Europe in transition; Spain begins, Netherlands to illuminated cultivation

Storm damage drives up tomato prices North America

The European season is divided. The Dutch growers are switching to illuminated cultivation, and supplies from Spain and Morocco are starting. This results in contentment among Dutch growers. In Eastern Europe, the season is over, and export is coming to a halt. Italy is also in the market. In North America, storms have limited volumes and thus driven up prices. Although the open field cultivation was hit in particular by the weather, Canadian greenhouse growers also benefit from the good prices. In South America, tomatoes are only grown for the domestic market. This means there are hardly any players from abroad to invest, and technology is limited. Still, a surplus arose in Paraguay, causing prices to plummet. In China, prices were also lower than last year on average.

A Japanese breeder with branches all over the world discusses his expectations for the cultivation of tomatoes. Niche markets are becoming more important, and there is more attention for certain characteristics of tomatoes, such as flavour and colour. Shelf life is also becoming more important.



Netherlands: transition to illuminated cultivation
In the Netherlands, the first tomatoes from the Canary Islands have arrived. After the trucks, in week 45 or 46 the first ships will come in. The season is looking good. The Spanish season was delayed due to the warm summer, and with high demand that results in a good market. Last week, the Moroccan season started with the first cherry (vine) tomatoes and baby plum tomatoes, but the volumes aren't big yet. From November on, supplies from Morocco will increase.

In Dutch tomato cultivation, the non-illuminated growers are heading towards the end of the season. The head is out for most of them. Because of the increase in illuminated acreage, however, supplies of Dutch tomatoes, in winter as well, are higher than ever. That alleviates some of the pressure in summer too, but this hasn't been able to save the summer this season. Until mid-August, the season wasn't good, while the year started off well with limited production and high prices. After that there was a lot of light and high production and disappointing prices – but from mid/late August on, the transition has started. Since then, prices have been consistently good.

The season for the Dutch specialties is also drawing to a close. Price setting is good. The season started off well, but has had a few bad weeks at the peak. The bonus of the start of the year was gone then. But a month or two ago, the price started to rise, and it remained good. Snack tomatoes, cherry, cherry vine: the market for all small tomatoes is good.

The import from Spain and Morocco is slowly starting to emerge. Both are later than normal – last year we were already importing for 3 weeks, which is why Dutch growers are contented now. Most Dutch growers have already chosen their variety for next year, and the snack segment is growing. But that's been happening for years, and every year there's a fear of it growing too big. For now there still seems to be room in this growing market. The acreage for mid-size individual seems to be shrinking. Vine provides better production and a higher price than individual, so the acreage for individual will decrease, and that's causing some tension already.

Late start Spain, more specialties
Part of the Spanish growers have planted too late. Another part has planted, but that production was lost due to the heat. At the moment, Almería and Motril (Granada) are in production. The harvest has been delayed due to difficulties setting the tomatoes, caused by the warm weather. The prices are high due to this late start with small volumes, also for the conventional tomatoes. The availability of individual cherry and cherry plum tomatoes was better. The harvest is really starting now, so there is no shortage anymore. Only the vine tomatoes have been delayed. The prices are expected to go down, and the market will stabilize.

The production of specialties is increasing rapidly. That's a threat to this market, because as more growers get into specialties, the special nature of these tomatoes diminishes. That could cause problems among Spanish growers.

Warm summer delays season Italy
At the wholesale market in Bologna, the Dutch vine tomatoes are making good money, just like the cherry tomatoes (3.20 euros per kilo) and plum tomatoes (3-3.50 euros per kilo) from Sicily. Vine tomatoes from Apulia and Campania yield around 1.50 euros per kilo. Italy has twelve production regions: Piedmont, Lombardy, Veneto, Emilia-Romagna, Tuscany, Lazio, Abruzzo, Apulia, Campania, Sicily, Calabria and Basilicata.

Because of the start of autumn, the market for green tomatoes, San Marzano and Cuore di Bue, is stable. The cooler weather inhibits consumption of this typical summer tomato. Prices for these tomatoes are around 80 cents to 1.30 euros per kilo. The new season on Sicily will really start in December, an exact date is also dependent on the weather. The Italians expect a good season for the tomatoes.

According to one grower from Ravenna, Emilia-Romagna, the warm weather of last summer has delayed the harvest in September. Just like in northern Europe, the tomatoes developed more slowly, causing a shortage. For this reason, the prices are higher at the moment. Within two months, the gap in the market needs to be filled.

A grower from Apulia, who grows cherry tomatoes, says the season started off quietly. Because of the high temperature in July and August, there was a big harvest of good quality. In the other large production regions, an opposite trend was noticeable. Growers complain about a small harvest, which contributed to the high prices mid-September.

On Sicily, prices around 2.50 euros per kilo in August were satisfactory for growers. From week 41 onward, prices went down to 1.80 euros per kilo. For the summer season, the biggest problems are linked to the high temperature and heavy rainfall. For winter, an increase in volume for cherry and plum tomatoes is expected.

In addition to the fresh tomato market, Italy has a major share in processing the fruit vegetable. According to official statistics, Italian companies processed around 4.9 million tonnes of tomatoes in 2014. This gave Italy a market share of twelve percent worldwide, putting the country third in the global ranking, behind the US and China. Within Europe, Italy is by far the biggest tomato processor, with a market share of 54 percent and revenue of 3 billion euros.

Polish season over
In Eastern Europe, the tomato season is over. There is still some volume available, but the quality isn't good enough for export anymore. The main markets for Poland are Belarus and the Balkans, and there is export within the EU. The new season starts in spring, at the moment tomatoes are imported from the Netherlands and Spain. Prices are high at the moment, but they are expected to decrease rapidly in the near future.

Belgian market going well
The Belgian market for greenhouse vegetables is quiet, but the tomato market has been going well since August. Prices are between 1 euro and 1.30 euros. Earlier this week, supplies of individual tomatoes and vine tomatoes at the auction were low, but there wasn't a clear cause for this. The domestic season is drawing to a close, and the Spanish products are gaining ground on the market.

German market dependent on import
The start of the new season in Southern Europe hasn't been able to make inroads in the German market yet. Due to limited availability, prices are high. Tomatoes are among the highest-selling vegetables in Germany, the average German eats 8.6 kilos of tomatoes a year. The market is so big that self-sufficiency is out of the question. Not even during the peak of the season. The production of greenhouse tomatoes was 84,496 tonnes last year according to statistics, 22 percent more than in 2013. On average, the acreage grows by eleven percent a year. The main production regions are Baden-Württemberg, Bavaria and North Rhine-Westphalia, accounting for 51 percent of the German tomato production.

Switzerland harvests 50,000 tonnes
The acreage in the Alpine country is under pressure. According to the official figures, the acreage is stable to slightly decreasing at best. In 2014, about 40,000 tonnes of tomatoes were grown, and 8000 tonnes of cherry tomatoes were harvested. All in all, the volume amounts to 50,000 tonnes in 2014. Last summer's warm weather also caused the Swiss growers problems, it was particularly tough for greenhouse employees. The high amount of sunlight caused a peak in production, which in turn caused a shortage. These days, cultivation circumstances are back to normal.

Expensive tomatoes in Israel
In Israel, the recent high temperature has also caused a smaller harvest and high prices. In previous years, however, prices were bad, causing many growers to give up. This also caused the harvested volume to decrease. The shortage on the market is expected to continue until the beginning of December.

During a hearing in the Israeli parliament on the crisis in the market, the government was called on to ease the import restrictions, and to import tomatoes. In addition, the bad price setting in recent years also emerged as a cause for the shortages.

The prices can remain high because the government keeps the borders closed to import of tomatoes from competing countries. In winter, Israel exports tomatoes to Russia and Europe, but due to the exchange rate for these currencies, the situation for the exporters isn't easy. In addition, there are a few growers who export to the US, but the growers need to meet strict demands for that.

More round tomatoes from Morocco
The season has started calmly with the first cherry (vine) tomatoes and baby plum tomatoes, but the volumes aren't big yet. From November onwards, more volume from Morocco will become available. Although the acreage has stayed the same, various growers have switched from baby plum and cherry tomatoes to cultivating round tomatoes. Last year, prices for these tomatoes were good. On the domestic market, growers are making good prices for the unsorted round tomatoes, causing lower volumes to be exported to countries like Russia.

South America: production for domestic market
Spread across the continent, tomatoes are grown year-round. In Colombia for instance, close to the equator, a year has two seasons, a dry and a wet season. Tomatoes can be grown year-round there, by making use of varieties that are able to withstand the circumstances during these seasons.

Remarkably, there is hardly any export of tomatoes from South America. Import is also nil, most countries are self-sufficient. On the continent, Brazil is the market with the biggest potential, with a population of 200 million.

All Latin American countries are noticing the consequences of El Niño, although the effects vary. Certain areas are confronted with drought, while elsewhere more rain falls than usual. For the tomato cultivation, the effects on the market are noticeable in supply and price. So far, sufficient volume has been harvested, and import was out of the question.

Tomatoes are, together with carrots and onions, the most important crops to be grown in South America. But because the entire volume is sold on the domestic market, the market is calm, only the weather can influence the prices.

This trend also has consequences for the development of the sector, however. Investments need to come from the country itself, and few foreign parties enter the tomato production. While in Mexico, for instance, the production could increase significantly with the help of imported technology and foreign investors, that development is less noticeable in other countries on the continent. An investment in a Dutch greenhouse is far too high, generally a foil greenhouse is the highest attainable. The tomato market has two varieties: round tomatoes and plum tomatoes.

Low prices due to surplus Paraguay
Paraguay did have a surplus recently, which resulted in lower prices. One box of 18 kilos of tomatoes yielded 25,000 guaraníes (3.86 euros). That was a decrease of 5,000 guaraníes (77 cents). For the growers, not much remains. It seems that more and more tomatoes are entering the market at the same time, with only few coming to Abasto, the central market in the country. The trend points to more and more direct supplies to supermarkets, or more ending up at the consumer through street sales. According to reports, the surplus will continue for a few weeks to come.

US: storms drives up prices
In the east of the US, tomato production was hit by storms, causing shortages. In the whole of North America, demand is still high, which causes prices to be high. Although the storm mainly caused problems for open field growers, Canadian greenhouse growers also profit from the higher prices. While it's said that these markets don't influence each other, the truth is more nuanced. Consumers opt for a different tomato if a product isn't available.

At the beginning of this month, the harvest of Baja tomatoes in California started. The season runs until mid-January. The rainfall on the eve of the season makes it difficult to predict volumes.

Australia: mainly tomatoes for processing
For the 2014/2015 season, statistics speak of a production of 300,000 tonnes for Australia. For the coming season, growers in Australia reckon with a harvest of 310,000 tonnes. The weather conditions are positive during the planting season, with only two extremely hot days, no frost and little wind. The majority of the harvest is processed. Australians are among the biggest consumers of processed tomatoes, with a consumption of 23 to 24 kilos per capita each year.

For growers, the costs for water are the biggest challenge. The exchange rate is favourable though, making it improbable that imported tomatoes will be cheaper. The export is expected to be lower, with Asia and the Middle East being the most important markets.

Chinese prices under pressure
With a volume of five to six million tonnes per year, China is among the world's biggest tomato producers. The cultivation is focused in the Shandong, Hebei, Xinjiang, and Henan provinces. Half of the acreage consists of greenhouses. Between October and June, the greenhouse tomatoes are on the market, in the summer months the open field tomatoes follow. The peak of the season is in June until September.

In Xinjiang, prices are around 380 to 400 yuan (52-55 euros) per tonne. This means prices are lower than last year, when tomatoes yielded between 450 and 500 yuan per tonne. In the province, a subsidy for cotton growers has been cancelled, encouraging growers to switch to tomato cultivation. This has caused production to increase.

Thai cultivation difficult
The cultivation of tomatoes in Thailand is difficult, the climate doesn't always cooperate in the Chiang Mai region. With a special greenhouse, however, two Dutch entrepreneurs succeeded in realizing a yield of thirty kilos per hectare. With the specially developed greenhouse, they were able to establish virtually year-round production of tomatoes.


Every week, FreshPlaza publishes an overview of the market situation of a product in a worldwide context. With these articles, we're aiming to give an idea of a global market that's becoming ever smaller as a result of globalization.

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