Report for Research Study on Thai Flowers and Cut Flowers in Japanese Market

Office of Agricultural Affairs, Tokyo Royal Thai Embassy

September 2008

Key Research Net Corporation No.11 Riki bldg., 7-5-34, Akasaka, Minato-ku, Tokyo 107-0052 Tel 03-5563-0868 Fax 03-3583-5555 [email protected] www.keyresearchnet.jp Contents

Summary ------1 Introduction ------5

I. Position of Floricultural Industry in Japan ------6 (1) Flowering plants indispensable to people’s living ------6 (2) Leveling-off demand for flowering plants in Japan ------6 (3) Growing import of flowering plants ------7 (4) Necessity of production cost reduction ------7

II. Flowering plant markets in the world------8 (1) Producing square measures for flowering plants in the world ------8 (2) Production value of flowering plants in the world ------8 (3) Growing consumption in Western countries and stagnant consumption in Japan -- 8 (4) Retail distribution channels in the world flower markets ------9

III. Productions of cut flowers/flowering plants in Japan ------11 (1) Production square measures for cut flowers and flowering plants in Japan ------11 (2) Production value of cut flowers and flowering plants in Japan ------11 (3) Future prospect of flowering plant production in Japan ------11 (4) Situation on number of registrations for new varieties of flowers ------24

IV. Import of cut flowers and flowering plants in Japan ------28 (1) Laws and regulations applicable to the imports of cut flowers and flowering plants ------28 1. The Customs Law ------28 2. Plant Protection Law ------28 3. Convention on International Trade in Endangered Species of Wild Fauna and Flora (Washington Convention) ------30 4. Plant Variety Protection Law ------30 (2) Import of cut flowers and flowering plants ------30 1. Decreasing domestic production and increasing import ------46 (3) Plant quarantine on imported cut flowers ------47

V. Distribution of cut flowers and flowering plants in Japan ------50 (1) Distribution of flowering plants ------50 (2) Distribution of cut flowers ------50 1. Cut flower markets ------50 2. Article characteristics of cut flowers ------56 3. Markets for orchid ------59 (3) Wholesale markets for flowering plants ------68 (4) Wet-type refrigerated distribution by bucket and others ------68

VI. Market trend and consumption trend of cut flowers and flowering plants in Japan ------72 (1) Market trend revealed by interviews with industry participants ------72 (2) Market trend revealed by consumer questionnaire survey ------74 1. Consumer questionnaire at flower shops ------74 2. Consumer questionnaire survey at flower schools ------84 3. Flower consumption trend in Japan revealed by consumer survey ------90 (3) Retail market of cut flowers ------91 (4) Market trend and consumption trend in flower markets in Japan (Conclusion) ---94 (5) Future perspective of flower consumption market in Japan ------94 1. For expanding flower consumption ------94 2. For expanding Den-phalae consumption ------95 3. Introduction of MPS (Flowering plants certification system) ------95

VII. Cut flowers in Thailand ------101 (1) Import of orchids------101 (2) About dendrobium phalaenopsis (Den-phalae) ------103 1. Wholesale price of Den-phalae ------103 2. Production of Den-phalae in Thailand and its export to Japan ------103 3. Import of Thai Den-phalae in Japan ------109 4. Shipment of Den-phalae from farm to its arrival in Japan ------110 5. Import and export cost for Den-phalaes ------111 6. Comments by importers not handling Den-phalae ------111 7. Consumers’ comments on Thai Den-phalae ------112 (3) Other Thai flowers ------112 (4) Japanese consumers’ comments on Thai flowers in interview-style surveying at shop fronts ------112 (5) Position of Thai cut flowers in imported cut flower markets in Japan ------112 1. Position of Thai cut flowers in import markets in Japan ------112 2. Competitions between Thai cut flowers and domestic or other countries’ cut flowers ------112 (6) SWOT of Thai cut flowers ------113 1. Strength ------113 2. Weakness ------114 3. Opportunities ------114 4. Threats ------115

VIII. R&D and technical development for flowering plants in Japan ------117 (1) National Institute of Floricultural Science (NIFS), National Agriculture and Food Research Organization ------117 1. About NIFS ------117 2. Cultivation and blooming regulation study team ------118 3. New character flowering plant development study team ------118 4. Flowering plant quality analysis study team ------118 5. Development of new variety ------118 (2) Research Institute of Environment, Agriculture and Fisheries, Osaka Prefectural Government ------120 1. New technique to cut buds for quality preservation ------120 2. Quality preserving technique for distribution ------120 3. Imported flowers and domestic flowers ------120 4. Contrivance for flower production ------121

IX. Floriculture enterprises in Bangkok and Chiang Mai ------121

X. Advices to Thailand ------122 (1) Den-Phalae ------122 1. Refrain from excess supply to Japan ------122 2. Elimination of short supply period (off-crop season) ------122 3. Invention of new variety of Den-phalae ------122 4. Regular shipment on specific day of week. ------122 5. Indication of size ------123 6. “Let’s present Den-phalae on special day” campaign ------123 (2) Marketing of flowers other than Den-phalae suitable to Japanese market ------123 (3) Alternative production center for domestic cut flowers ------124 (4) Seedling supply business ------124 (5) Ornamental plants ------125 (6) Fragrance flowers ------125 (7) Thai flower feature article in Japanese flower magazine ------125 (8) Advertisement in flower magazine ------126

APPENDIX-1 Main companies, organizations related to flowers business ------1 APPENDIX-2 Major Flower Exhibitions ------7 APPENDIX-3 Thailand companies and groups etc interviewed by Mr.Takahashi From July 16 to 25, 2008 ------8 APPENDIX-4 Names of companies, groups and associations with whom KRN interviewed ------10 APPENDIX-5 Photographs ------13 APPENDIX-6 Interview Report ------1-35 Summary Production of flowers and cut flowers in Japan The total production value of flowers in Japan is 479.4 billion yen of which that of cut flowers is 242.4 billion yen in 2006. Chrysanthemum is the most popular item that amounts to 79 billion yen accounting for 33% of whole cut flowers. Total production value of potted flowers amounts to 110.4 billion yen, of which orchid accounts for 31% of the total production amount. Total planted area of flowers in Japan is 36,743ha in 2006, of which 17,500ha is for cut flowers that accounted for 48% of total production area. Total shipment of cut flowers is 4,923 million stems, of which chrysanthemum is the leading item accounting for 1,875 million stems. Domestic production of flowers in Japan has been deceasing with its peak volume in 1998. Major factors of decreasing flower productions are attributable to a deceasing demand by sluggish economy due to the bursting of the bubble economy. Especially, these are the decrease in business demand for ceremonial occasions etc. and the number of people who are involved in flower production due to the advanced age of flower producers and the shortage of their successors.

Import of flowers and cut flowers of Japan The total import value of flowers of Japan in 2007 is 58,383 million yen, of which cut flowers accounts for about a half of the total value of 27,996 million yen. Chrysanthemum is a leading item in import value among cut flowers accounting for 29% of the whole value of 8,097 million yen in 2007, followed by 6,853 million yen or 24% of orchid, 5, 596 million yen or 20% of carnation, and 2,223 million yen or 8% of roses. The import of cut flowers of Japan keeps increasing every year since 1998. The import of cut flowers of Japan is characterized by the coexistence of the kinds of flowers and countries where these flowers are produced. For instance, chrysanthemum from Malaysia accounts for 70%, orchid from Thailand for 59%, and carnation from Columbia for 68% with top import shares respectively.

Market for imported orchid 6,853 million yen of total import value of orchid in 2007, the import amount from Thailand amounts to 3, 947 million yen which accounts for 59% of the total import value. The second place is New Zealand that amounts to 1,108 million yen, accounting for about 1/4 of that of Thailand. Most of the imported orchid from Thailand is Dendrobium Phalaenopsis (hereinafter called Den-Phalae), while the most of orchid from New Zealand is Cymbidium. When comparing the unit price per stem of orchid in the main wholesale markets in

Japan, Cymbidium is the most expensive per unit price and is traded around 400 - 800 yen per stem depending on the month traded. On the other hand, Dendrobium Phalaenopsis that is the most popular imported item is dealt at 30 to 80 yen per stem, which is just 1/10 of cymbidium.

Market trend of cut flowers and flowers in Japan The market sizes of flowers (all flowers including cut flowers, pot flowers, and bed flowers) are estimated to be approximately 1.5 trillion yen at the end users' price level. The personal consumption of flowers in Japan is in the second place in the world after the United States. The purchased amount of cut flowers per household of Japan in 2007 was 10,828 yen, which was a decrease by about 12% for the last 10 years as the purchase per household in 1998 was 12,268 yen. On the other hand, only 40% of the total domestic households buy flowers. The most favorite color of cut flowerers in Japan is white, and then light colors such as pink etc. but dark colors are not accepted by the market so much.

Flowers from Thailand Most of the imported orchid from Thailand is Den-Phalae. Yearly consumed stems of Den-Phalae in Japan is presumed to be about 100-120 million with slight differences year by year. Moreover, these stems are almost constant for the past 10 years.

Dendrobium Phalaenopsis (Den-Phalae) The wholesale price of Den-Phalae is highest in May, priced at more than 70 yen per stem. On the other hand, the lowest wholesale price is in January when the price per stem is approximately at 35 yen. The price in highest season is twice as much as that of the lower priced seasons. The reason that causes such a price difference is in an unbalanced demand and supply situation. The supply of Den-Phalae falls extremely for three months from April to June every year. Therefore, Den-Phalae is priced at the highest during this period.

Position of flowers of Thailand in import market The import value of cut flowers from Thailand to Japan in 2007 is 4, 094 million yen with 16.3% of share in importing countries that ranks at the second place following 5,013 million yen or 17.9% of Columbia. Until 2003, the import value of cut flowers from Thailand ranked at the top among all importing countries. That position was transferred to Columbia in 2004, since then Columbia has been enjoying the leading position in the cut flower import every year.

Even though Thailand became the second place in importing countries of cut flowers for Japan, they are keeping an important role as a cut flowers import country for Japan, with more importing value than that of Netherlands, New Zealand, Taiwan, Australia, and South Korea, etc.

Competition of cut flowers of Thailand with those produced in Japan or in other countries Almost imported cut flowers of Thailand into Japan are Den-Phalae. Because of the commodity characteristic of Den-Phalae that cannot be expected to other cut flowers, no one can find such a characteristic among cut flowers domestically made or imported from other countries. In other words, Den-Phalae is a flower indispensable for the cut flower's market of Japan.

SWOT of flowers of Thailand The most advantageous point of Thailand flower is in Den-Phalae that has established a certain position in the cut flowers market after all. Den-Phalae is being exported from Thailand to all over the world and the consumption in Japan is stable with 100-120 million stems a year. Another advantage of Den-Phalae is in a long life and a reasonable price. On the other hands, the weak point of flower industry in Thailand is that it has no competitive flowers complying with Japanese market besides Den-Phalae. In addition, Den-Phalae involves the problem of over supply, which has caused the price break in Japanese market. It is necessary to get rid of the situation of wholly-devoted to Den-Phalae so that Thailand may overcome such a problem. Therefore, it is necessary for Thailand to study the strategy to increase the export to Japan other flowers than Den-Phalae, such as, for instance, Phalaenopsis, Anthurium, Mokara, Oncidium, Aranthera, Vanda, and Cymbidium as cut flowers or pot flowers and to expand the export to Japan. Sonia and Anna share 80% or more of Den-Phalae exported from Thailand to Japan. It is always required for Thailand to study and develop new kinds of Den-Phalae in consideration of a serious influence once these items are bored by customers in spite of a current satisfactory marketing situation. We would like to advise as follows considering SWOT of flowers of Thailand.

Advice to Thailand Den-Phalae, which is the most suitable flower for the climate of Thailand, is produced mainly in the outskirts of Bangkok and exported all over the world. A large numbers of producers are making Den-Phalae causing, so to speak,

3 over-production, and, therefore, the price break in the export market. It is possible for producers and exporters in Thailand to solve the matter of price break and secure a reasonable profit if they discuss and take measures to adjust the supply of Den-Phalae for Japan in conformity with demand. Besides Den-Phalae, there are a lot of flowers in Thailand with export competitiveness such as Phalaenopsis, Anthurium, Mokara, and Onciidium, Aranthera, and Vanda. It is necessary to consider the strategy to export these flowers as cut flowers or pot-flowers for Japan. Greenhouses are indispensable for the production of flowers in Japan (especially in winter); however, a soaring fuel price for heating greenhouses caused by a recent rise of crude oil cost makes the flower-production unprofitable. Advanced age of flower farmers and lack of their successors will be a large factor of decreasing flower-production in Japan from now on. When considering a negative factor of such a flower production, it is worth while to consider to intend to produce cut flowers or pot flowers in Thailand that are currently produced in Japan as one of the measures to increase the export of flowers from Thailand to Japan because the flower production in Japan is expected to decrease in future to a large extent Thailand is excellent in a seedling production technology by Mericlones etc. Thailand should develop the production business of this seedling further and pay attention to the seedling supply business for the export to Japan by producing the seeds for cut flowers or pot flowers that are increasing the production cost in Japan. The import of the leafage (tree and leafage etc. mainly for ornamental plants) from Thailand is extremely small and is made only by a limited number of companies. However, ornamental foliage plants for appreciation centering on dracaenas and coconuts have much demand in Japan in parallel with cut flowers Thailand should advance the export to Japan of such ornamental foliage plants more positively. Consumers in Japan only know Den-Phalae as a flower from Thailand. One of the ways is to publish "Flower feature of Thailand" with the cooperation of a flower magazine publisher of Japan to let Japanese consumers understand flowers of Thailand well. R&D that Thailand should aim is to eliminate the off season of Den-Phalae production (to fin out a solution means of short supply occurring during April to June every year), the development of a new kind of Den-Phalae and the research, and development for keeping flower quality for a long time. Moreover, it is necessary for Thailand to always try to research and develop a new kind.

Introduction In Japan, flower cultivation for marketing is likely to have first emerged in the Edo era (1603-1867) and gained its momentum after the Meiji period (1868-1912). During this period, wholesalers and wholesale markets appeared connecting producers with retailers who sell flowers to consumers, and foundation for floricultural production and distribution was gradually established. However, it was only after the end of the World War II that flower production system as seen today was created. In only about a half century since that time, Japan’s floriculture industry has achieved a remarkable development up to the present date. Under such agricultural and social situations, the flower cultivation was revitalized initially by the outdoor culture of flowering plants in the 1950’s. The production of potted flowers and cut flowers began in urban neighborhoods. The production of cut flowers by open-field culture was started in the Pacific Ocean coasts having warm winter and even in cold upland areas during high-temperature summer season. Toward the end of the 1950’s, as soon as the agricultural plastic film was invented, it rapidly spread to be used for so-called PVC greenhouses for the cultivation of flowering plants. The greenhouse cultivation of flowering plants using simple heating equipment became prevalent in suburban areas, although floriculture production technology was still at a very low level at that time. As national income increases and people’s living becomes stable, demand for flowers becomes to grow as a matter of course. Among various agricultural fields, flower production and vegetable production were hoped for growing sector. An agricultural policy was implemented to financially support the floriculture production, while guidance to develop the production centers was started by government agencies and agricultural bodies. At the pinnacle of Japanese economy (so-called the bubble economy period), there was sharp increase in both the production and consumption of flowering plants. However, the collapse of the bubble economy in 1991 resulted in a drastic decrease in demand for cut flowers and other flowering plants for business use. Since that time, stagnant flowering plant prices, coupled with increase in foreign-grown flower imports, have caused a drastic change in the situations of cut flower production in this country. Large production centers such as Columbia and Ecuador in South America and Kenya in Africa emerged aiming to cover the whole flower markets in the world. Production centers subsequently expanded to India and Sri Lanka. The imports of cut flowers from these countries as well as Holland and Southeast Asian countries increased in Japan. As a result of the mass influx of cut flowers from abroad, a considerable change occurred in the consumer market of cut flowers in Japan. After the collapse of the bubble economy, demand for flowers for business use decreased due to prolonged economic

5 stagnation, whereas consumption for flowers for household use began to be noticeable. The advent of mass retailers such as supermarket and home center accelerated the demand for family use, triggering the emergence of affordable casual flowers. As a result, the consumption of flowers for at-home use was boosted up, thereby contributing to increase demand for imported flowers. In addition, starting from around 1996, people became to enjoy their daily life by adorning flowers and greeneries, which resulted in something like “gardening boom”. Traditional gardening as a hobby to grow flowers and greeneries has shifted to today’s gardening as a pleasure to design daily living with flowers and greeneries. Thus, Japan’s floriculture industry has reached the present status.

I. Position of Floricultural Industry in Japan With the early-stage history of floriculture industry in Japan as described above, how is the Japan’s industry positioned nowadays? Four major points on present-day floriculture business in Japan are as follows:

(1) Flowering plants indispensable to people’s living In Japan, to provide people with tastefulness and peace of mind in their daily living, flowering plants are used for every occasion and for various purposes including 1) to decorate living spaces (flower design, flower arrangement and bonsai), 2) to grow flowers and to landscape a garden (gardening and landscaping), 3) to express an emotion (Mother’s Day and flower for Buddhist rite), 4) to create amenity (indoor greening, rooftop greening and wall surface greening), 5) to use after making some processing (dried flower, pressed flower and preserved flower). While widely used in people’s daily living, flowering plants demonstrate and express its beauty, freshness, vividness, fragrance, season sense, harmony with nature and the like. After the World War II, the use of flowering plants on the occasions of various ceremonial functions for business purposes and for personal gifts has greatly expanded in Japan. However, as people are becoming to put more importance on “spiritual richness and comfortableness”, lifestyle-oriented pleasure with flowering plants such as “the designing of a living space with flowering plants” is expected to become more popular in the future.

(2) Leveling-off demand for flowering plants in Japan Floricultural industry has developed at all levels of industry ranging from producers, middlemen and processors to retailers, whose sales amount to about 1,500 billion yen in total counting consumers’ price. Today, floricultural agriculture accounts for more than six (6) percent of gross agricultural production. This industry is capable of gaining high

6 profits even from farmlands under constrained condition by means of intensive production method using good facilities and, therefore, is expected to keep an important position in this country’s agriculture from now on. Despite the development of favorable situations such as the dissemination of gardening to people’s living, total demand for flowering plants remains at the same level or it is rather slightly declining, because of decrease in demand particularly for business use. The percentage of home use in the total demand is on the increase, reflecting the decreased demand for business purposes. Consumers are increasingly becoming to place more importance on quality such as vase life, while seeking for affordably-priced flowers. Further, knowing that the development of new varieties is in progress, it is eagerly hoped that flowering plants having high-quality or unique characteristics and capable of satisfying consumers’ needs become available. When compared internationally, Japan’s flower market is large in size, where flowering plants are transacted at higher prices. Depending on the outcome of efforts to strengthen the international competitiveness of domestic products, the import of flowering plants has the potentiality of further increase toward the future.

(3) Growing import of flowering plants With regard to the world trend of flowering plants, the globalization of distribution and production of cut flowers is continuously in progress in global scale, as exemplified by American carnation and other cut flowers, which domestic production has been mostly replaced by imported products only in recent few years. Also in Japan, there is an increase in the imports of major cut flowers such as carnation, chrysanthemum and rose from China, Malaysia, and Columbia, while import trading partners for flowers are diversifying as seen in the rise of Vietnam as an export country of chrysanthemum. Further, the import volume of flowering plants is increasing. The competitive price is not the only reason for the increase. The importers of flowering flowers have been working on the improvement of long-term stable supply system in order to increase the import, for example, by coping with individual needs for mix shipment and others, which is not necessarily able to be met by domestic products. Under the circumstances, the domestic producers of flowering plants are required to make more efforts to satisfy the needs of consumers and end-users.

(4) Necessity of production cost reduction In keeping pace with increase in negotiation transactions in markets, expansion in off-market distributions, increased sales at mass retailers such as supermarkets, increase in direct selling and utilization of the Internet, the distribution and sales of flowering plants has been changing. Especially, quality control while in transit is gradually in progress as seen in the bucket refrigerated distribution system to supply cut flowers with

7 long vase life. Although some cost reduction has been achieved by adopting low-cost weather-resistant greenhouses, domestic flowering plants have yet higher production cost compared to overseas products, because of lagging laborsaving innovation and other reasons. It is necessary, therefore, for domestic producers to make much more efforts to reduce the production cost in the future.

II. Flowering plant markets in the world Before explaining about flowering plant markets in Japan, let’s take a look at the outline of flowering plant markets in the world.

(1) Production areas for flowering plants in the world The Graph-II-1 shows the shares by country and region in production areas for flowering plants in the world. China has the largest share accounting for 39 percent (171,600 ha), followed by India and E.U. Both Japan and U.S.A. have five (5) percent share (22,000 ha). It may sound strange that despite the vast land area of U.S.A. 25 times as large as Japan, the size of production area for flowering plants in U.S.A. is same as Japan. In fact, until several decades ago, flowering plant production in U.S.A. was not in such a small scale as it now stands. Due to catastrophic damage caused by an abrupt increase in cheap imports, the production area dropped off to the present level, which is now same as Japan.

(2) Production value of flowering plants in the world The Graph-II-2 shows shares by country and region in the production value of flowering plants in the world. E.U. has the largest share accounting for 41 percent (24.6 billion U.S. dollars), followed by U.S.A., Japan, China and Korea. Japan’s share is 13 percent (7.8 billion U.S. dollars). Thailand’s share is less than one (1) percent, which is almost same as India and Mexico.

(3) Growing consumption in Western countries and stagnant consumption in Japan The grapf-II-3 shows the share by country and region in the production value and consumption value of flowering plants in the world. U.S.A. has the largest share accounting for 19 percent (22.8 billion U.S. dollars), followed by Japan, Germany, U.K. and France. Japan’s share is 11 percent (13.2 billion U.S. dollars). Although flowering plant consumption in Japan accounts for 11 percent of the total world consumption, there is a considerable difference between Japan and Western countries in the growth rate of consumer market in the past 15 years. During the period, the growth rate of consumer market has nearly doubled in E.U. countries and has

8 increased by 50 percent in U.S.A., whereas it has remained almost at the same level in Japan.

(4) Retail distribution channels in the world flower markets The Graph-II-4 shows the retail sale routes of flowering plants in the world, classified by the types of distribution channels such as florist shop, garden center, supermarket and the like. This Graph explains that about two third of flowers are purchased at supermarkets in U.K.

Graph-Ⅱ-1. Flower production area per country (Total: 440,000ha)

Columbia Thailand Korea Brazil 8,800 8,800 2% 4,400 Others 8,800 2% 1% 2% 26,400 6% Taiwan 13,200 3% Mexico 22,000 5% China Japan 171,600 22,000 39% 5%

USA 22,000 EU 5% 66,000 India 15% 66,000 15%

Source: Flower Shop Manual

Graph-Ⅱ-2. Flower production value per country （Total：60 billion US$） Israel 600 Ecuador Taiwan 1% 600 India, Mexico, Thailand 600 1% 1,200 Australia 1% 2% Others 1,200 1,800 2% 3% Brazil 1,800 Korea 3% 3,600 6%

EU 24,600 China 41% 4,200 7% Japan 7,800 13% USA 12,000 20% Source: Flower Shop Manual

Graph-Ⅱ-3. World flower consumption value （Total amount ：120 billion US$）

Sweden Belgium 1.2 1.2 Austria 1% 1% 1.2 1% Others USA Russia 30.0 22.8 2.4 25% 2% 19% Switzerland 2.4 2% Japan 13.2 China 11% 3.6 Spain 3% 3.6 U.K. 3% Netherlands 9.6 3.6 8% Germany 3% 10.8 9% Italy France 7.2 7.2 6% 6% Source: Flower Shop Manual

Graph-Ⅱ-4. Distribution channel of flowers of main countries for retail

Flower Shop Street flower shop Others Garden center Super market

100%

80%

60%

40%

20%

0% U.K. USA Germany Netherlands France Japan Italy Spain Russia

Source: Flower Shop Manual

III. Productions of cut flowers/flowering plants in Japan

(1) Production square measures for cut flowers and flowering plants in Japan The Table-III-1 shows the acreage under cultivation, shipping volume and number of growers of flowering plants in Japan in 2006. The acreage under cultivation of flowering plants was 36,743 ha in total, in which 17,500 ha was occupied by cut flowers and accounted for about 48 percent of the total. The Graph-III-1 shows the acreage under cultivation of cut flowers, in which chrysanthemum ranks at the top accounting for 33 percent of cut flowers in total.

(2) Production value of cut flowers and flowering plants in Japan The Table-III-2 shows the production value of flowering plants. Japan’s production value of flowering plants in 2006 was 479.4 billion yen. Cut flowers were at the top with the production value of 242.4 billion yen accounting for 50 percent of the total. Among cut flowers, the largest item was chrysanthemum with the production value of 79 billion yen accounting for 32.5 percent of cut flowers in total.

(3) Future prospect of flowering plant production in Japan The domestic production of flowering plants in Japan has been declining since 1998 when it hit a peak (Graph-III-6). This slump is attributable to the following causes. 1. Collapse of bubble economy 11

The Japanese economy has been sluggish since the collapse of the bubble economy. Especially, there was a sharp decline in demand for business purposes including use for ceremonial occasions. During the bubble economy period, many wedding ceremonies and funeral services were gorgeously held, consuming a lot of flowers including expensive ones. After the collapse of the bubble economy, however, the ceremonies and services have become simple, consuming only smaller volume of flowers. As a result, with decreased quantitative demand, flower output has been declining since 1998. 2. Aging producers Producers supporting present-day flowering plant production in Japan are those in their 70’s and 80’s, which is same as in other agricultural products. With these aged persons gradually retiring, many flower farmers are having a difficulty in finding their heirs. Under these circumstances, flower producing population in Japan is expected to continuously decrease from now on. 3. Business setback The global business downturn started with soaring crude oil prices has spread to Japan. In early July this year, the Japanese government officially announced that Japan had entered

Table-Ⅲ-1. Harvest Area, Shipment Quantity and Number of Farmers of Flowers(2006)

Harvest Area Shipment Quantity Number of Farmers

Items

ha thousand stems farm Cut flowers 17,500 4,923,000 66,800 Chrysanthemum 5,715 1,857,000 … Chrysanthemum 3,161 1,034,000 9,610 Spray Chrysanthemum 783 285,400 3,490 Small Chrysanthemum 1,771 538,300 11,400 Carnation 437 411,500 2,330 Rose 490 369,800 1,710 Gentian 499 88,000 2,150 Gypsophila 289 67,300 1,590 Orchid 189 22,700 1,130 Statice 250 120,900 2,980 Gerbera 103 181,800 466 Lisianthus 449 116,900 4,780

Cut flowers with bulbs 4,853 499,500 … lily 879 175,600 4,140 Tulip 80 71,100 746 Alstroemeria 102 67,900 730 Other bulbs 793 185,000 6,270 Cut leaves 672 162,900 3,740 Cut Branches 4,024 245,900 15,600

Bulbs 575 165,300 1,580 Lily 96 13,900 351 Tulip 261 49,800 421 Gladiolus 35 23,400 220 Freesia 31 30,400 101

Pot flowers and plants 2,104 300,100 8,880 Cyclamen 232 22,400 1,720 Primula 65 14,400 841 Begonia 32 5,400 403 Orchid 268 19,400 … Cymbidium 91 3,210 491 Dendrobium 28 2,600 226 Phalaenopsis 71 6,420 405 Other orchid 79 7,170 732 Cactus 59 19,800 382 ornamental plants 351 55,700 1,550 flowering tress & shrubs 464 50,400 2,660

Seedling for bed flowers 1,702 800,300 6,710 Pansy 339 185,600 3,710 Salvia 59 24,500 2,000 Marigold 82 35,000 2,340 Petunia 109 53,500 2,150 Vinca 41 16,800 1,150

Others 14,862 22,312

Total 36,743 106,282 13

Source: The Ministry of Agriculture, Forestry and Fisheries

Graph-Ⅲ-1. Harvest area of flowers (2006)

Others 7,461 20% Flowering trees and shrubs 7,976 22% Total: 36,743 (Unit: ha)

Cut flowers 17,500 Seedling for bed 47% flowers 1,702 5%

Pot flowers and plants 2,104 6% Source: The Ministry of Agriculture, Forestry and Fisheries

Graph-Ⅲ-2. Harvest area of cut flowers (2006)

Lily Lisianthus 879 Cut branches 449 5% 4,024 3% 23% Gypsophila 289 2% Others Gentian Total: 4,718 499 17,500 27% 3% （Unit：ha） Rose 490 3% Carnation 437 Chrysanthemum 2% Small Chrysanthemum 3,161 1,771 18% 10% Spray Chrysanthemum 783 Source: The Ministry of Agriculture, Forestry and Fisheries 4%

Table-Ⅲ-2. Production value of flowers (2005,2006）

Items 2005 2006 million yen million yen Cut flowers 246,200 242,400 Total of chrysanthemum 82,900 79,000 Chrysanthemum - - Spray chrysanthemum - - Small chrysanthemum - - Carnation 17,100 16,600 Rose 23,300 23,500 Gentian 3,400 3,800 Gypsophila 4,300 3,900 Orchid 4,900 4,800 Statice 5,200 5,100 Gerbera 4,000 4,200 Lisianthus 9,700 9,900 Bulbs (cut flower) - - Lily 21,700 22,400 Tulip 3,500 3,400 Alstroemeria 3,900 4,000 Other bulbs - - Cut branches 12,200 12,300 Cut leaves 5,100 5,200

Bulbs 2,900 2,700 Lily 500 500 Tulip 900 900 Gladiolus 100 100 Others 1,800 1,100

Pot flowers and plants 110,400 110,400 Cyclamen 10,300 9,900 Primula 1,600 1,400 Begonia - -

Ornamental plants 19,300 18,700 Orchid 33,300 34,200 Cymbidium - - Dendrobium - - Phalaenopsis - - Other orchids - - Cactus 3,100 3,100 Flowering tree & Shrubs 16,200 14,900 Others 24,600 28,300

Seedling for bed flowers 37,200 34,700 Pansy 7,700 6,200 Salvia 900 800 Marigold 1,200 1,100 Petunia 2,300 2,300 Vinca 500 600 Other seedling for bed flowers 24,600 23,800

Others 103,000 89,200

Total 499,700 479,400 Source: Flower Data Book

Table-Ⅲ-3. Shipment quantity and harvest area of cut flowers by prefecture(2007)

Harvest area: ha

Shipment quantity： 1000stems

Prefecture Harvest area Rank Shipment quantity Rank

1 Hokkaido 628 9 177,700 9 2 Aomori 125 36 23,900 38 3 Iwate 545 12 103,400 15 4 Miyagi 175 31 47,800 29 5 Akita 138 35 32,000 36 6 Yamagata 409 16 74,700 20 7 Fukushima 521 13 77,300 19 8 Ibaragi 588 10 108,600 13 9 Tochigi 197 28 69,800 22 10 Gunma 313 20 60,000 25 11 Saitama 357 17 87,600 16 12 Chiba 732 6 252,700 4 13 Tokyo 339 18 71,800 21 14 Kanagawa 99 40 39,500 35 15 Niigata 251 24 55,000 26 16 Toyama 52 46 11,300 45 17 Ishikawa 62 44 10,300 46 18 Fukui 124 37 15,300 40 19 Yamanashi 26 47 6,520 47 20 Nagano 669 7 226,000 7 21 Gifu 101 39 24,400 37 22 Shizuoka 882 4 249,400 6 23 Aichi 1,771 1 736,400 1 24 Mie 115 38 22,500 39 25 Shiga 57 45 13,600 42 26 Kyoto 97 41 13,500 43 27 Osaka 183 29 48,600 27 17

28 Hyogo 276 21 104,700 14 29 Nara 249 26 66,600 23 30 Wakayama 825 5 180,600 8 31 Tottori 70 43 13,800 41 32 Shimane 75 42 13,000 44 33 Okayama 144 33 43,000 34 34 Hiroshima 203 27 46,200 30 35 Yamaguchi 167 32 44,200 33 36 Tokushima 274 22 45,200 31 37 Kagawa 177 30 64,900 24 38 Ehime 333 19 44,600 32 39 Kochi 520 14 81,400 17 40 Fukuoka 647 8 285,200 3 41 Saga 139 34 48,000 28 42 Nagasaki 272 23 109,900 12 43 Kumamoto 550 11 152,700 10 44 Oita 251 24 77,600 18 45 Miyazaki 416 15 122,400 11 46 Kagoshima 902 3 252,500 5 47 Okinawa 1,190 2 378,600 1 Total 17,240 4,835,000

Source: The Ministry of Agriculture, Forestry, and Fisheries

Graph-Ⅲ-3. Production value of flowers (2006)

Others 15.6 3% Flowering trees and shrubs 76.3 16%

Seedling for bed flowers 34.7 Total: 7% 479.4 Cut flowers （Unit：billion JPY 242.4 ） 51%

Pot flowers and plants 110.4 23%

Source: The Ministry of Agriculture, Forestry, and Fisheries

Graph-Ⅲ-4. Production value of cut flowers (2006)

Others 78.7 32%

Cut branches Total: 12.3 242.4 5% Chrysanthemum （Unit：billion JPY） 79.0 Lily 33% 22.4 9% Rose Carnation Lisianthus 23.5 16.6 9.9 10% 7% 4%

Source: The Ministry of Agriculture, Forestry, and Fisheries

Graph-Ⅲ-5. Production value of pot flowers and plants (2006)

Cyclamen 9.9 9%

Others 32.7 Ornamental plants 30% 18.7 17% Total: 110.4 （Unit：billion JPY）

Flowering trees & plants Orchid 14.9 34.2 13% 31%

Source: The Ministry of Agriculture, Forestry, and Fisheries

into recession. The skyrocketing crude oil prices have caused a rapid rise in the prices of foods, daily necessities and other grocery products essential to consumers’ daily living. Because of these factors, general consumers have become careful to spend money for such consumer goods as flowers which are not necessarily absolute necessity for their daily living. 4. Decreasing population Japan’s population is considerer to be at a peak at the present time and is expected to gradually decrease toward the future, resulting in decreased flower consumption in the future.

Graph-Ⅲ-6. Production value of flowers (1997～2006）

（Unit: billion JPY） 700

600

500

400

300

200

100

0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Source: The Ministry of Agriculture, Forestry and Fisheries

Graph-Ⅲ-7. Production value of cut flowers (1997～2006) （Unit: billion JPY） 350

300

250

200

150

100

0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Source: The Ministry of Agriculture, Forestry and Fisheries

Graph-Ⅲ-8. Number of famers growing flowers (1997～2006) （Unit: farms） 160,000

140,000

120,000

100,000

80,000

60,000

40,000

20,000

0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Source: The Ministry of Agriculture, Forestry and Fisheries

Graph-Ⅲ-9. Number of famars growing cut flowers (1997～2006) （Unit: farms） 90,000

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Source: The Ministry of Agriculture, Forestry and Fisheries

Graph-Ⅲ-10. Harvest area and shipment quantity of cut flowers (1998～2006) （Unit : ha）（Unit : million stems） 25,000 6,000

Shipment Quantity Harvest area 5,000 20,000

4,000 15,000

3,000

10,000 2,000

5,000 1,000

0 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Source: The Ministry of Agriculture, Forestry and Fisheries

Graph-Ⅲ-11. Harvest area and shipment quantity of Orchid

Harvest Area Shipment Quantity (Unit : ha) (Unit : million stems) 250 35,000

30,000 200 25,000

150 20,000

15,000 100

10,000 50 5,000

0 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Source: The Ministry of Agriculture, Forestry and Fisheries

(4) Situation on number of registrations for new varieties of flowers The Table-III-4 shows the summary of situations about the number of registrations for the new varieties of flowers, based on the report of a survey conducted jointly by the Plant Variety Protection and Seed Division of the Ministry of Agriculture, Forestry and Fisheries, and the Japan Flower Code Center. “Japan Flower Code” is assigned with a five-digit number to all varieties of flowering plants sold in Japan. This is to cope with a tendency that distribution channels are becoming large in size and expanding to wide areas, while sales methods are diversifying. This is also intended to rationalize the distribution of flowering plants by making physical distribution more speedily and improving the efficiency of paper works. As a rule, any producer intending to market a new variety is required to register it for obtaining a Japan Flower Code for it.

Table-Ⅲ-4. Number of newly registered flowers varieties

year 2002 2003 2004 2005 2006

Number of newly registered flowers varieties 894 590 897 933 986

Number of newly registered Japan flower 3,603 8,940 4,045 3,265 3,138 business code

Source: The Ministry of Agriculture, Forestry and Fisheries

Table-IV-1. Tariff rate of flowers（2007）

Statistical code Tariff rate Tariff rate (EPA) Unit

I II H.S. code Description General Temporary WTO GSP LDC Singapore Mexico Malaysia Chile Thailand 06.01 Bulbs, tubers, tuberous roots, Free Free Free Free Free corms, crowns and rhizomes, dormant, in growth or in flower; chicory plants and roots other than roots of heading No.12.12: 0601.10 Bulbs, tubers, tuberous roots, Free Free corms, crowns and rhizomes, dormant 010 Lilies spp. TH 020 Tulips TH 090 Other TH 0601.20 000 Bulbs, tubers, tuberous roots, Free Free TH corms, crowns and rhizomes, in growth or in flower; chicory plants and roots 06.02 Other live plants (including Free Free Free Free Free their roots), cuttings and slips; mushroom spawn:

0602.10 000 Unrooted cuttings and slips Free Free NO

0602.20 000 Trees, shrubs and bushes, Free Free NO grafted or not, of kinds whichi bear edible fruit or nuts 0602.30 000 Rhododendrons and azaleas, Free Free NO grafted or not 0602.40 000 Roses, grafted or not Free Free NO

0602.90 Other: Free Free - Mushroom spawn 011 -- Of shiitake mushrooms KG

019 -- Other KG 090 - Other KG 06.03 Cut flowers and flower buds of Free Free Free Free Free a kind suitable for bouquets or for ornamental purposes, fresh, dried, dyed, bleached, impregnated or therwise prepared: Fresh 0603.11 000 Roses Free Free KG 0603.12 000 Carnations Free Free KG 0603.13 000 Orchids Free Free KG 0603.14 000 Chrysanthemums spp. Free Free KG

0603.19 Other Free Free 010 - Lilies spp. Free KG 090 - Other Free KG 0603.90 000 Other Free Free KG 06.04 Foliage, branches and other Free Free Free Free parts of plants, without flowers or flower buds, and grasses, mosses and lichens, being goods of a kind suitable for bouquets or for ornamental purposes, fresh, dried, dyed, bleached, impregnated or otherwise prepared: 0604.10 000 Mosses and lichens 5% 3% Free KG Other 0604.91 000 Fresh 5% 3% Free KG 0604.99 000 Other 5% 3% Free KG

Source: Japan Tariff Association

IV. Import of cut flowers and flowering plants in Japan (1) Laws and regulations applicable to the imports of cut flowers and flowering plants Included in laws and regulations applicable to the imports of cut flowers and flowering plants are the Customs Law, the Plant Protection Law, the Convention on International Trade in Endangered Species of Wild Fauna and Flora (Washington Convention), and the Plant Variety Protection Law. The outlines of these laws are as follows:

1. The Customs Law The Customs Law sets forth custom procedures for the determination of tariff rates, the payment, collection and refund of custom duties, and the import and export of cargoes. The Table-IV-1 is the tariff schedule in fiscal 2007 for flowering plants. No import duty is imposed on any flowering plants except some moss.

2. Plant Protection Law The objectives of this law are to inspect the exporting, importing and domestic plant, to control the pests, and to prevent the outbreak and/or spreading to ensure the stabilization and development of agricultural production. a. Outline of Law (Import plant Quarantine outlined) There are many plant pests in overseas countries which are potentially hazardous to our agriculture. Plant quarantine is conducted under the Plant Protection Law to prevent the introduction and spread of these pests into Japan by enforcing inspection of imported plants by means of cargo, hand luggage, foreign mail matter, etc. at the seaports or airports of entry. Imported plants and their container packages shall be inspected, whether or not the inspection certificate issued by an appropriate organization of the exporting country or its copy is attached, whether the plants are prohibited or whether any harmful flora and fauna adheres or not. b. Objective articles Imported plants are classified to three groups, i.e. import prohibited articles, articles subject to import inspection and commodities not subject to import inspection. (Import prohibited articles) Some of the quarantine pests have a high risk of generating great economic losses to our agricultural production if they invade Japan. When they are technically difficult to intercept by the point-of-entry inspection and no practical control measures are available to combat them, there will be no means to prevent their introduction other than banning entry of the plants (and/or plant products) which can be the host of these pests. For these reasons, the importation of certain kinds of plants is prohibited under the Plant Protection Law. Pest distribution differs

28 with countries (regions). A species of pest may be present in one country (region) but not in other countries. Consequently, the same kind of plants may be prohibited from one country but admissible from another country. In addition, articles such as quarantine pests, parasitic plants, soil or plants attached with soil are prohibited entry into Japan. (Articles subject to Import Inspection) All the plant articles other than the prohibited items are subject to plant quarantine inspection. They can be imported if they pass the import inspection. This category involves an extremely wide range of plants (and/or plant products) such as seeds, nursery stocks (including scions) and flower bulbs, cut-flowers, fruits and vegetables, grains and cereals, beans and legumes, dried flowers, timber (excluding sawn timber), spices, medicinal plants, etc. If no quarantine pest is detected on your plants by import inspection, they will be passed for entry into our country. If any quarantine pest is found, their entry is refused. However, if any disinfection treatment is available, they can be passed for entry after the completion of the treatment. (Inspection of Import Cargo) Import inspection of bulk cargoes such as cereal grains or beans, etc. is routinely carried out on board the vessels prior to unloading operation. Shipments of fruits and vegetables are inspected in chilled warehouses specially designed for accommodation of these perishable products. Timber and logs are inspected either aboard the vessels or at the log pools after discharge. Containerized cargo shipments are inspected at the container terminal of the port of entry. Air cargo shipments are inspected at the inspection facilities of the Plant Protection Station of the airport. (Application of Import Inspection) For the inspection of import plants, you are requested to submit import application to the Plant Protection Stations supervising the seaport or airport of entry. Application will be accepted from seven days ahead of the date of arrival. (Documents required for Inspection) When you import plants, you are required to present an official phytosanitary certificate issued by the government of exporting country. The certificate is issued on the basis of export phytosanitary inspection undertaken by plant protection authorities of exporting country in conformity with the stipulation of the International Plant Protection Convention. Importer is requested to submit “Application for Import Plant Inspection” together with the Phytosanitary Certificate. (Inspection Method) For each species of plant materials and the size of the consignment, necessary amount of sample is drawn and closely inspected for the presence of quarantine pest or soil attached. Final decision on the inspection will be given as far as possible at the site of inspection. When a closer examination is necessary, samples are taken into laboratories of the plant protection station and subjected to precise indexing by using microscope and/or other sophisticated inspection devices. Tree fruit nursery stocks and flower bulbs are accommodated into the national post-entry quarantine facilities to inspect for virus and viruslike diseases for a

29 prolonged period. (Inspection Site and Contact Point) Inspection is carried out at the designated places within the areas of seaports or airports. Application for import inspection should be made to the Plant Protection Station responsible for the port of entry.

Flow of Plant Import Quarantine

Application of Import Plant Inspection

Import Inspection

Without parasitic insects With parasitic insects

Passed Rejected

Sterilization Disposal Load back

Issue of certificate

3. Convention on International Trade in Endangered Species of Wild Fauna and Flora (Washington Convention) The object of this law is to protect the certain endangered species of wild fauna and flora under depressed collecting and catching through the international trade control of the exporting and importing countries of the wild fauna and flora. The international trade of the fauna, flora and these products listed in Appendix I, II and III to the Convention are subject to the presentation of the export certificate issued under free from endangered situation of these lives in the export country to the certain office of the import country

4. Plant Variety Protection Law This law is the system concerning registration of seeds and seedlings for protecting of new varieties.

Under this law anyone who wants to import seeds and seedlings registered to the Ministry of Agriculture, forestry and Fisheries must get approval of cultivating said seeds and seedlings in Japan from rightful claimant.

(2) Import of cut flowers and flowering plants Focusing on cut flowers, the import situations of cut flowers and flowering plants are reviewed here. The Table-IV-2 shows the import value of flowering plants in Japan during 10 years from 1998 to 2007. After remaining roughly at the same level until 2005, the import value increased sharply in 2006 and 2007. The Graph-IV-0 shows the import value of flowering plants in Japan in 2007 with breakdown by cut flowers, bulbs, trees and others. The largest item in terms of value is cut flowers accounting for nearly a half (48%) of the total. The Graph-IV-0A shows the import share in 2007 of major cut flowers namely orchid, chrysanthemum, rose and carnation. Chrysanthemum was at the top accounted for 29% of the total. As to other flowers, anthurium, oncidium, lisianthus, gladiolus, calla, heliconia, hydrangea, cymbidium and mokara are imported. The Graph-IV-1 shows the transition of import value of cut flowers in the past 10 years. Since 1998, the import value has been increasing almost every year except one time. The Graph-IV-2 shows a comparison between the production value of domestic cut flowers and the import value of imported cut flowers in 2006. The domestic production value and the import value combined was 268,660 million yen, including the imported cut flowers of 26,260 million yen accounting for about 10% of the total. Although the production value of domestic cut flowers and the import value of imported cut flowers are incommensurable in a precise sense, judging from the production value and the import value, imported cut flowers account for about 10 percent of total cut flowers sold in Japan. The Graph-IV-4A shows the import share by major import trading partners in terms of value. Columbia is at the top and Thailand ranks second. The Table-VI-5 to VI-10 shows the import trading partners, import quantity and import value of major imported cut flowers in Japan between 2005 and 2007. The grapf-VI-5A to VI-10A shows the share of import trading partners in the import value of major imported cut flowers in Japan in 2007. From these tables and graphs, it is understood that many flowers are imported from Malaysia, Thailand, Columbia, China, India and Korea.

Table-IV-2. Itemized list of Import value of flowers (1998～

2007) Unit: million yen Items 2001 2002 2003 2004 2005 2006 2007 Total of bulbs 13,219 12,806 12,386 11,336 10,720 11,991 12,445 Sleeping bulbs 13,179 12,754 12,353 11,322 10,692 11,937 12,376 Lily 6,306 6,498 6,697 5,681 5,768 6,943 7,311 Tulip 3,919 3,444 3,086 3,221 2,829 2,959 3,000 Others 2,954 2,812 2,570 2,420 2,095 2,035 2,065 Growing bulbs 40 53 34 45 27 54 70 Total of trees and plants 8,530 10,132 9,701 9,460 9,504 9,830 10,510 Grafting trees 1,174 1,197 1,104 1,142 1,203 1,393 1,568 Fruits tree 19 11 16 35 45 38 35 Azalea 25 33 26 12 11 8 5 Rose(tree) 380 335 281 294 220 31 281 Others 6,932 8,556 8,274 8 8,024 8 8,620 Total of cut flowers 18,406 18,145 18,793 22,460 23,858 26,260 27,996 Orchid 5,801 5,699 5,481 5,854 5,811 6,283 6,853 Chrysanthemum 2,903 3,209 3,784 5,453 6,573 7,667 8,097 Lily 702 606 525 861 719 524 621 Rose - 1,498 1,669 1,922 1,989 2,235 2,223 Carnation - 2,661 2,959 3,500 4,017 4,734 5,596 Others 8,999 4 4 4,870 4,749 4,818 85 Lichen/Leaves/Branches 4,519 4,748 4,766 4,775 4,903 5,295 5,691 lichen 39 81 97 41 55 64 90 Leaves/Grass 4,480 4,666 4,668 4,734 4,848 5,231 16 Seeds 2,526 2,364 2,071 1,323 1,646 1,610 1,741 Total 47,200 48,195 47,717 49,354 50,631 54,986 58,383 Source: Ministry of Finance

Graph-Ⅳ-0. Import of flowers in Japan (2007)

Seeds 1,741 3% lichen/leaves/branches 5,691 Bulbs 10% 12,445 21%

Total: 58,383 （Unit : million JPY） Flowering trees & shrubs 10,510 18% Cut flowers 27,996 48%

Source: Ministry of Finance

Graph-Ⅳ-0A. Main cut flowers' import (2007)

Others Orchid 7,645 6,853 25% 23%

Total: 30,414 （Unit : million JPY）

Carnation Chrysanthemum 5,596 8,097 18% 27% Rose 2,223 7% Source: Ministry of Finance

Graph-Ⅳ-1. Cut flowers import value (1997～2006) （Unit : million JPY） 30,000

25,000

20,000

15,000

10,000

5,000

0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Source: Ministry of Finance

Graph-Ⅳ-2. Comparison between production value of domestic cut flowers and import value of cut flowers (2006)

Import value 26,260 10%

(Unit : million JPY)

Domestic Production value 242,400 90%

Source: Flower Data Book

Graph-Ⅳ-3. Import value of Orchid, Chrysanthemum, Rose and Carnation (1998～2007)

（Unit : million JPY） Orchid Chrysanthemum Rose Carnation 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Source: Ministry of Finance comment: After 2002, roses and carnations have been included in the statistics.

Table-IV--3. Monthly import quantity and value of primary cut flowers (2007)

Unit Quantity: kg

Value: 1000JPY

Total Orchid family Chrysanthemum family Lily family Rose Carnation Others Year Month Quantity Value Quantity Value Quantity Value Quantity Value Quantity Value Quantity Value Quantity Value

2007 1 2,314,551 1,792,719 477,381 417,508 943,493 560,708 60,600 40,129 275,410 190,955 282,716 238,405 274,951 345,014

2 2,173,611 1,697,077 337,452 319,807 928,897 553,169 15,742 15,475 292,149 231,375 338,260 267,588 261,111 309,663

3 4,351,516 3,095,097 562,825 543,516 1,873,521 1,063,850 27,904 29,193 551,415 309,483 837,769 696,812 498,082 452,243

4 2,386,589 1,843,965 374,345 392,508 964,462 568,182 13,350 15,871 322,148 119,406 492,485 465,389 219,799 282,609

5 2,617,802 2,186,271 436,259 516,653 889,364 520,124 22,622 19,465 301,863 136,041 754,554 724,419 213,140 269,569

6 1,838,601 1,458,355 377,401 469,298 807,442 468,002 67,198 24,815 159,012 56,232 265,484 228,081 162,064 211,927

7 2,188,901 1,755,787 459,827 626,558 880,114 514,046 203,088 34,989 155,648 71,012 336,306 302,140 153,918 207,042

8 3,322,903 2,742,215 679,629 862,733 1,375,574 917,862 371,506 85,596 153,703 90,294 517,771 507,073 224,720 278,657

9 3,623,821 3,026,232 773,277 818,547 1,206,008 819,937 377,370 96,862 277,700 219,584 667,144 621,271 322,322 450,031

10 3,031,782 2,549,927 697,685 695,968 867,848 563,466 229,233 55,594 406,821 262,845 430,374 371,880 399,821 600,174

11 2,712,849 2,332,779 539,691 536,443 825,328 510,987 193,871 60,051 359,999 256,066 409,497 374,400 384,463 594,832

12 4,292,368 3,515,557 646,583 653,942 1,588,414 1,037,121 335,275 142,700 398,398 279,474 837,766 798,418 485,932 603,902

Total 34,855,294 27,995,981 6,362,355 6,853,481 13,150,465 8,097,454 1,917,759 620,740 3,654,266 2,222,767 6,170,126 5,595,876 3,600,323 4,605,663

year on year 102% 107% 103% 109% 98% 106% 150% 119% 91% 99% 115% 118% 91% 96% (2007／2006) Source: The Ministry of Agriculture, Forestry and Fisheri

Table-IV-4 Cut Flowers import per country unit：kg、1,000 Yen 2005 2006 2007 Country Quantity Value Quantity Value Quantity Value Thailand 3,958,977 3,098,662 4,060,221 3,551,580 4,130,932 4,094,027 Taiwan 2,893,117 2,034,790 2,742,420 2,104,956 2,208,643 1,827,081 Korea 5,086,001 2,282,825 5,208,916 1,574,305 5,058,022 1,403,601 Netherlands 539,570 1,294,416 457,842 1,209,066 382,240 1,098,632 Australia 960,885 812,482 718,403 735,061 524,612 635,303 New Zealand 989,960 1,629,872 815,793 1,585,068 778,127 1,717,880 Singapore 550,076 447,187 188,842 192,996 134,659 151,708 U.S.A. 93,418 196,371 82,441 190,888 73,632 173,952 Columbia 2,836,374 3,754,794 3,124,008 4,384,328 3,529,440 5,013,523 Malaysia 6,669,378 4,542,712 7,900,069 5,731,397 8,214,936 6,262,517 South Africa 253,289 286,950 185,059 226,520 187,164 229,088 Spain 24,573 78,738 20,595 69,651 24,473 86,637 Mauritius 453 285 32,191 59,996 33,251 64,673 Brazil 1,858 3,108 2,083 3,632 815 1,619 Israel 144,582 159,326 124,300 144,745 123,677 159,089 India 724,089 428,682 870,562 650,395 842,014 699,141 China 3,402,695 1,705,247 5,096,161 2,346,456 5,827,094 3,102,443 Vietnam 1,009,420 720,841 1,230,686 828,761 1,404,886 984,438 Ecuador 474,200 866,257 530,909 1,016,897 585,472 1,058,219 Zimbabwe 51,758 55,927 46,332 39,356 36,353 41,118 Kenya 446,595 615,877 759,878 1,058,127 744,702 1,075,943 Turkey 75,200 81,125 97,512 104,888 111,118 119,059 Sri Lanka 38,588 35,545 59,898 62,351 57,696 60,316 Others 132,918 227,316 125,459 181,789 393,803 354,027 total 31,307,973 25,359,335 34,480,580 28,053,209 35,407,761 30,414,034 （E.U.) 605,467 1,477,822 622,314 1,496,816 567,977 1,447,624 Source: Ministry of Finance

Graph-Ⅳ-4A. Import value of cut flowers per country (2007)

Columbia 5,014 16% Others 5,895 Thailand 19% 4,094 13% Total: 30,414 （Unit : million JPY） China 3,102 Malaysia 10% 6,263 21% Korea 1,404 5% Taiwan 1,827 New Zealand Netherlands 6% 1,716 1,099 6% 4%

Table-Ⅳ-5. Import quantity and value of chrysanthemum in cut flowers per country (2005～2007) Unit：kg、1000JPY 2005 2006 2007 Quantity Value Quantity Value Quantity Value Total 11,502,423 6,572,772 13,350,758 7,666,812 13,150,465 8,097,454 Malaysia 6,331,532 4,217,413 7,304,814 5,190,030 7,593,523 5,666,380 China 1,512,529 610,887 2,532,030 961,867 2,729,063 1,054,097 Vietnam 740,410 471,360 915,770 559,276 1,052,603 671,374 South Korea 1,872,543 940,326 1,733,162 721,910 1,403,943 564,647 Taiwan 1,000,175 290,175 848,278 216,373 312,999 94,799 Indonesia 5,967 6,716 - - 40,236 30,885 Columbia 1,305 713 3,120 2,290 4,641 4,501 Thailand 12,795 9,518 4,733 3,817 4,233 3,088 Netherlands 19,928 20,805 3,529 4,810 799 1,384 Australia 3,610 3,582 2,404 3,794 500 892 Others 1,629 1,277 2,918 2,645 7,925 5,407 Source: The Ministry of Agriculture, Forestry, and Fisheries

Graph-Ⅳ-5A. Import value of Chrysanthemum in cut flowers per country (2007) South Korea 564,647 7%

Taiwan Vietnam 94,799 China 671,374 1% 1,054,097 8% Others 13% 46,157 1%

Total: 8,097,454 （Unit: 1000JPY)

Malaysia 5,666,380 70%

Source: The Ministry of Agriculture, Forestry and Fisheries

Table-Ⅳ-6. Import quantity and amount of orchid in cut flowers per country (2005～2007) Unit：kg、1000JPY 2005 2006 2007 Quantity Value Quantity Value Quantity Value Total 6,088,148 5,811,233 6,167,665 6,282,837 6,362,355 6,853,481 Thailand 3,883,121 2,979,741 3,978,519 3,397,467 4,055,630 3,946,681 New Zealand 635,230 1,040,022 542,631 1,054,224 499,222 1,108,211 Taiwan 840,608 1,052,859 957,004 1,118,650 1,130,584 1,059,483 Malaysia 194,611 222,382 471,861 452,760 510,935 504,529 Singapore 499,702 446,786 186,978 190,949 133,911 151,221 Vietnam 14,899 29,841 3,319 13,297 17,400 50,287 Netherlands 8,159 22,966 5,662 17,511 3,258 11,428 South Korea 5,068 4,822 1,680 3,896 3,426 8,121 India - - 1,163 2,366 2,952 3,208 Australia 1,240 1,889 2,856 4,575 788 2,431 Others 5,510 9,925 15,992 27,142 4,249 7,881 Source: The Ministry of Agriculture, Forestry, and Fisheries

Graph-Ⅳ-6A. Import value of Orchid in cut flowers per country (2007)

Others 33,069 0% Thailand Vietnam 3,946,681 50,287 59% 1% Total: Singapore Malaysia 6,853,481 151,221 504,529 （Unit : 1000JPY） 2% 7%

Taiwan 1,059,483 15% New Zealand 1,108,211 16%

Source: The Ministry of Agriculture, Forestry, and Fisheries

Import cut flowers

in wholesale

market

(Left) Aranda 160 yen/stem

(Right) Mokara 160 yen/stem

(Left) Den-Phalae 45yen/stem

Table-Ⅳ-7. Import quantity and value of carnation in cut flowers per country (2005～2007) Unit：kg、1000JPY 2005 2006 2007 Quantity Value Quantity Value Quantity Value Total 4,454,568 4,005,583 5,345,942 4,726,936 6,170,126 5,595,876 Columbia 2,593,256 2,901,367 2,876,275 3,362,584 3,268,395 3,788,925 China 1,582,766 814,975 2,097,679 1,000,798 2,467,035 1,397,001 Vietnam 131,646 117,080 186,208 144,182 222,008 158,013 Turkey 64,937 71,592 90,151 96,255 105,359 112,381 Sri Lanka 38,276 35,287 59,442 61,849 57,696 60,316 Ecuador 8,260 14,593 20,009 36,223 26,990 46,795 South Korea 19,753 25,962 9,719 14,475 7,601 12,125 Malaysia 3,102 2,096 - - 6,120 4,731 Spain 4,973 7,367 1,132 2,108 1,178 4,084 Others 19,397 26,948 9,119 15,111 7,744 11,505 Source: The Ministry of Agriculture, Forestry, and Fisheries

Graph-Ⅳ-7A. Import value of Carnation in cut flowers per country (2007)

Others 139,556 Columbia 2% 3,788,925 68% Turkey 112,381 Total: 2% 5,595,876 （Unit: 1000JPY）

Vietnam 158,013 3% China 1,397,001 25%

Source: The Ministry of Agriculture, Forestry, and Fisheries

Table-Ⅳ-8. Import quantity and value of rose (cut flowers) per country (2005～2007) Unit：kg、1000JPY 2005 2006 2007 Quantity Value Quantity Value Quantity Value Total 3,335,824 1,988,975 4,019,978 2,234,533 3,654,266 2,222,767 India 714,001 421,879 863,616 643,922 832,829 690,405 Kenya 93,426 110,540 359,054 442,213 363,549 471,858 Netherlands 145,907 298,494 124,198 290,780 101,730 268,108 South Korea 1,903,992 669,889 2,207,394 356,428 1,719,777 228,331 Ecuador 103,272 118,874 92,050 129,994 123,507 137,223 Columbia 121,214 124,844 102,486 117,937 87,961 110,386 Vietnam 117,563 96,347 124,500 110,807 112,781 104,114 Ethiopia - - 31,901 12,239 208,397 84,781 China 28,652 32,328 58,017 64,833 42,242 55,611 Others 107,797 115,780 56,762 65,380 61,493 71,950 Source: The Ministry of Agriculture, Forestry, and Fisheries

Graph-Ⅳ-8A. Import value of rose (cut flowers) per country (2007)

Vietnam 104,114 5% Others 212,342 10% Columbia 110,386 India 5% 690,405 31% Total: 2,222,767 Ecuador （Unit: 1000JPY) 137,223 South Korea 6% 228,331 10%

Netherlands Kenya 268,108 471,858 12% 21%

Source: The Ministry of Agriculture, Forestry and Fisheries

Table-Ⅳ-9. Import quantity and value of lily (cut flowers) per country (2005 ～2007) Unit：kg, 1000JPY 2005 2006 2007 Quantity Value Quantity Value Quantity Value Total 1,308,512 718,955 1,280,188 523,812 1,917,759 620,740 South Korea 1,164,856 593,469 1,185,415 434,220 1,847,469 550,422 China 126,452 105,919 73,639 70,458 56,712 52,957 Chile 1,896 2,004 6,102 7,429 4,594 6,658 Taiwan 6,296 6,193 11,100 6,772 5,511 5,904 Others 9,012 11,370 3,932 4,933 3,473 4,799 Source: The Ministry of Agriculture, Forestry, and Fisheries

Graph-Ⅳ-9A. Import value of lily (cut flowers) per country (2007)

Others South Korea 17,361 Total: 550,422 3% 620,740 88% （Unit: 1000JPY)

China 52,957 9%

Source: The Ministry of Agriculture, Forestry and Fisheries

Table-Ⅳ-10. Import quantity and value of other cut flowers per country (2005～2007) Unit：kg, 1000JPY 2005 2006 2007 Quantity Value Quantity Value Quantity Value Total 4,277,052 4,748,814 3,945,421 4,817,925 3,600,323 4,605,663 Netherlands 356,570 931,471 321,355 889,995 270,848 805,009 Taiwan 1,037,684 675,554 926,016 762,419 759,274 666,340 Australia 941,487 788,731 698,382 709,133 515,533 620,314 New Zealand 351,986 586,169 270,361 526,678 275,670 605,599 Kenya 342,667 375,962 388,255 483,801 364,393 464,313 Ecuador 333,100 462,864 377,686 495,427 377,735 415,288 South Africa 184,860 204,548 154,502 186,839 161,428 194,514 China 104,202 67,070 267,970 138,060 339,262 180,770 Israel 142,559 156,042 122,877 141,769 120,633 153,829 USA 59,878 131,098 54,939 136,932 46,912 121,540 Italy 31,881 57,987 39,950 73,482 40,202 84,911 Malaysia 140,133 100,821 121,632 87,418 100,564 82,554 Mauritius 36,049 61,486 31,752 59,758 33,251 64,673 Zimbabwe 51,675 55,715 46,332 39,356 36,050 40,124 South Korea 119,283 45,469 69,528 27,067 74,532 26,187 Chile 370 612 7,060 11,191 25,142 20,967 Columbia 7,770 9,996 14,588 16,209 15,279 16,625 Thailand 15,048 10,824 13,779 9,622 14,244 8,837 Others 19,850 26,395 18,457 22,769 29,371 33,269 Source: The Ministry of Agriculture, Forestry, and Fisheries

Graph-Ⅳ-10A. Import value of others cut flowers per country (2007)

USA 121,540 Israel 3% 153,829 3% Others 378,147 Netherlands China 8% 805,009 180,770 18% 4%

Total: South Africa 4,605,663 Taiwan 194,514 Ecuador （Unit: 666,340 4% 415,288 1000JPY） 15% 9%

Kenya 464,313 Austraila 10% 620,314 New Zealand 13% 605,599 13%

Source: The Ministry of Agriculture, Forestry and Fisheries

Table- IV-11. Import quantity and value of branches and leaves per country (2005～2007) Unit：kg, 1000JPY 2005 2006 2007

Quantity Value Quantity Value Quantity Value

Indonesia 407,925 154,081 408,175 180,088 415,974 192,045 USA 531,287 298,828 586,403 349,267 644,320 419,416 Taiwan 57,425 39,567 24,202 27,263 45,424 42,789 Costa Rica 396,306 244,085 366,165 247,382 456,482 253,152 China 11,197,408 2,460,974 11,510,103 2,636,825 11,586,704 2,922,411 Thailand 4,895 3,636 12,194 16,414 32,328 50,195 Australia 26,196 39,170 26,026 42,393 25,221 37,039 South Korea 8,480 6,691 3,080 2,732 8,680 9,623 Philippines 44,174 21,246 44,698 20,126 31,832 14,492 India 84,513 27,822 41,324 18,512 21,613 10,572 Singapore 3,131 4,373 27,417 27,996 23,245 24,789 Italy 159,162 298,711 113,918 225,153 93,829 210,361 Guatemala 130,789 81,561 109,008 83,315 83,380 68,346 Spain 8,701 22,471 9,225 24,326 5,949 18,098 France 16,198 32,688 15,355 36,663 14,008 39,602 Vietnam 36,951 23,601 31,377 20,805 30,740 20,077 Israel 54,587 62,605 45,048 56,066 62,375 75,573 Sri Lanka 50,056 47,481 44,169 47,742 32,207 34,321 New Zealand 21,263 39,393 38,640 61,640 47,048 94,376 Malaysia 1,116,918 995,004 1,230,519 1,096,233 1,275,237 1,158,810 Canada 111,991 56,291 98,491 56,284 47,734 30,850 Mexico 55,228 24,830 44,283 21,661 14,511 10,153 Panama 533,733 244,304 557,896 269,201 404,225 206,327 Ecuador 4,950 8,375 8,882 12,844 13,144 15,050 Others 80,103 103,159 110,133 103,652 182,240 159,836

Total 15,142,379 5,340,947 15,506,731 5,684,583 15,598,450 6,118,303 E.U. Total 208,675 393,130 256,373 304,234 123,915 285,343

3. Decreasing domestic production and increasing import The Table-IV-11 shows the shipping volume of domestic cut flowers and the import volume of imported cut flowers. From this table, it is understood that the shipping volume of domestic cut flowers is keeping the downturn every year, whereas the import of cut flowers is 46 increasing.

Graph-Ⅳ-11. Domestic cut flower shipment quantity vs. Import quantity Domestic （million stems） Import （1000 ton） 5,600 40.0 Import 5,400 35.0

5,200 30.0

5,000 25.0 Domestic 4,800 20.0

4,600 15.0

4,400 10.0

4,200 5.0

4,000 0.0 2002 2003 2004 2005 2006 2007

Source: Nikkei Newspaper 2008/6/25

(3) Plant quarantine on imported cut flowers The Table-IV-12 shows the quantity of imported cut flowers inspected for plant quarantine between 1996 and 2005. Chrysanthemum was the largest item in terms of the inspected quantity, which amounted to 169.5 million stems in 2005.

Inspection of Flowers: a. Inspection: The inspections on imported plants are conducted for pests including those not living in Japan. For example, fruits fly used to live in Okinawa before and its importation to the mainland Japan was prohibited at that time. However, it has already been eradicated today and is no longer under the ban. Meanwhile, if any pest is difficult to be found at the time of importation or is considered to cause a serious damage, an embargo on import is imposed on it. There is no problem to import any product from such countries that have no emergence of pest. There are no cut flowers except a few which are prohibited to be imported to Japan because of plant quarantine reason. (though flowers bearing fruits such as rosehip are prohibited.)

Table- IV-12. Quantity of import cut flowers inspected by plant quarantine office Unit: million stems year 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Total 699.7 609.6 687.7 737.0 829.2 836.9 863.4 887.0 992.3 1044.6 Orchid family 138.7 128.8 157.5 161.6 161.5 158.9 154.4 154.3 159.8 159.7 Fern family 191.1 126.1 123.9 93.9 106.6 104.4 93.9 89.5 87.3 81.7 Carex 39.4 23.9 26.4 29.6 29.5 33.1 32.6 39.6 26.4 24.6 Chrysanthemum 29.7 25.3 36.0 49.3 66.6 74.7 82.5 101.0 143.4 169.5 Carnation 40.8 39.1 45.5 54.1 59.6 67.8 109.4 107.2 141.9 162.5 Lily 9.6 7.5 6.4 7.3 8.1 6.2 6.2 7.1 9.6 8.0 Freesia 13.5 9.1 10.3 10.4 8.2 5.8 4.3 2.2 2.2 1.6 Rose 31.5 36.5 39.4 56.8 59.9 62.5 55.7 65.6 78.9 80.0 Anthurium 8.8 9.2 8.3 8.0 9.7 9.5 10.0 10.5 10.4 10.4 Nerine 7.5 7.0 5.8 6.6 5.9 5.0 4.3 3.5 0.0 0.0 Calla 4.5 4.2 5.2 5.5 6.0 7.1 5.1 5.4 4.0 4.6 Tulip 12.9 12.0 10.7 9.9 10.5 7.7 5.5 3.0 2.3 1.3 Gladiolus 15.1 10.2 5.5 11.6 5.5 3.9 5.7 4.7 4.4 5.3 Wax flower 9.6 7.9 9.4 10.4 9.9 8.6 9.3 9.1 10.0 8.3 Ruscus 1.4 1.3 1.0 1.0 1.2 1.0 0.5 0.1 2.4 2.6 Kangaroo-Paw 4.2 3.8 4.0 5.2 4.9 4.8 4.4 4.2 4.3 3.4 Dracaena 14.6 18.1 25.5 32.6 37.4 38.1 39.2 41.2 43.7 39.1 Leucadendron 40.0 4.1 4.3 4.8 6.0 5.9 6.8 6.2 7.1 7.0 Heliconia 0.4 0.3 0.3 0.3 0.2 0.2 0.1 0.1 0.3 0.3 Sandersonia - - 2.9 2.8 3.0 3.6 2.7 2.2 1.3 0.7 Alstroemeria - - 1.3 1.7 1.7 1.1 0.9 0.4 0.4 0.3 Sakaki-tree 26.4 31.3 36.2 42.2 42.6 43.1 43.5 44.5 48.5 51.3 Others 96.0 103.9 121.9 131.4 184.7 183.9 186.4 185.7 203.9 221.9 Source: Flower Data Book

Information on plant quarantine obtained through an interview with an inspector at Yokohama Plant Protection Station is as follows: b. Inspection method: An inspection is conducted on every import (100% inspection). An import made by an importer at a time is counted as one import. Accordingly, in case an importer imports same kid of flowering plant from same producer every week, an inspection is made on the each shipment. Inspections are implemented on samples drawn from the said shipment. The percentage of the quantity of samples differs depending on the said variety of flower and

48 imported quantity. In the case of cut orchids, the ratio is defined as follows: (Pieces or percent to be inspected in case of orchids) Up to 1,500 stems: 20% Up to 10,000 stems: 300 stems Up to 30,000 stems: 350 stems Up to 75,000 stems: 400 stems or more

Regardless of transportation methods such as cargo, traveling effects and mail, all plants are subject to inspection according to same criteria. As the goods are perishable, they are striving to expedite inspections. It takes 10~15 minute in average at the Narita airport. Even if any problem occurs, the inspection finishes within about 30 minutes.

If any pest is found in any plant, the said shipment is brought into a sealed storage to be fumigated there before passing through the customs. In case any pest is found, some importers send the shipment back to the said export country or divert it to third countries without sterilizing it in Japan (Such shipment is statistically included in “disposition”.) Out of the 1,500 shipments of cut flowers inspected in 2006, 185 shipments were subjected to fumigation and 7 shipments were disposed. c. Import inspection on Thai cut flowers Thai cut flowers were inspected on 68 thousands stems in 1997, 9,680 thousands stems in 2002 and 8,840 thousands stems in 2006. The percentage of the stems required for fumigation is small. Thai products are deemed to have been clearing customs without trouble. b. Resident quarantine inspector The system of resident quarantine inspector has been successful in Holland and many counties are now interested in this system. If inspections on flowers are conducted by a resident inspector, there will be a decreased possibility that any pest is discovered after the shipment have arrived at an airport in Japan The system will contribute not only to save the fumigation cost, but also to prevent the deterioration of flowers. For the purpose of shortening the time for customs clearance, this system was started in Holland around 1985 when the Narita airport was not yet opened. In Holland, the inspections are conducted inside the large flower market (Alsmeer). Therefore any disqualified flower can easily be replaced with a new product any number of times until it becomes to be qualified. This is the reason why the resident inspector system is workable in Holland. In Colombia and Korea, a similar system was once operated for a period of 1~2 years. However, as the inspections were carried out inside the airport, any replacement for disqualified item was necessary to be obtained in each case from a distantly located farm taking a long time. Under the circumstances, the system became nonfunctional and was finally given up. With the shortage of Japanese inspectors, the resident inspector system may be difficult to be

49 realized. As to advice to Thailand, a thorough pest control in Thailand is better for the both countries than stationing Japanese inspector in Thailand.

V. Distribution of cut flowers and flowering plants in Japan

(1) Distribution of flowering plants The Table-V-1 shows the transition of quantity, value and price of flowering plants at wholesale level between 2000 and 2006. The wholesale value of flowering plants as a whole has been decreasing since 2000 reaching 468 billion yen in 2006. As about 80 % of all distributed flowering plants are sold through wholesale markets, the size of retail market of flowering plants in Japan is estimated to be around 1,500 billion yen, taking those sold without going through wholesale markets into account. Then, let’s take a look at cut flowers next.

(2) Distribution of cut flowers 1. Cut flower markets In terms of wholesale value, cut flowers account for 73 % of the whole flowering plants (Graph-V-1). Judging from the wholesale value, the size of retail market of cut flowers in Japan is estimated to be about 1,000 billion yen by counting consumers’ price.. The Graph-V-2 shows the transition of quantity and price of cut flowers at wholesale level between 2000 and 2006, from which it is understood that the wholesale price per stem has been going up every year, whereas wholesale quantity has been declining year after year. Chrysanthemum accounting for 30% in cut flower markets The Table-V-2 shows the quantity, value and price of cut flowers at wholesale level between 2004 and 2006. The Graph-V-3 shows the wholesale volume of cut flowers in 2006 and the Graph-V-4 shows the wholesale value of cut flowers in 2006. From these tables, it is understood that chrysanthemum with spray chrysanthemum and small chrysanthemum combined accounts for 33% of the whole cut flowers in terms of quantity and 29% in value.

Table-Ⅴ-1. Wholesale quantity, value, and price of flowers

Unit Quantity：million stems Value：billion yen Price：yen / pc Items 2000 2001 2002 2003 2004 2005 2006 Total

Wholesale value 519 509 505 488 486 471 468 Cut flowers Wholesale quantity 6,925 6,657 6,569 6,377 6,251 6,102 6,101

Wholesale value 360 350 350 344 347 340 340

Wholesale price 52 53 53 54 56 56 56 Pot flowers and plants

Wholesale quantity 341 340 367 362 337 322 313

Wholesale value 127 126 124 115 110 103 102

Wholesale price 371 351 338 317 327 320 326 Seedling for bed flowers

Wholesale quantity 608 604 594 572 528 512 497

Wholesale value 32 33 31 29 29 28 26

Wholesale price 53 54 53 50 54 54 52 Source: The Ministry of Agriculture, Forestry and Fisheries

Table-Ⅴ-2. Wholesale quantity, value, and price of cut flowers （2004-2006） Unit Quantity: 1000stems

Value: 1000yen

Price: yen / stem

2004 2005 2006 Items Quantity Value Price Quantity Value Price Quantity Value Price Total of cut flowers 6,250,863 347,095,731 56 6,101,969 340,147,318 56 6,101,016 340,385,420 56 Total of chrysanthemum 2,001,019 105,043,376 52 2,001,912 100,939,645 50 2,033,305 99,964,302 49 Chrysanthemum 1,058,326 66,188,930 63 1,034,388 63,220,217 61 1,051,486 61,457,198 58 (import) 14,595 584,734 40 14,943 573,841 38 23,342 788,991 34 Spray chrysanthemum 372,972 19,087,231 51 396,753 19,183,771 48 405,009 19,977,287 49 (import) 63,914 3,521,183 55 81,559 4,165,308 51 88,576 4,751,131 54 Small Chrysanthemum 569,721 19,767,215 35 570,771 18,535,657 32 576,810 18,529,817 32 (import) 256 8,066 32 118 1,809 15 868 22,491 26 Carnation 513,680 22,485,135 44 492,768 21,854,853 44 495,082 22,648,817 46 (import) 59,471 2,118,085 36 71,526 2,558,426 36 83,042 3,050,966 37 Rose 447,213 28,600,920 64 433,589 28,999,046 67 421,962 30,272,278 72 (import) 55,328 2,102,529 38 54,867 2,408,588 44 57,069 2,697,096 47 Lily 203,878 30,263,781 148 193,518 30,012,102 155 195,174 29,688,829 152 (import) 7,582 896,809 118 6,365 776,913 122 4,499 528,776 118 Easter lily 42,350 3,966,537 94 39,259 3,842,338 98 39,519 3,747,220 95 Stock 61,704 4,018,462 65 63,527 4,491,063 71 78,583 4,282,697 54 Statice 139,901 7,174,273 51 139,721 6,942,474 50 146,633 7,183,357 49

Lisianthus 126,198 12,436,502 99 124,778 12,834,033 103 123,897 13,451,491 109 Freesia 44,608 1,799,678 40 41,112 1,624,728 40 41,047 1,591,581 39 Gladiolus 40,931 2,245,248 55 39,842 2,093,667 53 39,268 2,127,102 54 Total of orchid 172,011 16,018,250 93 172,383 15,995,920 93 171,223 16,069,636 94 Cymbidium 9,647 3,870,487 401 8,642 3,868,028 448 8,610 3,796,755 441 (import) 2,159 1,398,874 648 2,031 1,329,150 654 1,755 1,229,087 700 Den-Phalae 108,328 4,778,763 44 110,238 4,729,555 43 107,657 4,825,150 45 (import) 80,186 3,373,524 42 79,298 3,281,954 41 77,472 3,365,553 43 Oncidium 27,722 2,618,561 94 26,631 2,539,552 95 27,805 2,551,071 92 (import) 15,828 1,252,540 79 14,872 1,202,672 81 16,324 1,275,915 78 Gypsophila 76,012 6,189,848 81 77,110 5,812,942 75 81,783 5,559,234 68 Alstroemeria 72,490 5,412,597 75 74,918 5,518,265 74 77,052 5,750,385 75 Gerbera 211,384 5,813,243 28 213,218 5,877,962 28 209,111 6,171,187 30 Sweet pea 143,405 3,760,585 26 132,633 4,020,832 30 137,962 3,754,211 27 Tulip 72,331 4,316,237 60 69,865 4,111,005 59 73,376 4,014,324 55 Gentian 98,549 4,350,508 44 98,131 4,402,910 45 98,097 4,679,614 48 Delphinium 52,994 4,030,023 76 50,690 3,899,112 77 47,827 3,846,801 80 Other cut flowers 1,059,502 48,226,177 46 963,079 46,043,405 48 914,781 43,730,540 48 Cut leaves 390,864 11,185,395 29 397,732 11,429,017 29 397,076 11,865,464 30 (import) 123,948 3,271,237 26 123,937 3,350,143 27 125,673 3,473,498 28 Cut branches 322,189 23,725,493 74 321,443 23,244,337 72 317,777 23,733,570 75 (import) 42,069 2,644,404 63 41,585 2,776,100 67 42,360 2,897,199 68 Source: The Ministry of Agriculture, Forestry and Fisheries

Graph-Ⅴ-1. Wholesale value of flowers (2006)

Seedling for bed flowers 26 6%

Pot flowers and plants 102 Total: 468 22% （Unit: billion JPY）

Cut flowers 340 72%

Source: The Ministry of Agriculture, Forestry and Fisheries

Graph-Ⅴ-2. Wholesale quantity and price of cut flowers (2000～2006) Wholesale quantity Wholesale price （Unit: billion stems）（Unit: JPY/ stem） 8 60 Wholesale price 7 Wholesale quantity 50 6 40 5

4 30

3 20 2 10 1

0 0 2000 2001 2002 2003 2004 2005 2006 Source: The Ministry of Agriculture, Forestry and Fisheries

Graph-Ⅴ-3. Wholesale quantity of main cut flowers (2006)

Chrysanthemum 1,051 Others 17% 2,370 Gerbera 40% 209 Total: 6,101 3% （Unit: million stems） Gypsophila Spray chrysanthemum 82 405 1% 7%

Orchid 171 Small crysanthemum 3% 577 9% Carnation Lisianthus Lily 495 124 Rose 8% 2% 195 422 3% 7% Source: The Ministry of Agriculture. Forestry and Fisheries

Graph-Ⅴ-4. Wholesale value of main cut flowers (2006)

Chrysanthemum 61.5 18%

Others 116.1 Spray chrysanthemum 33% 20.0 Total: 6% 340 （Unit: Small chrysanthemum billion JPY） 18.5 5% Gerbera 6.2 Carnation 2% 22.6 7% Gypsophila Rose 5.6 30.3 2% Lily 9% 29.7 Orchid Lisianthus 9% 16.0 13.5 5% 4% Source: The Ministry of Agriculture, Forestry and Fisheries

2. Article characteristics of cut flowers Cut flowers are used in diverse ways in Japan. The distribution and use of cut flowers in Japan are explained as follows: a. Use of cut flowers Each demand for a cut flower comes from respectively corresponding specific use for the flower as listed below: 1) Business use for adornments at funeral services, wedding ceremonies, banquets rooms and various event sites as well as for flower arrangements to adorn shop fronts 2) Household use for indoor ornaments and floral offerings at family altars, household shrines and graves 3) Use for lessons or trainings at flower arrangement classes or schools. 4) Use as gifts (presents) given by companies and individuals. Traditionally, demand for flowers has been closely connected to religious rites in this country. In the old days, demand for flowers was mostly coming from needs for people to use flowers at funeral ceremonies and to offer flowers to family alters and graves. Along with subsequent economic and social development, there was a sharp increase in demand for business purposes to consume flowers at wedding ceremonies, banquets and other various events as well as for the decorations of stores in service industry. Also, there was an increase in demand not only as a personal gifts for birth days and commemoration days, but also as gifts on the occasion of holidays and various cultural events such as “Mother’s Day”, “Father’s Day”, “Valentine Day” and “White Day”. As a result, cut flower consumption has recently become to concentrate on “traditional event days” as we say, such as the New Year, the equinoctial week, Bon according to the lunar calendar, Christmas, “Mother’s Day” and “Valentine Day”. In addition, as the cut flower consumption has recently become to take root in people’s daily living, demand for so-called “casual flower” is increasing to adorn rooms at ordinary homes on normal days. b. Characteristics of cut flower distribution In general, it is the characteristics of agricultural product distribution that duration between the start of production and the time of shipment is comparatively long, and crop and harvest time are greatly affected by weather and other natural conditions. It is difficult, therefore, for producers to accomplish the production and shipment according to a prearranged schedule. Moreover, the lack of elasticity in supply is also a feature of agricultural products. Especially, in the case of cut flowers, despite the consumption concentrating on specific days such as “traditional event days”, the optimum time for harvest is very short. Even the supply of greenhouse-grown flowers is highly affected by weather and other natural conditions and is not necessarily able to meet the demand as originally planed. In addition, because cut flowers are commercialized after the upper parts of their stems are cut off, freshness is critically important to them compared to potted flowers and flowerbed seedlings. However, the adjustment of the shipment time entails a great difficulty. Particularly, it is customary in this country that cut flowers are transported throughout distribution channels in carton boxes

56 without water replacement. Therefore, compared to Western countries such as Holland where cut flowers are transported mainly in buckets, it is more difficult to preserve the freshness of cut flowers in Japan. Meanwhile, unlike ordinary agricultural products with heavy weight for selling price, cut flowers are comparatively lightweight and higher in unit price. For this reason, cut flowers are often economically feasible for air transportation and also for long-distance transportation. Further, although fruits and vegetables as well as potted flowers and flower garden seedlings are often sold loose as a single item, cut flowers are in many cases not “sold loose” as it is. Regardless of the types of intended end-use, cut flowers are often more or less processed into ornaments or bouquets at the retail level before they are sold. In other words, it is a feature of cut flowers that they are sold after a certain added value is created in them rather than sold as a single item. c. Importance of wholesale market for cut flower distribution The Chart in next page shows the distribution channels of cut flowers. More than 80% of cut flowers are estimated to be sold through wholesale markets, which are therefore playing a very important role as the core of the distribution channels. Most cut flowers grown by producers in domestic growing regions are shipped to wholesale markets directly by the producers or through agricultural cooperatives, voluntary shipping partnerships or regional middlemen (traders to collect and ship products). The most part of cut flowers handled by importers are also shipped to wholesale markets, from where they are shipped to retailers partially through fresh flower wholesalers and bouquet processors, before ultimately delivered to end-users for business use and general consumers for household use. A recent feature of cut flower distribution is the appearance of bouquet processors who deliver flowers to mass sales stores and others after processing cut flowers into a plain-wrapped bouquet, “packed flower” as we say. As mentioned above, because of reasons that freshness is extremely important to cut flowers, the number of cut flower products is almost countless, and cut flower producers, importers and retailers are all small in business size, wholesale markets are playing an important role in cut flower distributions. It is unlikely that the percentage of cut flowers sold through wholesale markets will decline in the future.

Chart: Distribution channel of cut flowers in Japan

Manufacturer Importer

Coop/ Shipping Union Local Dealer

Wholesaler

Intermediate wholesaler

Dealer Flower processor

Retailer

Consumer Commercial consumer

Source：Key Research Net

3. Markets for orchid The Graph-V-5 shows the wholesale volume of orchid in 2006 and the Graph-V-6 shows the wholesale value of orchid in 2006. The most expensive variety of orchid is cymbidium priced at a level between 300 yen and 800 yen per stem, though it varies depending on month. To the contrary, the cheapest orchid is Den-phalae priced at 30 yen to 80 yen per stem, which is exactly one tenth of the price of cymbidium (Graph-V-7). Market for Den-phalae About 110 million stems of Den-phalae, including both imported and domestic products, are sold through wholesale markets in a year. Because around 25% to 30% of total marketed volume is supposed to be sold without going through wholesale markets, the gross sales volume of Den-phalae is estimated to be around 140 million stems per year.

Graph-Ⅴ-5. Wholesale quantity of orchid (2006)

Domestic cymbidium Import cymbidium 6.9 1.8 4% Other orchid 1% 27.2 Domestic Den-Phalae 16% 30.2 18%

Import Oncidium 16.3 10% Total: 171 （Unit: million stems） Domestic Oncidium 11.5 7% Import Den-Phalse 77.5 44%

Source: The Ministry of Agriculture, Forestry and Fisheries

Graph-Ⅴ-6 Wholesale price of orchid (2006)

Domestic cymbidium 2,567 15%

Other orchid 5,900 Import cymbidium 35% 1,229 7%

Total: 17,070 （Unit: million Domestic Den-Phalae yen） 1,459 9%

Import oncidium 1,275 7% Import Den-Phalae Domestic oncidium 3,365 1,275 20% 7%

Source: The Ministry of Agriculture, Forestry, and Fisheries

Graph-Ⅴ-7. Monthly wholesale price of orchids in major market (2006) （Unit: yen/stem） 900 Average of orchid 800 family

Cymbidium 700

600 Cymbidium(import)

500 Den-Phalae 400 Den-Palae(import) 300

200 Oncidium

100 Oncidium(import)

0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: The Ministry of Agriculture, Forestry and Fisheries

Graph-Ⅴ-8. Monthly wholesale price of chrysanthemum in major market (2006) （Unit: yen / stem） 80 Average of chrysanthemum 70 family Chrysanthemum 60 Chrysanthemum( 50 import) Spray 40 chrysanthemum

Spray 30 chrysanthemum( import) 20 Small chrysanthemum

10 Small chrysanthemum( import) 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: The Ministry of Agriculture, Forestry and Fisheries

Graph-Ⅴ-9. Monthly wholesale price of carnation, rose, lily, and lisianthus im main market (2006) (Unit: yen / stem） 200 Carnation 180

160 Carnation(import)

140 Rose 120 Rose(import) 100 Lily 80

60 Lily(import)

40 Easter lily 20 Lisianthus 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: The Ministry of Agriculture, Forestry and Fisheries

Table-Ⅴ-3. Wholesale quantity, value, and price of main pot flowers and plants （2006）

year on year wholesale Wholesale Wholesale Items Wholesale Wholesale Wholesale quantity value price quantity value price million million yen yen / pot ％％％ stems Pot flowers and plants 313 101,800 326 97 99 102

Cyclamen 17 7,000 418 103 100 97 Primula family 11 1,200 107 110 97 88 Primula juliae 4 300 76 122 99 82 Primula polyanntha 3 300 108 107 98 92 Begonia family 8 1,800 242 96 96 101 Riegers Begonia 4 1,300 347 95 96 101 Carnation 5 2,000 397 99 104 106 Cactus 17 3,600 212 96 98 101 Kalanchoe 7 1,100 166 99 100 101 Orchid family 13 27,800 2,129 97 99 103 Cymbidium 2 6,100 2,463 104 101 97 Dendrobium 2 1,900 886 100 98 98 Den-Phalae 1 1,400 1,238 90 88 97 Phalaenopsis 4 15,500 3,675 65 101 106 Ornamental plants 52 17,100 327 93 97 104 Pothos 3 1,000 297 94 97 104 Fern 2 500 194 90 93 103 Dracaena 3 2,300 878 88 97 109 Flowering trees & shrubs 45 15,600 343 99 100 101 Hydrangea 4 2,400 622 107 109 102 Hibiscus 2 900 374 93 99 106 Poinsettia 6 1,900 313 101 97 96 Source: The Ministry of Agriculture, Forestry and Fisheries

Table-Ⅴ-4. Itemized list of wholesale quantity, value, and price of cut flowers

Cut Flower Small Total chrysanthemum chrysan- Spray Carnation Rose chrysanthemum chrysanthemum themum

Quantity 1,000 stems

1995 6,742,999 2,167,857 1,251,671 258,559 657,627 544,611 450,426 1996 7,039,198 2,206,543 1,279,906 269,632 657,005 566,606 483,192 1997 7,066,740 2,194,411 1,245,851 287,352 661,208 542,867 506,485 1998 6,881,386 2,113,529 1,206,880 303,658 602,991 533,600 500,819 1999 6,891,936 2,166,787 1,199,234 326,108 641,445 510,785 491,472 2000 6,925,093 2,205,890 1,214,635 330,966 660,289 510,428 479,572 2001 6,657,357 2,100,723 1,160,650 327,757 612,316 478,794 462,674 2002 6,569,117 2,065,095 1,133,539 343,429 588,127 500,484 449,239 2003 6,376,873 2,002,125 1,075,265 348,159 578,701 508,816 438,883 2004 6,250,863 2,001,019 1,058,326 372,972 569,721 513,680 447,213 2005 6,101,969 2,001,912 1,034,388 396,753 570,771 492,768 433,589 Value 1,000 Yen 1995 390,962,106 118,307,891 83,638,835 12,925,849 21,743,207 25,801,966 32,066,692 1996 400,167,372 112,963,739 78,780,275 13,704,398 20,479,066 26,384,262 34,762,925 1997 409,549,960 120,000,234 82,286,862 14,792,602 22,920,770 26,742,310 34,526,783 1998 421,645,060 131,758,919 87,553,058 18,702,854 25,503,007 27,497,310 34,037,155 1999 384,457,211 117,183,291 79,829,116 16,160,988 21,193,187 23,019,982 31,407,367 2000 360,246,543 104,800,130 70,017,187 14,942,535 19,840,408 21,532,582 30,962,205 2001 349,687,805 101,091,844 65,784,057 15,737,998 19,569,789 21,450,929 30,300,939 2002 349,941,127 100,402,553 64,959,071 16,495,246 18,948,236 22,907,206 30,623,496 2003 343,861,649 99,688,316 64,478,438 16,935,141 18,274,737 22,458,916 29,694,621 2004 347,021,143 105,043,376 66,188,930 19,082,552 19,767,215 22,485,135 28,600,920 2005 340,147,318 100,939,645 63,220,217 19,183,771 18,535,657 21,854,853 28,999,046 Price Yen/stem 1995 58 55 67 50 33 47 71 1996 57 51 62 51 31 47 72 1997 58 55 66 51 35 49 68 1998 61 62 73 62 42 52 68 1999 56 54 67 50 33 45 64 2000 52 48 58 45 30 42 65 2001 53 48 57 48 32 45 65 2002 53 49 57 48 32 46 68 2003 54 50 60 49 32 44 68 2004 56 52 63 51 32 44 64 2005 56 50 61 48 32 44 67

Alstroemeri Orchids Phalaenopsi Gypsophila Iris Cattleya Cymbidium Den-Phalae Oncidium a s Quant 1,000 stems ity 1995 166,169 4,786 10,769 111,551 - 5,363 114,618 36,660 59,532 1996 152,219 5,305 11,324 96,738 - 5,271 125,337 40,292 61,974 1997 155,102 5,183 11,216 100,715 - 5,278 113,864 35,993 60,540 1998 173,916 5,028 10,234 119,679 - 5,132 99,464 35,098 62,933 1999 178,633 5,216 10,078 119,758 - 5,444 97,189 32,631 66,528 2000 176,790 4,990 10,923 120,346 - 5,142 99,348 37,247 73,284

2001 170,478 4,856 10,561 114,673 - 4,988 91,301 32,579 74,607

2002 176,208 - 10,767 112,638 26,022 - 92,585 - 76,419 2003 169,496 - 10,223 109,105 24,977 - 85,941 - 77,848 2004 172,011 - 9,647 108,328 27,722 - 76,012 - 72,490 2005 172,383 - 8,642 110,238 26,631 - 77,110 - 74,918 Value 1,000 Yen 1995 19,333,827 1,880,100 4,534,247 6,575,988 - 2,688,902 10,701,240 1,894,723 4,080,277 1996 19,352,305 2,022,251 4,670,295 6,189,722 - 2,842,224 10,588,517 1,974,882 4,677,936 1997 19,430,868 1,998,536 4,659,805 6,250,151 - 2,717,215 9,989,709 1,762,129 4,885,493 1998 19,187,962 1,926,422 4,439,135 6,401,781 - 2,579,562 9,588,131 1,879,354 5,370,633 1999 18,319,728 1,791,308 4,320,271 5,816,132 - 2,547,470 8,205,566 1,623,212 5,090,778 2000 17,182,049 1,632,485 4,297,171 5,283,469 - 2,464,257 7,407,349 1,548,599 5,092,135 2001 16,557,723 1,548,797 4,127,130 5,057,209 - 2,344,907 6,994,058 1,381,085 5,241,236 2002 16,207,698 - 4,006,975 4,924,757 2,544,253 - 6,583,203 - 5,338,211 2003 15,708,153 - 3,865,900 4,691,016 2,512,050 - 6,252,718 - 5,463,862 2004 16,018,250 - 3,870,487 4,778,763 2,618,561 - 6,189,848 - 5,412,597 2005 15,995,920 - 3,868,028 4,729,555 2,539,552 - 5,812,942 - 5,518,265 Price Yen/stem 1995 116 393 421 59 - 501 93 52 69 1996 127 381 412 64 - 539 84 49 75 1997 125 386 415 62 - 515 88 49 81 1998 110 383 434 53 - 503 96 54 85 1999 103 343 429 49 - 468 84 50 77 2000 97 327 393 44 - 479 75 42 69 2001 97 319 391 44 - 470 77 42 70 2002 92 - 372 44 98 - 71 - 70 2003 93 - 378 43 101 - 73 - 70 2004 93 - 401 44 94 - 81 - 75 2005 93 - 448 43 95 - 75 - 74

Lily Stock Statice Lisianthus Freesia Gladiolus Orchid Easter lily

Quantity 1,000 stems 1995 215 704 55 414 74 434 157 526 121 935 93 852 56 494 166 169 1999 231 569 52 737 71 460 140 182 131 585 71 653 53 551 178 633 2000 232 733 53 516 70 821 144 820 131 976 69 493 48 821 176 790 2001 217 426 49 502 77 074 142 257 129 124 59 386 42 565 170 478 2002 213 431 49 256 69 758 142 731 130 994 54 250 43 650 176 208 2003 209 953 45 368 77 451 140 844 127 498 52 673 43 372 169 496 2004 203 878 42 350 61 704 139 901 126 198 44 608 40 931 172 011 2005 193 518 39 259 63 527 139 721 124 778 41 112 39 842 172 383 2006 195 189 39 524 78 618 146 626 123 900 41 106 39 268 171 240 2007 182 757 36 618 60 226 147 164 126 230 35 658 36 676 168 883 Value 1,000 Yen 1995 31 241 591 6 575 095 4 480 580 8 764 220 11 464 672 3 472 686 3 212 279 19 333 827 1999 34 594 334 5 476 523 4 375 211 7 640 012 12 202 246 2 931 682 2 603 831 18 319 728 2000 31 996 376 4 914 230 4 291 612 7 242 458 11 923 566 2 690 989 2 440 826 17 182 049 2001 30 815 916 4 678 938 4 206 969 7 464 855 12 239 358 2 265 658 2 254 802 16 557 723 2002 30 837 479 4 595 142 3 774 498 7 492 824 12 793 952 2 011 387 2 275 126 16 207 698 2003 29 798 726 4 211 447 4 051 476 7 185 092 12 596 702 1 925 369 2 177 591 15 708 153 2004 30 263 781 3 966 537 4 018 462 7 174 273 12 436 502 1 799 678 2 245 248 16 018 250 2005 30 012 102 3 842 338 4 491 063 6 942 474 12 834 033 1 624 728 2 093 667 15 995 920 2006 29 691 010 3 747 890 4 283 998 7 183 594 13 452 260 1 592 569 2 127 130 16 070 963 2007 28 597 968 3 559 445 4 119 959 7 125 059 14 082 017 1 491 436 2 160 485 16 329 905 Price Yen / stem 1995 145 119 60 56 94 37 57 116 1999 149 104 61 55 93 41 49 103 2000 137 92 61 50 90 39 50 97 2001 142 95 55 52 95 38 53 97 2002 144 93 54 52 98 37 52 92 2003 142 93 52 51 99 37 50 93 2004 148 94 65 51 99 40 55 93 2005 155 98 71 50 103 40 53 93 2006 152 95 54 49 109 39 54 94 2007 156 97 68 48 112 42 59 97

Other cut Cut Gerbera Sweet pea Tulip Gentian Delphinium Cut leaves flowers branches

Quantity 1,000 stems 1995 152 022 168 339 106 443 107 556 - 1 170 988 408 765 369 068 1999 228 976 150 932 111 056 114 541 - 1 242 853 427 897 371 656 2000 225 152 153 418 104 209 109 777 - 1 251 186 426 184 373 944 2001 218 294 154 991 90 484 111 761 - 1 249 804 411 366 374 248 2002 218 277 154 584 91 442 109 830 63 486 1 164 909 410 926 340 819 2003 215 465 132 295 84 157 103 057 59 442 1 132 885 394 741 319 931 2004 211 384 143 405 72 331 98 549 52 994 1 059 502 390 864 322 189 2005 213 218 132 633 69 865 98 131 50 690 963 079 397 732 321 443 2006 209 117 138 011 73 425 98 097 47 825 913 076 400 022 317 896 2007 199 121 131 531 62 993 99 580 44 800 832 905 389 923 309 330 Value 1,000 yen 1995 5 087 082 5 011 839 7 389 585 5 624 367 - 53 968 221 11 272 062 27 786 306 1999 6 102 322 4 410 564 6 724 537 5 356 274 - 55 723 049 11 255 460 25 687 765 2000 6 007 518 4 338 258 6 231 253 5 038 078 - 52 825 751 10 974 571 25 750 526 2001 6 133 976 4 299 299 5 560 335 4 889 130 - 52 523 392 10 851 068 24 546 318 2002 6 003 325 3 769 300 4 931 131 5 078 623 4 549 165 48 814 352 11 719 175 23 828 423 2003 5 958 559 3 623 271 4 828 210 4 431 928 4 347 455 49 500 102 11 216 030 22 954 552 2004 5 813 243 3 760 585 4 316 237 4 350 508 4 030 023 48 226 177 11 185 395 23 725 493 2005 5 877 962 4 020 832 4 111 005 4 402 910 3 899 112 46 043 405 11 429 017 23 244 337 2006 6 172 049 3 755 663 4 016 676 4 679 614 3 846 698 43 656 375 11 944 944 23 741 278 2007 6 413 967 3 703 871 3 704 150 4 814 639 3 707 833 40 930 113 11 910 674 23 600 223 Price Yen/stem 1995 33 30 69 52 - 46 28 75 1999 27 29 61 47 - 45 26 69 2000 27 28 60 46 - 42 26 69 2001 28 28 61 44 - 42 26 66 2002 28 24 54 46 72 42 29 70 2003 28 27 57 43 73 44 28 72 2004 28 26 60 44 76 46 29 74 2005 28 30 59 45 77 48 29 72 2006 30 27 55 48 80 48 30 75 2007 32 28 59 48 83 49 31 76

Table-Ⅴ-5. Wholesale quantity, value, and price of pot flowers and plants （2005,2006） Quantity: 1,000 stems Value: 1,000 yen Price: Yen/stem

2005 2006 Items Quantity Value Price Quantity Value Price Total of pot flowers and plants 321,880 103,011,557 320 312,756 101,812,479 326 Chrysanthemum 4,412 1,011,371 229 4,535 1,028,223 227 Cyclamen 16,163 6,995,818 433 16,721 6,987,742 418 Primula family 10,058 1,230,539 122 11,109 1,188,973 107 Primula Julian 3,235 302,271 93 3,948 299,389 76 Primula polyanntha 3,005 354,629 118 3,222 348,955 108 Begonia family 7,853 1,888,357 240 7,506 1,820,112 242 Rigers Begonias 4,060 1,395,434 344 3,874 1,342,609 347 Carnation 5,039 1,895,211 376 4,972 1,974,538 397 Cineraria 3,607 770,306 214 3,368 752,733 224 Geranium 4,296 788,931 184 3,970 742,429 187 Saintpaulia 982 161,837 165 833 137,796 165 Vinca 2,516 161,515 64 2,195 136,648 62 Gentian 1,225 330,308 270 1,135 322,446 284 Cactus 17,470 3,653,688 209 16,810 3,565,638 212 Kalanchoe 6,822 1,118,443 164 6,759 1,119,582 166 Orchid family 13,518 28,075,968 2,077 13,077 27,847,281 2,129 Cymbidium 2,396 6,052,882 2,527 2,487 6,126,726 2,463 Dendrobium 2,177 1,969,403 905 2,177 1,928,723 886 Den-Phalae 1,246 1,587,634 1,274 1,125 1,392,539 1,238 Phalaenopsis 4,423 15,265,140 3,451 4,215 15,488,637 3,675 Ornamental plants 56,202 17,628,659 314 52,298 17,097,589 327 Spathiphyllum 1,482 456,264 308 1,426 454,195 319 Pothos 3,575 1,023,772 286 3,353 995,353 297 Fern 2,674 503,790 188 2,403 467,422 194 Dracaena 2,946 2,361,030 802 2,604 2,286,268 878 Ficus Benjamin 498 425,625 854 397 382,244 963 Flowering trees & shrubs 45,918 15,610,498 340 45,339 15,562,797 343 Hydrangea 3,604 2,202,977 611 3,860 2,402,531 622 Azalea 1,855 396,605 214 1,958 432,123 221 Hibiscus 2,508 883,411 352 2,332 871,708 374 Poinsettia 5,977 1,939,891 325 6,048 1,890,800 313 Other pot flowers and plants 132,622 22,808,551 172 128,888 22,647,534 176 Seedling for bed flowers 512,280 27,513,249 54 496,759 25,698,425 52 Pansy 85,522 3,979,313 47 90,534 3,407,426 38 salvia 16,758 688,698 41 16,642 664,082 40 Marigold 22,602 866,443 38 21,634 793,887 37 Petunia 31,056 1,400,735 45 27,414 1,363,184 50 Other seedling for bed flowers 356,342 20,578,060 58 340,535 19,469,846 57 Source: The Ministry of Agriculture, Forestry and Fisheries

(3) Wholesale markets for flowering plants As mentioned above, about 80% of flowering plants in terms of quantity are sold through wholesale markets in Japan. Wholesale markets are divided into the central wholesale market and local wholesale markets consisting of about 157 markets in total across the country. The central wholesale market has about 2,000 buyers authorized by the Tokyo metropolitan government including specialty shops, mass sales retailers, florists for business use, floor brokers, outside wholesaler and local markets. The Ota Floriculture Co. is at the top of the wholesale business circle and handles as many as 12,000 kinds of cut flowers and 8,000 kinds of potted flowers. This company is playing an important role to connect 27,000 flower retailers to more than 130,000 producers and importers throughout the country, while handling about 10% of whole cut flowers sold in Japan. Sales commission rates are fixed by law to be 9.5% in the central market and 10% in local markets.

(4) Wet-type refrigerated distribution by bucket and others Wet-type refrigerated distribution by bucket and others means as follows: 1) As shown in the photo below, flowers are put in a bucket with water in it at the time of shipment and are transported as it is. 2) Throughout physical distributions, flowers are always kept under a low temperature, or are temporarily stored under a low temperature during pre-cooling treatment before shipment and then kept in refrigerator while in transit and also in wholesale market. As consumers are increasingly becoming to desire to purchase cut flowers with longer vase life without anxiety, it is important for us to improve the vase life in order to expand cut flower consumptions. The wet-type refrigerated distribution method enables cut flowers to receive water replacement at all times so as to maintain a longer vase life, while at the same time contributing to natural resource saving by reducing the quantity of waste carton boxes. Since 2000, the Ministry of Agriculture, Forestry and Fisheries has been conducting a survey on “results of wet-type refrigerated distribution of cut flowers by buckets and others” to investigate the situations of efforts to improve the quantity preservation of flowers through the dissemination of the wet-type refrigerated distribution. According to the findings of this survey, the wet-type refrigerated distribution is worked on in various regions in this country and the quantity of flowers marketed using this system has been increasing year by year.

Table-Ⅴ-6. Distribution by bucket with low temperature and wet condition（2000-2006）

Cut flower Rose ( cut flower) Distribution Distribution volume Distribution rate by Distribution rate by volume by bucket by bucket with low bucket with low bucket with low with low temperature and wet temperature and wet temperature and temperature and condition condition wet condition wet condition

2000 19.5 0.3% 12.7 2.8%

2001 34.5 0.6% 20.2 4.5%

2002 56.5 1.0% 34.6 7.9%

75.5 1.4% 39.4 9.5% 2003 (142.9) (2.7%) (69.2) (16.7%) 96.7 1.9% 51.3 12.6% 2004 (215.0) (4.2%) (122.9) (30.2%) 109.8 2.2% 59.3 15.2% 2005 (247.5) (4.9%) (139.1) (35.6%) 37.4 2.8% 64.9 17.6% 2006 (315.7) (6.4%) (148.5) (40.2%) Unit: million stems Source: The Ministry of Agriculture, Forestry and Fisheries

Distribution by bucket with low temperature and wet condition

Below picture shows special track for exclusively using for transportation

Above picture shows special tray for exclusively using for transportation

Table-Ⅴ-7. Ranking of annual sales value of flower wholesaler in central wholesale market (2007) Unit: million yen Rank Wholesaler Value year on year (%) 1 Ota Floricultural Auction Co. 30,572 103.9 2 Japan Flower Auction Co. 25,449 103.4 3 Higashi-Nihon Flower Action Co. 9,740 102.5 4 Setagaya Flower Auction Co. 9,707 105.6 5 Daiichi Flower Auction Co. 8,982 103 6 Tokyo Flowerport Auction Co. 7,856 101.7 7 Hanamitsu Flower Auction Co. 7,168 101.1 8 Sendai Flower Auction Co. 6,368 103.1 9 Okayama Flower Auction Co. 5,552 97.2 10 Tokyo Kinuta Flower Auction Co. 5,395 107.7 11 Senbana Flower Auction Co. 5,006 96.8 12 Kawasaki Flower Auction Co. 3,066 114.6 13 Akita Flower Auction Co. 2,501 101.5 14 Takamatsu Flower Auction Co. 2,471 96.8 15 Miyazaki Flower Auction Co. 2,295 97.3 16 Fukushima Flower Auction Co. 2,236 100.1 17 Ehime Flower Auction Co. 2,229 94.8 18 Kobe Flower Auction Co. 2,184 96.3 19 Yokohama Flower Auction Co. 2,128 94.6 20 Hyogo Flower Auction Co. 1,903 99.6 21 Tokyo Flower Auction Co. 1,883 99.4 22 Okinawa Flower Auction Co. 1,875 107.1 23 Hachinohe Flower Auction Co. 1,626 97.7 24 Okinawa prefecture Flower Auction Co. 1,421 100.6 25 Toyama Flower Auction Co. 1,381 112.2 26 Aomori Flower Auction Co. 1,214 99.8 27 Kawasaki Flower Auction Co. 1,161 124.6 28 Iwaki Flower Auction Co. 1,013 98.6 29 Sasebo Flower Auction Co. 1,005 94.5 30 Fukui Flower Auction Co. 964 96.3 31 Shinka Flower Auction Co. 680 101.9 32 Kanagawa prefecture Flower Auction Co. 360 103.8

Total 157,571 101.8 Source: Flower and Gardening Newspaper

(Summary of results of wet-type refrigerated distribution in 2006) According to a survey conducted by the Ministry of Agriculture, Forestry and Fisheries on the ratio of wet-type refrigerated distribution system in the shipping volume of cut flowers, distributed quantity under this system shoed a sharp increase in 2006 as seen in chrysanthemum, which amounted to 16.6 million stems, up by 158% from the previous year. This was the first time since the launch of this survey that the quantity of this flower distributed using this system exceeded 10 million stems. By the same token, Gerbera increased by 92% from the previous year to 13.84 million stems, carnation by 44% to 18.26 million stems and lisianthus by 43% to 31.63 million stems. Rose having the largest sales volume showed an increase in the quantity under this system by 7% from the previous year to 148.53 million stems accounting for 47% of the total. Total cut flowers distributed under this system were 315.73 million stems, up by 28% from the year before. The percentage of cut flowers distributed under this system in the marketed volume of whole cut flowers was 6.42%, up by 1.49 points from the previous year. The percentage of cut flowers to be distributed under this system in the marketed volume of whole cut flowers is forecast to exceed 7% in 2007.

VI. Market trend and consumption trend of cut flowers and flowering plants in Japan

In order to investigate the market trend and consumption trend of cut flowers and flowering plants in Japan, we have conducted interviews with floriculture industry participants such as importers, wholesalers and retailers as well as with consumers.

(1) Market trend revealed by interviews with industry participants With regard to consumer spending for flowering plants in the world, Japan ranks second after the United States. With the spending for whole flowering plants divided into for business use, for use as a gift and for personal use, the amount for the personal use accounts for 30%, which is considerably small compared to 70% in Europe. In addition, only 40 % of consumers purchase flowers in Japan. In other words, six people out of ten consumers do not buy any flower. This means, however, that flower consumption is highly possible to grow further from now in Japan. When it comes to the amount of flower consumption per head of population in regions, Kagoshima prefecture and Miyagi prefecture rank at the top with the consumption of 15,000 to 16,000 yen per year. This reflect the local characteristics of these regions, where more flowers are consumed for Buddhist rites. It is 11,000 yen in Tokyo. Okinawa has the least consumption with 5,000 yen per head. The types of flowering plants preferred by Japanese consumers have become highly diversified, whereas absolutely salable flowers have diminished. Consumers place importance especially on color, form of bloom and fragrance. In

72 inner city districts from where trend and information are transmitted, there is much demand for rarely available flowers in particular.

1. Color Although demand for colors varies depending on regional characteristics, household income and type of consumers, the best selling cut flowers in Japan have a light color such as white and pink. Japanese markets are not so much keen on dark colors. Especially, white is a routine color for wedding ceremonies and funeral services, for which white Den-phalae is often used. Many apparel stores use white color to demonstrate an expensive looking and Den-phalae is often used for this purpose. Although dark color is not a leading player in cut flower markets in Japan, thick color or blackish color such as Bordeaux has recently become popular among certain consumers, though it was described as dirty color in the past. Rare color such as blue is helpful to create a high-class image. Yellow is rather stagnant in these days, though it was previously selling well Subtle color or delicate color such as pinkish beige and color with gradation have been in fashion in the last two decades. Fresh flowers with infiltrated colored water have recently become to be marketed to a little extent, for which Thai orchid is used in addition to other flowers. For such use of flowers, colors close to natural hue are also preferred. A combination of green and white having cleanliness feeling is enjoying popularity just like apparels in fashion.

2. Form of bloom There is high demand for flowers with the unique form of bloom such as large bloom and double flower as well as delicately shaped flower. In the past, there was a very little consumption of large bloom flowers such as rose and dahlia and only a limited consumption was seen in summer and autumn. However, as a result of increase in both production and demand, these flowers have become to be marketed throughout a year. Among spray-shaped flowers, unique large single flowers are in demand. Demand for anthurium as single flower has been increasing.

3. Fragrance Since the emergence of English garden boom in a decade ago, natural scents have been attracting people’s attention and there is “aroma” boom in these days. Although Japanese people intrinsically like tasteless and odorless things, younger generations have become to prefer natural fragrance.

4. Variety In Japan, chrysanthemum has the largest consumption volume among cut flowers and accounts for 36% of the total volume, which is followed by carnation (10%) and rose (8%). (Please refer to the Graph-VI-2.) In past days, retailers used to have no problem so long as they carry only carnation for sales.

Nowadays, however, demand for orchid has increased and rose has high popularity. Unlike orchid, rose is preferred to be used in combination with seasonal florets such as sunflower and delphinium. Den-phalae is often used to adorn leis for hula shows. Demand for flowers to make bouquets has declined, whereas demand for flowers to be used for arrangements is on the increase. Flowers are sold in large quantity on Mother’s Day and during Christmas season. Phalaenopsis orchid sells well in March when many promotions are announced, in addition to on such occasions as opening of new store and elections.

(2) Market trend revealed by consumer questionnaire survey We have conducted a questionnaire survey of consumers including florists’ customers, flower school students and Thai festival visitors. Also, a round-table discussion by qualified green advisers was held. The findings of the consumer survey at flower shops and the questionnaire survey on flower school students are summarized as follows:

1. Consumer questionnaire at flower shops We have conducted a questionnaire survey of 132 consumers at the following three flower shops. Kirara Baytown Shop in Kaihin-Makuhari (Chiba) Kodaka Flower Shop in Kinshicho (Tokyo) Fan in Gakugei-Daigaku (Tokyo)

1) Gender and age bracket surveyed Table VI-A-1 Gender and age bracket surveyed of consumers for research at flower shop gender number of persons age bracket number of persons male 17 teens 1 female 113 twenties 13 unknown 2 thirties 31 total 132 fourties 31 fifties 30 more than sixties 24 unknown 2 total 132

Consumers

research at

flower shop

Above and left picture

shows consumers who are

checking preferable

Thailand flowers

2) Frequency of flower purchase

Graph VI-A-1 Frequency of flower purchase in flower shop

once a year; once in a few 5% days; 9% once a half year; 13%

once a month; once a week; 27% 46%

3) Frequently purchased flowers Among frequently purchased flowers, rose is at the top accounting for 21.4% of the total, followed by 50 kinds of flowers including gerbera (6.2%), lily (5.3%), tulip (3.3%), casa branca (2.95%), lisianthus (2.9%) and carnation (2.5%). As many as 7.8% respondents cited “seasonal flowers” without mentioning any specific flower name. This shows that as Japan has four seasons, people in Japan tend to put importance on a sense of the season when they purchase flowers.

Table Ⅳ-A-2 Frequently purchased flowers at flower shop name of flower votes ratio Rose 52 21.4% Gerbera 15 6.2% Lily 13 5.3% Tulip 8 3.3% Casablanca 7 2.9% Lisianthus 7 2.9% Carnation 6 2.5% Chrysanthemum 6 2.5% Sunflower 6 2.5% Babies' breath 4 1.6% Phalaenopsis 4 1.6% Sweet Pea 4 1.6% Orchid 4 1.6% Peony 3 1.2% Cymbidium 3 1.2% Dahlia 3 1.2% Ranunculus 3 1.2% Anthurium 2 0.8% Calla 2 0.8% Cherry blossom 2 0.8% Cyclamen 2 0.8% Clematis 2 0.8% Den-Phalae 2 0.8% Pink 2 0.8% Pansy 2 0.8% Freesia 2 0.8% Season’s flowers 19 7.8% not decide 8 3.3% Flower for Buddha or God 7 2.9% Branch flower 4 1.6%

4) Preferred flower color White accounting for 24.5% is by far the most preferred flower color, followed by pink (18.8%) and yellow (11.7%). Among the rest of colors each accounting for less than 10% of the total, unambiguous colors such as red, purple, green and orange were favored, whereas subtle color and sober color such as creamy beige were answered by few people. The consumers’ preference of faint color such as white color is coincide with what was told by people concerned with this industry.

Graph VI-A-2 Preferred flower color

not specially bright color 0.7% 1.1% vivid colorbeautiful color 0.4% 0.4% unknown sober color dark color 1.4% 1.1% 0.4% light color neutral 1.8% 0.4% beige 0.4% orange cream 4.3% 0.7% green white 5.7% 24.5%

blue 8.5%

purple 8.5% pink 18.8% red 9.6% yellow 11.7%

5) Factors for selecting flower With regard to factors which consumers take into account when selecting flowers, we have conducted a survey by multiple choice question method on personal use and use as a gift. As many as more than 20% respondents commonly chose a sense of the season and variety of flower. Subsequently, color and price were cited in common as an important factor. Although selected by 8.2% of respondents in the case of personal use, fragrance is ignored in the case of use as a gift. This is likely to mean that fragrance is important for many people to use for “healing” with health fad prevailing and flowers with the fragrance are purchased for their comfort. On the other hand, as every people have different tastes in scent, flowers with fragrance are often avoided to be used as a gift. Further, design accounts for 18.3% in the case of use as a gift, whereas it accounts for 6.1% in the case of personal use, indicating that arrangements are overwhelmingly purchased for a gift. Nowadays, however, a retailer (Aoyama Flower Market) has been very successful in mini-bouquets for home use priced at about 500 to 1,000 yen. In “others”, there were opinions about factors related to quality such as long vase life for personal use and about necessity to meet recipient’s image and taste when the flower is presented as a gift.

Graph VI-A-3 Factors for selecting flower (for own use)

not buy unknown others 0.4% 2.9% 0.0% design 6.1%

fragrance kind of flower 8.2% 22.5%

price season’s 17.2% flower 22.5% color 20.1%

Graph VI-A-3 Factors for selecting flower (for gift use)

others not buy 0% 0% fragrance unknown 0% 0%

color sense of the 17% season 24%

design 18% season’s flower 21% price 20%

6) Reason for selecting a flower shop According to our survey on main factors for selecting a flower shop, the largest number of answers accounting for 20.2% of the total has concentrated on a shop nearest to their work place and/or a shop on their way home. It is understood that consumers place importance on convenience rather than product itself. Beside, availability of various kinds of flowers, competitive price, quality, freshness, salesperson’s attitude toward customers and good sense are sought by consumers.

7) Amount of money spent per purchase With regard to the amount of money spent per purchase, 2,000 yen and less accounts for 80% of the total in the case of flowers for their own use, while 3,000 to 10,000yen centering on around 5,000 yen is answered by many respondents in the case of flowers as a gift. Consumers spend more than three times of money for flowers as a gift than those for their own use.

Graph VI-A-5 Amount of money spent per purchase (for own use)

more than 10,000 yen 5,000 - 0% 10,000yen not buy 3,000 - 1% 2% 5,000yen 4%

2,000 - 3,000yen 13% less than1,000yen 41%

1,000 - 2,000yen 39%

Graph VI-A-5 Amount of money spent per purchase (for gift use)

less than not decided 1,000yen 2% 0% 1,000 - not buy 2,000yen 1% 5% more than 10,000yen 14% 2,000 - 3,000yen 17%

5,000 - 10,000yen 25% 3,000 - 5,000yen 36%

8) Ranking of preferred Thai flowers Out of Thai flowers shown in “Cut Flowers & Ornamental Plants in Thailand 2000”, preferred flowers were chosen by 416 votes of 132 consumers. The most preferred flower is a white dendrobium, followed by white rhynchostylis, white curcuma, pinkish dendrobium, pinkish cattleya and green cattleya. It is understood that white color and light colors such as pinkish color have high popularity. Preferred varieties of flowers vary widely without any outstanding trend.

Table VI-A-3 Ranking of preferred Thai flowers (Research at flower shop) Rank votes page common name scientific name trade name cultivar color

1 21 6 Dendrobium Dendrobium hybrid Bangkok Queen white Rhynchostylis retusa 2 16 48 Rhynchostylis white "Alba" 15 11 Dendrobium Dendrobium hybrid Nasabi pink EPC. Viannawood x 15 41 Cattleya Cattleya hybrid green 3 LC. Thospol spot Curcuma thorelii 15 92 Curcuma Pearl Patumma white Gagnep BLC. Korat 4 12 42 Cattleya Cattleya hybrid crimson Sunset Vanda Kasem 11 28 Vanda Delight x Vanda red Charungrak Paphiopedilum 5 Paphiopedilum Niveum x 11 45 Paphiopedilum white variegation hybrid Paphiopedilum Bellatulum Dendrobium 11 49 Dendrobium yellow variegation chrysotoxum 10 25 Vanda Vanda hybrid Mas Los Angles pink C. Wakeriana alba 'rchid 10 37 Cattleya Cattleya hybrid white Glade' 6 FCC/AOS LC. Ann 10 40 Cattleya Cattleya hybrid Fortune 'KB' green AM/OST 7 9 17 Oncidium Oncidium hybrid Grower Ramsey yellow

C. Michael olins x BLC. Ewart 9 35 Cattleya Cattleya hybrid white Mc Donald AM/CST 8 82 Anthurium Anthurium hybrid Midori green 8 Curcuma parviflora 8 89 Curcuma Paper Patumma white Wall. 7 5 Dendrobium Dendrobium hybrid White Orange white BLC. Rattanakosin 7 32 Cattleya Cattleya hybrid yellow 'Cholburi' AM/RHT C. Pink 9 7 38 Cattleya Cattleya hybrid pink Diamond BLC. Mahinda 7 39 Cattleya Cattleya hybrid pink Yahiro Heliconia collinsiana 7 63 Heliconia Collinsiana Griggs 7 77 Anthurium Anthrium hybrid Merengue white 6 13 Dendrobium Dendrobium hybrid Fatima yellow Madame 6 14 Dendrobium Dendrobium hybrid crimson Pompadour 6 18 Mokara Mokara Chitti yellow Mokara Sayan x 6 21 Mokara yellow variegation Mokara Pralor 6 31 Ascocenda Ascocenda hybrid Dongtan red 10 BLC. Almakee 6 33 Cattleya Cattleya hybrid 'Tipmalee' yellow FCC/CST 6 36 Cattleya Cattleya hybrid C. Yaigwavong white 6 86 Anthurium Anthrium hybrid Rapido pink Adenium obesum Over 100 6 96 Adenium (Forssk.) Roem. & red variegation varieties Schult 5 29 Ascocenda Ascocenda hybrid Queen Florist crimson 5 30 Ascocenda Ascocenda hybrid Udomchai orange BLC. Pathum 11 5 34 Cattleya Cattleya hybrid yellow Gold No.2 C. Thosapol 5 44 Cattleya Cattleya hybrid crimson variegation spot x C.

Batalinii

Paphiopedilum Paphiopedilum 5 46 Paphiopedilum green hybrid Raisin 4 10 Dendrobium Dendrobium hybrid Pinky Doll pink 4 12 Dendrobium Dendrobium hybrid Sonia crimson variegation Mokara Sayan x 4 23 Mokara white variegation Mokara Annykoo Vanda Kultana Gold 4 26 Vanda yellow x Vanda Rasri Gold 12 4 27 Vanda Vanda hybrid Fuchs Delight red 4 50 Aerides Aerides multiflorum pink variegation Heliconia chartacea 4 62 Heliconia Sexy Pink Lane ex Barreiros Heliconia 4 70 Heliconia Turbo wagneriana Petersen 4 85 Anthurium Anthrium hybrid Safari crimson

2. Consumer questionnaire survey at flower schools We have conducted a questionnaire survey of 102 students at the following two flower schools. Mami Flower Design School in Omori (Tokyo) Hibiya Flower Academy in Omotesando (Toyo)

1) Gender and age bracket surveyed gender number of persons age bracket surveyed number of persons male 3 twenties 13 female 87 thirties 33 unknown 13 fourties 20 total 103 fifties 18 more than sixties 11 unknown 8 total 103

2) Frequency of flower purchase

Graph VI-B-1 Frequency of flower purchase in flower shop (for flower school students)

unknown once a once a year 2.9% few days 1.9% 2.9%

once a half year 13.5%

once a week 33.7%

once a month 45.2%

3) Preferred flower color The most preferred flower color is pink (18.5%) and white (17.6%), followed by yellow (10.5%) and blue (10.2%). Included in the rest of colors each accounting for less than 10% of the total is unambiguous colors such as green, purple, orange and red. Subtle colors and sober colors such as cream color are answered by few respondents.

GraphⅥ-B-2 Preferred flower color (for flower school students)

color with sense of rare color dark color season 0% light colorsmorky color 0% 0% warm color 3% 1% 0% black unknown 1% 2%

brown pink 1% red 19% 6% dark red 1% orange 7%

cream 2% purple white 9% 18%

green 10% yellow blue 11% 10%

4) Factors for selecting flower With regard to factors which consumers value when selecting flowers, we have conducted a survey by multiple choice question method on personal use and use as a gift. In the case of personal use, the largest number of respondents cited the type, variety, color and price of flowers each accounting for over 20 %, which was followed by a sense of the season accounting for 18.9%. Theses answers are likely to reflect the flower school students have enough knowledge of flower varieties and usually specify the name of flower concretely when purchasing a flower. In the case of use as a gift, the color, a sense of the season and design account for over 20% respectively, followed by the type, variety and price. Seeming beauty and atmosphere are appreciated. The flower school students are rather indifferent to fragrance.

5) Reason for selecting a flower shop According to our survey on main reason for selecting a flower shop, the largest number of respondents cited good quality and freshness (21.6%). And many people cited the availability of various kinds of flowers (16.7%). These two reasons are outstanding. It is interesting to know that these reasons are different from those of consumers surveyed at flower shops who put importance on accessibility from home and/or work place.

6) Do you like Den-phalae? Why do you like it? Knowing that flower school students have enough knowledge of Thai flowers and are very much interest in the flowers, we conducted a questionnaire survey of the students on Den-phalae. 52 % of them expressed their preference of Den-phalae. Reasons for it are long vase life (38.9%) and luxuriousness (14.4%). 36.2% of them replied that they have no interest in Thai flowers.

Table Ⅵ-b-3 Reasons and purposes to purchase Den-Phalae No. of Reason, Purpose Ratio person Long vase life 19 24.1% For Arrangement or bouquet 13 16.5% For decollation in home 9 11.4% Availability for decollating gorgeous 8 10.1% For gift 5 6.3% For lesson 3 3.8% For Buddha (For families grave 3 3.8% For making corsage 2 2.5% Less expensive 2 2.5%

tableⅥ-b-2 Reasons that Consumers like Den-Phalae

Reason No. Keeping freshness for a long time 35 Gorgeous, Splendid 13 Beautiful color 5

7) Have you ever bought Den-phalae? What is your reason and purpose for the purchase? Why do you refrain from purchasing Den-phalae? Those with the experience of purchasing Den-phalae account for 77.9%, while those without the experience accounts for 20.2%. Among reasons for purchase, long vase life accounting for 24.1% is at the top. 10% of respondents appreciated an advantage that Den-phalae can be gorgeously adorned and even a single stem can demonstrate its presence. With regard to purposes for use, flower arrangement and bouquet (16.5%) rank at the top, followed by adornment at home (11.4%). Although almost no answer was obtained about the reason why they are not buying any Den-phalae, there were two votes with comment that the said

87 respondents did not know how to coordinate Den-phalae with other flowers, while there were another two votes with comment that they did not know the existence of Den-phalae. In addition, included in other reasons were an image suitable to a gift, an expensive image and a necessity of troublesome care. These are considered to be attributable to the low awareness of Den-phalae.

Table Ⅵ-b-4 Reasons and purposes to not purchase Den-Phalae No. of Reason Ratio person I do not know how to arrange with other flowers 2 16.7% I did not know Den-Phalae 2 16.7% Den-Phalae seems to be for gift use 1 8.3% Looks like expensive flower 1 8.3% Not suitable for home use 1 8.3%

8) How should Den-phalae be improved to be purchased more? Among suggestions for improvements, the largest number of answers concentrated on increased color variation accounting for 31.4%. Blue, green, subtle color, gentle color, lovely color, sophisticated color and sober color were quoted as desirable colors for Den-phalae.

Table Ⅵ-b-5 Den-Phalae/ Points to be improved No. of Point Ratio person To increase variation of colors, patterns etc. 22 31.4% To decrease price 10 14.3% Stem’s length between flower and flower should be longer so 3 4.3% that many flowers can be obtained from one stem To make up impression of high quality 3 4.3% To show sample of arrangement 2 2.9% To let flower shops to decorate more Den-Phalae 2 2.9%

9) Suggestion for beautiful-looking materials in combination with Den-phalae With regard to suggestion for beautiful-looking materials in combination with Den-phalae, the most common reply was leafy plants accounting for 16.9%. Besides, tropical flora and others were suggested.

Table Ⅵ-b-6 Flowers and greens which seems to be suitable for arrangement with Den-Phalae No. of Suitable flower and green Ratio person Green plants, specially dark green 13 15.9% Anthurium 6 7.3% Tropical flower 6 7.3% Roses 4 4.9% Tropical green leaves 3 3.7% Big green leaves 2 2.4% Hydrangea 2 2.4%

10) Suggestion for sales method and promotional method to increase the awareness of Den-phalae With regard to suggestion for sales method and promotional method to increase the awareness of Den-phalae, there are many proposals concerning arrangements such as sales after arranging in various patterns and arrangement methods suitable to Japanese houses. These answers combined account for over 25%. It is understood that because Den-phalae is difficult to be coordinated with other flowers, many people wish to know how to coordinate it with other flowers. Table Ⅵ-b-7 Sales methods and advertising methods to increase degree of perception of Den-Phalae No. of Method Ratio person To sell many kinds of patterns 9 16.4% Suggestion to suite for Japanese home 5 9.1% To let flower shops to sell more Den-Phalae 3 5.5% To appeal long vase life 3 5.5% To sell station area so that consumers to buy more easily 3 5.5% To decrease imagination that orchid is expensive flower 2 3.6% To think about display for appealing to customers 2 3.6% To sell Den-Phalae together with other flowers so that consumers can find out more suitable flowers to arrange with 1 1.8% Den-Phalae

63. Flower consumption trend in Japan revealed by consumer survey 1) Favorite flower Japanese consumers like rose in particular and the ratio of rose in total flower consumption is outstanding. Following after rose, cited are lisianthus, orchid, lily, carnation, and gerbera each accounting for only 10% or less. No noticeable flower is found except rose. Despite having a lot of consumption, chrysanthemum is quoted by few people. This is considered due to the fact that this flower is purchased in the form of bouquets in combination with other flowers to be used for Buddhist rites. It is noticed that consumers focus on a sense of the season without adhering to any specific flowers and, therefore, they purchase flowers of each season. As highly appreciated for the long vase life, Den-phalae is often used for Buddhist rites and wedding ceremonies.

2) Favorite color Japanese consumers like to consume white color in specific. Following after white, cited are red, yellow, purple and the like. It is found that many Japanese consumers adorn several kinds of flowers together rather than adorn only one type of flower and, therefore, they tend to select such colors that they can easily coordinate with other flowers rather than eye-catching colors. There is an opinion that if Den-phalae had a color variation consisting of subtle color, neutral color, earth color and variegated color, consumers could use this flower more easily.

3) Frequency of flower purchase With regard to frequency of flower purchase by Japanese consumers, once a week accounts for about 50% and once a month accounts for about 30%, whereas once every 2 to 3 days is less than 10%. No purchase is made by 1% of respondents.

4) Factors for selecting flowers With regard to factors for selecting flowers, Japanese consumers put importance on the type, color, a sense of the season, price and design of flowers. Those who select a flower because of its fragrance account for less than 10% in the total. Besides, freshness, novelty and taste of recipient are mentioned.

5) Factors for selecting flower shop Easy access from home is valued in residential areas, whereas the availability of various kinds and accessibility from work place are valued in business districts. At flower shops holding lessons and at flower schools, the availability of various kinds, quality, low price and sense are appreciated. Some consumers select a flower shop based on the salesperson’s good advice.

6) Purpose to present flower as gift and its recipient Among recipients of flowers presented as a gift by Japanese consumers, friends and family members account for 70%. As to purposes for presenting flowers, the largest number of

90 respondents cited congratulatory gifts on celebratory occasions such as wedding, birth and retirement, which accounted for 38%. Calling present brought at the time of visiting an acquaintance accounted for 13%.

7) Amount of money spent per purchase There is a tendency that Japanese consumers try to spend less amount of money per purchase for their own use, whereas they spend more money per purchase for a gift, which amounts to three times as much as for their own use.

8) Favorite Thai flower Although no distinguished feature is found in Thai flowers preferred by Japanese consumers, white flower and faint-color flower are comparatively preferred by many people. The largest number of the flower school students has chosen green flower, reflecting that they are attracted by novel flower in color and shape. White color and green color are now in fashion, as confirmed by people concerned with this industry at the time of hearing investigations on them.

9) Evaluation of Den-phalae Den-phalae is highly appreciated by Japanese consumers for its long vase life. This flower is also highly evaluated because it looks gorgeous when adorned. Many respondents have an opinion that only a single stem of Den-phalae can demonstrate its presence when adorned and Den-phalae is also suitable to be used for arrangements. On the other hand, most consumers who have no experience in purchasing Den-phalae and no interest in Den-phalae do not know how to arrange it. Judging from the findings, if the number of colors preferred by Japanese consumers could be increased and the methods of arrangements and adornments suited to Japanese houses could be disseminated, much more Den-phalae would be expected to be sold.

(3) Retail market of cut flowers Pictures of cut flowers sold in flower retail shops are shown next pages.

Below picture shows Den-phalae cut flower. Retail price is 525 Yen/stem

Above picture shows Mokara cut flower. Retail price is 368Yen/stem

Below picture shows Den-phalae cut flower. Retail price is 1,575 Yen/stem

Above picture shows Gerbera cut flower. Retail price is 210Yen/stem

Below picture shows chrysanthemum cut flower bouquet. Retail price is 525 Yen/stem

Above picture shows Den-Phalae bouquet in super market. Bouquet consist from 4stems Retail price is 315Yen/bouquet

Below picture shows preserved flowers. Above picture shows Rose cut flower Retail price is 31,500Yen. bouquest. Retail price is 1,500Yen/bouquet

(4) Market trend and consumption trend in flower markets in Japan (Conclusion) Diversification in the variety of flowers is sought by Japanese consumers. While preferring the flowers of each season in addition to rose, they are also interested in novel flowers. In many cases, Japanese consumers use a flower in combination with other kinds of flowers rather than use it alone as a single flower. They put importance, therefore, on colors and shapes which are easily coordinated with other flowers. On the other hand, Den-phalae is appreciated for its volume which enables this flower to be used as a single flower in a small flower vase. Diversified expressions such as “neat and clean”, “pretty”, “gorgeous” and “unique” are found in key words sought for requirements of this flower. “Freshness” is also one of important points. Den-phalae is highly appreciated for its long vase life and gorgeousness. In addition, consumers seek for low-priced flowers when purchasing for their own use. Accordingly, Den-phalae has a pretty good chance to expand its buyers by appealing the advantage in price to consumers.

(5) Future perspective of flower consumption market in Japan Based on the findings of interviews with industry participants and questionnaire survey of consumers, future perspective of flower consumption market in Japan is considered here. 1. For expanding flower consumption In Japan, although flower consumption as a whole continued to decline after reaching the peak during the bubble economy period in 1980’s, it is likely to have hit bottom in the last few years. The percentage of flower consuming people is still as small as 40% of the total population and the ratio of flower purchase for their own use is also as small as 30% in Japan. This means, however, that flower consumption for home use and for own use have growth potential in the future. Nowadays, the quality and price of flowers sold at home centers have become to attract consumers’ attention and are gaining an advantage over conventional retailers. Home centers are expected to contribute to expand flower consumption in the future. Flower prices have already reached the lowest point as a result of keen competitions. Therefore, it is necessary for this industry to achieve the expansion of flower consumption by creating new consumers’ demand for flowers rather than by engaging in the price war. With regard to targeted flowers which consumption is intended to be increased, it is necessary for the industry to justify consumers’ appetite for the flowers by providing the flowers with newsy topics, entertaining features and story lines. There are success examples such as Valentine’s Day, when men present flowers to women overseas and women give chocolates to men in Japan. Following after this kind of success story, floriculture industry is required to create a day for the purchase of flowers. It is also necessary for the industry to hold exhibitions as many as possible and put up uniform posters showing flowers which are produced in Japan and are desired to be sold in this market. In this case, if any up-to-date color in fashion as used at Maison & Objet in Paris is promptly introduced into this country, a boom will be created for the color here. This year’s

94 fashion is, besides while and green, a modern color with Asian taste and ethnic taste, and a white-based fresh color.

2. For expanding Den-phalae consumption The largest consumers of Den-phalae are funeral service companies and wedding ceremony companies. However, as some consumers do not know even the name of Den-phalae, it is necessary for this industry to make efforts to further promote white Den-phalae toward wedding ceremony companies. Although a specific kind of flower has never been promoted until today, it is important that the specific name of “Den-phalae”, not the name of orchid in general, is recognized by consumers and, for that purpose, promotional efforts including advertisements are made through flower magazines and other media. As a result, consumers are expected to become to be familiar with this flower and to make it their usual practice to specify Den-phalae when purchasing it. It is also necessary to strive to have this flower used, beside in TV commercials and dramas, in TV programs such as “Hanamaru Market”, a talk show for housewives (It is said that they receive many inquiries about flowers adorned in the background of this program.)

3. Introduction of MPS (Flowering plants certification system) Foods are sold with clear notification of the place of production, the date of processing and the expiry date, whereas such indications are not attached to any flower. In fact, flowers with short vase life are sometimes sold at retailers. Therefore, in order to provide consumers with the sense of security and to gain the trust of consumers, it is necessary to clarify the time of harvest and the place of production of each flower. For this purpose, the introduction of MPS (Flowering plants certification system) is now advocated. If those engaging in the production and marketing of flowers participate in the MPS, they will contribute to improve quality (freshness preservation and traceability), promote branding (domestic product branding), increase the efficiency of distribution system and realize environment-friendly agriculture. At the same time, production centers’ brands are necessary to be created to expand the consumption of flowers.

Graph-Ⅵ-1. Auunal purchasing value of cut flowers per household and their rate

Purchase value Rate （Unit: 1000yen）（Unit: %） 20.0 46

18.0 44 16.0 42 14.0 12.0 40 10.0 38

8.0 36 6.0 34 4.0 2.0 32 0.0 30 1990 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Source: The Ministry of Agriculture, Forestry and Fisheries

Graph-Ⅵ-2. Usage of cut flowers in Japan

Others 30% Chrysanthemum 36% Wild flower 1%

Gypsophila 2% Gentian 2% Lisianthus 2% Carnation 10% Gebera Lily Statice Rose 2% 4% 3% 8% Source: Flower Shop Manual

Graph-Ⅵ-3. Distribution channel of cut flowers

Business use Mail order Flower shop 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1990 1992 1994 1996 1998 2000 2003 2006

Source: The Ministry of Agriculture, Forestry and Fisheries

Graph-Ⅵ-4. Consumer needs of cut flowers

Often Sometimes Seldom

Low price flowers

Type of flowers

Fresh flowers

Selection of color

Keeping freshness

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Source: The Ministry of Agriculture, Forestry and Fisheries

Table-Ⅵ-1. Annual expense of cut flowers per household Unit: yen

year Average in Japan Tokyo district

1997 13,110 15,062 1998 12,369 14,052 1999 12,240 13,894 2000 11,572 11,936 2001 11,645 11,215 2002 11,884 12,833 2003 11,103 13,119 2004 10,797 11,005 2005 10,401 11,090 2006 10,629 10,697 2007 10,909 11,774 Source: Flower Data Book

Table-Ⅵ-2. Monthly purchase of cut flowers per household Unit: yen year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total 1998 650 850 1,372 921 1,108 729 851 1,396 1,150 818 735 1,689 12,268 1999 758 781 1,365 952 1,067 782 840 1,300 1,136 809 671 1,635 12,094 2000 764 750 1,335 853 978 727 819 1,302 1,072 696 656 1,600 11,551 2001 659 746 1,311 914 1,056 772 740 1,337 1,096 766 676 1,482 11,555 2002 685 745 1,429 861 1,033 733 785 1,364 1,109 723 616 1,447 11,531 2003 669 750 1,269 810 1,009 686 746 1,211 1,043 705 680 1,458 11,036 2004 610 749 1,233 803 917 656 725 1,222 1,067 681 611 1,396 10,669 2005 560 622 1,211 786 973 689 732 1,266 1,019 687 623 1,396 10,562 2006 582 673 1,252 818 1,016 662 707 1,288 1,002 697 601 1,423 10,721 2007 578 696 1,189 768 979 673 809 1,239 1,081 707 700 1,409 10,828 Source: Flower Data Book

Ⅵ Table- -3. Monthly purchase of cut flowers per household Unit: yen Wage-earner All household household 1994 1999 2004 1994 1999 2004 Average 760 769 704 670 651 554 Retailer 537 471 402 459 395 301 Supermarket 95 153 162 90 131 131 Convenience store 2 2 2 1 1 1 Department store 16 20 13 15 16 12 Coop 14 13 20 13 11 15 Discount store 8 13 24 8 13 24 Mail order (internet) - - 1 - - 1 Mail order (others) 2 3 2 2 4 2 Others 86 94 78 80 79 65 Source: Flower Data Book

Table-Ⅵ-4. Information concerning flower shops Per retail store Value of sale per Retail store Employee Value of sale Employee Value of sale employee Unit store person million yen person 1000yen 1000yen

1991 25,940 78,924 729,581 3.0 28,126 9,244 1994 26,300 87,437 822,840 3.3 31,287 9,411 1997 26,692 90,743 876,293 3.4 32,830 9,657 1999 28,667 104,293 901,822 3.6 31,459 8,647 2002 27,170 101,085 800,040 3.7 29,446 7,915 2004 26,370 96,272 776,313 3.7 29,435 8,064 Source: Flower Data Book

Table-Ⅵ-5. Market price of chrysanthemum （Tokyo district） Unit: yen/stem year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Average 1990 222 224 244 218 215 199 209 201 213 212 222 210 216 1995 210 220 226 203 204 203 193 197 199 193 193 202 204 2000 205 210 212 191 198 198 204 203 203 192 191 209 201 2001 203 199 209 205 198 192 202 207 198 196 200 200 201 2002 195 199 209 198 192 190 196 212 205 191 204 205 200 2003 205 205 214 190 201 194 195 192 204 212 195 207 201 2004 199 199 203 204 195 199 201 201 203 215 215 206 203 2005 207 202 205 209 201 193 201 198 202 194 204 207 202 Source: Flower Data Book

Table-Ⅵ-6. Market price of carnation expect white color （Tokyo district） Unit: yen/stem year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Average 1990 200 201 222 203 285 194 210 210 202 215 215 211 214 1995 185 187 189 172 200 178 176 170 172 177 170 179 180 2000 172 168 178 167 192 161 165 166 169 172 167 176 171 2001 170 167 177 166 193 165 169 171 173 171 171 175 172 2002 172 168 175 172 187 165 168 160 171 168 170 177 172 2003 170 167 171 162 180 160 162 160 165 170 162 165 166 2004 169 167 176 172 185 169 167 171 167 171 177 178 173 2005 174 172 174 172 188 168 170 169 170 170 173 177 173 Source: Flower Data Book

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Table-Ⅵ-7. Market price of rose（Tokyo district） Unit: yen/stem year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Average 1995 320 326 342 321 307 300 283 276 297 303 296 326 308 2000 305 300 309 302 289 281 276 270 281 295 296 322 294 2001 304 308 332 299 289 270 270 274 282 290 290 308 293 2002 291 299 304 295 286 274 280 266 281 288 303 319 290 2003 306 303 319 298 292 276 276 262 272 285 279 322 291 2004 285 279 302 292 283 268 258 260 274 283 294 305 282 2005 299 291 300 287 283 279 278 275 277 280 292 312 288 Source: Flower Data Book

VII. Cut flowers in Thailand

As part of this research, we have conducted interviews with Japanese importers, wholesalers, retailers and consumers as well as cut flower exporters in Thailand. Based on the findings of these interviews, the situations of distribution and position of Thai cut flowers in markets in Japan are explained with our opinion added, as follows:

(1) Import of orchids According to import statistics and information obtained through our interviews with importers, cut flowers imported from Thailand are mostly orchids. Therefore, the import situation of orchids in Japan is first studied here. The Table-VII-1 shows the monthly import volume and price of orchids (cut flowers) in 2007, while the Table-VII-2 shows the import trading partners of orchids (cut flowers). The gross import value of orchids was 6,853 million yen in 2007, out of which the import from Thailand amounted to 3,947 million yen accounting for 58% of the total. In the foreign trade statistics in Japan, the orchids are not broken down into each variety of the flower. Therefore, it is statistically impossible to identify the varieties of the imported orchids. However, judging from information obtained from our hearing investigations on importers, more than 90% of orchids imported from Thailand are considered to be dendrobium phalaenopsis (hereinafter referred to as “Den-phalae”). On the other hand, orchids imported from New Zealand are mostly cymbidium and those from Taiwan are mainly oncidium.

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Table-VII-1. Import quantity and value of orchid per month（2007）

Quantity Value Month (ton) （million yen）

1 477 418 2 337 320 3 563 544 4 374 392 5 436 517 6 377 469 7 460 627 8 680 863 9 773 818 10 698 695 11 540 536 12 647 654

Total 6,362 6,853

Table-VII-2. Import of orchid (cut flower) per country (2007) Quantity Value Country (kg) (1000yen) Thailand 4,055,630 3,946,681 New Zealand 499,222 1,108,211 Taiwan 1,130,584 1,059,483 Malaysia 510,935 504,529 Singapore 133,911 151,221 Vietnam 17,400 50,287 Others 14,673 33,069 Total 6,362,355 6,853,481

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(2) About dendrobium phalaenopsis (Den-phalae) With Den-phalae accounting for over 90% of orchids imported from Thailand as mentioned above, the position of Den-phalae in cut flower markets in Japan is analyzed in details, as follows:

1. Wholesale price of Den-phalae TheGraph-VII-1 shows the monthly selling prices of Den-phalae sold in major wholesale markets in Japan, and the Graph-VII-2 shows the monthly selling prices of imported Den-phalae sold in major wholesale markets in Japan. As indicated in these graphs, Den-phalae fetches the highest wholesale price in May, when the price exceeds 70 yen per stem. To the contrary, its wholesale price reaches the lowest level in January, when it is priced at around 35 yen per stem. Thus, the highest price is twice as much as the lowest price. The reason for this difference in the price is due to an imbalance between the supply and the demand. In our interviews with seven importers, all persons in charge at the firms unanimously told that “despite demand for Den-phalae reaching at its peak during three months from April to June every year, especially in May with “Mother’s Day”, the supply of Den-phalae extremely reduces in this period, causing me a headache”. This decline in supply is understandably shown in the Graph-VII-3, which covers the monthly wholesale volume of Den-phalae sold in Japan since 1998. As told by the persons in charge at the importers, it is apparent that there was the decline in the wholesale volume every year during the three months from April to June. (Note) Mother’s Day A custom to present flowers on Mother’s Day is established in Japan since several decades ago. Although carnation was initially presented in most cases, many kinds of flowers in various colors are used in these days. For florist shops, Mother’s day is the busiest day in a year. Some flower shops attain one third of their yearly sales only on Mother’s Day.

2. Production of Den-phalae in Thailand and its export to Japan 1) Production and export of Den-phalae in Thailand The writer of this article has conducted interviews with many Den-phalae producers to investigate situations on the production and export of Den-phalae. Considering all information obtained together, the gross annual production of Den-phalae in Thailand is estimated to be around 1500 million stems. The two third of them, or 1000 million stems, is considered to be consumed within the country, while the one third of them, or 500 million stems, is supposed to be exported. Among destinations for exports, Europe ranks at the top with the export quantity of about 150 million stems per year. Roughly estimated quantities exported to other destinations are 110 million stems to Japan, 80 million stems to U.S.A., 60 million stems to China, 30 million stems to India and 20 million stems to Taiwan. (Please note that these numbers are merely inferred by the writer without any supportive evidence.)

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2) Thai suppliers of Den-phalae for Japan It is considered that there are about 20 Den-phalae produces in Thailand including both large producers and small ones, among which Excel Corporation is the largest. This company has two fellow subsidiaries, namely Bangkok Green Co. and Bangkok Orchid Co. Among the three companies, Bangkok Green Co. has the largest volume in export to Japan amounting to 27 million stems per year, which accounts for 90% of this firm’s total production of 30 million stems per year. (According to an explanation made by a person in charge at Bangkok Green Co.), the owners of these three companies are mutually brothers and sisters and all the three producers are actively engaging in the export to Japan. People in this business circle say that more than a half of Den-phalae exported to Japan is handled just by these three companies.

3) Varieties of Den-phalae produced in Thailand - Most popular varieties are Sonia and Anna – As part of this research, the writer has visited four Thai enterprises engaging in the production of Den-phalae for export to Japan All of them produce the varieties named “Sonia” and “Anna” and just these two varieties are estimated to account for over 80% of all Den-phalae exported to Japan. Only exception is “Laura”, which is produced by only Excel Orchid Co. Compared to Sonia and Anna, the cut flowers of this variety is capable of preserving freshness for a longer period of time and, therefore, is highly rated in Japan fetching a high price. This flower is exclusively imported by Proceed Corporation in Japan.

4) Largest bottleneck in Den-phalae production in Thailand - Drop in supply between April and June – This drop in sales volume is backed by data on suppliers (exporters) side. The Graph-VII-4 is compiled from data on the monthly production rate of Den-phalae at Bangkok Green Co., which the writer obtained from the company on his visit there. Bangkok Green Co., one of the leading Den-phalae producers, produces about 30 million stems per year and exports 90% of them to Japan. As indicated in this graph, their Den-phalae production drastically decreases between April and June. According to a person in charge at the company, this drop is due to climate condition in the period, under which Den-phalae is unable to grow and bloom because of the shortage of rain precipitation indispensable to this flower’s growth and blooming. For this reason, not only Bangkok Green Co. but also all other Den-phalae producers are suffering from the drop in their production in the period. After hearing his explanation, the writer told him that “all Japanese Den-phalae importers have headaches over the short supply of Den-phalae in this period. They are eagerly seeking for measures to increase the supply in some way or other. Under the circumstances, I was asked by them to thoroughly investigate actual situations in Thailand during my stay here”. In reply, the person said that “we understand very well that this particular period is the high season for flowers in Japan, when all Japanese importers are having difficulty in the short supply of Thai Den-phalae. However, it is our regret that, despite of our efforts to increase the production, we are still unable to

104 overcome the nature’s force and any measure is yet available for us to boost the supply of Den-phalae during the period”.

Graph-Ⅶ-1. Monthly wholesale price of Den-Phalae in main wholesale market(2006) （Unit: yen/stem） 80

0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: The Ministry of Agriculture, Forestry and Fisheries

Graph-Ⅶ-2. Monthly wholesale price of import Den-Phalae in main wholesale market(2006) （Unit: yen/stem） 80

0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: The Ministry of Agriculture, Forestry and Fisheries

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Graph-Ⅶ-3. Monthly wholesale quantity of Den-Phalae (1998～2007) （Unit: 1000stems） 11,000

10,000 1998 1999 9,000 2000 8,000 2001 2002 7,000 2003 6,000 2004

5,000 2005 2006 4,000 2007

3,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: Flower Data Book

Graph-Ⅶ-4. Monthly wholesale price of Den-Phalae (1998～2007) （Unit: yen） 90

80 1998 1999 70 2000 2001 60 2002 2003 50 2004 2005

40 2006 2007

30 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: Flower Data book

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From farm to shipment of Den-Phalae

Den-Phalae Farm

Flowers arriving to Packing and shipping center

Den-Phalae arrived from farm

Tubes containing agents keeping freshness is attached to flowers

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Flowers are sterilized before packing

Flowers are selected and packed

Flowers are packed in carton box in accordance with request of customers.

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3. Import of Thai Den-phalae in Japan 1) Import volume stable at around 110 million stems per year In the foreign trade statistics announced by the Ministry of Finance of Japan, the import volume of cut flowers is indicated in “per kilogram” but not “per stem”. Therefore, the details of imported cut flowers in terns of stem are unknown. This situation also applies to Den-phalae. However, summing up all information obtained through our interviews with Japanese Den-phalae importers, the import volume of Den-phalae in Japan is estimated to be around 100 to 120 million stems per year, though the annual quantity varies depending on year. The above number of stems remains at the same level in the past ten years.

2) Import firms Through our research of this time, major Japanese importers of Thai Den-phalae have been identified as follows: An Corporation Basic Corporation Classic Corporation Haruta Trading Co. Sojitz Meat & Agri Corporation Ocean Trade Co. Otani Trading Co., Ltd. YMS Kansai Co. Among these firms, those importing more than 10 million stems per year are presumably An Corp., Classic Corp. Haruta Trading Co., Otani Trading Co. and YMS Kansai Co. In particular, a large quantity amounting to more than 20 million stems per year is imported by both Classic Corp. and Otani Trading Co.

3) Import procedures Normally, upon making a shipment of any product, the exporter sends the invoice, bill of lading, packing list of the cargo to the importer, and the importer makes payment for the product after confirming the receipt of the cargo. In the case of Den-phalae, besides such normal procedures, imports and exports on consignment basis are prevalent. (Sales on consignment) In the case of sales on consignment, out of Den-phalae shipped to a Japanese importer by a Thai exporter, only the price for a portion of the Den-phalae actually sold in Japan are paid to the Thai exporter by the Japanese importer. In this case, after importer’s commission and expenses such as airway freight (if it is borne by the Japanese importer), import charges, consumption tax and inland flight are deducted from money collected from buyers, the Japanese importer makes the payment for the balance to the Thai exporter. This is called “consignment sales system”. Unlike the ordinary settlement procedures for import and export, this system is very advantageous to importers, because importers are not required to make any payment until the product is actually sold. To the contrary, this system is unfavorable to

109 exporters because exporters are unable to receive any payment immediately after the shipment. The emergence of this consignment sales system is attributable to the excess production and supply of Den-phalae in Thailand. Thai producers who have excessively produced Den-phalae desire to promptly work off as many flowers as possible. As a result, they become to consider that it is better for them to ship the flowers before the flowers loose freshness rather than carrying them in stock. Such imbalance between supply and demand (i.e. over supply) has resulted in the appearance of the consignment sales system.

4. Shipment of Den-phalae from farm to its arrival in Japan During our research of this time, through interviews with many Den-phalae importers and exporters, time schedules from the time of departure of Den-phalae from a farm in Thailand to the time of its arrivals at a wholesale market in Japan have become clear as follows:

(Shipment of Den-phalae from a farm to its arrival at a wholesale market in Japan) Any Den-phalae shipped from Thailand is usually sold by auction in markets every week on Monday, Wednesday and Friday. In the case of sale by auction on Monday 1) Friday: flowers are shipped to an airport from a producer’s farm or a shipping yard in Thailand. The Thai producer sends by fax the invoice and packing list of the shipment to the Japanese importer. Upon the receipt of the documents, the importer gives instructions on destination for the cargo to a customs broker 2) Saturday: The cargo leaves a Thai airport in the afternoon or in the early-evening, arriving at Narita Airport in the evening or in the late-evening. 3) Sunday: After clearing the customs in the morning, the cargo is delivered to a wholesale market in the evening. 4) Monday: Sale by auction begins at 7:30 in the morning. (If a buyer for a cargo is previously fixed, the cargo is taken by the buyer prior to the start of auction sale. This is called “pre-sales” system.)

Accordingly, in the case that any cargo is sold by auction on Wednesday and Friday, time schedules are as follows: (Auction sale on Wednesday) Sunday: Shipment from a farm in Thailand Monday: Arrival in Japan Tuesday: Customs clearance Wednesday: Auction sale (Auction sale on Friday) Tuesday: Shipment from a farm in Thailand Wednesday: Arrival in Japan Thursday: Customs clearance

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Friday: Auction sale

5. Import and export cost for Den-phalae As part of this market research on Den-phalae, we have also investigated a difference between producers’ selling price in Thailand and wholesale price in Japan. Cost calculation for the prices is as shown in the Table-VII-3, which is our estimation based on the findings of interviews with Thai exporters and Japanese importers. This cost calculation explains that Den-phalae priced at three (3) baht per stem at the time of shipment from a farm in Thailand is sold at about 35 yen (about 10 baht) per stem in wholesale markets in Japan. Though there are considerable fluctuations in retail price from season to season, annual retail price is estimated to be around 100 yen per stem on an average. The retail price is about three (3) times higher than the wholesale price.

Table-Ⅶ-3. Cost calculation of Den-Phalae export price to Japan and wholesale price in Japan Low price Average High price Currency case price case Flower, Packing & shipping cost that includes packing box, 1 liquid/liquid tube for maintaining freshness, Baht 2.0 3.0 6.0 labor cost, profit etc Total Ex-farm price of flower Inland freight, custom handling charge, Insurance, air 2 Baht 3.5 3.5 3.5 fright to Japan 3 Total CIF Japan Baht 5.5 6.5 9.5 4 (3.3 Yen/baht) Yen 18.2 21.5 31.4 Custom clearance charge 5 Value add tax, Inland freight Yen 10.0 10.0 10.0 Importer's profit 6 Total import price in Japan Yen 28.2 31.5 41.4 7 Wholesaler's commission (10%) Yen 2.8 3.1 4.1 8 Total wholesale price Yen 31.0 34.6 45.5 Source: Key Research Net Corporation Assumption by the information obtained from Japanese importers and Thailand exporters

6. Comments by importers not handling Den-phalae In this research, in addition to firms importing Den-phalae from Thailand, importers not engaging in the import of Thai Den-phalae were also interviewed. Such two firms, namely Suikoh Topline Co. and Create Co., cited the maturity and saturation of Den-phalae in Japanese market as the reason why they are not importing Thai Den-phalae (cut flowers).

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Demand for Den-phalae in Japan remains flat at the level of some 100 million stems per year, whereas Den-phalae are excessively produced in Thailand and are exported to Japan for low prices. With such low unit price, it is difficult for them to earn any profit on Den-phalae amid keen competitions prevailing. This is the reason why they are not handling Den-phalae.

7. Consumers’ comments on Thai Den-phalae (Awareness of Thai Den-phalae) As part of this research, we have investigated the awareness of Japanese consumers as to whether or not they know that Den-phalae are mostly imported from Thailand. Out of eighty consumers, to whom we asked the question at flower shops, only two people knew the fact. (Reason for purchase of Den-phalae) With regard to reason why consumers purchase Den-phalae, we asked the question to consumers at flower shops. Most of them cited “long vase life” and “low price” as the reason for their purchase, although some consumers stated “gorgeousness which is not available from domestic flowers” and “heat-tolerant” as the reason for their purchase. Judging from the finding that more than 80% of consumers who bought Den-phalae have cited “long vase life” as reason for their purchase, it is considered that the awareness of Den-phalae’s longevity have disseminated into Japanese consumers.

(3) Other Thai flowers In addition to Den-phalae accounting for more than 90% of all cut flowers imported from Thailand as mentioned above, other flowers such as mokara, vanda, dendrobium other than Den-phalae, cattleya and anthurium are imported.

(4) Japanese consumers’ comments on Thai flowers in interview-style surveying at shop fronts

(5) Position of Thai cut flowers in imported cut flower markets in Japan 1. Position of Thai cut flowers in import markets in Japan As shown in the Table-IV-4, the import value of Thai cut flowers in Japan was 4,094 million yen in 2007, accounting for 16.3% of the total import in terms of share by country. It was the second largest value next to Columbia (5,013 million yen, 17.9% share). Until 2003, among all import trading partners for cut flowers, Thailand was at the top in the import value. However, the top position was yielded to Colombia in 2004. Since that time, Columbia has ever year continued to be at the top in the import of cut flower. Though Thailand ranks second among import trading partners for cut flowers, the import value from Thailand is larger than those from Holland, New Zealand, Taiwan, Australia and Korea. Thailand holds an important position in import trading partners for cut flowers imported to Japan.

2. Competitions between Thai cut flowers and domestic or other countries’ cut flowers As repeatedly mentioned earlier, while Den-phalae accounts for over 90% in whole Thai cut

112 flowers imported to Japan, no cut flower competitive to Thai Den-phalae is available in domestic and imported flowers. This is due to the article characteristic of Den-phalae, which uniqueness is not found in any other cut flowers, through Thai Den-phalae is partly competing with Malaysian Den-phalae. Other major cut flowers imported to Japan are chrysanthemum (mainly spray chrysanthemum) and carnation. The main export countries of these flowers are fixed, namely chrysanthemum from Malaysia and the carnation from Columbia. Compartmentalization by type of flowers rather than competition between different kinds of flowers is seen among imported flowers.

(6) SWOT of Thai cut flowers As described above, although holding an important position in imported cut flower markets in Japan, Thai cut flowers have some disadvantages. From the standpoint of SWOT (Strength, Weakness, Opportunities and Threats), Thai cut flowers are considered here.

1. Strength (Dendrobium Phalaenopsis) Essential flower to flower markets in Japan It is definitely the strength of Thailand that Den-phalae has a firmly established position in cut flower markets and is exported from Thailand to all over the world. The consumption of this flower in Japan is stable at the level of 100 to 120 million stems per year. The main reason for Japanese people’s preference for Den-phalae is attributable to its “loveliness”. This modest-size flower has an exotic atmosphere of southern land which is not found in any domestic flowers, and is used on various occasions. Especially, this flower is essential to ceremonial occasions for the coming of age, marriage, funeral and ancestral worship. Long vase life This flower’s another strength is its long vase life. Den-phalae is often used to make up bouquets together with other flowers such as chrysanthemum and the bouquets are frequently placed on graves to adorn them. Visiting the grave of the Takahashi family during the Bon Festival in this August (a traditional event in Japan to recognize ancestral spirits), the writer noticed that bouquets containing Den-phalae together with chrysanthemums were placed on an other family’s grave and found that only the Den-phalae were surprisingly fresh, whereas all the chrysanthemums had wilted by that time. As mentioned earlier, an investigation on consumers’ attitude toward Den-phalae was also conducted by us as part of this research, and many consumers cited the long vase life of Den-phalae as a reason for their purchase of this flower. This consumers’ answer coincides with the above scene that the writer witnessed. Competitive price One more strength of this flower comes from its competitive price. Though it varies depending on season, the retail price of Den-phalae is 50 yen per stem in the cheapest time, whereas it is about 100 to 200 yen per stem even at the highest time. Its retail price is around 100 yen on an average in a year, which is nearly the same as price for a piece of chewing gum.

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2. Weakness No prevalent flower except Den-phalae Relation between strength and weakness of Thai cut flowers is similar to relation between heads and tails. Beside Den-phalae, other flowers such as dendrobium, anthurium, mokara, oncidium, aranthera and vanda are produced in Thailand and exported to all the world. However, with Den-phalae accounting for more than 90 % of all flowers exported to Japan, Thailand does not have any other prevalent flower which is welcomed by Japanese flower markets. This is a weakness of Thai cut flowers. Excess supply of Den-phalae Den-phalae is perfectly suited to climate in Thailand (particularly in the suburb of Bangkok) and is exported to all over the world. However, with many producers existing in the country, the overproduction of Den-phalae is prevailing in Thailand and the price falling of Den-phalae is also prevailing in the exports markets including Japan, where the supply of Den-phalae exceeds its demand at all times except one time in a year (please refer to the next page). Such excessively produced quantity is supplied to Japan on consignment basis (please refer to VII (2) 3) and is knocked down for cheap price at auctions, thereby triggering the price falling of Den-phalae in retail markets. Under these circumstances, some firms have withdrawn from the import of Den-phalae, while some companies have gone bankrupt (e.g. Thaisco Co.). Period of short supply (off-crop season) Despite the excessive supply and the price falling as mentioned above, Den-phalae becomes short in supply every year as far as the three months between April and June are concerned, as described in VII (1). During our interviews with seven Den-phalae importers as listed in VII (1), all of them unanimously told us that “despite demand for Den-phalae reaching at its peak during the period from April to June every year, especially in May with “Mother’s Day”, the supply of Den-phalae drastically reduces in this period, making me suffer a headache. If Thailand could supply sufficient Den-phalae to satisfy such demand at the peak period, the number of stems of Den-phalae sold in Japan in a year would surely increase by more than 20%”.

3. Opportunities Departure from exclusive devotion to Den-phalae As repeatedly mentioned earlier, with Den-phalae accounting for more than 90% of all cut flowers exported from Thailand to Japan, the import volume of Thai Den-phalae is stabilized at the level of 110 million stems per year and is not forecast to further increase at the present time. To increase the export of cut flowers from Thailand to Japan, it is necessary for Thailand to figure out a measure to increase the export of other flowers such as dendrobium, anthurium, mokara, oncidium, aranthera, vanda and cymbidium. As mentioned in the section for the trends of production and consumption, chrysanthemum is the largest item in Japan in terms of quantity of production and consumption. Among imported chrysanthemums, Malaysian spray chrysanthemum is the largest item. Admitting a difficulty arising from difference in climate

114 and other production conditions between Malaysia and Thailand, it is considered to be necessary for Thailand to take some sort of measures to increase the export of chrysanthemum, because it has the largest consumption among all kinds of flowers available in Japan. Seedling supply business As part of this research, the writer has visited more than ten producers of cut flowers in Bangkok and Chiang Mai (please refer to the APPENDIX-3). Many of these producers are engaging in productions in the fields ranging from seedlings to cut flowers. However, the following companies are producing only seedlings without handling any cut flowers. T.K. Nursery Co., Ltd., Bangkok Prayoon Orchid Co., Bangkok Yamamoto Dendrobium Co., Chiang Mai Chiang Mai Setcon., Ltd., Chiang Mai These companies produce tens of millions of seedlings from mericlones and are exporting them to enterprises in U.S.A, Europe and Japan.

Judging from my experience in visiting many seedling producers in Japan, Europe and U.S.A, producing technology (mericlones technology etc.) in Thailand is not inferior to those of Western countries and Japan. Thai technology seems to be equivalent or rather superior to them. There is a large difference in labor cost between Thailand and advanced countries. With the low cost of land, equipment and labor, Thailand seems to be capable of producing low-cost seedlings with a high-level global competitiveness. Thailand should further promote the seedling production. In Japan, seedling production is today no longer profitable because of high personnel cost and soaring fuel prices. Some companies have already started to import seedlings from China and Thailand. A business to supply seedlings to Japanese producers of cut flowers and potted flowers looks to be quite feasible to Thai enterprises.

4. Threats Exclusive devotion to Den-phalae As repeatedly mentioned earlier, more than 90% of Thai cut flowers exported to Japan are Den-phalae. In the event that Japanese consumers should become tired of Den-phalae for some reason or other, there would be a sharp decrease in cut flowers export from Thailand to Japan. Though no sign for such satiety is seen at present, it is necessary for Thailand to strive to invent a new variety having the same marketability in Japan as Den-phalae has. Only keeping the exclusive devotion to Den-phalae at all the time is risky for Thailand. If Japanese consumer should become tired of Den-phalae in the future, Thailand would inevitably face a serious problem Entry of other country’s Den-phalae to Japan As repeatedly mentioned earlier, Thai Den-phalae has already established a firm position in cut flower markets in Japan. However, other countries are intending to enter the Den-phalae market in Japan. For example, Malaysian Den-phalae is imported to Japan, though the quantity is rather limited. YMS Co., one of the leading Den-phalae importers, is importing

115 more quantity from Malaysia than from Thailand. This is because the large volume of a specific variety called “white” is imported from Malaysia. According to this company, though this variety is also produced in Thailand, Malaysian flower is better than Thai product in all aspects of quality such as whiteness, long stem and longevity. This kind of excellent Den-phalae grown in other country constitutes one of threats to Thai Den-phalae. Lopsided Den-phalae variety As mentioned earlier, Sonia and Anna account for more than 80% of all varieties of Den-phalae exported form Thailand to Japan. Though these varieties are selling well at the present time, if Japanese consumers should become tired of these varieties in the future, it would cause serious impact on Thailand. It is necessary, therefore, for Thailand to always promote the research and development of new varieties.

(7) Thailand’s cut flowers export Table VII-4 and 5 shows Thailand’s cut flowers export by types and by countries.

Table-VII-4 Cut flowers export from Thailand by types (2006) Ranking Country Stems Bahts 1 DENDROBIUM 589,479,895 2,180,749,674 2 MOKARA 11,216,261 58,678,748 3 ONCIDIUM 3,366,534 16,653,292 4 ARANTHERA 2,244,146 11,067,088 5 ARANDA 1,753,813 9,556,054 6 VANDA 165,942 2,188,209 7 ARACHNIS 64,392 309,369 8 RENANSTYLIS 23,272 197,181 9 ASCOCENDA 22,631 108,314 10 RENANTHERA 4,518 35,420 11 OTHERS 2,601 80,935 Total 608,344,004 2,279,624,284 Source: Thailand Custom Office

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Table-VII-5 Cut flowers export from Thailand by countries (2006) Ranking Country Stems Bahts 1 CHINA 208,660,918 705,483,305 2 JAPAN 118,802,115 521,048,936 3 ITALY 79,678,393 280,433,756 4 UNITED STATES OF AMERICA 61,737,449 242,803,868 5 INDIA 27,483,880 108,053,168 6 TAIWAN 23,845,330 80,421,960 7 THE NETHERLANDS 16,076,472 63,946,352 8 MALAYSIA 9,569,116 14,784,228 9 REPUBLIC OF KOREA 8,043,896 25,969,767 10 GERMANY 6,239,168 30,987,814 11 OTHERS 48,197,267 205,691,131 Total 608,334,004 2,279,624,284 Source: Thailand Custom Office

VIII. R&D and technical development for flowering plants in Japan

During this flower market research, for the purpose of investigating the situations of research and development for flowering plants in Japan, we have visited two institutions at the top of floricultural researches in Japan. The summary of the investigation is as follows:

Institutions: National Institute of Floricultural Science (NIFS), National Agriculture and Food Research Organization Research Institute of Environment, Agriculture and Fisheries, Osaka Prefectural Government

(1) National Institute of Floricultural Science (NIFS), National Agriculture and Food Research Organization 1. About NIFS This institute has 31 researchers specializing in flowers, boasting the largest scale in the world. Even Holland has only a horticulture research laboratory and has no special institute for flowers. This institute works on such matters that are unable to be tackled by the laboratories of local governments, private companies and universities. This institute has three research teams, each of which has an established research aim for five-year units. The aims for

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2006-2010 period are as follows: 2. Cultivation and blooming regulation study team “Cultivation of cut flowers such as chrysanthemum, clarification of special characteristics for blooming, and development of technology for stable high yielding” In order to realize the stable high-yield production of cut flowers in keeping pace with increasing demand for household use and other non-business uses, an analytical research is conducted on the isolation and expression of gene related to the cultivation and blooming of chrysanthemum and Texan bluebell. In addition, a study is under way to identify new disease damage to flowering plants, which causes serious trouble to the sable production, and to figure out the occurrence ecology. 3. New character flowering plant development study team “Development of technology to create new characters of flowering plants such as those with altered color “ This team aims to create disease-resistant carnation with long vase life by crossbreeding. Also, by using technologies such as genetic recombination and ion beam irradiation, this team tries to create the flowering plants of new shapes and colors un-producible by crossbreeding. For this purpose, they are engaged in the development of necessary promoter and DNA marker, and the searching of genes by which colors and shapes are formed. As to DNA marker, they have developed and commercialized a carnation named “Miracle Symphony. The vase life of this flower is three times longer than that of conventional carnations. “Miracle symphony” keeps good for such a long time as 20-25 days, whereas the conventional types endure only for 7-10days. The breeding of flowers having long vase life and disease-resistance property are not conducted by private sectors, as it does not directly reflect consumers’ interest. Accordingly, this institute is carrying out the breeding for producers. Seedlings are bought and multiplied by nursery companies. 4. Flowering plant quality analysis study team “Clarification of quality expression mechanism of flowering plants and development of quality preservation technology for bucket distribution system” Using petunia and torrenya as experimental materials, this team tries on a genetic level to clarify a mechanism to produce large-flowered varieties and different flower shapes, which are important factors for flower quality, in addition to such mechanisms as to breathe flavor component and to form marginal variegation on petals. With the most common request from consumers relating to the vase life of flowers, the development of quality-keeping agent to extend the vase life of cut flowers is in progress with an aim to realize the bucket distribution system for cut flowers. 5. Development of new variety Although unique colors and shapes have already been developed in many ways, many flowers with unique fragrance are not yet available. Such flowers are sure to be valuable. This institute is trying to restore the fragrance of foundation stock one way or another. Fragrances are likely to be controlled eventually by genetic recombination or with a medical agent. At present,

118 however, the technology is still in the research phase and is not yet put into practical use.

National Institute of Floricultural Science (NIFS),

National Agriculture and Food Research Organization

Experimental test for prolonging vase life of cut flowers

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(2) Research Institute of Environment, Agriculture and Fisheries, Osaka Prefectural Government Present situation of flowering plant production industry In the light of stagnating production of flowers in Japan, this institute is seeking for technical ways to improve it. Sensing a threat from imported flowers, Japanese producers are studying to produce differentiated high-quality flowers by breeding specific varieties. They are shifting to the direction where domestic producers specialize in high-quality cut flowers, while demand for reasonably priced flowers is fulfilled by imported products. For the purpose of reducing the loss of cut flowers, the development for quality preserving agents has considerably progressed. Japanese producers have techniques to domestically manufacture such agents for the regulation of flowering targeting at red-letter days (special events and days such as the Feast of the peach, Mother’s Day, New Year’s Day, the Bon Festival, etc.) so as to maintain the quality of flowers until they are delivered in a certain quantity just in time for such event or day.

1. New technique to cut buds for quality preservation Japan has an excellent technique to preserve the quality of flowers for the regulation of bloom dates. Although cold chains adopt a method not to produce stress on vegetables, a more advanced technique is required for flowers to control its bloom date so as to make it fall on a specific day. There are noticeable differences in conditions for the transportation of seeds. In addition, the timings of bloom considerably vary depending on temperatures and circumstances. Flowers are harvested, therefore, a little earlier as a means of control. A flower having sprouted out from a seed is harvested during it is still a bud. Bundled buds are put under controlled temperature and are injected with sugar. Then, taking into account an assessed flowering time, they are stored in a refrigerator in order to make them bloom at a targeted time. Accordingly, they come in bloom beautifully when they are finally taken out from the refrigerator. The timing can be either accelerated or retarded by using this technique. 2. Quality preserving technique for distribution There has long been a technique to preserve quality and freshness at distribution level. In the Ota Market, for example, flowers soaked in water are transported in low temperature chambers to prevent them from deterioration. As such water that prevents the growth of bacteria is used, bacteria adhered to cut edge are killed with it, and the flowers become nonperishable.

3. Imported flowers and domestic flowers The production of spraymum in Malaysia is nearly sufficient to fill the entire consumption in Japan. They are produced in highland areas and their production cost is lower than that in Japan due to the favorable conditions including the climate.

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In terms of the quality of cut flowers, Japan is by far the best in the world. However, when it comes to the yield per unit area, Holland is by far the largest. Unlike Japan in every way, Holland uses a lot of fossil fuels to adjust temperatures and control moisture contents. As a result, they can ship same-quality flowers in large volume whenever necessary. 4. Contrivance for flower production This institute is characterized by the production of flowers on raised shelves. The raised places enable workers to work standing and reduce their downward work load, thereby helping them improve the operating efficiency. As quality is affected by moisture control, gerbera is produced with less soil in a narrow root zone, while receiving water intravenously. Without using any soil, the plants are cultivated in turf-type mats soaked with soil and spread over asphalt. Such plants have been sustained for full four years only with controlled Standing type cultivation system under irrigations and fertilizers. development by Research Institute of Potted seedlings are grown in pots Environment, Agriculture and Fisheries, Osaka made of soils hardened with fibers, Prefectural Government and are just inserted into fences. The seedling is put in a bed made from the melted mixture of polyester fibers and soils. Then, it grows up as if it is cultivated in usual soil. As the fiber is hardened, the soils do not break up even if water is poured over them. It is enough for you just to water it once a day. Any wall of a house can be decorated with flowers so long as the house is equipped with a fence. Therefore, the merchandizing of this system is now in progress. This will contribute to the greening of wall surfaces. Further, as the weight of the pot is as light as 300 grams per piece, you will not inflict any injury even if it falls down on you.

IX. Floriculture enterprises in Bangkok and Chiang Mai

From July 16 to July 25, 2008, the writer visited producers and exporters as well as organizations of producers and exporters relating to cut flower and seedling business in Bangkok and Chiang Mai regions. The list of them is as perTable-IX-1. Information obtained from them is appropriately incorporated into the various pages of this report and therefore the details of individual meetings are skipped here.

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X. Advices to Thailand In the chapter I through chapter VIII, the details of Japanese flower markets are explained focusing on cut flowers. Finally, here are advices to producers, exporters and governments related to cut flower business in Thailand. These advices are based on our analysis of information obtained from companies in Japan and Thailand through our interviews conducted for this research. Please also refer to the section (6) “SWOT of Thai cut flowers” in the chapter VII “Thai cut flowers”.

(1) Den-phalae With Den-phalae accounting for more than 90% of all Thai cut flowers exported to Japan, advices about Den-phalae are first mentioned as follows: 1. Refrain from excess supply to Japan Perfectly suited to climate in Thailand, Den-phalae is produced mainly around Bangkok for export to all over the world. However, this flower is now excessively produced by many producers and is causing price falling in export markets. In particular, its supply to Japan is in excess of its demand at all times except a certain period of a year. Because of the excess supply to markets, Den-phalae is suffering from remarkable decline in price in retail markets in Japan, thereby making it impossible for many Thai producers to gain reasonable profit on this flower. To overcome this problem, it is expected that through consultations between producers and exporters in Thailand, the supply of Den-phalae is reduced to a level in compliance with its demand so that they are able to gain fair profit from this flower business. 2. Elimination of short supply period (off-crop season) Despite the price falling of Den-phalae prevailing in Japan because of the over supply, this flower becomes short in supply every year during the three months between April and June. It is important, therefore, for Thailand to take some measures to diminish the short supply period (off-crop season). Although it is understood that this problem can not be solved overnight, because the decreased production in the period is due to climate in Thailand, it is important for Thailand to take some measures such as the invention of a new variety capable of growing and blooming in the period in question. 3. Invention of new variety of Den-phalae Sonia and Anna account for more than 80% of all varieties of Den-phalae imported to Japan. Though these varieties are selling well at present time, if Japanese consumers should become tired of these varieties, it would cause serious impact on Thailand. It is necessary, therefore, for Thailand to promote the research and development of new varieties at all times. 4. Regular shipment on specific day of week. As previously mentioned, imported Den-phalae are sold through “auction” or by “pre-sale” in wholesale markets on Monday, Wednesday and Friday. There in no problem with such Thai exporters who make their shipments regularly in time for the intended sale by auction held in Japan on every Monday, Wednesday and Friday. However, those who making their shipment every week on an irregular base (for example, Last week’s shipment was made for an auction

122 on Friday, whereas this week’s shipment is made for an auction on Wednesday) is recommended to fix as much as possible a day of week when they make a shipment. This suggestion is based on the findings of our interviews with Japanese importers. If a Japanese importer could know beforehand a specific day of week when a certain cargo from a certain Thai exporter surely arrives, the importer would be able to arrange an auction sales or pre-sales for the cargo in advance. Because of this arrangement, it is easier for the importer to sell out of the cargo, compared to such cargo that comes in at odd intervals. 5. Indication of size Thai Den-phalae are classified into 2L, L, M and S in sizes (70cm, 60cm, 50cm and 40cm respectively) according to the length of stems, and these sizes are indicated on respective package. However, many Japanese importers desire that the actual lengths of each stem are shown in centimeter in stead of the descriptions of 2L, L, M and S. This is because a Den-phalae in L size may actually measure 64cm or 58cm in length and, due to such lack of uniformity, the actual lengths of stems are unknown until they are actually checked. If actual lengths are indicated in centimeter by exporters before shipment, Japanese importers are able to know the lengths before they open the packages and able to deliver to any customer any length of the flower which is specified by the customer without opening the package each time before making a delivery. This is why Japanese importers desire the description written in centimeter. . 6. “Let’s present Den-phalae on special day” campaign Since several decades ago, Japanese people are accustomed to present carnations on Mother’s Day. Though the ratio of carnations used for the present has recently decreased to around 30% of all flowers, it was definitely carnations that were presented on Mother’s Day a few decades ago. As already mentioned above, demand for Den-phalae is leveling off in Japan and is not expected to increase further unless a proper measure is taken. Under the circumstances, as a method to increase demand for Den-phalae, it is recommended that Thai producers launch a campaign under the slogan of “Let’s present Den-phalae on Mother’s Day”, obtaining supports from the Thai government. With longer vase life and more vitality compared to other cut flowers, Den-phalae is best suited to a gift to be presented on birth day wishing for longevity.

(2) Marketing of flowers other than Den-phalae suitable to Japanese market Although many kinds of flowers other than Den-phalae such as dendrobium, anthuruium, mokara, oncidium, aranthera and vanda are produced in Thailand for export to all over the world, more than 90% of all flowers exported to Japan comes from only Den-phalae. It is a weakness of Thai cut flower business that no prevalent flower is available except Den-phalae. In order to overcome this weakness and change it to the strength, a new type of flower suitable to Japanese markets is necessary to be invented. In our consumer research, Thai cut flowers that Japanese consumers like have been identified in the Table VI-A-3 “ Ranking of preferred Thai flowers”, namely Dendrobium, Cattleya, Curcuma, Vanda, Oncidium,

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Anthurium, Mokara, Heliconia, Rhynchostylis, Raphiopedilum etc.

(3) Alternative production center for domestic cut flowers As shown in the Graph- III-2, chrysanthemum is the largest item among Japanese cut flowers in terms of production value accounting for 79 billion Yen, 33% of the total production value. The second largest item is rose with 10 % share (23.5 billion Yen), followed by Lily 9 % (22.4 billion yen), carnation 3% (16.6 billion Yen). Orchid is the largest item among Japanese pot flowers in terms of production value accounting for 34.2 billion Yen, 31% of the total production value. The second largest item is ornamental plant with 17 % share (18.7 billion Yen), followed by flower tree 13% (14.9 billion yen), cyclamen 9% (9.9 billion Yen). As greenhouses are indispensable to cut flower and pot flower productions (especially in winter), cut flower and pot flower production is recently becoming to be an unprofitable business in Japan due to the sharp rise in heating fuel cost caused by soaring crude oil price. If fact, the number of farmhouses withdrawn from flower and pot flower production is recently increasing among not only cut flower producers but also potted flower producers. Another serious problem in Japan which would cause decline in flower production in future is aging workforces of flower farmers and lack of heirs in farm families. Taking these negative factors into account, flower production in Japan is forecasted to remarkably shrink in the future. Assuming that demand for flowers in Japan continues to remain at the same level from now on, the portion of demand unfulfilled by domestic cut flowers has to be supplemented by imported products. Accordingly, as one of measures to increase the export to Japan, it is worthwhile for Thailand to aim at producing the cut flowers and pot flowers now produced in Japan.

(4) Seedling supply business See 3 pictures which shows Tissue culture laboratories. During stay in Thailand, the writer became to understand that Thailand had a high-level technology for seedling production. (Please refer to the section (6) “SWOT of Thai cut flowers” in the chapter VII “Thai cut flowers”.) The production technology (mericlones technology etc.) in Thailand is not inferior to those of Western countries and Japan. It seems that they may be equivalent or rather superior to them. Labor cost makes a large difference between Thailand and advanced countries. With the low cost of land, equipment and labor, Thailand is capable

124 of producing low-cost seedlings having high-level global competitiveness. It is recommended, therefore, that Thailand seeks for further expansion of seedling business with an aim to produce more seedlings for cut flowers and potter flowers for the purpose of exporting them to Japan, where production cost for the seedlings is increasing.

(5) Ornamental plants In Japan, leafy plants (ornamental plants and other trees and leaves for ornamental purpose) imported from Thailand is now very limited in quantity with only few firms engaging in the import. However, as Japan has a considerable demand for ornamental plants such as dracaena and coconut along with cut flowers. It is recommended that Thailand actively promote the export of these ornamental plants to Japan.

(6) Fragrance flowers As outlined in the section for consumer trend, fragrance flowers are now in a sort of trend in Japan. People in floriculture industry anticipate that this tendency will last long from now. It is also important for Thailand to invent flowers with fragrance.

(7) Thai flower feature article in Japanese flower magazine Flower Auction Japan Co., one of wholesalers we interviewed this time, carries from time to time feature articles in “Hana Jikan” (Flower Time), a monthly flower magazine published by Kadokawa Magazine Co., in tie-ups with enterprises and countries related to flowers. A person at the Flower Auction Japan told us that they are prepared to carry “Thai flower feature” in this magazine, if requested by Thai government. In this case, Thai government only need to provide the company with the flowers, which the government wishes to export to Japan, in a quantity required by the company together with information of the flowers. This plan is applicable not only to the Thai government but also to flower export organizations such as Thai Orchid Exporter Association.

(8) Advertisement in flower magazine Picture shows advertisement of Den-Phalae “Laura” Following articles appear in this advertisement.

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“My name is Luara” “ Long vase life, 2 times long vase life compared to conventional Den-Phalae” “ Big and thick petal” “Cultivated by coconut shell and strong against diseases and insects, we guarantee stable supply”

This variety is produced by Excel Orchid and exclusively imported by Proceed Co. According to Proceed Co., their sales volume has been extremely increased after they started this advertisement. This kind of advertisement is also very important for Thailand growers and exporters if they want to increase export amount to Japan.

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APPENDIX-1 Main companies, organizations related to flowers business

Group, Association, Governmental Organization

Name Address Phone URL Japan Flower 6F Fukuroku bld., 2-7 Wholesale Market Kanda-Tsukasa-cho, Chiyoda-ku, Tokyo 03-3291-6987 http://www.jfma.jp/ Association 105-0048 Japan Flower Trade 2-1-5-324, Omori-minami, Ota-ku, Association Tokyo 143-0013 03-5705-7056 --- 4F Yamaichi bld.,. 3-6-17 Japan Flower Higashi-Nihonbashi, Chuo-ku, Tokyo 03-3664-8739 http://www.jfpc.or.jp Promotion Center 103-0004 Ministry of Agriculture, 1-2-1 Kasumigaseki, Chiyoda-ku Tokyo Forestry and Fisheries 100－8950 03-3502-5959 http://www.maff.go.jp/e/index.html

Yokohama Plant Protection Station､The 3F 5-57 Kitanaka st. Naka-ku, Ministry of Agriculture, Yokohama, Kanagawa 231-0003 045-211-0375 http://www.pps.go.jp/english/index.html Forestry and Fisheries Japan Flower bulb 279-1 Yamashita-cho, Naka-ku, http://www.e-jfta.com/ENTER%20FOR% Traders Association Yokohama, Kanagawa 231-8477 045-212-2042 20ENGLISH.html 6F Shin-Hitokuchizaka bld.,. Housei Japan Floral Marketing Univ. 3-3-9 Kudan-kita, Chiyoda-ku, 03-3238-2700 http://jfma.net/eng/index.html Association Tokyo 102-0073 Import Company

Name Address Phone URL

127 1F Hirai bld., 2-33-5 Kichijoji-Honcho, An Corporation Musashino, Tokyo 180-0004 0422-21-6215 http://www.an-corp.jp/english/index.html 2-11-31 Minami-Kaneda, Suita, Osaka http://www.create-flower.com/English/To Create Corporation 564-0044 06-6389-1211 p_English.html 7-11-7, Todoroki, Setagaya-ku, Tokyo Sudo Syoukai Co., Ltd. 158-0082 03-3704-3751 http://www.farmachine.co.jp Sojits Meat & Agri 2-27-10 Hacchobori, Chuo-ku, Tokyo Corporation 104-0032 03-3537-2321 http://www.nima.co.jp 1-11-3 Iguchidoh, Ikeda, Osaka YMS Kansai Co. 563-0023 072-762-8068 --- Classic Japan 1-3F Sebunesu bld., 12-13 Niban-cho, Corporation Chiyoda-ku, Tokyo 102-0084 03-3264-5523 --- 2F-2 Kyoto Toshiba bldg., 25 Ocean Trade Co. Saiinhira-machi, Ukyo-ku, Kyoto 075-314-8733 http://www.oceantrading.co.jp 615-0022 321-1 Sanbanwari, Iwafuji-cho, Nisshin, http://www.hakusan1.co.jp/english/index2 Hakusan Co.,Ltd. Aichi 470-0104 0561-75-5777 .html 65 Kanowari, Jinnoshinden-cho, TACT Co.,Ltd. Toyohashi, Aichi 441-8077 0532-31-9476 http://www.e-tact.jp/plants.html 2-12-8, Ginza, Chuo-ku, Tokyo, Proceed Corporation 104-0061 03-3543-2678 http://www.proseedcorp.jp/ Topline bld., 3-11-10 Yushima, Suiko Topline Co.,Ltd. Bunkyo-ku, Tokyo 113-0034 03-5818-0888 http://www.suikohtl.com 4-7, Nishiarai-cho, Tokorozawa, Basic Corporation Saitama 359-0035 042-998-0911 --- Otani Trading Co.,Ltd. 245-2925 Kawakami, Narita, Chiba 0476-49-3000 http://www.otani-shokai.com/english.html 287-0244

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Wholesale Company Name Address Phone URL Ota Floriculture Auction Co., Ltd. 2-2-1 Tokai, Ota-ku, Tokyo 143-0001 03-3799-6711 http://www.otakaki.co.jp/ Flower Auction Japan, http://www.faj.co.jp/english/01_CORPOR Inc. 2-2-1 Tokai, Ota-ku, Tokyo 143-0001 03-3799-5435 ATE/01_1_greetings.html Tokyo Flower Port 3-4-1 Rinkai-cho, Edogawa-ku, Tokyo Co.,Ltd 134-0086 03-5674-7100 http://www.tokyoflowerport.com/ Retail Company

Name Address Phone URL

Planet Co.,Ltd. 7F Happy bld., 6-19-14, Jingumae, 03-5469-0590 http://www.g-planet.com/ Shibuya-Ku, Tokyo 150-0001 4F Toshin 6th bld., 1-5-21, Katsushima, Daiichi Engei Co. Shinagawa-ku, Tokyo 140-0012 03-6404-1516 http://www.daiichi-engei.jp 1-6-30 Minami-azabu, Minato-ku, Hibiya Kadan Tokyo 106-8587 03-5444-8719 http://www.hibiyakadan.com 1-15-15 Takaban, Meguro-ku, Tokyo fan 157-0004 03-3711-8945 http://flower-fan.blog.so-net.ne.jp/ 1-2-3 Utase, Mihama-ku, Chiba Kirara Bay Tawn 261-0013 043-213-6851 --- 6-1-23 Nakanobu, Shinagawa-ku, Tokyo Kodaka Hanaten 142-0053 03-3782-0871 --- 2582 Nippa-cho, Kouhoku-ku, Yoneyama Plantation Yokohama, Kanagawa 223-0057 045-531-8999 http://www.yoneyama-pt.co.jp/

129 2 Kiribatake, Kanagawa-ku, Yokohama, http://www.sakataseed.co.jp/english/comp Sakata Garden Center Kanagawa 224-0041 045-531-8999 any/message.html 2-6 Nakase, Mihama-ku, Chiba Uniliviing 261-7115 043-297-7903 http://www.uniliv.co.jp/english_data.html 2-3-11 Inagekaigan, Mihama-ku, Chiba Unidy Home Center 261-0005 043-241-3211 http://unidy.info/index.html

Research Institute Name Address Phone URL Osaka Prefectural 1-1 Gakuen-cho, Naka-ku, Sakai, Osaka University 599-8231 072-252-1161 http://www.osaka-u.ac.jp/eng/index.html Research Institute of Environment, Agriculture and 1-3-62 Nakamichi, Higashinari-ku, 06-6972-7661 http://www.epcc.pref.osaka.jp/reaf/ Fisheries, Osaka Osaka 537-0025 Prefectural Government National Institute of Floricultural Sciences, NIFS, National 2-1 Fujimoto, Tsukuba, Ibaragi 029-838-6801 http://flower.naro.affrc.go.jp/index-e.html Agriculture and Food 305-8519 Research Organization Grower/Producer

Name Address Phone URL 7F Happy bld., 6-19-14, Jingumae, Planet Co.,Ltd. Shibuya-Ku, Tokyo 150-0001 03-5469-0590 http://www.g-planet.com/ 470-4 Takefukuro, Inzai, Chiba Harudyn Shinohara 270-1325 0476-42-5858 http://www.jsjardin.co.jp/en/index.html

130 1280-1 Hara, Uonuma, Niigata Yamaki Farm 949-7422 025-794-2455 http://www.yamaki-noen.co.jp/ 562-1 Kitasho, Waki-machi, Mima, Kawano Mericlone Tokushima 779-3604 0883-52-2189 http://www.kawano-mericlone.com/

Seedling/Breeding Company Name Address Phone URL 3F Bridgestone Hirakawa-cho bld,. Suntory Flowers 2-13-12, Hirakawa-cho, Chiyoda-ku, 03-5210-3818 http://suntory.jp/FLOWER/ Limited Tokyo 102-0093 Kirin Agribio 8F Nichibei bld,. 2-24-2 Hacchobori, Company, Limited Chuo-ku, Tokyo 104-0032 03-3523-6750 http://www.kirin-agribio.co.jp Sakata Seed 2-7-1 Nakamachidai, Tsuzuki-ku, http://www.sakataseed.co.jp/english/comp Corporation Yokohama, Kanagawa 224-0041 045-945-8800 any/message.html 180 Minami-Ebisu-machi, Takii and Co., ltd. Shimogyo-ku, Kyoto 600-8686 075-365-0123 http://www.takii.co.jp/ 2-1-8 Hachimanyama, Setagaya-ku, Misyoshi Co.,Ltd. Tokyo 156-0056 03-3302-4755 http://www.miyosi.co.jp/

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News Paper/Publication company

Name Address Phone URL

Flower and Horticulture 7F Marunouchi station bld,. 2-18-13 News Marunouchi, Naka-ku, Nagoya, Aichi 052-201-5771 --- 460-0002 4F Yamaei bld,. 2-25-10 Myoueki, Green News Nishi-ku, Nagoya, Aichi 451-0045 052-571-2200 http://www.green-joho.jp/ 7F Mejiro LK bld,. 4-21-19 Sodo publishing Shimo-ochiai, Shinjuku-ku, Tokyo 03-5996-6601 http://www.sodo.co.jp company 161-0033

Flower School

Name Address Phone URL Kita-Aoyama N bld,. 3-8-3 Nicolai Bergmann Kita-Aoyama, Minato-ku, Tokyo 03-5464-0716 http://www.nicolaibergmann.com flowers & design 107-0061 Mami Flower Design Mami bld,, 2-11-6 Sanno, Ohta-ku, School Tokyo 143-0023 03-3774-3986 http://www.mamifds.co.jp Hibiya Flower 5-53-67 Jingu-mae, Shibuya-ku, Tokyo Academy 150-0001 03-5485-3916 http://www.hfa.co.jp/index.php

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APPENDIX-2 Major Flower Exhibitions

Name of Exhibition Venue Convened Organized by URL

Annually in International Flower Makuhari IFEX Office (Reed Exhibitions Japan October or http://www.ifex.jp/english/ Expo Tokyo Messe Ltd.) Novenber http://www.kateiengei.or.jp/show/ Japan Flower & Makuhari Annually in The Japan Home Garden Association 2009_pamphlet/2009F&G_pamphl Garden show Messe March et.html Japan Grand Prix Tokyo Annually in Japan Grand Prix International Orchid http://www.orchidweb.jp/orchidsh International Orchid Dome February Festival Office ow/jgp2008/index.htm Festival International Roses Seibu International Roses & Gadening Show Annually in May http://www.bara21.jp/index.html & Gardening Show Dome Organizing Committee Japan Flower Annually in Japan Flower Festival Executive http://www.pref.kochi.jp/~deaihak not fixed Festival spring or autumn Committee u/jff/JFF01.htm Tokyo Annually in http://www.green-joho.jp/fair/inde Gardening Trade Fair Ryutsu Green News autumn x.html Center Agro-Innovation Makuhari Biyearly Japan Management Association http://www.jma.or.jp/ai/ Japan Messe

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APPENDIX-3 Thailand companies and groups etc interviewed by Mr. Takahashi From July 16 to 25, 2008

Name Category Interviewee Activities etc.

1 Hal Trading Co., Ltd. Exporter of Mr. Shuji Hara Japanese flowers export company. Classic Hana flowers Managing Director Exporting orchid (mainly Den-Phalae) to Bangkok Japan 2 Sojitz Corporation Exporter of Mr. Nakamura, Managing They had exported chrysanthemum to Japan Bangkok flowers Director but they had a lot of claims and they gave up Mr. Shino, General Manager business 3 T.K. Nursery Co., ltd Grower & Mr. Trakool, General Production of seedlings of Den-Phalae. Bangkok. Exporter Manager Exporting to Japan 4 Bangkok Green Co., Grower & Miss. Kanokorn Sanguthai Production and export of cut flower Den-Phale Ltd Exporter Deputy Managing Director to Japan. Bangkok Most biggest Den-Phalae exporter to Japan 5 Sawasdee Plara Co., Grower & Mr. Hirofumi Nakagawa Production and export of Denphalae Ltd Exporter Managing Director (Japanese company) Bangkok 6 Prayoon Orchid Co. Grower & Mr. Prayoon Ployphommas Production of orchids seedlings and export Bangkok Exporter

7 Thail Orchid Co. Grower & Mr. Jade Meyanyieam, Production and export of orchids Bangkok Exporter Managing Director 8 Yamamoto Grower & Mr. Yot Chaiyaphan Japanese grower Dendrobium Exporter General Manager Producing Seedlings of dendrobium and Chiang Mai exporting to Europe, USA, Japan etc 9 Thapawong Orchid Grower & Mr. Yasutane Yamaguchi Production of phalaenopsis (butterfly orchid)

134 Co., Ltd Chiang Mai Exporter Manager and export to Japan. Owner is son of Mr. Naron Wongwan, former Vice-Prime Minister. 10 Chiangmai Setcon., Grower & Mr. Masashi Saito Production of Curcuma seedlings and Ltd. Exporter Managing Director exporting to USA and Japan. Chiang Mai 11 Chiang Mai Rose Rose Grower Mr. Acharichai Rujavichai, Got information about rose production and Group Comittie, Gorup Chairman sales Chiang Mai 12 Mr. Pojana Nagavajava Grower & Mr. Pojana Nagavajava Got information concerning Thailand’s Flower Expert, Chiang Exporter flowers in general Mai 13 Chrysanthemum dealer Grower & Ms. Pimpian Somrit Got information about .Chrysanthemum in Chiang Mai Exporter general 14 Siam Nistrans Forwarder Mr. Koichi Ishibashi Forwarder, got information about handling of Chiang Mai flower export

135 APPENDIX-4 Names of companis, groups and associations with whom KRN interviewed * Interviewed x Interview was rejected

Apart from the report, we wrote interview report. Please refer attached paper.

Category Name Prefecture Result Japan Flower Wholesale Market Tokyo * Association Japan Flower Growers Association Tokyo x Japan Flower Export & Import Tokyo * Association Japan Flower Promotion Center Tokyo * Ministry of Agriculture, Forestry and Tokyo * Group, Fisheries Association Yokohama Plant Protection Station､ The Ministry of Agriculture, Forestry Kanagawa * and Fisheries Japan Home Garden Association Tokyo x Japan Flower Designer Association Tokyo x Japan Flower bulb Traders Association Tokyo * Japan Flower Society Tokyo x Japan Floral Marketing Association Tokyo * Research Institute of Environment, Agriculture and Fisheries, Osaka Osaka * Research Prefectural Government Institute National Institute of Floricultural Sciences, NIFS, National Agriculture Ibaragi * and Food Research Organization An Corporation Tokyo * Create Corporation Aichi * Importer Sojitz Meat & Agri Corporation Tokyo * YMS Kansai Co. Osaka *

136 Classic Corporation Tokyo * Ocean Trade Co. Kyoto * Hakusan Co.,Ltd. Aichi * TACT Co.,Ltd. Aichi * Suiko Topline Co.,Ltd. Tokyo * Greenwings Japan K.K. Tokyo x Basic Corporation Saitama * Otani Trading Co.,Ltd. Tokyo x Ota Floriculture Auction Co., Ltd. Tokyo * Wholesaler Flower Auction Japan, Inc. Tokyo * Tokyo Flower Port Co.,Ltd Tokyo * Planet Co.,Ltd. Tokyo * Daiichi Engei Co. Tokyo * Aoyama Flower market Tokyo x Hibiya Kadan Tokyo * Fuga Tokyo x fan Tokyo * Kirara Bay Tawn Chiba *

Retailer Joyful Honda Ibaragi x Yoneyama Plantation Kanagawa * Sakata Garden Center Kanagawa * Uniliviing Chiba *

Unidy Home Center Chiba *

JFTD (Japan Florist Telegraph Tokyo x Delivery Association) e-hana.com Tokyo x Flower Net Co. Tokyo x

137 Planet Co.,Ltd. Tokyo * Grower Yamaki Farm Niigata * Kawano Mericlone Kagawa * Flower and Horticulture News Aichi * Newspaper, Green News Aichi * Publication Sodo publishing company Tokyo * nicolai bergmann flowers & design Tokyo * Flower Mami Flower Design School Tokyo x school Hibiya Flower Academy Tokyo x Suntory Flowers Limited Tokyo * Kirin Agribio Company, Limited Tokyo * Seeding & Kawano Mericlone Kagawa * Breeding TACT Co.,Ltd. Aichi * Sakata Seed Corporation Kanagawa *

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APPENDIX-5 Photographs

Group interview Green adviser got together and they discussed freely about flowers

Right

Interviewed with

Daiichi Engei

Left Interviewed with National Institute of Floricultural Sience

139

Home Center

Unidi Home Center, Chiba

140 Retail flower shop in department store

Daiichi Engei

Shinjuku Isetan Department

Hibiya Kadani Yokohama Sogo Department

141 Retail flower shop in railway station

JR line Yokohama Station

Keikyu Line Kanazawa-Bunko Station

142 Retail flower shops in town

143

Some retail flower shop have air conditioned room for cut flowers

Hydro-culture plants with special pot

Organic, fair-trade and MPS is becoming popular. Picture is poster in Ota market

144

145