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Prospects of price gains amid smaller European kiwi crop

The world’s top kiwifruit producer and consumer, China, is set to again grow about 1.3 million tons, while the Northern Hemisphere’s next biggest growers, Italy and Greece, are in line for lower output.

Europe’s kiwi growers have hopes for better prices this season with new estimates showing their 2016/17 kiwi volume is forecast to slip 5% on the previous season, to under 700,000 tons. Though kiwi giant China should again come in with 1.3 million tons – double the combined crop of the Southern Hemisphere’s New Zealand and Chile – the total Northern Hemisphere crop is poised to be down 5% to just under 2.03 million tons.

Italy, then Greece, are Europe’s main kiwi producer countries and in the case of the former, Italian produce association CSO expects the major Italian growers and distributors – Apoconerpo, Jingold, Naturitalia, Agrintesa, Spreafico – will harvest 20% less kiwis, a total of 469,000 tons, of which 400,000 tons will be marketed. A key reason is that plantation yields have been below average in southern and central parts of Italy.

Less kiwis from Greece, more from Spain Greek growers expect to harvest 145,000 tons, a result 15% leaner than the previous season. The kiwi plant needs a cold winter, followed by a sunny spring, but winter was mild in the Thessaloniki region, causing bad flowering and less buds. In Spain, however, increased investment in new plantings in Galicia (673 ha now planted) is paying off in the shape of a 12% rise to 16,000 tons, Growers in Turkey and Romania are also planting more kiwi plants and seeing production pick up.

But the broader backdrop of lower European production is generating hopes for better prices among Europe’s growers. This year they expect to fetch €0.35 to €0.40 a kilo for good sizes and quality, while last year the price did not exceed €0.30/kg. This season started well and with demand for premium European kiwi growing. In Italy and France, growers gained licences to grow limited quantities of the yellow kiwi Zespri SunGold.

Boost to kiwi promotions With the EU’s help, growers and packers have developed new promotional activities which will further enhance cooperation and open new markets, and means less kiwis will remain in storage this season. French, Italian and Spanish packers are planning to ship extra fruit to other destinations, such as Japan and Taiwan. And over the next two years, new promotional activities will take place in major cities worldwide, for example, in Toronto and Shanghai. 

LH

This article appeared in the Kiwi produce report in edition 146 of Eurofresh Distribution magazine. Read more from that edition online here.

Read more kiwifruit news here.

 

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Sunny markets return for seed potatoes

The seed potato crop now covers almost 80,000 ha in North-West Europe

The main countries producing seed potatoes are the Netherlands with 40,180 ha (unchanged compared to 2015), 20,023 ha in France (+3.2%), 15,912 ha in Germany (-2.4%) and 2,257 ha in Belgium (-9.2%). Annual changes in the multiplication area indicate which variety is finding its place on the market or which is hardly moving. The chart gives the figures for the last 5 years for the main varieties by category.

Mid-early varieties gaining space

All the main varieties in the early segment are declining, while the mid-earlies are gaining space. Premiere is present in the 4 countries but comes second in the earlies ranking, behind Sinora, due to a sharp decline (21%) this year. Friselander, Anosta and Berber complete the top-5. In mid-earlies, Felsina (multiplied only in the Netherlands) is on the rise. Artemis (fresh market) is decreasing and Miranda remains steady. Processing factories are looking for fewer earlies and mid-earlies as they want to continue later and later into July with old crop tubers kept in high-performance storage facilities.

Varieties for seed export markets

This is a very competitive market where it is hard for new varieties to find a place. Spunta always leads the ranking thanks to demand from the whole Mediterranean basin (the South of Europe and North Africa), and this year has gained some hectares, rising to 8,000 ha in these 4 countries. Desiree, Kennebec and Jearly are increasingly produced less and less and replaced by a lot of varieties adapted to local growing and ware conditions. The European export trade is mainly towards the Middle East, North Africa and Southern Europe.

Varieties for European fresh market

Annabelle dominates the firm flesh category (waxy potatoes) but is losing hectares for the second consecutive year. Charlotte (mainly multiplied in France) is increasing this year but has been on an up and down trend for the past 10 years. Hansa and Nicola are decreasing but still ahead of Allians. Jazzy is booming and has taken over the 6th place from Cilena which has been falling for 4 years now. In floury varieties, Agata is by far the top variety, ahead of Monalisa. Both are present only in France and the Netherlands, with similar areas in each country. In this category all the breeders are searching for a variety with a (very) high yield, good washability and an acceptable frying colour to supply the European and export markets. As this is not easy to select, the existing varieties are holding their place.

Processing varieties

These varieties are being pushed higher by fast growth in European processing activity, with major developments worth noting: Bintje (-19%) has slipped to 4th place behind Fontane (+23%), which has clearly taken over the leadership, Agria (+12%) and Innovator (+10%). Challenger has lost 18% and returned to its 2014 level. All the other major varieties are also on the increase with the exception of Ramos (-35%). Lady Anna is booming (+75%) at almost 400 ha of seed multiplication. The crisping varieties are dominated by Lady Claire, with more than 1,000 ha, despite a 15% fall this year. It is followed by Hermes (+24%), Lady Rosetta (-4%), Pirol (+4%) and VR808 (+8%). Changes are expected in this category in the coming years.

Fast improvements inorganic varieties

Organic potato production has been increasing very fast in recent years. Varieties with more resistance to late blight are difficult to develop so a variety like Agria is still mainly used (thanks to its relatively good tolerance to late blight on the leaf and very good French fry quality). Carolus, Vitabella and Sarpo Mira are going up considerably. The other varieties in the top 8 are going down.

LH

Seed potato image: ‘Early Rose variety seed tuber with sprouts’ by Mathias Karlsson (Own work) [GFDL, CC-BY-SA-3.0 via Wikimedia Commons

 

 

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China opens its door to more imports

China continues to increase its trade deficit in fresh fruit, with a 33% jump in imports of fruit from temperate zones in 2015

According to UN statistics, in recent years China’s imports of fresh fruit and vegetables have exceeded its exports, a trend that continued in the first half of this year. In 2015, China’s tropical fruit imports reached 2.9 million tons, up 8% yoy, and fruit imports from temperate regions climbed 33% to 0.75 million tons.

Thailand was again the biggest fruit exporter to China in 2015 – its 1.7 million tons accounting for 57% of the total volume – followed by the Philippines and Ecuador. The latter two being big exporters of bananas.

Though China is the world’s second largest banana growing country, with about 12 million tons annually, it is eager to top up its banana stocks, especially over winter, taking imports of 0.95 million tons.

Its imports of the high quality Ecuadorian banana rose to 283,00 tons but the opposite occurred for bananas from Costa Rica – which went from supplying 11,000 tons in 2014 to almost none in 2015.

Dragon fruit the king with 813,000 t

In 2015, Chain’s main import, other than bananas, tropical fruits by volume was dragon fruit (up 30% yoy to 813,000 tons), lychees and longan (405,000 tons), durians (300,000 tons), watermelon (200,000 tons) and mangoes and mangosteen (113,000 tons).

Thailand is the source of more than 90% of this fruit and dragon fruit accounts for about half of its tropical fruit exports to China. It is also the exclusive exporter of durian and dragon fruit. Vietnam exports 148,000 tons of fresh lychees and longans, both stalwarts on Chinese menus. Malaysia and Taipei supply China with mango, as does Australia with modest quantities in the off-season.

The volume of all fruit imported by China from Vietnam in 2015 was just over 158,600 tons, down 10% on 2014. Imports from Myanmar remained stable at under 70,000 tons. Indonesia and Malaysia both export less than 10,000 tons a year.

548,000 tons grapes, citrus, cherries and kiwifruit

China’s total imports and exports of deciduous fruit, kiwifruit and citrus are increasing constantly. In 2015, grapes had the largest volume (251,000 tons), followed by citrus (215,000 tons), cherries (92,000 tons), kiwifruit (90,000 tons) and pears (8,000 tons).

The biggest exporter of these kinds of fruit is Chile, which with an export volume of nearly 200,000 tons – mainly consisting of grapes and cherries – accounts for almost a fifth of China’s total. The US comes second with 126,000 tons – up 50% yoy.

Promotions have helped the US almost double its citrus exports to 40,000 tons, while South African citrus is a winner in summer (100,000 tons). New Zealand ‘Jazz’ apples found their way to Chinese supermarket shelves, while Zespri could overcome its tax problems with the Chinese authorities. Exports of kiwifruit increased more than 50% to 66,000 tons. In 2016, New Zealand surpassed the US and Chile to become China’s top apple supplier.

The market for Australian and Egyptian citrus opened up and exports reached 35,000 tons and 21,000 tons respectively. China’s neighboring country Uzbekistan is a larger supplier of grapes.

EU fruit shipments down since 2015

In 2015, the volumes of EU fresh fruit exports to China went down to 24,000 tons. Citrus imports achieved a poor 4,000 tons, while imports of kiwifruit from France and Italy went down to 12,000 tons. In 2016, a special effort was made to ship trial volumes of Belgian and Dutch pears and bi-colored apples from Poland. For 2017, Spain has high hopes for the results of a protocol signed between it and China allowing it to export peaches and plums there.

Since the Russian food embargo was applied in 2014, fruit and vegetables formerly exported to Russia have been partly reoriented towards certain Asian countries such as China and the Philippines, markets which were already open before 2014.

South East Asia – China’s main partner

On the export side, Southeast Asia remained the key market for China’s fruit, with Thailand at the top by far, followed by Vietnam and Malaysia, in terms of volume, Data shows exports to these countries have increased substantially every year. China’s top fruit exports are apples, grapes and citrus.

LH

 

 

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How sustainable is the banana industry?

Four of the Voluntary Sustainability Standards (VSS) used in the banana industry were covered in an Intracen/UN survey – Fairtrade International, Organic, GlobalGAP and Rainforest Alliance/SAN – certifying banana production in 10 major banana-producing countries.

Four of the Voluntary Sustainability Standards (VSS) used in the banana industry were covered in an Intracen/UN survey – Fairtrade International, Organic, GlobalGAP and Rainforest Alliance/SAN – certifying banana production in 10 major banana-producing countries.

GlobalGAP had the largest VSS-certified banana area in 2013, whereas the area with most growth (2008–2013) was seen for Fairtrade International. Fairtrade bananas are cultivated by 11,600 small-scale farmers and 10,100 plantation workers, who are represented in 123 producer organisations. Fairtrade International certified 33,000 hectares of bananas in 2013, meaning 5% of the global banana export area. More than 620,000 metric tons were produced. The countries with the largest areas were: the Dominican Republic (11,416 hectares), Ecuador (6,401 hectares), Peru (5,286 hectares), Colombia (4,644 hectares) and Ghana (1,367 hectares). Together, these five countries represented 88% of the total Fairtrade International banana area. This area has increased by almost 60% since 2008.Organic bananas represented almost 8% of global banana exports, with more than 48,000 hectares (estimated harvested area). An estimated 850,000 metric tons were produced in 2013.The Dominican Republic (22,000 hectares), Ecuador (10,400 hectares), the Philippines (6,000 hectares), Peru (5,500 hectares) and Mozambique (1,700 hectares) had the largest organic banana areas, together representing almost 95% of the total organic banana area. Since 2008, the organic banana area has increased by almost 18%. About half of these organic bananas are also Fairtrade.

Since 2002 the EurepGap certification was import by the major retailers. In 2014 more than 223,000 hectares of bananas were GlobalGAP-certified, meaning 31% of global banana exports. The largest areas were in Ecuador (64,089 hectares), Colombia (43,690 hectares), Costa Rica (28,397 hectares), Guatemala (25,871 hectares) and the Dominican Republic (14,896 hectares), taking up almost 84% of the total GLOBALGAP banana area, which has declined by 6% since 2012.

By choosing Rainforest Alliance Certified™ products, consumers can support environmental, social and economic sustainability. Rainforest Alliance/SAN certification covers more than 109,000 hectares of banana land. Almost 3 million metric tons of Rainforest Alliance/ SAN bananas were reported in 2014 on 1,600 farms, accounting for 15% of global banana export volume. Six countries represented 90% of the total Rainforest Alliance/SAN banana area: Costa Rica (22,475 hectares), Guatemala (26,126 hectares), Colombia (14,731 hectares), Honduras (9,560 hectares) and Panama (5,618 hectares). This area has increased by 28% since 2008. These different kinds of certifications identify which produce is organic, Fairtrade, etc. These allow major retailers to meet the demand for sustainable produce. The issue with this is that the retailers are not necessarily willing to pay a premium for it. The advantage, however, is that the growers/exporters gain access to retail stores in the EU. The table below shows that countries with a large area of certified land increased their market share over the last quarter – particularly when the produce carries a Fairtrade, Organic or Rainforest Alliance Certified logo. Unfortunately, there is no independent agency that verifies whether the claims carried by these products are true.

LH

 

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A win-win situation with Africa

More than a million tons of fruit and vegetables are exported by the EU to Africa

The European Union’s imports of fresh fruit and fresh vegetables from outside the EU remained stable at 11.8 million tons (worth almost €11.8 billion) and 1.6 million tons (€1.7 billion) respectively in 2015. A 3% increase in volume is visible compared to 2014. Imports of fresh fruit are largely being complemented by developing countries. South-Africa is the largest African supplier, shipping citrus, apples and pears in large quantities to the EU, while mangoes come from West Africa and some avocados are shipped from Kenya. As for vegetables, most are supplied by producers in the EU, neighbouring countries, Africa and Israel. In winter, African vegetables go to Europe.

1.2 million tons of vegetables from Northern Africa

In 2015, about 1.2 million tons of fresh vegetables were imported into EU28 from Africa, representing a market share of 73% that remained stable compared to the previous year. There are only two countries dominating the market: Morocco and Egypt. Early potatoes are a much loved import, with 151,000 tons imported from Egypt and a rise of 26%. Moroccan potato growers added 6,000 tons, too. Together with Israel, they supply the bulk of the early potato imports.

The story of winter tomatoes is well known and under heavy attack from Spanish growers import volumes stabilised at 390,000 tons. Huge foreign investments in the Senegalese and Tunisian tomato industry were not profitable and volumes fell to 13,000 tons and 10,000 tons respectively. Out of all the winter tomatoes imported into the EU, 84% came from these 3 countries. In winter, squashes and courgettes are more and more on the European supermarkets’ order lists. Morocco was able to sell 3% more, reaching 141,000 tons, but Egypt, Kenya, Senegal, Tunisia and South Africa are smaller players in this market segment. The European production season for fresh beans and pulses is mostly limited to July and August, when beans and pulses are among the most widely grown vegetables in Europe. Italy and Spain are the largest producers of beans, whereas France and the United Kingdom are the largest producers of peas. European production of sugar snaps and mange touts is lower than for fresh beans and pulses, but it is growing as these products are becoming more popular.

Outside of Europe, fresh beans and pulses are also grown extensively in Asia and Africa, as well as in South America (e.g. sugar snaps in Guatemala), who are strong suppliers to European supermarkets. Morocco, Egypt, Kenya and Senegal have an export market of 196,000 tons, of which Morocco takes 65%.

Importance of CSR, transparency 

Most of these fresh vegetables sold in the European market are sold through large supermarket chains and specialist shops. Large supermarkets have very strong purchasing power and buyer requirements are very important for them. For all vegetables, quality during harvest and shipping, as well as Corporate Social Responsibility (CSR), are becoming increasingly important, as well as supply chain transparency and information sharing. Long-term partnerships are desired by EU buyers to ensure product supply and quality. Worldwide production is increasing and competition is very fierce. Temporary shortfalls in supply or demand (e.g. through border closures) have a huge impact on prices. Certification and fulfilling both legal and non-legal requirements are major obstacles for producers and exporters entering the market. This said the fact that the majority African countries are not yet capable of having an outlet to the European market.

African imports of 452,000 tons of European onions

In 2015, apple and pear growers from Europe produced large volumes, especially Poland, seeing impressive apple production. Belgian pears were also abundant and the Dutch onion crop reached a record of 1.5 billion tons. The Russian boycott in place since August 2014 affected the whole trade. It was obviously nice to have such a volume market it, but when this door closes, operators look for new ones elsewhere. In 2015, the Netherlands the onion trade saw success, achieving record exports. Total EU onion exports, of which 95% are produced by the Dutch, reached 851,000 tons, up 20% compared to the year before. The challenge for onion exporters was to find gaps in the world between the old and new local harvests. West African countries offered a solution and bought 452,000 tons, up 14%. FOB prices per kg increased to €0.26 kg. Senegal remained the largest importer with 153,000 tons and Ivory Coast bought 95,000 tons, up 43% with at competitive prices. They were followed by Guinea with 53,000 tons. Fifteen other West African countries sourced onions in the Netherlands. West-African countries now buy more than half of European onion exports.

African apple imports of 480,000 tons

The loss of the Russian apple  market was not fully compensated by sales into new markets. In 2015, EU apple exports to the world reached 2.1 billion tons, down 5%. Africa helped and bought 480,000 tons, up 10% on the previous year. The largest volume of 227,000 tons went to Egypt, 46% up on the year before. About 8% fewer French apples were sold in Algeria and Italian apple exports to Lybia dropped by 31%. This is in contrast to improved sales in almost all West African countries, which is an indication that the local population is liking the taste of a sweet apple more and more. Africa is becoming an important outlet for European apple exports, taking a 23% market share. 

LH

Composed satellite photograph of Africa by NASA, Public Domain, https://commons.wikimedia.org/w/index.php?curid=10199518

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Bananas from Ecuador in Asia to stay?

Asian consumers really like Ecuadorian bananas, which is why the country’s exporters forecast that these quantities will be repeated for 2015 and 2016, or even increased slightly up to 17 million boxes.

Weather problems in the Philippines in 2014 created opportunities in the Asian market that Ecuador’s banana exporters hope will endure.

Ecuador has always exported to Asia. But until now, only insignificant volumes were being shipped, because even though the quality of Ecuadorian produce was better than the local supply, the shippers could easily be priced out of business. Year-end figures for 2013 showed exports of just 3 million crates. But in 2014, the Philippines had weather problems and was unable to supply its market share, leaving the window open for Ecuadorian operators to export an impressive 16 million boxes.

Asian consumers really like Ecuadorian bananas, which is why the country’s exporters forecast that these quantities will be repeated for 2015 and 2016, or even increased slightly up to 17 million boxes. Even when Philippine fruit comes back onto the market, it seems likely that Asian consumers will continue to appreciate the good prices and high quality of bananas from Ecuador. But this all remains to be seen, depending on market stability.

For Ecuador, last year 2015 was unusual, with constantly low prices. Historically, the campaign is split into two periods: high prices and low prices. Annual report graphs outlined how one season and the high-priced period minimised the losses that occurred during the low price periods. When doing the books, it was usually considered a “good” season. Nevertheless, in 2015 the price of Ecuadorian banana suffered no periods of variation, and instead remained stable. This new model gave rise to concern and uncertainty in the sector, with exports to Asia most likely to suffer.

LH

This article appeared on page 80 in the News section of edition 141, Jan/Feb 2016, of Eurofresh Distribution magazine. Read that issue online here.