Singapore grapples with thorny and competitive orchid market

Singapore grapples with thorny and competitive orchid market

By Dean Visser

SINGAPORE (DPA): Orchid cultivation is just the kind of industry that tiny, high-tech Singapore likes - clean, green and exotic, a business where ingenuity and precision stand a fighting chance against pure brute quantity.

But orchid exporters in the city-state - the world's second largest supplier of the popular blooms - are grappling to keep their place as costs rise and more players enter the quirky market.

Singapore shipped out only S$23.5 million (US$15.6 million) worth of orchids in 1996, the lowest figure in years and a startling drop from US$27.52 million in 1995.

Government officials and flower growers said the drop-off was partly caused by tight price competition from vastly larger Thailand, which exports more orchids than any other country.

"Thailand has been able to market at sometimes half the price of Singapore," said Toh Peng San, president of the Singapore Orchid Exporters Association and managing director of Toh Orchids.

There is little that can be done about this in Singapore, a wealthy island republic of 647.5 square kilometers (259 square miles) where owning land is an obsession and the standard of living is by far the highest in Southeast Asia.

Singapore has a highly-trained, English-speaking labor force whose average yearly income is 24,000 Singapore dollars, far more than Thailand or any other country in the region.

Overcrowding is another problem, as boom times in the early 90s drew a lot of new players into Singapore's orchid business. "If everyone jumps into the same pool, it's a bit difficult for the best swimmers to move around," Toh said.

Singapore orchid growers are also keeping a wary eye on other countries that are venturing into the industry.

"Trinidad and Costa Rica are going into the tropical dendrobium market. This is a major variety exported by Singapore and Thailand," Lee Siew Mooi, head of the Orchid and Ornamental Plant Section at Singapore's government Primary Production Department, said.

Countries in Singapore's own back yard are causing some further concerns by venturing into orchid exporting. Malaysia, Indonesia, India and even China have been taking steps toward building up the industry.

The fickle nature of the orchid market is another problem for exporters in Singapore, and around the region.

"The orchid industry is like the fashion industry," Lee said. "People are always looking for new things."

Cultural and regional tastes come into play too. When Japan was a growing market, excited growers in Singapore quickly tailored their orchids to the Japanese aesthetic.

"A few years ago we discovered that the Japanese like pink color," Toh said. "We developed in Singapore a pastel pink orchid."

While the pink blooms were wildly popular in Japan, they caused trouble elsewhere.

"We lost the German market," he said. "Germany at one time was our biggest market, and the pink orchids are one reason we lost it."

Germans and other European orchid fanciers "love the big, strong-stemmed flowers", Toh said. "The Japanese love the more delicate variety."

"We are far too reliant on the Japanese market where orchids are concerned," Toh said. The Japanese bought 17.34 million Singapore dollar's worth of the flowers in 1996, some 73 per cent of Singapore's total orchid exports.

Australia comes in a remote second with only 1.46 million, followed by Malaysia with 1.40 million and Greece and Switzerland with 0.58 million each.

Despite the less-than-flowery outlook, Singaporean officials and orchid dealers expressed their country's characteristic determination and optimism, sticking to Singapore's oft-proven "best, not most" recipe for success.

"We still have the lead," Lee said. "We have a lot more variety (than competitors), and we have the lead in technology."

"We are focusing on marketing and on developing new varieties for the market," Lee said. "Because of our space constraint, we go for quality. We want to maintain premium prices for our products."

"We have to go on probing that edge," Toh agreed. "We can keep creating new varieties to meet the market requirements, whereas the Thais just put what they have on the counter."

Singapore is quite secretive about new orchid markets it is exploring, but China is known to be one. China's 40 per cent import tax and 17 per cent value-added tax, however, would make exporting to China "quite impossible", Toh said.

"We have to look for a location to grow the flowers there," he said.

Toh said he and his company had already set up some operations in Malaysia. "We are also looking at Vietnam, Myanmar and India," he said.

But he noted that Vietnam and especially Myanmar, while they offer low costs, would need better infrastructure and air traffic in order to be adequate hosts for Singapore's satellite orchid farms.