Houli’s exclusive Oncidium zone comprises a total of 38 flower growers on 31 hectares of agricultural land, who are organized into three production and sales cooperatives. These operations generated NT$110 million in export revenue in 2011, with an average export price per stem of NT$19—triple the domestic wholesale price.

Li Qiyin (left) is hoping that flamingo lilies will become eligible for ECFA tariff reductions.

Hung Chih-wen, head of one of the co-ops, has established a packaging facility to collectively process Oncidium cultivated by the co-op’s members. The facility is capable of processing a weekly total of 240,000 plants—four shipping containers—for Japanese consumption.

Hung says that Japan is facing a serious issue of ageing among its flower growers and the industry is in decline. Fu­ku­oka and Oki­nawa are the only two major places left in Japan that cultivate Oncidium, and they can only supply 5% of market needs. As a consequence, imported cut flowers account for 95% of the market, and 90% of the imported Oncidium comes from Taiwan.

The main varieties of Oncidium exported to Japan are Gower Ramsey, a bloom with yellow petals and auburn spots, and Honey Angel, a flower with pure yellow petals and a longer-than-average vase life.

The Honey Angel variety is becoming increasingly popular in the Japanese market, says Hung, predicting that this year its share of the Japanese market will draw level with Gower Ramsey’s.

In 1992, trial exports of Taiwan’s Oncidium to Japan began with only 2000 plants, yet current annual sales are at 10,000 times that level. The success lies largely in a preservative spray, invented by Huang Zhao­jia, research fellow at the Taiwan Agricultural Research Institute. The invention allows Oncidium to be exported by sea instead of by air, while preserving the freshness of the flowers—thus reducing shipping costs.

Collective grading and packing are also keys to improving the quality of Oncidium exports. Hung Chih-wen says that in the early days, the packaging was of poor quality due mainly to the inadequate equipment. But the current facility includes standardization and a complete grading system to ensure that every flower exported meets the same quality standards—and will therefore sell better on the wholesale market.

Despite the success in the Japanese market, developing a second major market will not be easy. Although as of 2012 Oncidium exports to mainland China are exempt from tariffs under the Economic Cooperation Framework Agreement (ECFA), Hung doesn’t think there will be any significant changes in the mainland market in the immediate future. The mainland doesn’t yet have a comprehensive wholesaling system, and mainland consumers haven’t yet got into the habit of buying cut flowers.

The key obstacle, however, is that the price of Oncidium imported from Taiwan is three to four times higher than the locally grown product. So in terms of price, it’s very difficult to compete.

“And we don’t want to drop our prices.” Hung believes that cutting prices to pander to the market is simply not sustainable. “We want to market Oncidium, not ‘dump’ them. While mainland importers have given Taiwan’s Oncidium the thumbs up for quality, they’re complaining vigorously about the price.”

Through participation in international flora expositions, in recent years Taiwanese Oncidium growers have expanded their business into the Middle East, albeit still at the trial stage. Hung has recently received an order for 10,000 plants—a considerable consignment.

Oncidium are well received in the Japanese market. They are used for many occasions including weddings, funerals, festivals, religious ceremonies, and also for general flower arrangements. But because most Chinese regard red as the color of good luck, yellow flowers don’t make the grade for special occasions. On the mainland, even the local Oncidium rarely make it into the wedding market. Li Qi­yin, head of another of ­Houli’s sales cooperatives, has tried to make the most of the tradition, lobbying the government to include red-based flamingo lilies in the list of ECFA tariff reductions as soon as possible.

Li’s co-op, comprising seven growers, generated NT$30 million export revenue in 2011, an average of NT$11.7 per stem, slightly higher than the local wholesale price of NT$10.

Japan is currently Taiwan’s most reliable export market for flamingo lilies, but a glut of varieties has surfaced. Li notes that flamingo lily exports to Japan exceed 100 varieties of almost every conceivable color: Emerald, White Angel, pink Rosa, red Cherub, and double-color Qianlida. So unless some novel colors like pure yellow or blue can be developed, it’s going to be hard to make a splash.

The situation in Chinese communities, however, is quite different. Orders from Hong Kong surged before the recent Chinese New Year, with orders for several thousand pure red flamingo lilies, pointing to the enormous potential for this product on the mainland market.

But the lack of transparency in the operation of the mainland flower market and manipulation of prices also concern Li.

Li first set foot in the flamingo lily export business in 2000. 2008 witnessed an annual export volume of over 10 million blooms for the first time, and growth has been stable since, with volumes reaching 16 million plants in 2011.

Li says that the flamingo lily export industry is confronting issues yet to be resolved. First, flamingo lilies need to be shipped by air at a premium of NT$3 per stem above sea freight since longer-term preservation techniques have not been fully developed. Also, while flamingo lilies come in a huge variety of colors, competitive colors such as blues or pure yellows are still in the pipeline. Thus he has thrown himself into cultivating a range of new varieties.

Various species and varieties of flowers can generate returns at different levels in different international markets, but developing new markets often throws up barriers and setbacks. While open trading conditions are providing significant market opportunities for Taiwan’s flower industry, at the same time there are severe challenges that will need to be faced.