The international market for cut flowers is worth over $100bn a year – twice the size of the copper trade. The market is becoming increasingly electronic and sophisticated. Could a futures market bloom? Siân Williams investigates.
The flower market rarely makes the headlines, but it is a large industry. UK consumers spend £2.2bn on flowers a year, more than the £2bn they spend on music.
As an agricultural commodity, in which price is affected by many variables beyond the control of growers and distributors, flowers might be suitable for futures trading.
For example, 14% of the production cost of cut flowers in the Netherlands, the world’s biggest flower exporter, comes from energy and transport. Light intensity, the availability of water and the cleanliness of soil affect crop yields; then there are the cost of pesticides and other chemicals and financing costs.
The market is also influenced by trends....