GLOBAL MARKET OVERVIEW TOMATOES

 

From Europe to Africa and across the Atlantic, the tomato industry is encountering a multitude of challenges and opportunities. The Netherlands and Belgium grapple with a backlog in planning and skyrocketing prices, while Germany witnesses a decline in tomato valuations due to a surge in local supply. Across the English Channel, the United Kingdom faces a perfect storm, battling delayed planting, soaring energy costs, and diminishing profits for growers. Meanwhile, in Italy, tomato prices experience a slight dip but remain relatively high. In Spain, traded volumes take a hit as local productions displace imports. Moroccan producers demand dialogue with the government to secure export assurances, while South Africa benefits from increased demand despite dampened weather conditions. Finally, in North America, tomato pricing remains under close scrutiny in a highly variable market.

The Netherlands: Tomatoes survive crisis year well
Spring has been moderate in the Netherlands and Belgium, with the result that some growers are complaining of a backlog in their planning. The kilos lost at the beginning cannot be made up (easily). Tomato prices have invariably been well above the five-year averages recently, and sometimes even above record prices from 2022. Prices did start to fall in April. Still, that delivered above-average prices in week 21, compared with the years before 2022.

Meanwhile, growers are also already looking past the longest day and towards next winter. The exposure issue is in full play. Some growers had already cultivated last winter under (full) LED and many more growers plan to do so next winter, sometimes still in combination with HPS because the step to full LED is too big for them.

Growing under LED is more energy-efficient, but also requires a different way of growing. Moisture problems play tricks on growers, and growers also see quality problems with LED cultivation, which also occurred earlier when HPS lighting was used. previously when HPS lighting was on the rise. The optimum LED crop does not seem to have been invented yet.

The Netherlands' largest agricultural bank recently noted, at a tomato event, that growers have miraculously come through the past crisis year well. The crux of the matter, however, is that this money seems to have been made with smart energy management, including energy trading, than with selling tomatoes. Some growers now also grow and sell cucumbers. A choice to spread risk because of the still ubiquitous ToBRF virus. All challenges notwithstanding, several growers also opted for new construction. Something the chosen greenhouse builders are also very happy about.

Germany: Local produce stays strong as prices fall
Tomatoes of Dutch and Belgian origin obviously predominated in the German markets. The assortment was completed primarily by deliveries from Italy, Germany, France and Turkey. Supply grew and locally outstripped demand. This inevitably led to falling prices. Quality, which was not always convincing, as well as some Class II offers, also contributed to the falling valuations. Only the local product was able to maintain the previous price level in some places.

The United Kingdom: Cost skyrocket, causing losses for growers
Hundreds of tonnes of tomatoes are currently going to anaerobic biomass plants every day in the UK. Normally, would be the case this for a couple of days in the season, but it has been happening all month.

It is the perfect storm, growers delayed planting by a couple of months due to high energy costs and are now in full production. Meanwhile, the Spanish crop, which would normally be finished by now, was delayed because of cold weather, and they are still exporting to try to make up for losses. The Dutch growers also delayed planting due to energy costs and are in full swing.

“Anything being imported from the EU has had the benefit of EU subsidies, UK growers don’t get these, they didn’t get them before Brexit either as most of the growers are too small and there was too much paperwork involved," according to an industry source.

Growers cannot go on sustaining losses like this while costs skyrocket, normally, there would be 2 or 3 plantings each year, but most growers will only do two or even just one to cut down on losses. In July 2019 some greenhouse growers stopped, and during the pandemic, more stopped. We are now seeing, and will continue to see, more and more stopping as costs increase and skilled labour is harder to find.

Italy: Tomato prices fall slightly, but remain high
A north Italian wholesaler says that the prices of Italian tomatoes have fallen, although they remain quite high. This is because before there was only product from Sicily, while now there is more competition from Lazio and, for the green type, also from Veneto. In week 22 at wholesale, the plum tomato was sold at around 3.50 euro/kg, the cherry tomato at 2.50 euro/kg, the Pixel at 2.20 euro/kg, and the vine tomatoes at around 1.90 euro/kg. The green beefsteak tomato from Veneto is priced at around 1.70-2 euro/kg. "And if you look at prices in supermarkets," the wholesaler concludes, "it exceeds 13 euro/kg, as it is sold in 300 gram trays for 3.99 euro. The consumer does not notice this, but the price per kilogram is very high." On the markets there are also Dutch vine tomatoes of fair quality, not very high, which cost 1.20 euro/kg.

In Sicily, long winter cycles are now being switched to short summer ones. With regard to winter tomatoes, compared to last season, this year the campaign ended earlier, because the months of October, November and December - characterised by high temperatures - brought forward the ripening of the tomatoes on the plant, creating a concentration of product in a short time. There was a comeback for the vine tomato, which had suffered a drastic reduction in volume in recent years following the outbreak of ToBRFV. Production of smooth round is about to return to pre-emergency levels, if not higher.

For the future, starting with the next crop year, the sector will have to face an increasingly tight labour shortage. Another point of utmost importance is that the end of the energy crisis will lead to the resumption of production under artificial light in the Netherlands, France, Germany and Poland: this will mean that the dynamics of the fruit and vegetable trade will return to their previous state and producer prices in Sicily of over 2.40 euro/kg for plum tomatoes - almost unheard of at the end of May - will become rarer again.

According to GfK Consumer Panel data, tomatoes are bought by 89% of Italian households. In the last 12 months (ending in March 2023), the frequency of purchase (18 times in one year) and the average expenditure per act of purchase have increased (from €2.1 two years ago to around €2.4). The quantity purchased each time has decreased (from 0.9 kg two years ago to the current 0.8 kg).

Spain: Traded volumes drop 30%
The average price of tomatoes in Spain remains at similar values ​​to the previous week and the traded volumes have reduced about 30% compared to the previous week. The vine tomato is the commercial type that is experiencing a greater decrease in its volumes in this period. Mainly export-oriented tomato varieties are being replaced by local European productions in the stores, which leads to a gradual reduction in its average price since the beginning of May.

The commercial tomato types distributed in the local market get the highest prices, as due to their large size they don’t have a fierce competitor in the productions of other peninsular regions.

Morocco: Producers want assurances around export restrictions
The Moroccan export tomato season is drawing to a close, with the exception of a few producers who are growing elongated tomato and cherry tomato varieties destined in particular for the British market.

The season was marked by poor climate conditions, phytosanitary problems and the government-imposed restrictions on export.

Producers are calling for dialogue with the government, and assurances that export restrictions will not be imposed next season.

South Africa: Increased demand for tomatoes despite damp weather
The weather in South Africa has been cold and wet, which is not good for either tomato production or consumption. It’s not been the normal March/April changeover, a tomato trader observes, with rain both in the north and the south of the country.

Nevertheless, demand increased last week and the average price increased to R8.43/kg (0.39 euro). Tomato prices at the Johannesburg municipal market vary across packaging (except punnets) between R7 and R13 (0.6 euro) /kg.

If the winter tomato crop from Limpopo is not affected by adverse weather, prices could come under pressure in June due to high supplies.

Demand at the markets is dampened and the state of the economy is telling, traders say, while Cape tomato producers think twice before sending their tomatoes to Gauteng because of transport costs.

“But the main challenge is power for pumps for water, packhouses, washing machines. It costs farmers an enormous amount. I have been told by a farmer that where his energy costs used to be 12 to 15%, it now runs to 48% of his production cost,” a tomato trader at the Johannesburg municipal market says.

North America: Tomato pricing on watch
Growers and shippers are especially eyeing quality on tomatoes right now. “It’s the tail end of a season and the beginning of a new season and you’re also watching to see how much the rain is affecting local crops,” says one shipper.

Currently, southern Florida is wrapping up its tomato production. “It’s been plentiful south of Immokalee and the mid-section of Florida so things will now progress to northern Florida,” he says. Regional production will also begin in states such as Arkansas and the Carolinas.

Mexico also has good tomato availability. “California is delayed. Their crop won’t be more available until the middle to end of June this year,” says the shipper.

Along with greenhouse growers producing tomatoes year-round, Canadian greenhouse production is also underway.

To meet the typical tomato availability at this time of year is strengthening demand, though there’s often a small lag right after Memorial Day. 

All of this leaves pricing inconsistent right now. 

Next week: Global Market Overview Kiwi!