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Orchids Cultivation




The fundamental issue in the Phalaenopsis industry


by Chiachung Chen


From 2003 to 2007 was the best period in Europe for the Phalaenopsis industry. The supply was increased each year. However, the sale price was stabilized. The Phalaenopsis pot plants were called a miracle crop in the flower industry. This industry expanded rapidly in these years. The key point for this industry is the constant supply of Phalaenopsis pot plants through the years.

I. The process of Phalaenopsis pot plant production

The flow chart of the traditional Phalaenopsis production is showed in Figure 1. A nursery such as Floricultural and Anthura performs the breeding, selection and production of young plants. As the young plants reach the required size (usually determined by leaf width and culture period), young plants are delivered to a production company such as Opti-Flor and Ter Laak, young plants are transplanted into 12-cm pots and sent to the vegetative-phase greenhouse.

In this growing greenhouse, typical day and night temperature are maintained at 28 and 26. As these plants reach the mature state, they are moved to a cooling room for spiking. This environment is maintained at 20 and 18 for the day and night, respectively.

The required period for the Phalaenopsis pot plants in weeks is shown in Figure 2. At the nursery, 2 or more years are required to produce tissue-culture plantlets from the mother plants. These plantlets are removed from culture vessels and transplanted into a soft tray or plug tray. After 26 weeks’ culture, plantlets grow to be young plants and are delivered to the production company. At the production company, half a year (26 weeks) is required to culture the young plants into mature plants and treat the plants by cooling for flowering. The Phalaenopsis pot plants are then transported to auction market or to the customer directly.

The flow chart in Figure 2 shows the perfect production plan. The production companies receive the young plants from nurseries in regular schedules. Each week or every 2 weeks, they receive a fixed quantity of young plants and prepare them for production. After 46 or more weeks, these plants are sole as flower products. The production period is fixed.

Because of the regular production schedule, the space utilization of a greenhouse for production is easy to plan. Nearly 30% area is used for the first stage, the vegetative-phase; 15% area is used for the second vegetative phase; 17% area is used for spiking; and the last 38% area is used for flowering. The required labor is fixed and the management is easy.

Because the production companies receive the young plants at a fixed time, the nursery can easily arrange their production plan. They can produce the same quantity of young plats every week, so they can prepare the same quantity of plant-tissue plantlets in the same quantity each week. In other words, sterile laminar-flow cabinets can operate every working day and the required number of operators and quantities of tissue-culture materials are easy to prepare.

So the key to the success story of the Phalaenopsis industry is the supply of a fixed quantity of plantlets by nurseries. The production company receives a similar quantity of young plants and sells them after a fixed culture time. In the auction market, the same quantities of Phalaenopsis pot plants are sent every working day and similar quantities of products are sold in the market. In the first stage of 2003-2007, each sector of this Phalaenopsis industry worked well and smoothly.


II. The change of sale price

Since 2008, the quantity of Phalaenopsis pot plants had the problem of over-supply. The supply during each month in the auction market was not constant. The sales quantities of Phalaenopsis in a typical auction market for 2010 and 2011 are in Figure 3. In some months, the supply quantity was higher.

The sale prices of Phalaenopsis in the auction market for 3 years (2008-2010) is in Figure 4. Prices were higher in February, May and November. The lowest price was in summer.

A similar trend could be found in the data for 2014 (Figure 5). There are three sizes of pot in the flower market. The distribution of prices for three pot sizes was similar. Higher prices were found in February, March, May, November and December. The lowest prices were in summer.


III. The new production schedule

At the beginning of the diversity of the Phalaenopsis pot plants market, different pot sizes were accepted in the market. The production schedule for four pot sizes is in Figure 6. The required culture period differs for various pot sizes, and the required space for different pot sizes differs. The change in production schedule affects the production period, required greenhouse space and amount of labor. It also affects the delivery time and quantity of young plants for the nursery.


IV. The estimated demand for Phalaenopsis pot plants in the market

The law of demand and supply is the basic principle for the flower market. The estimated trends of the demand are in Figure 7.

Three types of demands are as follows:

1.      Small demand: June, July, August and the first 2 weeks of September

2.      Moderate demands: January, March, October

3.      High demand: February, May, the last 2 weeks of September, November, December. 

For production companies, the Phalaenopsis production was affected by their supply of pot plants. The estimated demand for Phalaenopsis in one auction market of The Netherlands is in Figure 7.

1.      If the total supply quantity is 600,000 units (in Figure 7), the supply of each week is lower than that of the demand, and the orchid price is high. That was true in the era of 2003-2007.

2.      If the total quantity is 1,000,000 units (in Figure 7). Orchid company gain benefit in some months and loss in others’ month. As the gain larger than loss, they obtain the positive net income.

3.      If the total supply quantity is too high (1,400,000 units in Figure 7), orchid companies obtain a benefit in only some months. Most of the year, they receive a negative net income. The total income is negative.

To operate an orchid production company sustainably, the total supply of Phalaenopsis pot plants for each week or each month should to be adjusted. Now, to obtain more benefit, the basic way is to reduce production costs by increasing the growing area of the orchid company. Some companies with small greenhouse areas were forced out of this industry.


V. Fundamental problems in the Phalaenopsis industry

Besides reducing production costs by increasing greenhouse area, the other way is to adjust the supply of Phalaenopsis pot plants in each week or each month, that is, orchid companies could increase the supply in higher-demand months such as in February, March and May and reduce the supply in the hot season. In this way, the supply and demand could be balanced. The supply of Phalaenopsis pot plants is not constant throughout the year. There will be higher requirements during some important holidays and pretty low requirements in the summer.

If production companies adopted this new production schedule, the space utilization of their greenhouse needs to be rearranged. The labor requirement must be modified. The most important change in the production schedule is the supply time and quantity of young plants. As the young plants are delivered, they are not cultured with the same schedule and sold with same quantity. Orchid production companies want to order more young plants for high-demand months and fewer quantities for summer.

As the production companies change their production plan, a serious problem occurs in the nurseries. The nursery needs to deliver a high quantity of young plants in high-demand months and less quantity during some weeks. It needs to modify the production plan. The laboratories need to produce more tissue-culture plantlets in some months and reduce the production in other months. They cannot produce the same quantity of plantlets for each day or each week. Under this condition, all sterile laminar-flow cabinets do not operate all around the year. This uneven production schedule cause management problem in the laboratory. This is the fundamental problem for the Phalaenopsis industry in Europe.

Some methods could be used to alleviate this uneven production. The Original Equipment Manufacturer of tissue-culture plantlets in other countries is one way. However, overseas laboratories also face same problems of uneven production as their production scale is expanded.

The uneven supply of flowers to market is the essential problem for the Phalaenopsis industry could make the balance of demand and supply. The supply and demand should be balanced. However, the uneven supply to market induces an uneven production of young plants and tissue-culture plantlets for the nurseries and problems for nurseries and production companies.






        Note: Black- 2009, Blue- 2010

Figure 3. Sales of Phalaenopsis in a typical auction market



Figure 4. Sale price of Phalaenopsis in a typical auction market




Figure 5. Sale price of three pot sizes of Phalaenopsis in 2014



Figure 7. Estimated demand of Phalaenopsis in The Netherlands




About the author:

Professor Chiachung Chen, Ph. D.

Biosystems Engineering Laboratory
National ChungHsing University

250 KuoKuang Rd.,

Taichung, Taiwan 40227

Tel: 886-4-22857562, Fax: 886-4-22857135

Web site: http://amebse.nchu.edu.tw/orchids_cultivation.htm

Email: ccchen@dragon.nchu.edu.tw