published April 21, 2011

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Economic Impact of Japan's Catastrophe

© 2011 Tom Oder
Tainan City Mayor Lai Ching-te stresses the importance of the orchid industry to the economy of Tainan and Taiwan during welcoming remarks at the opening ceremonies of the Taiwan International Orchid Show. The Taiwan Orchid Plantation, where the TIOS is held, is in Tainan. Photo: Thomas Allen Oder.

The March 11 earthquake in Japan is having a significant effect on Taiwan's orchid exports to one of its most important trading partners.

Japan is the second largest market destination for Taiwan Phalaenopsis growers. Almost a third of the Phalaenopsis exported from Taiwan, 31 percent, go to Japan, according to TAITRA, a Taiwan trade promotion organization. The United States receives 41.6 percent of Taiwan’s Phals and 5.6 percent go to The Netherlands.

Phalaenopsis are Taiwan’s primary orchid export and had an export value of US $82 million in 2010. Taiwan’s total orchid export value in 2010 was US$116 million.

"After talking with people in charge of other nurseries in Taiwan, most of us have been asked to postpone shipments,"Stella Yuan, chief executive officer of the Agriculture Business Division of Taiwan Sugar Corporation, said on March 14.

"There is no more information under these circumstances," she said. "We are very worried about the effects of the earthquakes. All we can do is to wait and see and trust the picture will be more clear next week."

SOGO is one of the nurseries that is postponing shipments to Japan.

© 2011 Tom Oder

 

Visitors to the Taipei International Flora Exposition enter the Taiwan exhibit in the outdoor international garden. The phalaenopsis behind the glass are in a standard 40-foot seagoing container like the kind Taiwanese growers use to ship their signature orchid, the phalaenopsis, to the United States. In this case, the container has been given a glass front to show off typical Taiwanese breeding. Photo: Thomas Allen Oder.

 

Most of their customers in the stricken country are safe and their greenhouses were not damaged by the earthquake or tsunami, said Jeffrey Feng, manager of the marketing and sales department. However, due to limited electricity and petroleum in some areas, the Japanese cannot heat their greenhouses.

Since any plants shipped now would be damaged by cold temperatures, SOGO has temporarily discontinued shipments to Japan. Those shipments account for about 15 percent of SOGO’s sales revenue, according to Feng.

The plan, Feng said, is to work with their customers and rearrange shipments based on the customers’ situation.

SOGO can keep the plants longer in their nursery in Taiwan as they wait for conditions to return to normal at destination greenhouses in Japan, Feng said. Or, if they have to cancel some orders to Japan, they will transfer those plants to customers to the United States or in Europe without penalty to the customers in Japan.

Yupin Biotechnology Corporation is one of the companies that says its exports to Japan will continue.

"It is because we export mature plants to Japan," said Michael Lee of Yupin's Export Department. "These plants will bloom in a cooling house after four months."



Thomas Allen Oder