Spain: a worrying increase in Andalusia

Spain: a worrying increase in Andalusia

 
The figures collected by Mesa del Tomate answer the remaining questions concerning the importance of tomatoes this year in the economy of Extremadura. With 24 664 hectares planted, surfaces dedicated to processing tomatoes will only drop by 1% compared to what they were in 2016, but the supervisory organization has estimated – and confirms – that the quantities contracted are 14% higher than they were last year. Mesa del Tomate has also confirmed that the price for raw materials continues to drop.
 

For Domingo Fernández, President of the fruit and vegetables department of the food industry Cooperative of Extremadura, "If there isn't a big harvest, many growers are going to lose money". Answering questions asked by the daily newspaper Hoy, Manuel Vazquez Calleja, president of the AMITOM and General Director of Conesa, the main tomato processing group of Extremadura, recently stated that "prices continue to fall because there is a lot of stock on the market" and lamented the fact that "…the expected production volume this campaign is greater than it should be".
According to the basic data gathered by Mesa del Tomate, 24 664 hectares are expected to be planted this year, which is 250 hectares less than in 2016 (24 915 ha). However, the variation is more significant in terms of production, as the contracts amounted to 2 200 190 mT in 2016 – of which only 1 872 818 mT were actually harvested (85%), while the remaining volumes were destroyed by harsh weather that hit the Vegas Altas region. Average yield in these regions did not exceed 78.92 mT/ha. For 2017, growers hope to harvest 2 140 333 mT, which is 14% more than last year, with an expected average yield of 86.78 mT/ha.
 
With a 715 000 tonne program, Conesa will account for one third of the harvest in Extremadura. As for the agricultural and industrial cooperatives of the Extremadura Food-industry Cooperative, they account for close on 59% of the contracted total, "a proportion that is constantly increasing, with more and more growers wanting to deliver their tomatoes to cooperatives", explained Domingo Fernández.
 
According to local sources, the price of raw materials should drop by an average of 2 to 3 euros per tonne this year, a level that will also be affected by the way this year's season unfolds. This amount has been at the root of discussions regarding prices to be paid to growers this year. A few days before the end of March, the Conesa group considered decreasing its field gate price (because factory deliveries are no longer carried out by the growers) from EUR 72 /mT paid last year to EUR 70 /mT in 2017.
The prices agreed by processors that are supplied by cooperatives are expected to be higher, close on EUR 75 per tonne in 2017 (against EUR 78 per tonne last year). "Despite the general downward trend, cooperatives are paying more and cooperative growers are receiving a share of the profits distributed at the end of the season", added Domingo Fernández.

Manuel Vázquez defends the arguments of processors. "Although there is good demand, there are a lot of stocks and prices continue to drop. A lot of tomato products are available for sale in California and in China, without counting the considerable increases in regions like Andalusia, all of which have a major impact on prices."
 

As we demonstrated in our special report dedicated to the Spanish industry in the March 2017 issue, Extremadura remains the main region for growing and processing tomatoes in Spain, but the Andalusian industry has been investing heavily, and this new area of competition is progressing rapidly. This is the case of the Algosur company, which is about to invest EUR 26 million to enlarge its factory at Los Palacios y Villafranca (south of Seville). Algosur is set to become the third biggest European tomato processor in 2017.
In 2016, the region used 8 250 hectares to grow processing tomatoes, producing a crop of 755 000 mT. This year, close on 9 000 hectares have been planted, with a production target of 940 000 mT. "Even with a lower price, performances are better [in Andalusia]. Per hectare yields are higher, for comparable costs [to those of Extremadura]. This is an advantage for them, but it's worrying for us," concludes Domingo Fernández.
 
(See also our reports and articles in the Tomato News issues of November 2015 and March 2017.)