For many, flower bouquets are the go-to gift choice when congratulating a colleague, visiting an ailing relative, or simply showing love and kindness to partners and friends.
And the global popularity of these carefully-arranged and vividly-colored bundles has led to the creation of a billion-dollar flower bouquet market. And demand for beautiful bouquets has kept growing, with global flower bouquet exports in 2021 reaching $11 billion—which is a 30.2% rise since 2017.
Louis Lugas Wicaksono uses data from World’s Top Exports to highlight the spread of this industry. In this image, he shows the flower bouquet exports across different countries in 2021.
Far at the top of the list and best known for their tulips, the Netherlands dominated the flower bouquet export industry in 2021.
Four economy-wide factors—governance, education, infrastructure, and trade policy—relate closely to more varied and complex exports across countries
As the world’s biggest copper producer, Chile’s shipments of the metal meet around one-third of global demand and represent about half its goods exports.
But beyond mining’s dominance, Chile’s trade flows are more varied and complex than they may appear, with significant exports of vehicles, pharmaceuticals and telecommunications equipment. And according to a recent IMF staff paper, the Andean economy is among those that shine as a role model for diversification policies.
By looking beyond commodities, the research shows that economy-wide policies such as governance and education help foster diverse exports more than narrowly targeted industrial policies, a finding that can better guide nations aiming to expand their international trade.
The examination of 201 countries and territories goes beyond the economic complexity indices that have traditionally been used by economists. Those proxies for the productive capability of a given economic system have strong sensitivity to commodities, which can distort their accuracy.
For a more nuanced read, staff research proposes new ways to gauge diversity and complexity of national exports and suggests how economy-wide policies can foster such variety. Economists call these horizontal policies because they apply broadly across a country instead of targeting single sectors. The approach also takes stock of an economy’s geographic proximity to trade partners, and how it affects exports excluding commodities like metals or oil.
This lens offers policymakers lessons for how they can better support more multifaceted trade, a common objective in emerging and developing economies because it’s associated with less volatile economic output and faster long-term expansion.
Four key factors
The methodology shows a clear a link between the non-commodity exports that aid diversification and complexity and four economy-wide variables that help support them: governance, education, infrastructure, and open trade. Improving those areas helps to diversify by creating conditions that make it possible to boost complex or higher-value-added exports.
This is significant because demonstrating how economy-wide policies do explain diversification challenges the belief that industrial policies, meant to support specific industries, offer the best way to broaden trade.
The analysis shows that, except for abundant copper reserves, Chile’s economic profile, surprisingly, resembles Malaysia’s. The Asian nation has similarly strong education and institutions, but it benefits from being much closer to the major global supply-chain hubs of China, Japan and Korea.
Prominent Asian and European exporters, from Hong Kong and Singapore to Ireland and Denmark, have among the most diverse and complex shipments and the strongest horizontal policies.
Good policies can make a big difference
For governments aspiring to more varied trade flows, the new approach to explaining diversification underscores the need to effectively shorten geographic distance by enhancing connectivity between nations. Better transportation logistics, at seaports for example, effectively shorten distance by reducing transit times for goods. Other helpful policies include easing trade policy barriers, enhancing trade facilitation, fostering the spread of technology through educational exchange programs, and investing in communication technologies such as broadband that support the digital economy.
Strengthening horizontal policies may seem challenging, especially for countries with lower income. However, several countries have much stronger policies than expected for their income levels, including Rwanda for governance; Georgia and Ukraine for educational attainment; Malaysia for infrastructure; and Mauritius and Peru for tariffs. These economies can be role models.
To be sure, that doesn’t deny the potential effectiveness of more targeted support for individual sectors. Industrial policy levers, though, may be less effective or even harmful. Potential drawbacks include diminished fiscal capacity, a race to the bottom in taxation, and eroded multilateralism. Furthermore, there is no cross-country statistical evidence of their effectiveness.
Instead, diversification strategies built around broader policies and connectivity are both less controversial and more supportive of export diversification and complexity.
Source: IMF, article by Gonzalo Salinas, 22 September 2021
The Department of Trade, Industry and Competition (the dtic) launched the Export Barriers Monitoring Mechanism (EBMM) that will put South Africa in a strong position to provide the type of consistent, ongoing support that is needed to continuously improve the country’s export environment. The Department’s e Deputy Director-General of Export Development, Promotion and Outward Investments, Ms Lerato Mataboge said the fundamental aim of EBMM is to make the government’s support to exporters facing barriers more effective, more flexible, and more accessible.
By creating a systematic approach to monitoring these barriers, the government can develop a long-term agenda to target the most important export barriers. By addressing each individual barrier, government can begin to manage each problem with the level of nuance and detail needed for these complex challenges.
During an initial pilot project, 28 key export barriers were processed by the EBMM and during the initial phase of the national lockdown, the EBMM methodology was used to process 76 barriers related to COVID-19. From today, the EBMM is open to any firm that encounters an export barrier of any kind, whether locally or in any foreign market.
In 2018, South African exporters faced an estimated 154,571 unique customs requirements worldwide. Over the last ten years, 23,795 new or amended technical barriers to trade have been registered with the World Trade Organisation; while over the same period 13,364 sanitary and phytosanitary barriers were registered or amended.
DTIC’s priority is to work progressively to smooth these barriers, the experience of the last decade of trade has demonstrated that we need to be prepared to manage this growing complexity. Increasingly, a key component of global competitiveness will be how we manage a constantly changing global trading environment. Managing this environment will only be possible through a close working partnership between the government and the private sector.
Speaking at the same launch, the Executive Director of the South African Electrotechnical Export Council, Ms Chiboni Evans, highlighted the importance of maximising content and projects in the African continent, and the important role played by export barriers in reducing competitiveness in the region.
Persistent logistics barriers meant that transporting goods by road took longer from all our major cities to mines in the Southern African Development Community (SADC) region. It was then easy for these countries to import goods from Asia, Americas and Europe rather than waiting on South Africa.
Highlighting previous experiences of partnering with the dtic to resolve export barriers, Ms Evans noted that a lot of the barriers to export can only be resolved by the private sector working together with government. She added that this new mechanism will assist greatly in opening up government support to a much broader spectrum of private sector individuals.
Maintaining trade flows during the COVID-19 pandemic will be crucial in providing access to essential food and medical items and in limiting negative impacts on jobs and poverty.
The speed and scale of the crisis are unprecedented. But governments can ameliorate the impact. The following documents, hyperlinked to this page provide initial guidance for policymakers on best practices to mitigate pandemic-related trade risks, support trade facilitation and logistics, and implement trade policy in a time of crisis.
Managing Risk and Facilitating Trade in the COVID-19 Pandemic
Maintaining trade flows as much as possible during the COVID-19 pandemic will be crucial in providing access to essential food and medical items and in limiting negative impacts on jobs and poverty.
Some countries are closing border crossings and implementing protectionist measures such as restricting exports of critical medical supplies. Although these measures may in the short-term provide some immediate reduction in the spread of the disease, in the medium term they may undermine health protection, as countries lose access to essential products to fight the pandemic. Instead, governments should refrain from introducing new barriers to trade and consider removing import tariffs and other taxes at the border on critical medical equipment and products, including food, to support the health response.
Trade facilitation measures can contribute to the response to the crisis by expediting the movement, release, and clearance of goods, including goods in transit. The World Bank Group provides guidance and technical assistance to developing and least developed countries to implement best practices to facilitate the free flow of goods.
Do’s and Don’ts of Trade Policy in Response to COVID-19
Despite the initial inclination of policy makers to close borders, maintaining trade flows during the COVID-19 pandemic will be crucial. Trade in both goods and services will play a key role in overcoming the pandemic and limiting its impact in the following ways:
by providing access to essential medical goods (including material inputs for their production) and services to help contain the pandemic and treat those affected,
ensuring access to food throughout the world,
providing farmers with necessary inputs (seeds, fertilizers, pesticides, equipment, veterinary products)for the next harvest,
by supporting jobs and maintaining economic activity in the face of a global recession. Substantialdisruption to regional and global value chains will reduce employment and increase poverty.Trade policies will therefore be an essential instrument in the management of the crisis.
Trade policy reforms, such as tariff reductions, can contribute:
to reducing the cost and improving the availability of COVID-19 goods and services,
to reducing tax and administrative burdens on importers and exporters,
to reducing the cost of food and other products heavily consumed by the poor and contributing to themacro-economic measures introduced to limit the negative economic and social impact of the COVID-19 related downturn,
to supporting the eventual economic recovery and building resilience to future crises.
Governments with industries producing COVID-19 medical goods or food staples can further contribute by committing to refrain from limiting exports through bans or taxes. If export restrictions must be used, then they should be targeted, proportionate, transparent, and temporary.Measures to streamline trade procedures and facilitate trade at borders can contribute to the response to the crisis by expediting the movement, release, and clearance of goods, including goods in transit, and enabling exchange of services.
Reforms can be designed to reduce the need for close contact between traders, transporters and border officials so as to protect stakeholders and limit the spread of the virus, while maintaining essential assessments to ensure revenue, health and security. Interventions to sustain and enhance the efficiency of logistics operations may also be critical in avoiding substantial disruption to distribution networks and hence to regional and global value chains.
The covid-19 pandemic is increasingly a concern for developing countries. Using a new database on trade in covid-19 relevant products, this paper looks at the role of trade policy to address the looming health crisis in developing countries with highest numbers of recorded cases. It shows that export restrictions by leading producers could cause significant disruption in supplies and contribute to price increases. Tariffs and other restrictions to imports further impair the flow of critical products to developing countries.
Following the announcement made by the Minister of Finance in the 2020 Budget Review regarding the introduction of export taxes on scrap metal, the National Treasury today publishes for consultation the basic approach for such tax. This proposal is related to the phasing out of the current price preference system for scrap steel, and follows the recommendations from a feasibility study conducted by the International Trade Administration Commission (ITAC).
Given the need to consult all stakeholders, including possible winners and losers, the consultation will take place in two phases. The first phase will be a shorter and broader public comment process on the objective, implementation, functioning and economic and financial impact of such an export tax, including the level of rates and base for such a tax. Comments on the impact to current firms and industries, and the implications for the tax and trade system will also be welcome, as well as comments on strengthening the administrative capacity of SARS to implement such export taxes.
The first phase will be followed by a more intensive second phase of public comment, on the proposed legislative provisions to give effect to specific export taxes on scrap metal, to be included in the 2020 draft Taxation Laws Amendment Bill (TLAB). The first phase will commence immediately and run up to the end of April 2020, while the second phase will commence with the publication of the Taxation Laws Amendment Bill in mid-July and run up to the end of August/September 2020.
As recommended by ITAC, the proposed export taxes to apply to scrap metal are as follows:
Scrap metal category Equivalent specific tax (Rand per tonne) Ferrous metals (including stainless steel) R1000.00 per tonne Aluminium R3000.00 per tonne Red Metals R8426.00 per tonne Other (waste and scrap metals) R1000.00 per tonne
Written comments on the proposal on export taxes on scrap metal must be submitted by no later than 9 April 2020.
Upon receipt of the comments and submissions on the proposal on export taxes on scrap metal, the National Treasury (working with the Department of Trade, Industry and Competition and other governmental stakeholders) will engage directly with stakeholders until the end of April through technical workshops to discuss the comments received. Thereafter, the proposed provisions on the export taxes on scrap metal will be developed for inclusion in the TLAB, which will be published in mid-July 2020 for public comment.
Further, as part of the TLAB consultation process, National Treasury will also engage with stakeholders through the usual workshops held after the receipt of written comments on the draft Bill. The Standing and Select Committees on Finance in Parliament are expected to make a similar call for public comment, and convene public hearings on the TLAB before the formal introduction of the Bill in Parliament. Thereafter, a response document on the comments received will be presented at the parliamentary committee hearings, after which the 2020 draft Taxation Laws Amendment Bill will then be revised, taking into account public comments and recommendations made during committee hearings, before the Bill is tabled formally in Parliament for consideration.
The proposal on export taxes on scrap metal is included in Chapter 4 of the 2020 Budget Review, which can be found on the National Treasury (www.treasury.gov.za) website.
The Indian Customs department (CBEC) has allowed self-sealing procedure as of 1 October for containers to be exported, as it aims to move towards a ‘trust based compliance environment’ and trade facilitation for exporters.
In a circular to all Principal Chief Commissioners, the Central Board of Excise and Customs (CBEC) said exporters who were availing facility of sealing at the factory premises under the supervision of customs authorities will be automatically entitled for self-sealing facility.
It said that permission once granted for self-sealing at an approved premise will remain valid unless withdrawn. However, in case of change in the premise, a fresh approval from Customs department will be required.
“The new self-sealing procedure shall come into effect from October 1, 2017. Till then the existing procedure shall continue,” the CBEC said.
It asked field officers to notify a Superintendent-rank officer to act as the nodal officer for the self-sealing procedure.
The officer will be responsible for coordination of the arrangements for installation of reader-scanners.
Earlier in July, the CBEC had said it will introduce the system of self-sealing by 1 September , as against the practise of sealing of containers under the supervision of revenue officials.
However, the CBEC now said that exporters can self-seal containers using the tamper proof electronic seals from 1 October 2017.
Under the new procedure, the exporter will have to declare the physical serial number of the e-seal at the time of filing the online integrated shipping bill or in the case of manual shipping bill before the container is dispatched for the port.
The exporters will directly procure RFID seals from vendors.
“In case, the RFID seals of the containers are found to be tampered with, then mandatory examination would be carried out by the Customs authorities,” the CBEC said.
From October 1, the exporters will need to furnish e-seal number, date of sealing, time of sealing, destination customs station for export, container number and trailer track number to the customs authorities.
In a circular in July, the CBEC had said it endeavours to create a trust based environment where compliance with laws is ensured by strengthening risk management system and Intelligence setup of the department.
Accordingly, CBEC has decided to lay down a simplified procedure for stuffing and sealing of export goods in containers. Source: The India Times > Economic Times, 5 September 2017.
The South African Revenue Service (SARS) has seized a Ferrari that was smuggled into the country. The luxury vehicle worth an estimated R13.8m was stored at a warehouse in South Africa since 2014.
In February 2015, however, the vehicle’s owner submitted an export declaration to take the car to the Democratic Republic of Congo through Beitbridge border post. A day later, there was an attempt to have the vehicle returned to South Africa through the same border post.
The vehicle has been detained and a letter of intent has been issued to the owner in terms of the Promotion of Administrative Justice Act No 3 of 2000 to enable them to make representation to SARS.
While commodity prices tanked and unemployment rose during South Africa’s worst ever drought over the last few months, wine making increased.
What’s more, South African wine exports were up a further five percent in 2015 and the industry is expecting even more growth in 2016 as South African wine continues to find new markets around the world.
While almost every farming industry is struggling in South Africa, the wine industry is going through “one of its most exciting phases in history” according to Roland Peens, director of wine retailer Winecellar.co.za.
The country is the seventh largest producer of wine in the world and for the 12 months preceding June 2015, wine production was at 959 million liters, with 423 million liters sold for export and 395 million liters sold domestically.
Not only is South Africa producing some fantastic wines, but the struggling rand is actually helping wineries as it offers a lucrative export market. The UK is by far the biggest receiver of South African wines with 109 million liters exported here. Germany is second with 79 million while Sweden, France, Netherlands and Denmark all take between 20 to 25 million litres of South African wine.
Canada (18 million litres), USA (11 million liters), Belgium and China (9 million litres each) and Japan and Switzerland (6 million litres each) make up the other big export markets. Source: www.thesouthafrican.com
Kenya’s cut flower exports rose by 11.7 per cent during the first quarter of this year to 136,601 tonnes. This was a remarkable growth for the sector at nine per cent in volumes and 18 per cent in value compared with the same period last year.
“This was a remarkable growth for the industry that has endured many challenges in the recent past. This calls for the government to continue creating a conducive environment for doing business,” said Kenya Flower Council chief executive officer Jane Ngige.
Vegetable exports, however, declined by 3.3 per cent from 16,600 tonnes to 16,1000 tonnes during the period under review. The agriculture, forestry and fishing sector on the other hand, expanded by 4.4 per cent compared with 2.2 per cent last year. This growth was reflected in the increased use of agricultural inputs during the quarter.
According to Kenya National Bureau of Statistics (Knbs), the country’s horticultural sector earned Sh100.8 billion last year, a six per cent growth in comparison with Sh94.7 billion earned in 2013.
This came despite the challenges that the flower industry faced in the last quarter of the year when Kenya started exporting under the European Union’s Generalised Scheme of Preferences (GSP) from October 1 to December 25 last year, following failure in the finalisation of the East African Community-European Union Economic Partnership Agreement (EPA).
Kenya remains one of the top three exporters of cut flowers in the world. The major markets are the EU, America, Australia, Russia, and Japan. Ngige said increased demand for fertilizer, a key input for agriculture sector, was notable as reflected by its import which grew by 18.4 per cent from 224,000 metric tonnes in first quarter 2014 to 265,9000 metric tonnes in the first quarter of this year.
Tea production and coffee sales declined by 27.2 per cent and 8.6 per cent, respectively. The fall in tea production was attributed to inadequate rains and frost that was reported in some tea zones. Source: Customs Today
Export taxes are increasingly becoming a focus of attention in South African trade policy, and the objective of this paper is to review the trade and economic issues associated with these taxes. While they are similar to import tariffs in their effects, export taxes remain very much the ‘poor cousins’ of import tariffs in trade policy circles. While attention is paid to them in many bilateral and regional agreements, the multilateral World Trade Organisation (WTO) has little to say about them other than an awakening to their importance when it comes to negotiating a new member’s accession to the world body.
South Africa currently levies an export tax on unpolished diamonds in an attempt to develop local skills and promote the domestic industry, and it is considering a recent department of trade and industry report that recommends that consideration be given to an export tax on iron ore and steel. South Africa has some of the prerequisite market power in the global iron ore trade but not enough to ensure an outcome entirely beneficial to its export trade. The salutary example of South Africa’s competitor India is discussed, as India recently increased its export tax in this sector to 30% and has seen its global market shares plummet. The more interesting sector for South Africa is the ferrochrome and ferrochrome ore trade, as here South Africa does have significant market shares. South Africa has had about a 45% market share over the last three years in global exports, while China has imported around 70% to 85% of this global trade in recent years. Advocates argue that a tax on chromite ore exports will shift the relative economics back to empower South African producers of processed ferrochrome. This sets the stage for an interesting battle between South Africa and China, and one set against the background of South Africa’s recent admission to the BRICS club. If such an export tax is invoked, South Africa needs to be conscious that it at best provides a window of opportunity for the domestic sector to improve its technological efficiency and that it is not a long or even medium-term solution.
To curb rampant corruption and smuggling through Zimbabwe’s borders the government is introducing new import and export licences with special security features.
Mike Bimha, Zimbabwean Industry and Commerce Minister says the local industry was being negatively affected by cheap imports into the country, some of which were being smuggled through the country’s borders.
“There are a number of fake import and export permits in the country, which is affecting our industry.As a consequence, my ministry has given a directive that all import and export licenses have to be renewed so that new ones can be issued that have special security features.”
“We are also working on a number of interventions to protect local industry.”
“We are looking at removing duty on raw materials as well as reviewing tariffs and duties with a view to restricting some imports coming into the country.”
“The reviewing of duties is not a once-off exercise but will continue in consultation with local industry.”
“We meet with industry on a regular basis where we discuss tariffs and we make the policy recommendations based on these meetings.
Zimbabwe’s trade deficit is expected to widen this year with statistics showing that the import bill so far this year is now $8,3 billion against exports of $5 billion while imports for last year were $7,6 billion against exports of $4,43 billion. Source: TransportWorldAfrica
The report, South Africa Economic Update 5: Focus on Export Competitiveness, examines the performance of South Africa’s export firms against that of peers in other emerging markets— and analyzes the challenges. It assesses South Africa’s economic prospects in the context of the global economic environment and prospects.
With this Economic Update, we hope to enrich the on-going debate on growing a sector critical for South Africa’s economic growth. As with previous editions, this report is intended not to be prescriptive but to offer evidence-based analysis that will help bring South Africa’s policymakers, researchers, and export stakeholders closer to finding innovative and sustainable ways to grow the sector. The report highlights opportunities for growth, particularly with Sub-Saharan Africa being the largest market for non-mineral exports. It also explores strategic directions that can ignite export growth and help South Africa realize its goals of creating jobs and reducing poverty and inequality.
The report identifies three areas that present opportunities to promote the competitiveness and spur the growth in South Africa’s export sector:
Boosting domestic competition would increase efficiency and productivity. By opening local markets to domestic and foreign entry, South Africa would enable new, more productive firms to enter and place downward pressure on high markups. This would lower input costs and tip incentives in favor of exporting by reducing excess returns in domestic markets. Competition would also stimulate investment in innovation and, over time, condition the market to ensure that firms entering competitive global markets have reached the productivity threshold to support their survival and growth.
Alleviating infrastructure bottlenecks, especially in power, and removing distortions in access to and pricing of trade logistics in rail, port, and information and communication technologies would reduce overall domestic prices and further enhance competitiveness. It would be especially beneficial for small and medium-size exporters and non-traditional export sectors, which these costs tend to hit harder.
Promoting deeper regional integration in goods and services within Africa would generate the right conditions for the emergence of Factory Southern Africa, a regional value chain that could feed into global production networks. South Africa could play a central role in such a chain, leveraging the scale of the regional market, exploiting sources of comparative advantage across Africa to reduce production costs, and providing other countries in the region a platform for reaching global markets. Progress on all three fronts would help catapult South Africa toward faster-growing exports, allowing it to realize the higher, more inclusive, job-intensive growth articulated in the National Development Plan.
Zimbabwe’s central bank on Wednesday said it would allow the Chinese yuan, Indian rupee, Japanese yen, and Australian dollar to be added into the basket of multiple currencies to be circulated inside the country.
The decision was unveiled by the monetary statement issued by acting governor of the Reserved Bank of Zimbabwe Charity Dhliwayo.
“We wish to advise exporters and the general transacting public that individuals and corporates can also open accounts denominated in the Australian Dollar (AUD), Chinese Yuan (CYN), Indian Rupee (INR) and Japanese Yen (JPY),” Dhliwayo said.
She said the decision to include the three foreign currencies is made upon the consideration that trade and investment ties between Zimbabwe, China, India, Japan and Australia have grown appreciably in recent years.
Zimbabwe has adopted a multiple currency system since the collapse of its local currency, the Zimbabwean dollar in 2009. The most used currency in the southern African country since then has been the US dollar and South African rand. The Botswana pula and British pound are also among the foreign currencies allowed to circulate.
Zimbabwe’s Finance Minister Patrick Chinamasa said last December during his annual budget statement that the multiple currency system is to stay for foreseeable future.
China is Zimbabwe’s major trading partner. Bilateral trade exceeded 1 billion US dollars for two consecutive years since 2012. While Zimbabwean officials have expressed the intention to add Chinese yuan into the currency basket, no formal agreement has been signed between the central banks of the two countries yet. Source: zimdev.wordpress.com
Ngodwana Mill, situated in the province of Mpumalanga (South Africa) is a fully integrated kraft mill producing pulp for own consumption as well as newsprint and containerboard. (Sappi)
The Sappi group, one of the world’s largest manufacturer of gloss paper, plans to use the port of Maputo, in Mozambique to export to Asian markets a group official told financial news agency Bloomberg. Alex Thiel, who is responsible for the group’s business in Southern Africa, said that in October an agreement was reached with Dubai-based port operator DP World, which together with South African logistics group Grindrod and state company Portos e Caminhos de Ferro de Moçambique, is a partner in Maputo port company Empresa de Desenvolvimento do Porto de Maputo.
The Sappi group, which is also one of the world’s largest producers of dissolving wood pulp, plans to ship 10,000 containers per year via the port of Maputo as it is just 250 kilometres from the group’s factory in the South African province of Mpumalanga.
“We have decided to export via the port of Maputo in order to save money as the second-closet port, in Durban, is 650 kilometres from the factory,” said Thiel.
The Mpumalanga factory, which starting producing dissolving wood pulp at the end of July, has already reached 75 percent of its installed capacity of 210,000 tons per year, and is expected to achieve maximum production in February 2014. The wood pulp will be exported via the port of Maputo to China, India and Indonesia, where it will be used to make thread for the textile industry. Source: http://www.macauhub.com
You must be logged in to post a comment.