The 2011 Import and Export Market for Cut Flowers and Foliage in South Africa by ICONGroup


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									   The 2011 Import and Export
   Market for Cut Flowers and
     Foliage in South Africa

                         Professor Philip M. Parker, Ph. D.
                      Chaired Professor of Management Science
                    INSEAD (Singapore & Fontainebleau, France)                                      ©2011 ICON Group Ltd.

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                                About the Author
Dr. Philip M. Parker is the Eli Lilly Chaired Professor of Innovation, Business and Society at
INSEAD where he has taught courses on multivariate statistics and global competitive strategy
since 1988. He has also taught courses at MIT, Stanford University, Harvard University, UCLA,
UCSD, and the Hong Kong University of Science and Technology. He is the author of six books
on the economic convergence of nations. These books introduce the notion of “physioeconomics”
which foresees a lack of global convergence in economic behaviors due to physiological and
physiographic forces. His latest book is "Physioeconomics: The Basis for Long-Run Economic
Growth" (MIT Press 2000). He has also published numerous articles in academic journals,
including The Rand Journal of Economics, Marketing Science, the Journal of International
Business Studies, Technological Forecasting and Social Change, International Journal of
Forecasting, the European Management Journal, the European Journal of Operational
Research, Journal of Marketing, International Journal of Research in Marketing, and Journal of
Marketing Research. He is also on the editorial boards of several academic journals.

Dr. Parker received his Ph.D. in Business Economics from the Wharton School of the University
of Pennsylvania and has Masters degrees in Finance and Banking (University of Aix-Marseille)
and Managerial Economics (Wharton). His undergraduate degrees are in mathematics, biology
and economics (minor in aeronautical engineering). He has consulted and/or taught courses in
Africa, the Middle East, Asia, Latin America, North America and Europe.

                                 About this Series
This series was created for international firms who rely on foreign export markets for a
substantial portion of their business or who might be threatened by foreign trade competition.
The estimates given in this report were created using a methodology developed by and under the
direct supervision of Professor Philip M. Parker, the Eli Lilly Chaired Professor of Innovation,
Business and Society, at INSEAD. The methodology, relying on historical figures of economic
growth and trade flows, estimates the market shares of some 150 countries for over 500 industrial
or product categories. The figures should be seen as market estimates, as opposed to historical
records, as these are projected for the current year of trade.

Some of the methodologies and research approaches used in this report have benefited from the
R&D Committee at INSEAD, whose research support is gratefully acknowledged. Additional
editorial assistance from Tiffany LaRochelle, ICON Group International, Inc., is also
acknowledged.                                                    ©2011 ICON Group Ltd.

                           About ICON Group Ltd.
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                                                    Contents        v

Table of Contents
1     INTRODUCTION AND METHODOLOGY                              7
2     SOUTH AFRICA AND THE WORLD MARKET                         9
    2.1     Imports in South Africa in 2011                     9
    2.2     Exports from South Africa in 2011                  10
3     IMPORTS IN SOUTH AFRICA                                  11
    3.1      Africa                                            11
       3.1.1   Kenya                                           11
       3.1.2   Zambia                                          12
       3.1.3   Zimbabwe                                        12
    3.2      Asia                                              13
       3.2.1   India                                           13
       3.2.2   Philippines                                     14
4     EXPORTS FROM SOUTH AFRICA                                15
    4.1      Africa                                            15
       4.1.1    Mauritius                                      15
    4.2      Asia                                              16
       4.2.1    Hong Kong                                      16
       4.2.2    India                                          17
       4.2.3    Japan                                          18
       4.2.4    Singapore                                      19
    4.3      Europe                                            20
       4.3.1    Austria                                        20
       4.3.2    Belgium                                        21
       4.3.3    Bulgaria                                       22
       4.3.4    Denmark                                        23
       4.3.5    France                                         24
       4.3.6    Germany                                        25
       4.3.7    Greece                                         26
       4.3.8    Hungary                                        27
       4.3.9    Ireland                                        28
       4.3.10 Italy                                            29
       4.3.11 Norway                                           30
       4.3.12 Poland                                           31
       4.3.13 Slovakia                                         32
       4.3.14 Slovenia                                         33
       4.3.15 Spain                                            34
       4.3.16 Switzerland                                      35
       4.3.17 the Netherlands                                  36
       4.3.18 the United Kingdom                               37
    4.4      North America & the Caribbean                     38
       4.4.1    Canada                                         38
       4.4.2    the United States                              39
    4.5      Oceana                                            40
       4.5.1    Australia                                      40
    4.6      the Middle East                                   41
       4.6.1    Bahrain                                        41
       4.6.2    Qatar                                          42
       4.6.3    Saudi Arabia                                   43                         ©2011 ICON Group Ltd.
                                                          Contents        vi

    5.1   Disclaimers & Safe Harbor                                  44
    5.2   ICON Group Ltd. User Agreement Provisions                  45                               ©2011 ICON Group Ltd.
                                                     Cut Flowers and Foliage in South Africa      7

On the demand side, exporters and strategic planners focusing on cut flowers and foliage in South
Africa face a number of questions. Which countries are supplying cut flowers and foliage to
South Africa? How important is South Africa compared to others in terms of the entire global
and regional market? How much do the imports of cut flowers and foliage vary from one country
of origin to another in South Africa? On the supply side, South Africa also exports cut flowers
and foliage. Which countries receive the most exports from South Africa? How are these exports
concentrated across buyers? What is the value of these exports and which countries are the
largest buyers?

This report was created for strategic planners, international marketing executives and
import/export managers who are concerned with the market for cut flowers and foliage in South
Africa. With the globalization of this market, managers can no longer be contented with a local
view. Nor can managers be contented with out-of-date statistics which appear several years after
the fact. I have developed a methodology, based on macroeconomic and trade models, to
estimate the market for cut flowers and foliage for those countries serving South Africa via
exports, or supplying from South Africa via imports. It does so for the current year based on a
variety of key historical indicators and econometric models.

In what follows, Chapter 2 begins by summarizing where South Africa fits into the world market
for imported and exported cut flowers and foliage. The total level of imports and exports on a
worldwide basis, and those for South Africa in particular, is estimated using a model which
aggregates across over 150 key country markets and projects these to the current year. From
there, each country represents a percent of the world market. This market is served from a
number of competitive countries of origin. Based on both demand- and supply-side dynamics,
market shares by country of origin are then calculated across each country market destination.
These shares lead to a volume of import and export values for each country and are aggregated to
regional and world totals. In doing so, we are able to obtain maximum likelihood estimates of
both the value of each market and the share that South Africa is likely to receive this year. From
these figures, rankings are calculated to allow managers to prioritize South Africa compared to
other major country markets. In this way, all the figures provided in this report are forecasts that
can be combined with internal information sources for strategic planning purposes.

After the worldwide summary in Chapter 2 of both imports and exports of cut flowers and
foliage, Chapter 3 goes into detail on imports, but for each major country of origin serving South
Africa. A “major” market is defined as a country where South Africa represents a substantially
large share of either imports or exports. For each major country exporting to South Africa, one
can thus observe how important South Africa is to that exporting country compared to other
countries of the world. Chapter 4 does the same, but for exports of cut flowers and foliage
originating from South Africa, for each major country of destination. In doing so, one can
discover the share that South Africa has in each major market; this share value is often used as a
measure of competitiveness for South Africa. In all cases, the total dollar volume and percentage                                                       ©2011 ICON Group Ltd.
                                                      Cut Flowers and Foliage in South Africa       8

share values by major trading partner are provided. Combined, Chapters 3 and 4 present a the
total picture for imports and exports of cut flowers and foliage to and from South Africa to and
from all other major countries in the world. "Cut Flowers and Foliage" as a category is defined in
this report following the definition given by the United Nations Statistics Division Classification
Registry using the Standard International Trade Classification, Revision 3 (SITC, Rev. 3). The
SITC code that defined "cut flowers and foliage" is 2927 . For more information on this
definition, please refer to the following web site: .

This report is updated on an annual basis. To ensure that you have the most current version,
please check the web site of ICON Group at

Important Caveat. The figures should be seen as market estimates, as opposed to historical
records, as these are forecasted for the current year of trade. More importantly, in light of the fact
that unforeseeable factors might interrupt markets in achieving their reported levels, the figures
should be seen as estimates of potential. For example, "mad cow" disease, foot-and-mouth
disease, trade embargoes, military conflicts, acts of terrorism and other events will certainly
affect the actual trade flows recorded for a variety of industry or product categories. In such
cases, the difference between the numbers given in this report and the numbers actually observed
might be interpreted as the "net loss" or "net gain" due to these exogenous events affecting
regular trade flows that would have occurred had these events not have taken place.                                                        ©2011 ICON Group Ltd.
                                                        Cut Flowers and Foliage in South Africa         9

                 Imported Cut Flowers and Foliage in South Africa, 2011
                              (Structure of Foreign Import Competition)

Country of Origin             Rank         Value (000 US$)              % Share        Cumulative %
Zimbabwe                           1                      719               45.59                  45.59
Kenya                              2                      302               19.15                  64.74
Zambia                             3                      234               14.84                  79.58
India                              4                      211               13.38                  92.96
Philippines                        5                       92                5.83                  98.80
the United States                  6                       19                1.20                 100.00
Total                                                   1,577              100.00                 100.00
    Source: Philip M. PARKER, Professor, INSEAD, copyright 2011,                                                          ©2011 ICON Group Ltd.
                                                        Cut Flowers and Foliage in South Africa       10

                Cut Flowers and Foliage Exports from South Africa, 2011
Country of Destination        Rank         Value (000 US$)              % Share        Cumulative %
the Netherlands                   1                    17,651               34.61                  34.61
Germany                           2                    12,929               25.35                  59.97
the United Kingdom                3                     6,044               11.85                  71.82
the United States                 4                     3,202                6.28                  78.10
Japan                             5                     2,955                5.79                  83.90
Switzerland                       6                     1,962                3.85                  87.74
Italy                             7                     1,516                2.97                  90.72
France                            8                       995                1.95                  92.67
Saudi Arabia                      9                       523                1.03                  93.69
Poland                           10                       423                0.83                  94.52
Australia                        11                       309                0.61                  95.13
Belgium                          12                       306                0.60                  95.73
Canada                           13                       277                0.54                  96.27
Qatar                            14                       273                0.54                  96.81
Singapore                        15                       266                0.52                  97.33
Austria                          16                       240                0.47                  97.80
Hong Kong                        17                       213                0.42                  98.22
Spain                            18                       189                0.37                  98.59
Greece                           19                       181                0.35                  98.94
Norway                           20                       126                0.25                  99.19
Bulgaria                         21                       108                0.21                  99.40
Hungary                          22                        98                0.19                  99.59
Bahrain                          23                        64                0.13                  99.72
Denmark                          24                        40                0.08                  99.80
Slovenia                         25                        38                0.07                  99.87
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