Almost all shipments by Ecuador flower growers for Russia’s March 8 Ladies Day have been delivered. The question now becomes, will the growers get paid?
Most shipments went out before Russia’s invasion of Ukraine on February 24, and before world governments imposed economic sanctions. “We hear that the Russian economy has been badly hurt by these actions and are concerned that our members are paid,” says Alejandro Martínez, president of the growers association, Exploflores. “We have received word that at least two of the distributors that send flowers around the country have suspended operations. Almost 95 percent of our deliveries are now in Russia and we have $50 million at stake.”
After Colombia, Ecuador is the largest provider of cut flowers to Russia, with annual sales amounting to about $120 million.
Most flowers are shipped by Air France, KLM and Martinair Cargo to Amsterdam where they continue on to Russia in refrigerated trucks. All three carriers suspended service to Russia on February 26. A smaller amount of flowers ship from Cuenca.
Quito shipping agent Byron Torres, general manager of Hellman Distributors, says he is receiving little information from distributors in Russia. “At least one says it is operating as usual but others say there are problems but don’t say what those are,” he says. “Some companies in Saint Petersburg and Moscow are not returning calls or answering text messages.”
He added that some Ecuadorian flowers have been delivered to Ukraine, the status of which is currently unknown.
Martínez says that most payments from Russia to Ecuadorian growers depend on the SWIFT international banking system which has been suspended for most Russian banks. “We don’t know the alternatives at this point and are gathering information,” he said. “Some of the Russian distributors say they intend to pay but don’t know how. There is also the issue of the depreciation of the ruble and whether we will receive full payment in dollars or be forced to take a loss.”