The prices of organic vegetables, including tomatoes, are under pressure this year. According to David Caparrós, of Balcón de Níjar: this is mainly caused by the fact that some entrepreneurs market organic vegetables as traditional vegetables, which disturbs the market.
"Since November 2018, we have had organic tomatoes on offer that are about 20% larger than those of the previous season; a result of a warmer winter than usual," says David Caparrós, director of Balcón de Níjar. According to the trader, good prices were paid for traditional tomatoes up until January. The prices were even higher than those paid for organic tomatoes. This led many 'mixed' entrepreneurs (those who work with traditional, as well as organic tomatoes) to sell organic products as conventional products.
Although this 20% increase in the supply up to January did not have much of an influence on prices, "many 'mixed' entrepreneurs started selling their organic production as such from the moment the price for traditional tomatoes started to decline. Since then, we have noticed a greater pressure on sales. It is not normal for such low prices to be paid during this time of the year, when there is generally less volume available prior to the start of the harvest in Central Europe. At this time, the prices paid should be the best of the season. Three seasons ago, we had similar volumes and prices were much higher."
According to David Caparrós, the profit margins of organic vegetables have been reduced in recent years, mostly due to the cost of the investments in production resources and, in particular, to the decrease in the average prices paid for organic products. "With traditional products, more is sold when prices go down, but with organic products this strategy doesn't work; the only result is lower margins with the same sales volume. Moreover, the production and labor costs for organic cultivation have increased in recent years, while prices have generally declined."
Balcón de Níjar is specialized in the export of organic tomatoes to countries in Europe. They mainly export cherry tomatoes, as well as loose tomatoes, plum tomatoes and on the vine tomatoes. Recently, they have also introduced a line with special tomatoes, with very limited volumes of varieties such as Kumato, Raf and Rosa. They also sell organic peas and have recently started working with eggplant, zucchini and bell and Palermo peppers to be able to meet the orders from their customers in Spain.
"We have very good prospects for the Palermo peppers, which we'll be working with for the first time this year. In recent years, the demand for this product has increased strongly in the summer, and the supply in Spain is not very large, because of the difficulty to grow this pepper with high temperatures," explains David Caparrós.
The director of the Almeria-based company expects the available tomato volumes to decline in the coming weeks, despite the sustained high temperatures, as the cycle of the plants is already very advanced.
Caparros is currently pessimistic about the possible consequences of Brexit for the sale of tomatoes. "As the date draws nearer, it becomes clearer that this situation will not end in a very positive way." In addition to the depreciation of the pound, which will make us less competitive as exporters, if there's a no-deal Brexit and tariffs increase, sales will be affected. Normally, we start negotiating our programs with the major British chains around this time, but because of the uncertainty surrounding Brexit, things are currently very quiet."