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EU avocado prices to lower over the long-term

EU avocado prices to lower over the long-term

The world’s production of Hass avocado is estimated to grow on average by around 230,000 tons per year over the next five years, an increase of 14%. The US and the EU markets currently receive about 90% of global avocado imports, with imports increasing on average by 85,000 and 70,000 tons a year respectively over the last five years. Despite growing demand, the Asian avocado market still relatively small, with China and Hong Kong together importing 53,000 tons in 2017.

After climbing steadily for several years, avocado prices in the EU dropped in 2018. The dramatic fall in the summer was mainly due to the increased supply from Peru, where exports have tripled. And the EU avocado market looks set to change for good, with established producers like Mexico and South Africa increasing output, joined by new producers like Kenya, Colombia, Brazil and Morocco. Avocado supply to the EU will continue to grow and result in mismatches similar to those witnessed last summer.

There is still plenty of room for Europe’s avocado market to expand further. In 2018, the EU’s avocado supply reached 636,000 tons. Per capita consumption is 1.2 kg per year. If consumption across the region rises to the level of the Nordic countries (just over 2 kg), the market could reach over 1 million tons. Particularly in southern Europe, Eastern Europe and Germany, avocado consumption is still rather low.


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Global banana market in crisis

banano mundiall

After 2018 got off to such a positive start in terms of both price and volume, the banana market has experienced a rapid fall in prices since April due to overproduction. This crisis, which started in Russia before moving westwards, comes at a time when negotiations are set to begin between Europe and the countries of the dollar zone with a view to lowering tariffs. This crisis has been on the horizon for some time now and has only been averted thus far by adverse weather conditions lowering output. But the long-expected trouble now appears to be at the gate. The exceptional beginning to 2018 has made the subsequent fall that much more dramatic. Prices have fallen from a record high of €18-19 to a record low of €3-4.

The oversupply derives from the huge international production base which has grown to meet the rising consumer demand. Meanwhile, productivity is also rising and other producing countries are re-emerging such as Honduras and Nicaragua. West Africa is also expanding (with the noteable exception of Cameroon.)  

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Del Monte focus on Russia, a promising and challenging market

BANANA Delmonte2

Russia is a market full of opportunities, it’s actually the 8th largest grocery market globally, but it’s also a challenging one! That´s why Del Monte’s Vice-President, Mohammed Abbas, said: “Our focus is Modern retail, a segment that represents 70 % of the market, 24 % of it belonging to top 5 retailers*. By addressing this key target, not only does Del Monte reduce the risk by working with insured companies, but it benefits from a good brand exposure with its end consumers.”

During this season Del Monte’s strategy will consist in 3 key pillars. First, to increase the product range: Del Monte started cooperating with one of the largest importer of bananas in Russia and hope thus to develop brand awareness and get Russian buyers accustomed to bananas from Costa-Rica. Del Monte is also considering other products such as Jet Fresh pineapples, figs, herbs and other exotic fruit shipped by air. Second, to offer additional solutions: Customization is more and more requested and alongside with fruit shipped in standard packaging, Del Monte is offering various types of consumer packs for bananas. Another example is Del Monte Pineapple peeling stations. They provide strong support accompanying long-term programs for pineapples. The impact of peeling pineapples on a live station in front of customers has a positive impact on sales by 10 times. And Third, to extend the geographical coverage:  Vladivostok market and CIS countries such as Ukraine, Georgia, Armenia, Azerbaijan are part of Del Monte’s expansion plan.

About the Russian experience, Abbas also says: “Del Monte learned 2 important lessons from its experience in Russia:  to be patient as contracts are complicated and might delay the operations. And also to be persistent as local buyers can be quite conservative and reluctant to change their habits. For example, they would tend to prefer Ecuadorian bananas over other sources and consider pineapples as new year fruit or fruit for decoration”.

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The unique nature of the UK tomato market

tom uk

The UK’s tomato market is unique and very diverse. The average consumer in the UK eats 160g of fresh tomatoes per week. While the UK produces around 92,000 tons of its own tomatoes each year (mainly in Lancashire, Yorkshire, Kent and Sussex), approximately 400,000 tons are imported, mainly from Spain and the Canary Islands, especially during winter, with cherry and plum tomatoes also imported from the Netherlands, Israel and Italy. Of the tomatoes to be found on the shelves of UK retailers, 70% are loose and 30% are vine. UK consumers are very demanding when it comes to selecting their tomatoes, with 14% of all tomatoes purchased organic and 23% premium.


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No shortage of banned fruit and vegetables in Russia

The embargo on EU and US products proves ineffective

The embargo on EU and US products proves ineffective

Despite the embargo imposed by Russian authorities on imports of certain products from the EU and the US, Russia’s supermarket shelves are teeming with apples, pears, peaches, apricots, cherries, tomatoes, aubergines, spinach and asparagus. By going through numerous intermediaries (as indicated by the accompanying documents), these fruits and vegetables make it through customs and phytosanitary controls. The exporting country, as indicated in the documents, is often one that has never previously exported to Russia, such as Liberia or Sierra-Leone, or one that does not even grow such products. For instance, Belarus is cited as a kiwi and pineapple producer.
Russia’s agricultural produce inspectorate, Rosselkhoznadzor, together with the customs office, has been taking to steps to detect such falsifications and is constantly adding to the list of “dubious” countries which are forbidden from exporting fruit and vegetables to Russia. These steps, however, are not proving very effective as each new ban merely leads to the emergence of new off-shore go-betweens.
Although the offices responsible for conducting inspections of imported produce regularly report uncovering containers of produce subject to embargo, this is mostly for show. Careful scrutiny of customs data makes it clear that these detected illegal batches are simply a drop in the ocean. For example, in the first five months of 2016, Cote d’Ivoire alone exported to Russia, Belarus and Kazakhstan more than 15 million tons of produce valued at almost US$100 million, and to Bosnia and Herzegovina 13.6 million tons worth US$13 million. Therefore, although Rosselkhoznadzor will continue trying to enforce the embargo, banned fruit and vegetables will still find ways into Russian supermarkets. After all, where there is demand, there will be supply. 


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Chinese blueberry market growing exponentially

China is bursting for more blueberries.

China is bursting for more blueberries. The market is growing exponentially, according to Eric Li from Yiguo. Yulei Zhao from Haisheng confirms the rapid growth of the blueberry market in China.

The Chinese area was 113,300 hectares of strawberries in 2014, spread out from the north to the south of the country. Production amounted to more than 3.1 million tonnes. For blueberries, the area was 27,100 hectares, good for 26,100 tonnes of production. The raspberry cultivation is small, with 8,500 hectares. “Looking at trends, we can see that strawberries are showing a stable growth,” Yulei says during the Global Berry Congress. “The market for blueberries is growing exponentially.” That is underlined by the latest figures, which indicate an area of more than 31,000 hectares and a harvest of more than 43,000 tonnes. “Raspberries are a relatively new product in China, but the market has been growing since 2013,” Yulei continues.

Prices for blueberries are considerably higher during the winter months, compared to the summer months. That’s why Haisheng is looking for a good position on the market at times when prices are attractive. The company is active in the trade of extracts, but also in the cultivation of various products, including soft fruit. Compared to other product groups, the soft fruit segment is small. The company has ten cultivation locations for strawberries, with a total area of 160 hectares. The area for blueberries is 248 hectares. Raspberry and blackberry have an area of 7 and 1 hectare, respectively. The areas for apples and oranges are larger. The apple cultivation amounts to 3,400 hectares, the orange cultivation is 540 hectares.

China is facing a unique challenge. The transport distances to reach the domestic market are often hundreds of kilometres. Besides, the Chinese prefer fruit with high brix levels. “Integrating modern technologies is the key to improve production,” Yulei concludes.

Eric Li is more focused on the sales on the Chinese market. E-commerce plays an important part in that. In 2015, the market for online purchases increased by 36.2 per cent in China. The online purchases of fresh products increased by 80.8 per cent in that year. Last year, five per cent of the Chinese bought their fresh products online. “In coming years, that will just continue to increase,” Eric says. The younger generation is pushing the increase. “They are too busy to do their shopping, but they want good food, without having to cook complicated recipes.”

In 2013, online giant AliBaba made a strategic investment in Yigou. The company, founded in 2005, sees an annual growth, and has more than ten DCs in China. And that number continues to increase. “In future, we will see a merger between online and offline,” Eric says. With that, he refers to the increasing trend of online shops opening physical stores.


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Prince de Bretagne asks us to take tomatoes out of the fridge

The French brand Prince de Bretagne is aiming for consumers not to put the product in the fridge...

The French brand Prince de Bretagne is aiming for consumers not to put the product in the fridge, but to leave it at room temperature. “The reason is because it loses flavour in the fridge. Historically, consumers have placed tomatoes in the fridge, but we want to raise awareness that this is wrong,” says Prince de Bretagne’s head of products, Pierre Gelebart.

Prince de Bretagne, with certifications such as GlobalGAP and Corazón de Coliflor, works with 2,300 producers who grow different vegetables such as cauliflowers, tomatoes and artichokes.