At the start of the New Year the global tomato market is faced with many of the same issues seen in 2022, with the increase in energy costs putting pressure on grower margins still at the top of the list. This is particularly evident in the Northern European markets, where supplies have dropped considerably compared to last year, as many growers opt not to turn the heat or lights on for their winter crops. The lack of an expected Christmas peak in prices has further affected margins at the end of last year, although some countries like Belgium and France have since seen a slight rebound. In the US, however, demand is still good and prices are average, whilst in China the prospects for 2023 are positive: prices are on the rise, and the potential for exports is increasing.
Benelux: Lower production expected in new season
The hoped-for rise in tomato prices towards the end of 2022 has disappointed. In the week before Christmas, the average selling price at Belgian auctions, a key market reference, actually dropped. In the weeks after Christmas, prices did rebound, although certainly not above-average prices despite a more limited supply. Over the whole of 2022, Belgium's largest auction does speak of "decent prices" for "a lot of tomato varieties". However, cultivation costs also rose. The niche segments are having a harder time than the classic varieties.
The supply from the exposed crop is smaller than usual this winter. Precise figures are still lacking, but estimates assume about 100 hectares of exposed cultivation in the Netherlands (compared to 800 hectares previously). Growers who have started growing under lights have concluded contracts with buyers for this purpose and have also made price adjustment agreements in connection with rising energy costs. On the energy front, for many growers, having a combined heat and power (CHP) plant is proving to be very important to continue operating profitably. Growers currently also sometimes make money from selling energy.
To reduce the gap in production, more autumn tomatoes have been grown. Here it is estimated that the acreage in the Netherlands has reached 150 hectares, mainly coarse vine tomatoes. A number of additional cucumber growers have set tomatoes for an autumn crop. Pricing for autumn tomatoes disappointed growers. The hoped-for peak prices around Christmas did not materialise.
Usually, tomato prices continue to rise in January, after which, as soon as more and more growers return to production even traditionally without lighting in February, the price starts to fall. For next season, growers' start of production is more staggered. Growers have tried to get through the colder winter well without excessive heating costs by planting more widely. Production per square metre is expected to be lower this season. There are players on the market from Spain, Morocco as well as Turkey and Poland to fill in the gaps in production. Turkish and Polish growers, for instance, are focusing on growing coarse vine tomatoes, usually a crop that is grown with a lot of additional light in Dutch greenhouses.
Germany: Difficult year for tomatoes
Overall, 2022 has been a difficult tomato year, reports a grower. "Early production was somewhat higher because we had more sunlight. However, too little CO2 and persistent heat resulted in a disappointing autumn campaign. As a result, we had a difficult phase in terms of supply between late September and late October, which completely wiped out the plus we had in spring. Overall, the production was therefore lower than in previous years."
During the summer, there was pressure in terms of tomato supply, which was also affecting in prices. Consequently, more advertising campaigns were launched from retail to counter oversupply. "The current energy crisis makes profitable winter production of tomatoes almost impossible and also causes decreasing purchasing power on the marketing side. Therefore, we decided to scale back cultivation of the more exclusive tomato varieties in favour of the runners-up. Nevertheless, I assume that the more exclusive varieties will also rise again in consumer favour on the long term."
France: Prices slowly rise
For most classic tomato varieties, now that the holiday period is over, the demand seems to be a little more sustained. At the same time, there are fewer volumes in production in certain places of origin, such as the northern countries (Belgium and the Netherlands), which have produced less this winter, as they did not want to heat their greenhouses due to the increase in energy costs. But Morocco and Spain have also sent less to French markets, as their quality has not always been optimal with a lack of colouring, and therefore not to French tastes. As a result, faced with this slightly stronger demand at the beginning of the year and the fact that some producers are a little less present in volumes, stocks are starting to decrease, orders are starting to pick up again, particularly for round tomatoes, and prices are slowly rising. For all French operators, prices have increased compared to last week and continue to increase at the moment.
As far as the premium tomato ranges are concerned, however, consumption was not at its best during the holidays and they continue to sell with difficulty afterwards. The consumer seems to be "going for the basics" and there has been little excitement about these premium products, even during the holiday season.
Italy: Christmas standstill causes concerns for Italian tomatoes
A wholesaler in northern Italy says that the situation in the tomato sector is very worrying. Over the Christmas period, the market was almost at a standstill with consumption falling. Prices have also dropped. Plum and cherry tomatoes were sold at €1.50/kg, Piccadilly tomatoes at €1.20, and even vine tomatoes showed falling prices. Only the heirloom tomato survived better, but that too is now declining. As regards sales channels, the small shops were less affected by the drop in consumption than the big supermarket chains. "It was therefore a very underwhelming Christmas period, and the crisis is continuing even now in the post-holiday period. The production comes from Sicily, and it shows an excellent quality. It is not worth importing from Spain because there is no economic advantage. Farmers are in crisis because production costs have skyrocketed and the prices they get do not cover the higher expenses."
In Sicily, high quantities of Pachino PGI tomatoes are still unsold. One of the main causes is the price to the consumer, which continues to be very high despite the very low prices offered to producers to buy the tomato. "We have tons and tons of tomatoes left on the plants and very few orders from the big retailers," says the president of the Protection Consortium. "With this atypical winter, in which temperatures are as high as 22 °C, the product ripens quickly and has to be harvested. Without buyers, however, it will be largely lost. Many Sicilian producers risk closure unless decisive and concrete action is taken to change the situation."
"There are specific limits that regulate the minimum purchase price of the product, but they are almost never respected, ignoring - in the name of profit - the sacrifices, dedication and fatigue of the many local producers who make enormous efforts every day to bring to the tables of Italians a unique product, one of the best known and best loved in the world. In addition to this," emphasises the president of the Consortium, "there are absolutely unacceptable energy price increases and unfair competition from tomatoes from abroad, where the cost of labour only affects the product by 10% compared to 60% in Italy."
Spain: Low prices, but positivity for start of 2023
The tomato acreage has increased in Almeria this season. Growers planted more vine tomatoes and less specialties. The acreage of round tomatoes has also decreased as Morocco keeps gaining ground. The high temperatures during most of the season so far has caused more problems related with pests, although tomato seeds are more resistant compared to other vegetables.
Since the export season started in Almeria in October, prices continue to be low and disappointing in general, given the expectations. Although the increasing Moroccan production has been adding pressure to the Spanish tomatoes in the European markets, this week there are custom problems at the Spanish borders in the port of Algeciras that is holding back the Moroccan tomato shipments and the shortage of tomatoes in the markets are beginning to be noticeable. Some exporters fear that after this problem is solved the markets could be flooded with Moroccan tomatoes next week. Nevertheless, the Spanish tomato exporters expect good months of January and February with a big supply.
Turkey: Largest harvest for Turkish tomatoes
Turkey has produced 185 million tons of tomatoes in 2021 and is the third largest producing country, after China and India. Turkey’s overall average is 11 to 13 million tons. Turkey is the world’s fifth country with a percentage of 7-8 percent of tomato export. European consumers mainly prefer vine and table tomatoes. These tomato varieties are grown in greenhouses. Therefore, pesticide levels are very low and at acceptable percentages. Turkey’s tomato harvest amount is high this year, especially beef, tori, vine, (organic and non-organic) cherry, and cocktail varieties will be best offers.
South Africa: Tomatoes in high supply but demand is lacklustre
The South African school year starts in early January, so school uniforms and stationery are what South Africans are spending their money on, and consequently this is always a very difficult time of the year for tomato sales.
Last year this time a tomato shortage developed as a result of heavy rains which reduced availability, but the tomato market looks very different this year.
The tomato market is very full: 1,800 pallets on Thursday morning, compared to 1,100 pallets last year this time, but the problem is there’s no buying power (an agent at the Johannesburg market says that cocktail markets are barely moving), putting prices under pressure. It is expected that tomato prices could increase towards April.
The average price is just under R8 (0.45 euro) per kilogram while last year it climbed as high as R12 (0.67 euro) per kilogram.
There are a lot of tomatoes coming from the Western and Eastern Cape, most production areas are sending to market.
"There has been a dramatic increase in tomato supply after last year’s shortage and the consequent high prices. Therefore, guys were planting extra tomatoes for what they perceived would be a short market - and now it’s turned the other way,” says a tomato trader. “The guys that have planted more are going to be in a bit of trouble.”
There is still the issue of tomato leafminer moth Tuta absoluta, which is affecting quality and some isolated hail incidents in Limpopo and Mpumalanga.
As for rain damage, luckily December’s rain hasn’t been too bad for tomatoes and its effect on quality doesn’t seem significant at the moment.
It seems as if the heavy rains in the north could for the moment be over, an agent opines, but everything depends on the weather prospects of late summer and early autumn which can affect tomato quality into May.
Loadshedding is a bitter pill to swallow for everyone in the chain. Growers struggle to complete their irrigation schedules and diesel generator costs run to many thousands of additional expenditures at a time of general price inflation across the board.
China: Tomato prices on the rise
Vegetable prices in one of China's large vegetable producing regions Shandong are rising, including tomato prices. Greenhouse growers in the Yangtze Delta supplying the mega city of Shanghai have seen recent prices of around 15.8 yuan per box (2.30 USD) and this price is expected to rise. Fresh greenhouse tomatoes are more common on first tier city supermarkets and online stores, including Dingdong Maicai and MeiTuan.
Meanwhile a Chinese greenhouse tomato grower is looking for export opportunities in neighbouring markets including Southeast Asia and Russia for its fresh tomatoes. China is a large exporter of processed tomato products, but fresh tomatoes exports are currently limited. This might be the start of a new development, as with domestic production increasing, exports are more attainable.
North America: Good demand for tomatoes but concerns about pricing and ToBRV pressure
Supplies of tomatoes are slightly uneven right now. Supplies on field-grown tomatoes, 5x6s and Roma tomatoes have improved and are back down around the $1/lb. range--this is coming down from a lengthy run at $2/lb., particularly following Hurricane Ian at the end of September.
“However premium TOV (tomato on the vine) supplies have tightened dramatically the end of the year,” says one greenhouse grower. “It sounds like there were a lot of pre-planned ads to move expected larger supplies around the holidays, but the supply just wasn’t there to support that and a lot of short buys sucked up what was available in the open market. Going into 2023, we are seeing spot market prices for clusters approaching $3/lb.”
Following Hurricane Ian, grape tomatoes were also pricing over $2/lb on bulk product and over $3/lb on packaged dry pints. “Supply has since improved, and the pricing has dropped to more or less average. Currently the premium on the vine snacking sector is over supplied,” he says.
Industry-wide in greenhouse production, product is coming in from Mexico and some lit product from Canada as well. “Most of the new domestic greenhouse builds in the U.S. are outfitted with HPS or LED grow lights so the majority of the domestic supply is in production as well,” says the grower.
As for demand, it appears to be average to good for this time of year with pricing mainly being driven on the supply side.
On the growing side, there is also a continued focus on the Brown Rugose Virus, a disease the industry has been dealing with for a few years now and has caused hardship via it reducing plant vigour, compromising quality, and shorting the longevity of an otherwise productive crop. “Growers are learning to adjust and adapt, utilizing different cultural and labour practices, enforcing workforce isolation and using excessive sanitary procedures,” says the grower.
Meanwhile other industry challenges include increasing energy costs which have made wintertime growing more costly. “As one of our largest expenses for winter production, these hikes in utilities, first spurred by the distant war in Ukraine, have lingered, directly affecting our bottom line,” says the grower.
As for pricing, on a rolling four-year trend, December 2022 saw above average pricing, though the sentiment is that higher pricing is needed in winter months to sustain healthy operating margins. “All of this increased costing we’ve been experiencing paired with below average yield due to disease pressure, means that at the end of the day the tomatoes have to be worth more. Otherwise, growers will just stop growing,” says the grower. He notes that the company’s European partners have reported that many greenhouses outfitted with lights for winter production, will not be producing this time of year due to costs.
Looking ahead, however, movement is typically good in the new year thanks to healthy eating resolutions. “There’s usually not too much new supply entering the market this time of year and January tends to be one of the strongest months as far as pricing goes. So, in the short-term, I expect pricing to hold,” says the grower.
However, with decent field tomato availability again at the $1/lb. pricing, that will put pressure on other items, including hothouse tomatoes. “There’s also the unknown around the virus, forcing crops to end early and shifting cropping cycles out of their normal timing we’ve seen in past years,” says the grower.
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