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1. Climate Problems Leading to Supply Limitations

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Submitted By mayraverix001
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1. Climate Problems Leading to Supply Limitations In the flower business we are not free of regular changes in the weather that could affect the production from our suppliers. When these weather events are known for their seasonal arrivals and intensity, they are usually handled and the risk of damage is controlled; however, there are climatological phenomenons that are more strength and arrivals can’t be predicted. This is the case of “La Nina” phenomenon that visits South America every seven years leaving catastrophic disasters. Colombia, which supplies 65 percent of all the flowers in the USA, is one of the most affected places from this climatological phenomenon, and as a result increases in labor costs, and uncertainty with the quality of the products and prices when turning to other suppliers are expected.
Although Augusto Solano, President of the Association of Colombian Flower Exporter, shows positivism about the situation because eighty percent of the crops are located in the Savannah of Bogota, which has not been affected for the rain considerably, according to Kevin Priest, Cleveland Plant and Flower President, fewer flowers would be available for the upcoming holidays and retailers should turn to new suppliers in order to fulfill actual demand. Also, Ecuador, the second flower exporter country (16%), has experience some flooding for the same reason, but not as intense as in Colombia. For instance, weather events like “la Nina” have flower wholesalers and retailers uncertain because they know that Colombia’s competitors will raise prices which will lead to increase logistical costs.
Finally, having Colombia with climate problems, and Ecuador being slightly affected, leaves Flowers to Go with the only option of looking for other suppliers. However, as mentioned before, competitors will raise prices because they know what Colombia and Ecuador are experiencing; this will affect directly and negatively on the prices we offer. Moreover, Flowers to Go will have to see as next options to buy flowers from countries like Netherlands (6%), Canada (4%), and Mexico (3%), which are the next top flower import countries in the USA; and considering the locations and regulations of these countries, Flowers to Go will be directly affected by the increase on delivery and labor prices. Furthermore, Flowers to Go will have to face the risk of insecurity in the quality of the new products from the new suppliers.
In conclusion, this environmental condition happening in South America, affecting our two greatest flower supplier countries, will threaten Flowers to Go negatively because it will generate more delivery and labor expenses, increase our prices to our clients reducing sales, and compromise the quality of the products and services towards our clients. http://aboutflowers.com/about-the-flower-industry/industry-overview.html http://www.fandwb.com/the-news/434-heavy-rains-hit-colombian-flower-farms.html http://www.washingtonfloral.com/index.php/About-Us/letter-from-florexpo.html http://www.safnow.org/index.php?option=com_content&task=view&id=8259&Itemid=409

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