This week, the global market report is slightly different from what you are used to getting from us. In recent days, the measures enforced by the various national governments have followed one another quickly. Therefore, this time we are having an overview of the consequences of those measures on global fresh produce trading.
Precautions are being taken in almost all countries: working from home as much as possible, warehouses not working at full capacity because of the space that must be kept between the employees, carriers who have to stay in their trucks and space restrictions in the companies. The demand is focused on the retail, although in some countries, this boom is already leveling off, now that people have already stocked up. The demand for citrus fruits is increasing due to their vitamin C content; however, Spain reports that there are hardly any stocks left and prices are rising. Meanwhile, avocado, mango and berry traders fear a drop in the demand for their products. When it comes to logistics, the shortage of reefer containers and the restrictions to air freight are the main factors affecting the sector. Road traffic in Europe is hampered by internal border controls. The growers are also concerned about a shortage of labor.
The Netherlands: Huge increase in supermarket turnover, while catering suppliers see turnover evaporate
Last weekend, supermarkets were the stage of bizarre situations. Despite warnings, there was hoarding of toilet rolls, hand soap or pasta, but also of fruit and vegetables. The CBL reports that some consumers have been buying much more than they usually do in their daily or weekly groceries. The consequences for the fruit and vegetable trade are very diverse. Supermarket suppliers have seen a huge increase in their turnover. Catering suppliers, on the other hand, are seeing their turnover evaporate. According to The Greenery CEO Steven Martina, the volumes last weekend exceeded those of Easter and Christmas. Catering establishments, on the other hand, have been closed since Sunday evening, so their situation is more troublesome. There are also major concerns on the import side, especially for suppliers at a great distance. It is very difficult to make decisions about trading with products that will arrive in three or four weeks. We now see this in preparation for the South African citrus season. Uncertainty is rampant," says Michel Jansen, of Total Produce. The focus seems to be mainly on products that are attributed to have beneficial effects, such as ginger and garlic, and products with long shelf lives, such as onions, cabbage and apples. The potato market does not yet seem to be benefiting from the situation. Market traders feel negatively disadvantaged compared to supermarkets now that many public markets have been closed, but in the Netherlands there is still no total lockdown, as in other countries. Growers who are missing out on sales are coming up with creative solutions, like drive-ins for the sale of their products. Also, more people than ever before in the fruit and vegetable trade are working from home. In general, businesses feel supported by the package of support measures that the government has announced.
Belgium: Potato sector the most affected
Although Belgium is certainly affected by the coronavirus, the consequences for imports are still not too bad. The supply of overseas products will continue for the time being, but this can change quickly. Flights are being canceled and the importers hope that the ports will not come to a standstill. Sales at the Center Européen de Fruits et Légumes (European Center for Fruit and Vegetables) continue as normal. Sales no longer take place in the gallery and the stalls are also no longer placed. The gallery remains accessible, but the center has called for orders to be placed if possible by telephone or email. In the potato sector, the companies that supply industrial kitchens and fast food companies with potatoes and chips are currently particularly affected. With regard to the orders for processed vegetables, there has been a drop in the demand from large caterers (schools, hospitals, etc.), although this has been offset by the greater purchases from retailers.
United Kingdom: Lack of workers will be the biggest challenge in May
The demand for fruit and vegetables is shifting from the food service to the supermarkets and hospitals. Now that people are stockpiling, the fruit and vegetable shelves in supermarkets are often empty. With a shift in the demand, more people are coming to the local supermarkets to buy large quantities of fruit and vegetables which have arrived directly from the wholesale market. The wholesale markets themselves are also opening their doors to the public for direct sales. The main concern among growers is mainly the imminent shortage of workers from Eastern Europe. This fear was already there with Brexit, but with the coronavirus it will only get worse. A grower suggested that the people working in hotels and restaurants could perhaps lend a hand, although he does not think they have the right mindset for that.
Germany: Imminent shortages of seasonal laborers and logistics workers
In Germany, there is as yet no reason to fear a lack in the supply of fresh fruit and vegetables. However, when it comes to the workforce within the sector, the trade association DFHV foresees major problems in the short term. "The current shortages of truck drivers will only get worse," said DFHV chief Dr. Andreas Brügger. He therefore argued for a relaxation of the preventive measures, so that logistic workers are not unnecessarily put in quarantine.
Seasonal workers are in a similar situation. At the moment, there is an urgent need for laborers in order to bring the first asparagus of the season to the shelves. "Growing fruits and vegetables is of no use if these cannot be carried from point A to B, or even harvested," says Brügger's urgent message.
Austria: Depressed mood in the country
In Austria, strict security measures are in place to prevent the further spread of the virus. Meetings with more than five people are not allowed and there is limited freedom of movement. “It is noticeably quiet on the street; the mood is very depressed. The supermarkets have been in complete chaos for a week due to massive hoarding and the wholesale markets are still in full operation.”
A trader who is mainly devoted to supplying catering companies reports a drop in the turnover of approximately 90%. "The government is speaking of compensation schemes, but whether this also applies to SME's remains to be seen." People are now trying to make the best of the situation, according to the trader. “We have been supplying fruit packs to private individuals for quite some time, and we will now be expanding this activity as much as possible. Many consumers are now avoiding public spaces, including retail stores, and prefer to have their food delivered.”
Switzerland: Dramatic scenes in supermarkets
Empty fruit and vegetable shelves have been spotted daily at Swiss retail stores for over a week. Daily order volumes are around 60% greater than normal, which has an impact on the logistics processes. "Efforts are being made to get orders from A to B in time." The situation is hectic and uncertain across the board, but it is still manageable.
France: Basic products are mostly the ones being hoarded
The French social life has largely stopped. Schools, hospitality establishments and shops selling non-primary necessities have all closed their doors. Anyone on the street without a valid reason risks a € 135 fine. Of course, all this is taking a toll on the fruit and vegetable market.
Just like in many other European countries, there has been plenty of hoarding in France. This has resulted in empty shelves and substantial turnover increases for the supermarkets. Supermarket directors and politicians continue to assure everyone that there will be no shortages and that there's no need to hoard, but consumers don't seem to care. The most popular products are basic ones, such as carrots, potatoes and citrus fruits. Luxury products, such as asparagus, on the other hand, are not doing as well. Those growers who normally sell large volumes to schools and catering establishments have been hit hard. They now have to search for other sales channels.
The logistics has become a lot more complicated due to the corona crisis. “For example, carriers do not want to run the risk of being stranded in Italy, so Italians now sometimes pick up the goods themselves in the South of France.” There are also more border controls, which results in delays.
Although the wholesale market of Rungis has closed its flower department this week, the trade in fruit, vegetables and other food products continues. This will continue to be the case, says Rungis director Stéphane Layani.
For the coming season, wholesalers expect volumes in fruit and vegetables to decrease somewhat; not because of a lack of volumes, but because many delays are still expected across the board. This is due to border controls, adherence to strict hygiene regulations and workers, including fruit pickers, calling in sick due to illness. Given this and also the high demand, prices are expected to rise. You can already see this happening with some products.
Italy: Citrus is doing well; shortage of workers ahead of the harvest
The whole country is in lockdown. The situation in the north is very bad, while in the south it is more under control for the time being. With some exceptions, Italians will have to stay inside their homes until April 3. Supermarkets are open, but tourism has disappeared and schools are closed, resulting in a sharp drop in consumption.
In some cases, the retail in Italy has increased its orders by 30%, while those of the hotel and catering industry have fallen by 80% in the last three weeks. Prices are currently good for suppliers, mainly because the availability of imported products has been reduced. For some, sales have increased by 40% or more.
Changes are being made to the programs in the field for the coming months. For example, stone fruit growers are leaving less fruit on the tree, so that their harvest will be smaller, but with larger sizes. Citrus fruits are currently doing well, but the demand for vegetables such as broccoli, cauliflower, spinach and artichoke has fallen. Artichokes are no longer harvested due to low consumption and the closed markets and restaurants. This product's prices have fallen by an average of 50%. The price for strawberries has also fallen by 40-50%. Meanwhile, the industrial tomato season is about to begin.
When it comes to the logistics, there are mainly problems at the borders with Austria, Slovenia and Croatia. For the time being, no problems seem to be arising in the ports. The wholesale markets are open, but with many precautions. However, traders see that their sales have halved. The shortage of workers remains a major problem. Many of these laborers are currently in their home countries and cannot, and/or won't go to Italy to help in the harvest.
Spain: Demand for citrus is rising, but stocks are almost empty
After Italy, Spain is the most affected country in Europe, with the virus having spread much faster than elsewhere in recent days. The country has been in lockdown since Friday. Records have been broken at the auctions, as far as products manage to get there, in any case. Growers are trying to harvest as much as possible and work longer to keep up with the demand from the supermarkets. Some traders have limited their sales to their customers, while others have speculated on the market. The demand for bananas and potatoes is particularly high and their prices have risen. In recent days, the price has fallen again, now that Spanish consumers are somewhat calmer and haven't been hoarding as much. This is a "rebound" effect that can be observed with many products. The demand for citrus fruits remains high and prices are rising, although there's not much left in stock in Spain. With an economic recession ahead, traders fear that the demand for luxury products, such as mangoes, avocados and berries, will fall.
Warehouses currently remain open with strict regulations for their workers, which is slowing down the production process. Exports to other European countries are increasing due to the growing demand for fruit and vegetables. The higher demand, problems in the production and rising costs have led to tension between importers and exporters. Many trucks are also returning to Spain empty. Further restrictions on unprocessed products may result in more problems for the sector.
Morocco: Borders with Europe closed
Morocco has closed its borders to Europe. This has stopped the arrival of Moroccan workers in Spain, which is creating a problem for the next harvest. Only 35% of the workforce is currently in the country, which means that not all products can be harvested.
Poland: Demand for apples is rising, borders are closing
The Polish borders are closed, with only goods for transport and Polish citizens allowed through, but the lines at the border with Germany are long. In fact, they are often longer than 20 kilometers. Meanwhile, the demand for apples in the country is rising sharply due to hoarding behavior. Companies report that they can continue working, although adhering to some safety regulations. Other traders fear a decline in the demand for fruit and vegetables because of their shorter shelf life, as schools are closed and sales channels are limited.
Hungary: "Severe staff shortages affect Chinese cabbage harvest"
The harvest season is about to start in Hungary. The first batches of Chinese cabbage will be harvested in the Central European country next week. "However, I have no idea how we we'll manage to do this, now that the seasonal workers from Romania are staying at home en masse," says a South Hungarian trader. This will certainly become a problem when the main Hungarian export products, peppers, tomatoes, cherries and plums, are also harvested, a trader predicts. Almost all corona infections have been reported in and around the Hungarian capital Budapest. Nevertheless, a full closure of the catering industry has been announced. In the retail, as in other European countries, there has been some hoarding behavior. "The fruit and vegetable shelves cannot be stocked up fast enough, especially in the case of products with a longer shelf life, such as potatoes, onions, carrots and canned vegetables.
Greece: The logistics is the biggest challenge
All tax obligations are currently suspended for Greek companies. That means that there will be no penalties if companies are behind in paying their taxes. In the meantime, sales are still made whenever possible, because fruit and vegetables remain necessary. The biggest challenge for a Greek exporter is being able to deliver orders on time due to problems at the EU's internal borders.
Turkey: Iran and Iraq borders closed; prices have fallen
While the European demand for citrus fruits has tripled, the Turks in the east have seen the borders with Iraq and Iran hermetically closed. The border to Syria is also closed, although political reasons also play a role there. Fruits and vegetables in Eastern Turkey have therefore been sold with discounts of up to 90%.
Some warehouses are currently closing and taking a 10 day holiday. All orders have now been shipped and sold at a lower price than usual. The number of infections in Turkey is increasing and it is feared that the country is following Europe's path. Transport is one of the biggest problems at the moment. Carriers do not dare driving to Europe and the controls at the European internal borders do not make transport any easier.
Israel: Workers unable to get to work because of closed borders
Everything in Israel is closed. Only supermarkets, pharmacies and other vital shops are open. The population has started to hoard, especially canned and dried foods, but also fruit and vegetables. People in the food industry are still allowed to work. The biggest problem, however, affects the field workers, as many of them are unable to show up to work because of the closed borders with, for example, the West Bank. There are also some problems in the packing stations. If you have permission to work, you have to stay two meters away from your colleagues and there is only room for a third of the total staff. Last week, there was a problem with an Italian freighter in an Israeli port, as there were fears that the crew had been infected. Although things are slowly improving in issues affecting the workers, everything in the fruit and vegetable sector in Israel is slower than usual.
India: The logistics will be a challenge
The recent pomegranate season ended in India with lower volumes. However, for the next season, which starts in June, a great yield (+30%) is expected thanks to the monsoon. The main market for the pomegranate seeds is Western Europe. Due to the coronavirus, Indians expect a greater demand for pomegranate seeds, since they are rich in antioxidants. However, the logistics is becoming a major challenge, because air freight is hardly possible. This could have effects on the logistics chain in India.
Thailand: Coronavirus is taking a toll on pomelo exports
Although the pomelos are of good quality this year and the volumes are good, with 3 million pieces of fruit, exports are expected to shrink significantly due to the coronavirus. The export of this product has been troubled by the virus since early 2020.
Ghana: Exports to Europe have completely stopped
Although the coronavirus has not yet arrived in Ghana, trade has come to a complete standstill because of it. European importers have been canceling their orders en masse. A papaya and pineapple exporter is currently making no shipments to Europe. The exporter hopes that the virus will disappear in the summer, when the mango season starts for him, as he has expanded the acreage this year. Meanwhile, it is necessary to look for other markets, but alternatives such as the Middle East have also been hit hard by the virus.
South Africa: Citrus industry awaits release of reefer containers from China
The impact of the coronavirus on apples and pears, the most exported fruits at the moment, appears to be minimal. The demand is good and there seems to be no reduction in it. In week 11, apple exports to the UK increased by 177% and those to the Middle East grew by 56%, while exports to East Asia fell by 34%. Cumulatively, at the end of week 11, apple exports to East Asia had increased by 42% compared to 2019. The same is true for pears, whose exports to the UK and Russia increased, while those to East Asia declined by 54%. By the end of the week, exports to all regions had increased compared to last year.
Citrus sales are currently strong and a grower thinks that this is a good way to test the logistics lines. Getting the products onto the shelves of European supermarkets can be a challenge.
The South African citrus sector is anxiously expecting China to free up ports and reefer containers for the industry, as the first large volumes of South African citrus will hit the market in May and June.
South Africa has also taken action. Transport documents are drawn up digitally, many people are working from home and warehouses are enforcing some rules. Schools are closed. For now, the disease has been reasonably well-contained in South Africa.
China: The country is slowly going back on track
China has done everything in recent months to get the virus under control. Over the last two weeks, more companies have been going back into production and the virus is under better control. The fruit and vegetable sector was an exception and had already returned to production during the difficult times when supermarkets had to be supplied with fresh products. Now all activities are being resumed and imports and exports are slowly starting up again.
North America: Air freight from South America and Europe hindered
Canada and the United States have been dealing with a lot of panic buying, but since there are sufficient fruit and vegetables in stock, there is no threat of shortages. The transition between the seasons and the rainfall in California are now a challenge. After all, they can result in lower volumes of certain types of fruit and vegetables. A shortage of niche products is also looming, as many of those special kinds of food arrive by air freight, and that is where the market's biggest problems now lie. For example, there is a reduced supply of golden papayas and ginger from Brazil on the Canadian market. The borders between the US and Canada are closed, but not for food. What the importers and exporters are weary about is a possible closure of the border between Mexico and the US.
Chile: Impact of virus on trade not yet visible
Schools and events have been canceled in the country, but the measures have not yet had an impact on the trade of fruit and vegetables. The country is now involved in the apple season, and the kiwifruit one will follow soon. For the time being, Chileans haven't yet seen an unusual rise in the demand for their products. However, the government is holding its breath with the approach of autumn, which will make people more susceptible to diseases. If the virus spreads, it could become a major challenge for the growers and packing stations in the country. However, the president has announced a "State of Catastrophe" for the next 90 days with far-reaching powers for the country's government.
Costa Rica: Demand for pineapples is increasing, problems mainly in the logistics
The pineapple harvest remains on track, while the demand from North America and Europe appears to be sharply increasing. One of the main challenges is finding reefer containers for export. This may push prices up in the coming weeks, but for the time being this is speculation.
Mexico: Biggest fear is US border closure
There have been few reports of infected people and the country has also taken few precautions. The avocado industry is trying to keep the market stable with sufficient products and to keep deliveries on schedule. For the winter vegetables, they continue to work at a normal pace, although some importers currently want to cross the border as much as possible. If the borders between Mexico and the US close, many exporters foresee problems.
Australia: Fear of labor shortages
The major impact of the coronavirus is an imminent shortage of workers in the sector. The Australian Fresh Produce Alliance is urging the government to extend the visas of all workers in the sector in order to guarantee the supply of fruit and vegetables to Australian consumers. Also, the availability of reefer containers and air freight to ship their products is a challenge for exporters. The government assures that the food logistics chain is working well in the country and is not at risk.
New Zealand: Putting people from other sectors to work.
As in Australia, the biggest challenge at the moment is an imminent labor shortage. To prevent this, the sector has proposed employing people from other sectors, such as forestry, for the fruit and vegetable harvest.
Next week: Overview global orange market