Global Market Report: Tomatoes

The tomato market is also feeling the impact of increased energy costs, which have hit many greenhouse growers hard. In European countries such as the Netherlands, despite high market prices for tomatoes, increasing costs are eroding growers' profit margins. However, this situation becomes an advantage for some countries with mild climates that require less energy to grow tomatoes, such as Turkey. In Italy, increased competition is affecting the price of tomatoes in the domestic market. Meanwhile, in Spain and South Africa, adverse weather conditions have led to reduced tomato production in some areas, Spain has experienced high temperatures in summer, and parts of northern South Africa are currently facing heavy rain and even hail. In China and Brazil, there are also problems with tomato production, but not related to weather. Covid control measures in China and political turmoil in Brazil have made it difficult for products to get where they need to go. It remains to be seen how the tomato market will continue to develop as many parts of the globe head into winter.

Netherlands: Tomato prices recover, but high costs hurt profits

In the Netherlands, tomato prices began to recover after falling in August.

As costs rise, the extent to which growers will actually benefit from higher prices remains unclear. The Wageningen University and Research Center estimates that growers' turnover will increase by about 5% this year. A decrease in the number of tomatoes entering the market has led to higher prices. In addition to tomato sales revenue, some growers generate revenue from electricity sales through cogeneration.

At the same time, many growers have begun crop rotation. For some growers, greenhouses have been (again) empty this winter longer than usual. Open and heated planting has been greatly reduced this winter. However, some growers opt for so-called autumn cultivation so that they can harvest their products in the greenhouse on Christmas Eve using minimal heat. Growers are also increasingly concerned about the possibility of growing in more southern regions such as Spain and North Africa.

Another area of concern for growers remains tomato brown wrinkled fruit virus (ToBRFV). According to the latest official data, the virus is present in 41 companies. Growers are working to introduce resistant varieties while also looking for a vaccine. For vaccines, only authorized parties are currently allowed to use them, although growers are not moving fast enough. At the same time, with strict hygiene measures, they are trying to keep the virus out or at least under control. Another option is to convert crops. Some growers (also) started growing strawberries, cucumbers, or peppers.

Germany: Tomato prices are a third higher than last year

Many countries are involved in the current sale of tomatoes in Germany. However, the Netherlands and Belgium dominate. Morocco and Turkey mainly ship round tomatoes, Italy mainly ship cherry tomatoes, and Croatia and Spain mainly ship vine tomatoes. In general, the quality of the product is not always convincing. In some places, certain varieties have a wide range of prices. In general, prices sometimes (depending on the variety and origin) are a third higher than the previous year's level.

France: Imbalances between supply and demand push prices down

At present, tomatoes on the French market include France, Belgium and the Netherlands at the end of the season, France, Morocco, Spain have also begun to harvest new tomatoes, and Turkey also has a small supply.

Currently, there is an imbalance between supply and demand for French tomatoes, and due to the presence on the market of all these products of origin, there is too much supply compared to a level close to half of the demand. The wholesale tomato market is very calm. Consumption is low, but this applies to the fruit and vegetable industry as a whole. The decline in consumption may be related to the season, but also to inflation and the overall atmosphere that is not conducive to consumption. This imbalance has led to a decline in tomato prices.

Quality is difficult to define, because there are all kinds of products on the market, including products that don't sell fast enough, products with poor categories at the end of the quarter, and high-quality products that don't sell well in the new season.

This may be difficult for another 2-3 weeks, but we can hope to recover in January.

Italy: Tomato production continues to grow, but external competition is also increasing

Tomatoes are the fresh vegetable of choice in Italian household sourcing. This is also thanks to a wide range of segments (round, ribbed, cherries, plums, beef heart tomatoes) and products for different purposes (sauces, salads, snacks).

In the last 12 months to September 2022, more than 22.8 million Italian households have purchased tomatoes at least once. The average spend per purchase is increasing, from around €2.00 to more than €2.3 (according to the GfK Consumer Group). This growth involves regular products, while sales of organic tomatoes tend to remain steady.

An analysis by Ismea shows that Italian tomato production is around 1 million tons, growing slightly even in the long term (9.5% in 10 years), while annual consumption per capita, about 18 kg, is also growing, 12.9% in ten years. In first place in terms of production is Sicily, which covers about 40% of the country and reaches 25,000 hectares, followed by Lazio and Apulia.

After experiencing summer production marked by a severe shortage of products, the Sicilian edible tomato division is entering half of the European market with winter production that is excellent in terms of quantity and quality. The season will peak in a few weeks.

"In general, the production situation has improved because the impact of ToBRFV is much smaller, thanks on the one hand to the introduction of varieties that are resistant to the virus, and on the other hand to the fact that producers have been able to endure this problem after years of severe testing. One entrepreneur reported that "in 2022, the damage caused by heatwave weather was even greater, resulting in a 50% drop in production. Persistent high temperatures across Europe have also led to increased competitive pressure from all producing countries, especially those that are able to continue the harvest, as they have the advantage of unusually mild weather. To this we must add Morocco and Turkey, whose export figures have been growing at double-digit rates since 2021, who are increasingly exporting goods to Central and Northern Europe, since they have had to reduce trade with Russia as the conflict continues. Since labor costs in these regions are much lower, they are present in large quantities in the European market, selling their products at lower prices than in Italy (less competitive). Its price is about 1.30-1.40 euros / kg, which is slightly higher than the cost of production. ”

Spain: Unstable climate leads to irregular production

Tomato cultivation in Almeria increased this season, although production was not as large as the sector initially expected. In the case of Dutch winter tomato production, which is expected to be significantly reduced due to high energy costs, Spanish growers grow more tomatoes with vines. The area under cultivation of round tomatoes has decreased, as the area under cultivation in Morocco has been expanded, replaced by the cultivation of other specialty varieties. As the Netherlands, Poland and Hungary have extended their tomato seasons, while demand for Spanish tomatoes remains low, forecasts are still far from reality. At the same time, Morocco already has a great deal of availability. Spanish exporters expect the Dutch season to end in early 2023, although production will gradually decline from these weeks.

Tomatoes are usually a stable product in terms of production, but production has been irregular so far this year due to unstable climate. Summer and autumn temperatures are too high, which has led to high tomato production so far, but unfortunately this has also led to more pests. But over the past few days, the weather has gotten colder, which will slow down production. Tomato prices are expected to rise in the coming weeks, as prices are currently below cost and profit margins are almost zero.

Turkey: High energy prices in Europe could be positive for Turkish tomatoes

Turkey produced 185 million tons of tomatoes in 2021 and is the third largest tomato producer after China and India. The country's overall average output level is between 11 and 13 million tons. Turkey is the fifth largest exporter of tomatoes in the world, accounting for 7-8% of global tomato exports. Its main markets are the Eastern European countries of Belarus, Ukraine and Russia, as well as Israel and Middle Eastern countries. Energy prices in Europe have risen due to reduced energy supplies due to the ongoing war in Ukraine and Russia, which has affected greenhouse production. Therefore, the demand for imported tomatoes in Europe is expected to be high. Turkey is probably one of Europe's preferred purveyors of tomatoes. Turkish tomatoes are harvested in large quantities this year, especially steaks, tori, striped vines, cherries (organic and non-organic) and cocktail varieties will be in abundant supply.

South Africa: Tomato prices rose but suffered heavy losses due to weather

South Africa has recently experienced heavy rains, hailstorms in some places such as the Northwest Province, and some tomato growers have suffered heavy losses.

However, last Tuesday a large number of tomatoes entered the municipal market, where tomato prices fell by almost 25% due to increased supply. The average price of Grade 1 tomatoes is now R8/kg (3.36 RMB), with Johannesburg tomatoes overall at around R6.65 (2.79 RMB), while in Cape Town they cost R10.20 (4.29 RMB) per kg. Overall, tomato prices are higher this year than last year.

The upcoming summer vacation should stimulate tomato demand.

China: New pandemic control measures have led to higher tomato prices

Vegetable prices in East China are expected to continue to rise. At present, the epidemic prevention and control measures implemented nationwide have increased the difficulty for trucks to enter and exit regional vegetable production areas and markets.

Xinjiang in the northwest region is another important tomato producing region. Wholesale tomato prices hovered around 4.50 yuan per kilogram or $0.63 per kilogram this week.

In Miyun, north of Beijing, fresh greenhouse tomatoes have just entered the harvest period. Miyun is the center of tomato production, with an annual output of more than 3 million jin, or 1.8 million kilograms. In recent years, the local government has invested in Miyun's tomato production, including subsidies for greenhouse construction and agricultural inputs. The price hovers around 20 to 40 yuan per catty, or $0.6-$2 per 5 kg.

North America: Thanksgiving is approaching, but tomato prices remain high

In early November, North American retailers aggressively stocked their stores with tomatoes, but demand is slowing as Thanksgiving approaches in the United States. One grower-shipper expects the situation to continue over the next two or three weeks.

Weather conditions in Florida and Baja California negatively affected the availability of Roman tomatoes, steak tomatoes, grape tomatoes and cherry tomatoes. Although this is not the case for all tomato varieties. "There are plenty of tomatoes with vine and mixed cherries on the market," says the grower and shipper.

Another grower and shipper in Florida said tomatoes from outside the state are still in short supply. "The weather will definitely affect product availability for some time," he says. "We've had a good rain and now the cooler weather is affecting the size and quality of southern fruits."

In turn, he does not expect to return to normal until mid-December or even January. "Tomatoes will be in great short supply and very expensive", he said, adding that Mexico has also experienced cold weather and is in short supply, so there are also a lot of green tomatoes coming from Mexico. "Truck freight rates get very high this time of year, with prices ranging from $0.50 to $1 per box delivered to customers," he says.

While Roman tomatoes, steak tomatoes, grape tomatoes, and cherry tomatoes are in short supply, prices are likely to continue to rise. B.C.'s greenhouses are coming to the end of the season, but California and Mexico can produce year-round. "When the west coast of Mexico starts ramping up production in December, these markets will generally decline," he added.

He expects tomato demand to increase slightly before Christmas before strengthening in January. Consumers tend to look for healthier options in January, but "meeting that demand can be a challenge as tomato production is at its lowest level during the winter months," says the grower-shipper.

"Tomato demand is slowing with Thanksgiving in the United States, but it won't last long as we head into the holidays, although inflationary effects may affect that demand," said the grower-shipper.

Brazil: Tomato prices rose in November due to political turmoil and temperatures

The first week of November saw political turmoil in Brazil, paralyzed after the results of the presidential elections, with Lula da Silva narrowly defeating Jair Bolsonaro. In addition to causing unease in a country divided by protests, fraud from the government itself was eventually fined $4 million by the High Electoral Court, driven by a complex electoral campaign, yet politicians did not stop demagoguery, and road blockages had an impact on the economy, such as basic products such as tomatoes.

In fact, at the beginning of November, the circulation of tomatoes was blocked, and many trucks carrying the product ended up on the road. According to Hortifruti/Cepea, at the center monitored by the entity, on Monday, October 31, it was reported that "imports of tomatoes were very low, which led to a significant increase in prices." On Tuesday, November 1, as the lockdown intensified, there were no records of tomato arrivals, and the only factory that reported sales that day was Ceagesp (SP), which reported selling a small number of products left over from the previous day. ”

"Given these factors, the week ended with an increase in tomato prices for all wholesale markets. In Ceagesp (SP), tomatoes sold for R$78.33 (105.52 yuan), up 36.58% compared to the previous week. In Belo Horizonte (MG), tomatoes were priced at R$86.57 (116.61 yuan), up 42.24%. In Rio de Janeiro (RJ), prices were R$82.22 (110.76 yuan), up 24.37%, and in Campinas (SP), prices averaged R$100.00 (134.71 yuan), up 23.28%. ”

With the end of road jams, tomato circulation and harvesting activities returned to normal in the last days of the second week of November. "However, contrary to expectations, the number of tomatoes offered this week was significantly reduced compared to the previous week", explains Hortifruta/Cepea. "The week before, due to the high temperature, the fruit ripened faster and the harvest was early. So, as the weather warmed up that week, the number of ripe tomatoes in the field was very small, which eventually led to a shortage of products on the market. ”

In light of this, tomato prices rose in most wholesale markets this week. In Ceagesp (SP), tomatoes rose by 13.29% compared to the previous week. In Belo Horizonte (MG), the price increased by 9.68% and in Campinas (SP) it increased by 23.33%.

In the third week of November, as temperatures rise and the fruit ripening process returns to normal and harvests increase. "Therefore, the price began to fall from Thursday the 17th. However, despite the depreciation in the last days of the week, the weekly average price rose again in all centers monitored by Hortifruti/Cepea. "In Ceagesp (SP), the product is up 14.55% from the previous week; In Campinas (SP), tomato prices increased by 8.1%; In Belo Horizonte (MG), prices rose by 15.15%; In Rio de Janeiro (RJ), prices closed up 28.48%.