April 2022 Fresh Produce Market Report
The war in Ukraine appears everywhere we look, and without belittling the humanitarian crisis it also affects the produce we all buy. We are already seeing the effects in dairy, bread and a lot more. Ukraine is an incredibly important food producer in fact it is:
- 1st in Europe in terms of arable land area
- 3rd place in the world by the area of black soil (25% of the world’s volume)
- 1st place in the world in exports of sunflower and sunflower oil
- 2nd place in the world in barley production and 4th place in barley exports
- 3rd largest producer and 4th largest exporter of corn in the world
- 4th largest producer of potatoes in the world
- 5th largest rye producer in the world
- 5th place in the world in bee production (75,000 tons)
- 8th place in the world in wheat exports
- 9th place in the world in the production of chicken eggs
- 16th place in the world in cheese exports
- In peacetime, Ukraine can meet the food needs of 600 million people
Understandably the horrific situation dominates this month’s report. The thoughts of all of us are with the Ukrainian people.
The war in Ukraine has overshadowed European markets this week and although world demand for processed products is at an all-time high, there is much less activity in the free buy physical markets this week. Exports of frozen products to Russia, which have been halted, are reported to account for around 5 to 7% of total frozen product exports (12,000 to 20,000 tonnes of raw potatoes) per month but this could “easily” be taken up by demand from Asia. Buyers have held back from the physical free buy market and are taking a “wait and see” attitude.
Potato trade feels very subdued with prices weakening when other commodities such as wheat, fuel and fertilizer are escalating to highs never seen before. It is looking very likely that planted area of potatoes will be reduced based on the volume of seed still available. There is circa 25,000 tons of seed that didn’t come in from Europe this year due to sanctions post-Brexit and there is still surplus seed available from our UK producers. Growers can now lock into good forward prices for cereals for 2022/2023 which puts the future of the UK potato crop into more uncertainty.
Monday 4th April 2022 marks International Carrot Day. Carrots naturally come in many colours, flavours, and textures and contain different nutrients. White carrots are crispy, red carrots are starchy, purple carrots are spicy, etc. So how come carrots always seem to be orange and taste the same? One word, Netherlands.
During the 17th century, the Dutch tore away from the Spanish crown and to honour the Dutch royal family, the House of Orange-Nassau, they turned everything orange including houses, clothes, jam, candles, liqueurs, and, of course, carrots. Thanks to international trade, they spread orange carrots to the rest of the world until society barely recognized any other type.
Europe’s glasshouse growers are turning down the heat due to soaring gas bills, making high prices and shortages of salad veg likely in the UK.
The supply of tomatoes, cucumbers, peppers and cut flowers is predicted to fall from the Netherlands, where an estimated 2.4 billion cubic meters of natural gas a year is needed to heat 25,000 acres of high-yielding glasshouse.
Expect salad prices to increase towards the end of the Spanish season. Meanwhile, many British glasshouse growers didn’t go ahead with their normal January crop plantings because of high gas prices and the lack of workers.
More South African pears could end up in processing this season as the industry focuses on plans to counter Russian problems “Russia normally receives a specification of fruit which we cannot offer to other markets,” said Gysbert du Toit, marketing director at Dutoit Agri at Ceres.
South Africa is likely to export a record volume of apples and pears this season if present favourable conditions continue. In total, the apple and pear export volume is expected to reach 67.3m cartons, 32 per cent higher than the 2019 crop. We normally see apples rise at this time of year, but they seem to be steadily priced. We will wait and see what the impact of sending or not sending fruit to Russia will do to the European and UK markets.
The suspension of shipping services and payment transfer systems relating to Russia represent major new hurdles for the South African citrus industry.
In terms of the Russian market, the South Africans to a large extent make use of conventional shipments, presented through a partnership between Seatrade and the Baltic Shipping Company. It is understood that around 75% of South African citrus shipments of between 200,000 and 250,000 pallets are handled by the partnership annually.
Spain will be moving to the 2nd crop from the middle of March and volume will start to increase as we get into the main part of the season so supply should be good. In May we will see the early season UK/Belgium supply.
In general, fewer raspberries are being planted from suppliers and availability has been challenging throughout the season. Again, in theory, supply should increase as the main season in April begins and volume should be good.
Continual problems with airfreight spaces and increased clearance charges have maintained a high blackberry price.
The Chilean/Peruvian season will finish in March, and we will move over to Spanish. Availability will be tight and prices will be 25% more expensive than last year.