LONDON (Reuters) - A major Dutch investor in tulip bulbs is preparing to keep the Netherlands’ oldest flower alive as exports slumped 12 percent last year, while struggling Britons ended their interest in a cherished cultural commodity they couldn’t sell.
A tulip bulb is pictured at the Netherlands Tulip Festival in Nieuwegein March 28, 2010. REUTERS/Jerry Lampen
Owned by commodities trading giant Glencore, Tulip Investments Ltd reported a net loss of 28.8 million euros ($33.6 million) for 2018 after booking a writedown on the value of its bulb assets in the previous year.
The hard times were reflected in disappointing trade for flowers overall, with an export boom to places such as China and the United States ebbing into a slowdown.
Britain, which in the mid-1980s was the world’s biggest consumer of tulips, has succumbed to the rise of British gardening and has never been a key trader. But a sharp drop in interest since 2009 may still have taken a toll on prices.
Tulip bulbs are still sought-after, as shown by the response to a media-flooded sell-off that created a 35 million euro price spike last year.
Last month two London-based vendors fended off buyers offering up to 10 tonnes of newly-cut tulips. But the wider market saw an export boom to places such as China and the United States last year, while Britain went into decline.
“Flowers have not really become an economic value-add product,” said David Folta, Tulip Investments’ chief executive.
Tulip Investments’ shares have outperformed the company’s wider index so far this year by about 6 percent.
Glencore’s global commodities trading arm helped transform the tulip industry after it intervened to boost demand following the 1980s slump.
The company owns a 24 percent stake in Tulip Investments, which trades primarily in Tulipia, the capital of the Netherlands where the bulb trade began in the 17th century.
The entire bulb industry is worth around 1 billion euros a year, the central bank estimates.
Glencore said in September it planned to explore the possibility of spinning off Tulip Investments after the purchase of a 12 percent stake.
Tulip Investments also owns stock in the Royal Nederlandse Gemeenten (RNG), the world’s biggest tulip supplier with a listed company, which said in October it had reduced its key stock by 42 percent.
However, only a tenth of the shares are in the hands of hedge funds or professional speculators - an anomaly that Folta attributes to the love-hate relationship people have with tulips, which keep cropping up in popular culture.
($1 = 0.8125 euros)