 percent. Lower world prices are likely in 1996/97, a
situation that should strengthen demand. Although the quantity of U.S. almond exports
was down sharply in 1995/96, due to a smaller harvest, the value of shelled and prepared
and preserved almond exports reached a record $870.6 million, up 21 percent from the
previous year. Almond prices were up sharply in 1995/96 due to significantly smaller
world supplies. Some recovery in the volume of U.S. almond exports is expected in
1996/97 based on the larger harvest, although the United States is expected to face
increased competition from Spain.

Large production increases in the United States and Spain, and smaller increases in Greece
and Turkey will likely increase the combined almond output for the six countries surveyed
to 351,400 tons (shelled basis)--an increase of 34 percent from 1995/96, but slightly below
the previous 5-year average. In Italy and Morocco, the crops are estimated down 60 and
12 percent, respectively.

Selected country almond exports in 1996/97 are forecast to increase 6 percent to 187,800
metric tons based on expected larger production and likely lower prices which should
increase demand. Both Spain and the United States are forecast to increase exports.

United States

The final estimate of U.S. almond production for 1995/96 is 167,831 tons, down 50
percent from 1994/95, because of an off-year in the production cycle and excessive rains
especially during the bloom. Production in 1996/97 is forecast up 43 percent, to 240,400
tons, as the production cycle recovers from the previous small harvest. The bloom varied
from good to excellent across the growing area in California, but cold weather and
intermittent rain during February and March hampered pollination.

The larger 1996/97 U.S. almond crop is expected to stimulate both domestic and export
sales due to likely lower prices and greater availability of the product. A larger supply of
almonds is expected to boost U.S. exports by 5 percent.

In 1995/96, shelled almonds, including prepared/preserved, accounted for the vast
majority, 97 percent, of U.S. exports. Due to the short 1995/96 crop, exports of shelled
almonds declined 22 percent. In 1995/96, principal U.S. customers for shelled almonds
included the European Union (EU), Japan, Canada, South Korea, and Hong Kong.

Exports of inshell almonds provided the remainder of U.S. almond exports. In 1995/96,
exports of inshell almonds plummeted 61 percent by quantity, due again to the diminished
U.S. almond crop. Owing to the more discretionary nature of the use of inshell almonds
among retail consumers, exports of inshell almonds fell even more than exports of shelled
almonds. In 1995/96, major U.S. customers for inshell almonds included India, Brazil, the
European Union, Israel, and Hong Kong.

The foreign markets for the different types of U.S. almonds have different characteristics.
U.S. shelled almonds often enter markets for food processing ingredients where fewer
options are available to manufacturers. Price and quality play a major role in these
transactions. Value-added prepared or preserved almonds must compete in other
countries against numerous snack foods and desserts, including bakery goods, confections,
and snacks. Meanwhile, cultural preferences for unshelled U.S. almonds influence
purchases in particular countries, such as India.

Spain

Almond production in 1996/97 is forecast at 67,800 tons, up 50 percent from 1995/96,
because of increased rainfall following the adverse conditions of dry weather and high
temperatures in 1995/96. Both the quality and the kernel size of the 1996/97 almond
crop are expected to be good.

The area planted to almonds for 1996/97 increased slightly to 615,000 hectares, of which
595,000 hectares are bearing. Nearly half of Spain's almond crop is produced in the
Valencia and Andalucia regions. Between 8 and 10 percent of area planted to almonds is
irrigated.

In 1996/97, almond exports from Spain are forecast at 27,300 tons, up 28 percent from
the previous year's volume based on likely lower prices and continued strong demand
among food manufacturers in the European Union. The vast majority of Spain's almonds
are shipped to other EU countries. For example, in 1995/96, EU purchases represented
93 percent of Spanish almond exports.

The United States remains the principal foreign supplier of almonds to Spain. In 1995/96,
U.S. almonds constituted 89 percent of total Spanish imports, while other EU countries
supplied 9 percent of imports.

In 1996/97, domestic almond consumption in Spain is expected to increase 5 percent to
49,000 tons as industrial demand for almonds recovers from the previous year's slump.
Stocks were drawn down sharply in 1995/96 due to the smaller harvest.

The Spanish nougat industry, which uses 70 to 80 percent of the almonds consumed
domestically, is the largest in the world. Spanish nougat manufacturers prefer Spanish to
U.S. almonds because of flavor differences and the higher oil content of Spanish almonds.
U.S. imports are mainly used for low-priced nougat or marzipan. Millers of almond flour
seek U.S. almonds due to their uniformity and low rate of breakage. Almonds compete
primarily with hazelnuts and peanuts in Spain's industrial food processing market.

Turkey

Almond production for 1996/97 is forecast at 15,700 tons, up 15 percent from the
reduced 1995/96 estimate of 13,700 tons. The estimate for 1995/96 was revised
downward because of early frosts in key growing areas, which adversely affected
production. Production is concentrated in the Aegean, Marmara, and Mediterranean
regions of Turkey.

The United States accounted for 88 percent of the small quantity of Turkish imports of
almonds. Other imports originated from the European Union. Turkey maintains a
5-percent tariff on almonds along with a 35-percent surcharge on the C.I.F. value of
almonds.

Almond consumption is growing slowly in Turkey, largely due to the abundant availability
of hazelnuts, a close substitute for almonds. Most of the increase in aggregate
consumption results from rising population rather than per capita consumption. Almonds
generally are consumed whole as a snack food and only limited amounts are utilized in
confectionary products.

Italy

Almond production for 1996/97 is forecast at 6,000 tons, down 60 percent from 1995/96
because of unfavorable weather and declining production capacity of the trees. Intense,
continuous rains in the producing areas of Apulia and Sicily from February through April,
combined with freezing temperatures in late-winter have resulted in the lowest expected
output in the last 2 decades. Concurrently, harvested area has been trending
downward--from 102,459 hectares in 1994/95 to an estimated 93,000 hectares in 1996/97.
Numerous uprootings occur each year because of the declining productivity of older trees.

In the late-1960's, output averaged over 40,000 tons. In recent years, the crops have
ranged from 12,000 to 20,000 tons as growing competition from California and Spain
eroded profits, thereby limiting the farmers' incentive and financial ability to maintain their
orchards.

In 1996/97, Italian exports of almonds are forecast to decrease more than 50 percent to
1,000 tons due to the reduced harvest. In 1995/96, other EU countries accounted for 90
percent of Italian almond exports. The current EU export subsidy for almonds exported
to third countries is 180 lira (12 U.S. cents) per kilogram.

In 1996/97, Italy's almond imports are forecast to rise by more than 50 percent to 10,000
tons. In 1995/96, the United States accounted for 53 percent of total Italian imports.
Because of a smaller harvest, Spain lost its place as the leading supplier to the Italian
almond market. The current EU ad valorem customs duty for shelled almonds is 2 percent
for imports within the EU-wide quota of 90,000 tons and 6.8 percent for imports over
quota.

In 1996/97, Italian consumption of almonds is expected to decline 22 percent to 15,000
tons, continuing a downward trend which began in the early 1990's. Most almonds enter
the food manufacturing sector as an ingredient. However, the processing industry has
replaced, when technically possible, almonds with hazelnuts, depending on prices. For
example, the domestic market situation during the last few months has been characterized
by record high almond prices and relatively low hazelnut prices, which has pushed the
confectionary industry to shift from one nut to the other.

Greece

Almond production in 1996/97 season is forecast at 15,000 tons, up 15 percent from the
previous harvest. Improved weather from last year has boosted output in 1996/97, as area
harvested remained stable at 41,500 hectares.

In 1996/97, Greek exports of almonds are expected to plummet 53 percent to 400 tons.
In 1995/96, other EU countries purchased 94 percent of Greek almond exports.

Greece's almond imports in 1996/97 are expected to remain at least year's level. Other EU
countries supply most of Greece's imports.

Morocco

Sweet almond production in 1996/97 is forecast at 6,500 tons, down 12 percent from the
upwardly revised 1995/96 estimate. Abundant rainfall from November 1995 to April 1996
considerably reversed the stress on the trees caused by last year's drought and was
expected to result in a good crop. However, excess rainfall during May caused the
number of fruit per tree to drop significantly. Area harvested is estimated up slightly in
1996/97, to 9,000 hectares, of which about 50 percent is irrigated.

Local demand for sweet almonds consumes most Moroccan production. Morocco
exports some sweet almonds, mainly to Libya. Imported almonds sometimes make up for
shortfalls in the domestic market.

Historically, Morocco's imports of almonds have been insignificant. Nevertheless, with a
reduced 1996/97 harvest, Morocco may import up to 100 tons of almonds.

(For further information on supply, distribution, and trade contact William Janis at
202-720-0897. For information on U.S. marketing opportunities, contact Stacey Peckins
at 202-720-5330. For information on production, contact Kelly Kirby Strzelecki at
202-720-6791.)

PRODUCTION AND TRADE OF FRESH CUT FLOWERS IN SELECTED
COUNTRIES

U.S. exports of cut flowers and nursery products (CFNP) in 1995, valued at $193 million,
declined for the second consecutive year. CFNP exports, which peaked at $209 million in
1993, registered the largest declines in 1995 in the Netherlands and Germany. Canada, the
European Union and Mexico accounted for about 85 percent of the total export value in
1995. Cut flowers, valued at $40 million, were up 6 percent, while nursery products were
down 4 percent from 1994. Imports of fresh cut flowers into the United States continue
to gain market share. In 1995, imports of fresh cut flowers were valued at $512 million,
up 22 percent from 1994 and 59 percent from 1991. Colombian flowers continued to
represent the bulk of all U.S. flower imports, followed by the Netherlands, a distant
second.

United States

Roses, carnations, pompon and standard chrysanthemums, gladiolus (spikes), and orchids
are commercially the most important cut flowers in the United States

Most cut flowers, chiefly carnations and roses, in the United States are produced year
round in greenhouses, and/or in some sort of building structure. Fresh cut flowers not
grown under greenhouses or other types of structures are referred to as field flowers and
include gladiolus, daisies, statice, and snapdragons. In recent years, pompons have gained
in popularity as a cash crop item and are grown by many farmers throughout the United
States in open fields.

In calendar year 1995, production of roses, carnations, chrysanthemums, and gladiolus
(spikes) in the United States totaled 692 million stems, down 15 percent from 1994, and
40 percent below 1992. The decline is due primarily to import competition.

Wholesale values of top cut flowers declined in 1995

According to the National Agricultural Statistical Service (NASS), the wholesale value of
total cut flowers produced in the United States in 1995 was $409 million, down 8 percent
from 1994 and 4 percent below the value in 1993.

California tops U.S. flower producing states

California continues to be the leading producer of cut flowers, accounting for 62 percent
of the total U.S. wholesale value in 1995. Other important producing states include:
Florida, Colorado, Hawaii, Michigan, New Jersey, New York, Minnesota, Ohio,
Pennsylvania, Oregon, and Washington state. Of the 36 states NASS surveyed in 1995,
14 recorded higher wholesale values, while 21 recorded lower values over the previous
year.

Hybrid tea (standard) roses, valued at $114 million, accounted for about 28 percent of the
total cut flower production sales in 1995. Gladioli's were valued at $36 million; followed
by standard carnations, $17 million; pompons (mums), $17 million; sweetheart roses, $11
million; miniature carnations, $11 million; and standard chrysanthemums, $8 million.

Official U.S. Department of Agriculture production statistics are available only for
selected varieties of fresh cut flowers, and are based on the actual numbers of flowers sold
in 28 states prior to 1992, and 36 states from 1992 forward and include only commercial
production.

U.S. Market News reports a declining trend in the volume of cut flower imports

U.S. Imports of fresh cut flowers in 1995 totaled 4.17 billion stems valued at $512 million,
down 5 percent in volume but up 22 percent in value from 1994. The decline in volume
was attributed mainly to fewer imports of carnations. In 1995, Colombian flowers
accounted for 63 percent of the value of all U.S. imports. Traditionally, Colombian
flowers account for the lion's share of U.S. total imports annually.

Americans buy only half as many cut flowers as the Japanese and Italians, a third as many
as the Swiss

Fresh cut flower sales to consumers in the United States have traditionally been made by
retail florists for use in weddings, funerals, get-well gifts, special occasions such as
Mother's Day, etc. In recent years, there has been a relatively large increase in sales of
fresh cut flowers through mass marketers such as supermarkets, garden stores, flower
stands and street vendors.

U.S. exports of cut flowers reached record level in 1995

In 1995, U.S. exports of fresh cut flowers registered a record value of $40.3 million, up 6
percent from 1994. U.S. flowers were shipped to more than 39 countries. The top four
markets were Canada, $18.0 million; Mexico, $9.4 million; Japan, $7.2 million; and the
Netherlands, $2.1 million. These four markets accounted for approximately 90 percent of
the total U.S. export value in 1995. About 60 percent of all U.S. flower exports originate
from California.

U.S. exports of cut flowers for the first 6 months of 1996 valued at $24 million are on
track to establish a new export record value this year

With the influx of fresh cut flowers entering the United states from abroad, the cut flower
industry in the United States is beginning to branch out into foreign markets to expand
sales. From 1991 to 1993, the California Cut Flower Association (CCFA) conducted
several small floral marketing programs in Taiwan, Japan and Hong Kong through the
Western United States Agricultural Trade Association with some reported success. In
1996, the CCFA received Market Access Program funds through the California
Agricultural Export Council and plans to conduct floral marketing activities in Canada.
The focus of the CCFA plan will be to educate the Canadian trade about U.S. flowers and
educate U.S. shippers on how to deal with the export market.

U.S. exports of nursery products down

In 1995, U.S. exports of nursery products valued at $153 million, declined for the second
consecutive year. Reduced exports to the Netherlands and Germany were the primary
reason for the decline. Principal nursery product items included trees, tree parts, shrubs,
bushes, herbaceous plants, nursery stock, bulbs and corms, etc. Canada, The European
Union, and Mexico accounted for 87 percent of the total value. Other important but
smaller markets including Japan, Ecuador, Hong Kong, the Caribbean, other western
Europe, and the Middle East accounted for the balance of U.S. nursery product exports.

On February 14, 1994, the U.S. Floral Trade Council, with the support of Roses
Incorporated, filed an anti-dumping petition with the International Trade Administration
(ITA), U.S. Department of Commerce, and the International Trade Commission (ITC)
concerning imports of fresh cut roses from Colombia and Ecuador.

In March 1995, the U.S. International Trade Commission, based on the record developed
in above investigation," determined that an industry in the United States is neither
materially injured nor threatened with material injury by reason of imports of fresh cut
roses from Colombia and Ecuador that are sold in the United States at less than fair value
(LTFV).

Colombia

Colombia is the world's second largest producer of fresh cut flowers

In value terms, cut flowers are now Colombia's third most important agricultural export
crop--after coffee and bananas. Production of fresh cut flowers in Colombia in 1995
totaled 156,000 metric tons, up 3 percent from 1994. Most production is in greenhouses
covering 4,400 hectares with only about 45 hectares are produced on open fields.
Greenhouses are generally constructed of wooden frames and covered with plastic
sheeting. Approximately 89 percent of Colombia's greenhouses are on the outskirts of
Bogota, with 7 percent near Medellin, and 4 percent in the Cali area.

In 1995, carnations accounted for 44 percent of total cut flower production, followed by
roses with 21 percent, and pompons at 16 percent. Nearly all of the carnations, roses,
alstroemerias, and gysophila are grown near Bogota.

Cut flower production in Colombia is forecast to grow by about 5 percent per year
through 2001

Cut flowers in Colombia are produced on about 460 farms owned by about 260
individuals and sold by about 300 exporters. The floriculture industry in Colombia
employs about 75,000 in direct jobs, which includes 70 percent women, and generates
another 50,000 indirect jobs.

Asocolflores (Flower Growers Association), the only flower grower association in
Colombia, was organized in 1971 and has about 240 members or about 90 percent of all
the Colombian flower producers.

Greater productivity emphasized

In recent years, greater emphasis has been placed on gaining more productivity from the
same planted area than on placing flowers of higher value in world markets. While
production has increased an average of 7 percent each year during the last 6 years, area
has expanded an average of only 3 percent each year.

The lack of Colombia's plant variety protection has limited production growth

One limitation that Colombian flower growers have faced in obtaining higher yielding
varieties is that Colombia had no plant variety protection legislation. As a result, many
foreign breeders were reluctant to sell their newest flower varieties to Colombia. Also,
the lack of plant variety protection hindered development of new domestic varieties.
However, on March 9, 1994, Colombia issued decree No. 533 which established
regulations that were in accordance with the UPOV (International Union for the
Protection of Varieties of Plants) rules, which should improve the situation.

Production costs

Labor costs account for 42 percent of total production costs. Other costs include: energy,
11 percent; cuttings for propagation, 15 percent; packing, 6 percent; chemicals, 7 percent;
plastic sheeting, 3 percent; and other costs, 16 percent. In 1995, total production costs in
U.S. dollars rose 19 percent, and a similar increase is expected in 1996. The fixed
investment cost per hectare of flowers is $71,400 or $28,900 per acre.

Domestic consumption

About 5 percent of Colombia's flower production goes to the domestic market. In
general, flowers that do not meet export quality specifications are sold on the domestic
market. When export quality flowers are sold in the domestic market, their price is four
times what domestic flowers normally cost.

Export outlook

In 1995, Colombia was the world's second largest exporter of cut flowers in volume after
the Netherlands. Colombia accounts for about 11 percent of the world export market for
cut flowers, compared to the Netherlands' 59 percent, including shipments to other EU
member states.

Total export value for 1996 expected to reach US$492 million

The export value of Colombian flowers in 1995 reached US$460 million, up 20 percent
from US$382 million in 1994. Colombia exports more carnations than any other country.
Colombian exports of flowers by variety to the United States are as follows: standard
carnations, 95 percent; miniature carnations, 68 percent; pompon chrysanthemums, 75
percent; and roses, 51 percent.

Air freight helps develop U.S. flower market

The growth of Colombian fresh cut flowers exports to the United States was facilitated by
the development of speedy and reliable air freight service and by a sophisticated flower
receiving infrastructure at the Miami International Airport. More Colombian flower
exporters are bypassing the common marketing channel, the Miami importer, to capture
extra profit by cutting out one link in the distribution chain.

Colombian cut flower industry has been aggressively seeking new markets by shipping
approximately 6 percent of its flower business to 32 additional countries

Colombian cut flower exports to the United States account for approximately 80 percent
of its flower trade, with the remainder going mostly to countries in the EU, which
accounted for 14 percent in 1995. Cut flower exports to the United Kingdom during the
same period accounted for 6 percent; Germany, 3 percent; and Canada and Spain, 2
percent each.

Colombians work to penetrate Japanese flower market

Since 1988 Colombia has been working to increase its penetration into the Japanese
flower market. Colombian flower exports to that market have increased from 36 tons in
1988 to 450 tons in 1995. Almost all the flowers exported to Japan have been
carnations--miniature and standard.

The major problem for Colombia in shipping flowers to Japan has not been freight costs,
but phytosanitary inspection delays, which adversely affect market life of the flowers.

The Japanese government has agreed to establish a branch office of its health inspection
service at the Bogota airport to pre-clear flower shipments to Japan. Asocolflores
estimates that Colombian flower exports to Japan could expand to about $100 million a
year.

Shipments to the United States could be pre-cleared

The United States Animal and Plant Health Inspection Service (APHIS) is also in the
process of establishing a pilot project in Bogota to pre-clear flower shipments to the
United States. Such a program would save money for both the Colombian exporters and
APHIS.

Policy situation

Colombian flowers exported to the United States are duty-free under the Andean Trade
Preference Act (ATPA). Cut flowers account for about 60 percent (by value) of the
Colombian exports under ATPA.

Colombian flower producers also want the Andean Pact group to join Mercosur, another
free trade and economic group, which includes Argentina and Brazil, two important
flower markets.

On January 1, 1997, the European Union will eliminate import duties on fresh flower
imports from Colombia--until that time, fresh cut flower imports from Colombia to the EU
are subject to seasonal import duties (20 percent from June 1 to October 31, and 14.2
percent from November 1 to May 31). The EU also applies a 16.7 percent duty on
non-fresh flowers.

Previously, Colombian flower exports to the EU were subject to seasonal import duties of
24 percent for July 1 to September 30, and 17 percent for October 1 to June 30.

White rust disease restricts movement of chrysanthemums from some Colombian farms

In 1988, the Animal and Plant Health Inspection Service of the U.S. Department of
Agriculture discovered white rust--a disease that attacks chrysanthemums--in a shipment
of Colombian flowers arriving in Miami. In response, ICA (the Colombian Agricultural
Institute) ordered all flowers from the Bogota farm where the disease originated to be
incinerated and its soils chemically treated. Also, imports of flower cuttings from
countries where white rust exists were prohibited and a Colombian farm monitoring
system was put into operation with the cooperation of Asocolflores.

White rust is discovered once or twice a year in farms in the Bogota area. In August
1989, ICA prohibited the production of two chrysanthemum varieties--Super White and
Super Yellow--which are particularly susceptible to white rust.

Netherlands

The Netherlands is the world's largest producer and exporter of fresh cut flowers

In 1995, area devoted to cut flowers totaled 6,168 hectares of which 3,669 hectares were
under glass greenhouses and 2,500 hectares in open fields. In 1996, flower production
area is estimated at 6,170 hectares. Detailed production information by flower type and
volume is not available.

Flower marketing

In the Netherlands, the Aalsmeer flower market, a cooperative of about 5,000 flower
growers, is the largest flower auction site in the world. Reportedly, flower products are
shipped to Aalsmeer from some of the world's largest flower producers for assessment by
the auction's 2,500 buyers.

At the Aalsmeer market, flowers are sold via the auction clock and by negotiated deals
between large buyers--supermarket chains, etc. and large growers or groups of growers.
Often the auctions act as an intermediary in these negotiated deals.

Export situation

Fresh cut flowers exported from the Netherlands in 1995 were valued at US$2.8 billion,
up 22 percent from 1993 and 73 percent from 1985. In 1995, Dutch exporters expressed
concern that the export value of cut flowers to Germany, Holland's most important export
destination, stagnated for the first time. While the demand for Dutch flowers in the
western part of Germany decreased slightly in 1995, a modest growth in eastern Germany
did not compensate for that loss.

The Netherlands largest export growth in 1995 took place in France, up 12 percent from
1994, and in east European countries--Czech Republic, Slovenia, Croatia and Russia.

Dutch expenditures on flowers and plants lagging behind other sectors

In 1995, Dutch consumer expenditures for cut flowers, potted plants and ornamental
products, decreased 1 percent from the year earlier. Higher consumer costs for vacations,
municipality taxes and very successful company savings plans for employees (tax benefits)
have left less money available for consumers to spend in retail stores, including the flower
shops. Also, slower economic growth in Germany, the Netherlands leading export
market, is another reason for the decline in domestic demand for cut flowers.

Costa Rica

Cut flowers and ferns remain the third most important agricultural export category behind
bananas and coffee

According to ACOFLOR (Association of Costa Rican Flower Exporters), current area
planted to flowers (not tropical) in Costa Rica is estimated at about 300 hectares, all
under greenhouses. Area planted to tropical flowers and ornamental plants is estimated by
the Costan Rican Ministry of Agriculture at about 4,500 hectares.

The majority of the flowers are grown in the Central Valley provinces of San Jose,
Heredia, and Alajuela. Production takes place year round. The lower areas of the valley
provinces provide the best growing conditions for flowers. Tropical flowers are grown
mostly on the Atlantic side of the country in open fields. Ferns are grown in the highlands
of Alajuela and Cartago, all under plastic covering.

Total area planted to ferns (leather leaf) is estimated at about 1,000 hectares, all under
plastic covering. There are approximately 40 fern growers in Costa Rica, with about 5
companies controlling the largest share of the export market. Many independent growers
sell their product to larger companies for export. Ferns are exported by air and sea.

According to ACOFLOR, the main obstacle that faces Costa Rican flower and fern
exporters is inadequate infrastructure, especially at Costa Rica's international
airport--resulting in losses to exporters.

Export values for cut flowers, ornamental plants, and foliage up

In 1995, exports of cut flowers, ornamental plants and foliage from Costa Rica were
valued at US$112 million, up 17 percent from 1994.

Exports of fresh cut flowers and ornamentals from Costa Rica in 1995 combined for a
total value of US$63.5 million, up 14 percent from 1994. Exports of foliage for the same
period were valued at US$48.9, up 22 percent from 1994.

Exports of flowers from January to June 1996 were up 7 percent as compared to the same
period in 1995. According to CENPRO (Center for Export Promotion), flower exports
are expected to grow in the future but at a slower pace than in the past few years. On the
other hand, exports of tropical flowers, ornamentals and foliage are expected to continue
growing at a stronger pace. For the period indicated above, ornamental plants grew 18
percent, while exports of foliage grew 28 percent.

The United States continues to be the primary market for Costa Rica's cut flower exports

In 1995, exports of Costan Rican cut flowers were valued at US$22.2 million, up 7
percent from 1994. Chrysanthemums, lilies, roses, and gingers were the primary flowers
exported. The main market for Costan Rican ferns was the European Union (mostly the
Netherlands and Germany).

Germany

While Germany is perhaps the world's largest and most important import market for
floricultural products, with annual sales estimated at US$5.5 billion, it is also a significant
producer of flowers and ornamental plants

Since the reunification of Germany in 1990, domestic sales of floricultural products have
grown by nearly 25 percent. Annual turnover in the German wholesale floricultural
market is presently estimated at US$5.5 billion.

Production of floricultural products in Germany include cut flowers, potted plants, garden
and balcony plants. The production of potted plants, garden and balcony plants has
increased both in terms of quantity and value. In the case of cut flowers, the quantity
produced has declined, but the value has increased.

Import market

Germany is perhaps the largest importer of floricultural products in the world. Between
1990 and 1995, German floricultural imports averaged US$2.0 billion per annum. The
Netherlands dominates this import market with an average share of nearly 75 percent.
Other major suppliers include the United States, Costa Rica, Italy, Denmark and Kenya.
The United States is the largest non-EU supplier of floricultural products to Germany,
mostly cut greenery and foliage. While the United States maintains a market share of less
than two percent of the German floricultural market, U.S. exports to Germany have
averaged about US$38 million per year from 1990 to 1995.

Phytosanitary requirements

EU phytosanitary regulations for imports of floricultural products are contained in the EU
Directive 77/93/EEC. The Directive provides detailed listings of harmful organisms
whose introduction is prohibited. Generally, plants must be free of pests and diseases not
endemic to the EU. Special phytosanitary certification is required for plants which are
shipped in soil or other growing media containing soil.

There are no specific labeling requirements beyond general product identification (e.g.,
name, weight and number). Companies selling product in Germany must provide
assurances that the product packaging can be properly recycled or disposed of. Generally,
this is done under contract with the German Dual system, a company with limited liability.
U.S. exporters may rely on their German importer for assistance in this area.

Ecuador

Near perfect weather continues to boost cut flower production in Ecuador

The cut flower industry in Ecuador has diversified from producing mainly roses,
carnations, and chrysanthemums into producing gypsophilias, pompon chrysanthemums,
statices and other flowers.

In 1995, production of cut flowers in Ecuador is estimated at 20,300 metric tons on about
600 hectares. About 75 percent of the total production area is under greenhouses, and
the balance in open fields. Traditionally, over 90 percent of Ecuador's total cut flower
production is exported.

Strong consumer demand for roses has helped Ecuador to become a distant third-ranked
player in the U.S. market

In 1995, exports of cut flowers from Ecuador is estimated at 22,000 tons, up 16 percent
from 1994. Roses accounted for about 50 percent of total exports; carnations,
chrysanthemums, and gypsophilas accounted for most of the remaining cut flower exports.

Flower packaging

In Ecuador, one metric ton of fresh cut flowers is equivalent to about 59 boxes of 17
kilograms each. The stem equivalent of each 17 kilogram box varies by flower variety:
Roses, 13 bunches x 25 units equals 325 stems; chrysanthemums, 25 bunches x 10 units
equals 250 stems; carnations, 25 bunches x 25 units equals 625; statice, 40 bunches x 10
units equals 400 stems; and pompon chrysanthemums, 40 bunches x 6 units equal 240
stems.

For further information, please contact Emanuel McNeil at (202) 720-2083.

Last modified: Tuesday, May 08, 2001

CIRCULAR SUMMARY: World Horticultural Trade and U.S. Export Opportunities Foreign Agricultural Service, Press Release, OCTOBER 1996

CIRCULAR SUMMARY: World Horticultural Trade and U.S. Export Opportunities Foreign Agricultural Service, Press Release,
OCTOBER 1996