The economics of Ethiopian floriculture

Most cut flowers have a high value-weight ratio, and are very perishable.  Flowers are consumed throughout the year, and must respond to varying consumer requirements through time.  Thus, the industry depends on air transport and cold-chain logistics throughout the value chain.  Air transport fees account for more than half the total cost of the product…and combined with marketing account for up to 75 percent of total costs.  Frequency and timeliness of flights and other logistical arrangements are of utmost importance in meeting orders on time and ensuring that flowers arrive fresh to maximize vase time.  The strategic and role of EAL [Ethiopian Air Lines] becomes clear from this perspective.

That is from Arkebe Oqubay’s Made in Africa: Industrial Policy in Ethiopia.  In Ethiopia, they sell this book for less than half of its Amazon list price.

Comments

'In Ethiopia, they sell this book for less than half of its Amazon list price.'

Um, there are ways to acquire books for cheaper, even in Ethiopia.

Not that an Amazon affiliate that likely earns some nice pocket change from that relationship is likely to talk much about such things, of course.

I used to shop at a Paris bookstore that had American science and engineering textbooks at a small fraction of the price charged for the US edition. They were softback, on thin paper, and illustrations were greyscale, but otherwise they were identical to the US version including pagination. They were intended for sale in Africa and Asia and even emblazoned with that instruction, prohibiting their sale in better-off places.

It's a form of price discrimination, one that I was happy to find and take advantage of for books that I wanted on my own shelf for reference purposes. I wish I could remember the name or location of that bookstore, but it is lost and confused with other things I found on other trips to Paris.

As a faculty person I can now get electronic versions of books that I'm teaching for free from the publisher, which is a great convenience when I want to project and discuss a chart or diagram during a lecture. But that is restricted to books where I can make a reasonable claim to have it as an assigned required book for students to purchase.

Kenya has not had as much success as Ethiopia in the flower market, not having (I suspect) the benefit of having established the trade before the regulatory barriers to the EU were put in place.

I think you're talking about the "Nouveaux Horizons Collection/Library". Not sure if the library still exists. But the discounted books are still sold in bookstores in Africa and also Haiti.

'As a faculty person I can now get electronic versions of books that I'm teaching for free from the publisher, which is a great convenience when I want to project and discuss a chart or diagram during a lecture. But that is restricted to books where I can make a reasonable claim to have it as an assigned required book for students to purchase.'

I'm fairly confident that publishers are still handing out free review copies to faculty members as a way to influence sales, also.

You can get the same cheaper made/cheaper sold International Editions on Amazon, you just have to go to say, Amazon India instead of the U.S. version of the site.

'but were otherwise identical to the US version including pagination'

Me and a few of my engineering college buddies thought we could save a fortune buying these books for school a few years ago. $40 beats $220 for a Thermodynamics I book. Who cares if it's paperback?

Turns out the text IS identical, but the problem sets ARE NOT. And they're not in the inches, pounds, BTUs, etc. that the US book was in. The professor assigned problems out of the US edition.

We were going to just buy one US edition to share until we were told the final exam would be open book. We all ended up paying for our own. There's a special place in hell for those publishers.

Australian imports from Ethiopia -- $20 million worth of coffee and not much else.

Australian exports to Ethiopia -- $700,000 worth of airplanes and spare parts. $340,000 worth of telecom equipment. And not much else.

Ethiopia is beating Australia in trade! Very unfair!

This guy gets it.

Clearly the only rational response is to start a trade war. Hold onto your hats! The Boston Tea Party ain't gonna hold a candle to the Sydney Coffee Party!

Ironic. Coffee trees can grow in Sydney:

https://www.smh.com.au/lifestyle/gardening-with-jackie-french-the-coffee-miracle-20140725-zwcai.html

A tiny amount of coffee is produced in Australia, but it's just for a laugh. If you look at the prices they charge for it you can see they must be joking.

With Australian labour costs, it requires a lot of capital investment in mechanical picker. So if we tried to produce most of our own coffee it would increase the cost of a cup by cent.

"Ethiopian Airlines, Africa’s largest carrier, handles 90 percent of horticultural exports via Addis Ababa’s Bole International airport, where a new 150,000-square-meter cargo hub has capacity for 1 million metric tons of sensitive produce annually, including fresh flowers. The airline has a fleet of six Boeing Co. 777F freighters and last month ordered four more at the Dubai Air Show worth $1.3 billion at list prices."

https://www.bloomberg.com/news/articles/2017-12-19/from-africa-to-your-loved-one-ethiopia-targets-u-s-rose-market

Interesting. I didn't think the Ethiopians would be foolhardy enough to try and export to the USA, I was thinking Europe which is only four hours or so away rather than 10. In fact, Columbia has a "lock" on rose exports to the USA, also using a fleet of jumbo jets, and they drove Pasadena, California out of the market about ten years ago. Let me Google on the excellent Indo site how far Addis Adaba vs Bogota are from the USA.
1) Bogota, Colombia and Dallas, Texas, United States, as the crow flies:
2428 miles (3908 km) (2110 nautical miles)
2) Addis Ababa, Ethiopia and New York, New York, United States, as the crow flies: 6970 miles (11218 km) (6057 nautical miles)

Wow! I stand vindicated, as usual: Ethiopia is about three times farther than Columbia from the shores of the USA. Jet fuel costs, which are rising, will kill the Ethiopian flower trade to the USA. They still have Europe however.

Land and water must be super cheap in Africa to overcome the transport costs.

Here's the cut flower world export ranking data from 2013 ... Kenya ranks #4, Ethiopia #6, Israel #10

http://www.hortibiz.com/item/news/top-10-cut-flower-exporters-in-the-world/

From 2006, more detail on the business in Israel ... with Kenya #2 in exports to the EU

"In aggregate, Israel’s flower, plant and propagation-material export brings upward of $200 million into the economy annually. The country is third only to the Netherlands and Kenya in supplying the European Union with its flowers. Each year 1.5 billion stems are exported, double from only 10 years ago – while the number of growers engaging in export has dropped by 75 percent. The system, along with the growers, has simply become more efficient."

https://www.israel21c.org/business-is-blooming-for-israeli-flowers/

Nice cite, thanks. I would have thought the Dutch were more like #5 than #1 due to their high labor costs. Their minimum wage for example is something like 70 Euro a day, higher than even the French. The Greeks by comparison are at 30 Euro a day and the Filipinos are at $10 a day (and it's considered a good wage).

Remember too that the Israelis are growing all these flowers in a desert.

Britain is considering banning drinking straws. Maybe they should ban cut flowers instead. Think of all the jet fuel that would be saved. Of course there would be some unintended consequences...

Valentine's Day would be a lot tougher if you had to think of a present your girlfriend actually liked.

I am impressed with the way some pre-teen child's home work now forms the basis of British government policy on drinking straws. Not everyone can aspire to grow up to be President, but we should all dream of writing some juvenile garbage that changes national policy.

So, an anecdote from a plumbing supply store near Fairfax Circle. One of the younger male counter employees was talking about having bought a dozen red roses that he planned to give to his girlfriend, in the hope of having sex following such a present and dinner at a restaurant. He was between the storeroom and front area, where there a couple of customers, and was unaware that one of the customers was a middle aged woman. When he noticed, he was quite embarrassed, but the woman just smiled, and said it would work with her, and good luck.

A dozen red roses carry a certain symbolic weight that is recognized by both the giver and the recipient. Whether this fits into your framework of actually liking something is unknown.

Of course, that was a couple of decades ago, so who knows, maybe things have changed.

Recent years make one increasingly question whether there will always be an England. Not their finest hour.

Well, at least the English supported Brexit.

Flowers in Ethiopia, the view from Lake Zuwai:

https://www.bbc.com/amharic/44120511

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