Martin Stilwell: The evolution of the tomato paste market

Tomatoes from Surplus to Shortage! How long will it take?
Martin Stilwell’s presentation during the 2025 Tomato News Conference @ANUGA on 5 October 2025

Click on the image above to watch the recording on Vimeo or read the transcript below.
All the slides are available HERE

Martin Stilwell: Good afternoon. It’s nice to see you all. If I bore you in this presentation, it’s the presentation essentially comes from, I think it was Nick Castle who asked Sophie whether we had any data on export trends. So I’ve spent a few months looking at export trends, and I will share that with you today.

Right. So we will look today at exports in the order of magnitude, descending order of magnitude, China, Italy, USA, Spain, Portugal, Chile and Iran. Obviously, there are more countries, but there’s a limit to what, to the time available.

Now, before talking about this, there is one major issue which has occurred this year. California has had an enormous crop. Yields, I say here, have gone up by 7 to 8%. I think when the final numbers are in, the average yield in California will have risen by more than 10%. California was an area which was significantly below last year, produced almost the same quantity, an extra million tons. Better varieties, perfect weather combination of the two. Will this happen again, or is it one off?

The debate is important, and it’s just starting now. Now I go back to this graph, and anyone who’s listened to me before will know it. Essentially what this, I can’t point it out, but it’s production. But instead of looking at the actual productions, the black line, I look at two years, the two-year rolling average and the three-year rolling average.

And why is this? Essentially because the product we produce can be stored at least for two years, possibly by as much as three, and therefore the amount produced in over a period of three years is important in establishing the balance between supply and demand. The green line is the trend and must in some way be linked to consumption.

Now when we look, and I have 2025, it already has the California numbers in it. And 2026, I’m assuming the production, having reduced this year, will continue to reduce next year in order to bring supply in line with demand. In Hungary last year, I said we needed to cut 8 million tons of production. This year we’ve probably cut four. So we need to cut off a further 4 for next year, if we are to bring the market into balance. Now, looking at exports, and exports are important because, I said you had never seen what I’m going to present today, which is the movement of trade where these different countries export to and the conflict which arises in a commercial sense, between the different supplying countries, we have China vastly larger than anybody else, then California, then Italy, of course Italy. We need to remember that Italy imports a very significant quantity of tomato, which it then reprocesses and exports, United States, then Spain, Portugal, Chile, and more recently, Iran has become a major exporter.

Now, looking at what we expect to be produced this year, we’ve seen these numbers before. And why should we look at exports, competition, falling or rising prices. It allows us, sharing this information allows us to plan, it allows us to refocus sales. And basically it’s sharing a bit of information which is available and which should help us in making decisions.

Now, if we look at Chinese exports since the fourth quarter of 2021, and I’ve done this by quarter and by country, and it’s quite a spreadsheet. China exports to nearly 200 and something countries. So, what is interesting is that Chinese exports have actually stalled.

So China appears to have reached a stage where it’s no longer penetrating the market, it’s no longer increasing its sales. Now there’s another factor which is important. And here I compare the export numbers which you saw in the previous slide to, production of the previous year. In fact, we should normally think that we as processors export was what was produced in the previous harvest. And here we see the reason in the quarters from 2024 onwards, why there is a surplus in China that China produced very much more than it’s exporting.

Now where does China sell to? Africa. And it is in fact impressive to see what China has done in Africa. Chinese exporters dominate the African continent. Very few other countries manage now to export to Africa. They’ve managed to grow the market. And it’s still growing and it’s quite a significant market for them or a very significant market for them.

I also put here the Middle East. The Middle East is an important market or has been an important market for European producers, for North American producers, and for China and China here is increasing its sales and therefore decreasing the sales of the other suppliers.

Chinese exports to the EU. There has been significant pressure on China, within the EU for reputed problems with labor relations in Xinjiang. And this has had some impact on sales in Europe. And you can see the gradual decrease of sales from China into Europe.

Far East, markets close to China. We would expect China to increasingly dominate this area of business. And in fact, it is doing so as we see. Caribbean, Central America and South America, this is new, and you can see that from the low numbers of exports. But China has turned its eyes on this market as a market with potential for them. And it is increasing its sales at the moment.

This, what I talk about, isn’t specifically about China. It’s about these seven countries.

Italy exports decreased significantly and in 2023 then increased again.

Italy has a “Made in Italy” strategy, which has been extremely successful. It does, however, at this moment face increasing problems, a problem related to cost. And it’s a problem which is similar to that shown in the previous presentation to olive oil, where you see the difference of cost between Italian produced olive oil and Spanish produced olive oil. And it’s an issue which Italy needs to pay some attention to, because the consumer, we don’t know how elastic demand will be. But I nevertheless compliment Italy on its “Made in Italy” strategy. It has been up to now extremely successful.

This is one of the areas where “Made in Italy” has been very successful, export to North America, to the USA, to a lesser extent to Canada, over 30,000 tons and growing. It’s interesting to see this happen.

Exports to Europe, again, very volatile. Don’t really know why 2022 dropped like that. It may be a problem with the data, but in general, there appears to be a decreasing trend. If we look at exports to Australia, New Zealand, Middle East and Asia, all of them are growing at the moment.

Now we move on to the USA. I haven’t looked at so many years as I have for the other countries. But exports in the USA, typically the USA aims to export around 25% of the crop in California. This allows it to run a longer season, which obviously helps its costs. It also runs the longer season because the weather permits it to, exports in 2025 related to the size of the 2024 crop. And this is a year running until the end of July. Not this year, but July 2024 to July 2025. I expect the number in 2026 to increase dramatically.

Exports to Canada, obviously, important Canada, Central America and the Caribbean. Canada stands alone separately and is largely supplied by California. I added them up because I didn’t want to drown you in data if you wanted to see them separately, I can also give them to you. But there is an important sale to the Caribbean and Central America, a lesser important amount in South America.

So, the U.S also will have to pay attention to China, who are starting to export into areas close to them.

Europe and Asia: US supplies approximately 20% of its exports to each one of them.

Now Spain, again, the crop is more or less in line with the previous year’s production. Spain exports largely to Europe, which is hardly a surprise. And of course, 10% to Asia, which is the next largest market.

Portuguese exports, like Spain, similar to the production, 85% to Europe, 11% to Asia. And here I included the Middle East. And it’s interesting to see that, particularly in the light of the next countries, I will show you, basically, Spain and Portugal, who have significant business in the Middle East, are struggling to compete with Iran and China., the US also.

Chilean exports, again, not very different, from the other graphs. Other than China, generally exports are in line with the volume processed, which isn’t very surprising. Now the red line shows exports into, South America, Central America and the Caribbean, to Asia, and to Europe. And Chile is generally being quite successful and is in an upward trend in all of these areas.

Now, finally, Iran.
Iran has emerged as a major exporter to the Middle East, Russia, where it has become, together with China, the two suppliers of Russia, replacing USA, Spain and Portugal, the Middle East, and more recently also to Europe.

Exports, again the same pattern. Production and exports go up and down in line with each other. And then if we look at, 55% of all Iranian exports go to the Middle East, which is hardly surprising. Then, the exports to Europe, which have increased, although they decreased in the current year in line with the decrease in production in Iran in 2024.

Exports to Russia, which I find quite surprising, have decreased this year, quite significantly, while those in China to Russia have increased, China has almost become the monopoly supplier of Russia in tomato paste.

So as a summary: China dominates sales to the African continent. Iran has been increasing sales to the Middle East and Europe. China and Iran have replaced the EU and North America’s supplier to Russia. China has turned its attention to South America, Central America and the Caribbean, where its sales are increasing. Chile has increased its production and increases its sales to Europe, and the USA, with increased competitiveness, will push to supply Europe and to defend its position, with Central America and the Caribbean.

I apologise for the spelling mistakes and that’s what I have for today. Thank you.

Antonio Casana: Please stay here because, we have a few minutes for the Q&A section. Thank you for the clarity and for the contribution that we received from your presentation. Please note that both presentations, the first one from Arete, and this one from Martin, will be available on our website, Tomato News in, a few days. And remember that, there is the 2025 Processed Tomato Yearbook available for free for all of you. And I invite you to register on our website to receive the weekly newsletter that give a very real and transparent situation of our industry.

We have some minutes for the Q&A section. I invite you to ask, any detail of these two speeches. Anyone that want to start?

Nick Castle: Great presentation. So basically, looking at these charts in this data set, is it fair to say that South America is repositioning and losing market share from China into their own region, into their own backyard? And was there anything that stuck out in the data? It’s to, which territories in particular in South America?

Martin Stilwell: Yes. You will have seen or you may not have noticed, I passed through the graphs quite quickly, the volumes to South America, Central America and the Caribbean are relatively small to date, but they are growing strongly. Whether there will be a fight back… But certainly I’ve done this country by country, which was quite a task. Certainly in the Caribbean, and as you probably know, there are some large consumers in the Caribbean, China has been very successful in entering into that market. It has also entered into the market of Central America, quite successfully. Panama, El Salvador, just a few of them, Mexico less so. But I would have to look at the data again because, as I said, there are a lot of countries and, I can’t remember all the data.

 I would say that, if there is interest, we could publish some of this data in Tomato News. Generally, the data on exports is not available, grouped by area. Which makes it quite difficult to study. And that’s why  I’ve had more time on my hands and I’ve been doing that.

Antonio Casana: Thank you. Martin, I wonder if anyone wants to ask a question yet?

Participant: Thank you, Martin, for your great presentation. I have two questions about, China. I mean, what would you expect for next year? As for tomato paste, do you think the numbers for China will go up or down? This is my first question. And second is you mentioned the Middle East and how Iran is changing. What would be your expectation about China, to do in the Middle East next year?

Martin Stilwell: I think the first graph I shared of Chinese exports, global exports showed that, in the last three years, maybe even four years, their exports have been flat, 1.1, 1.2 million, but, basically not growing. And then if you consider the prime market, which everybody targets, which is Europe, China has struggled in Europe over the last years.

And it’s been looking to replace that volume in other areas. I do think that they will focus on the Middle East. I see in terms of individual countries, importing countries. When you look at the reverse of what I’ve shown, which is the imports, are starting to use Chinese paste, we should, I am not here to talk in the name of China, but we should remember that the Chinese industry is now an industry which has been in place for a long time. The problems which it had originally, with many quality problems, have to some extent been resolved. And it is quite possible to buy quite good quality product in China. So they are of course, as we all know, a formidable competitor, they have a relatively weak currency, which helps. As a previous seller of tomato paste, people may challenge what I put up. But I always think that information is vital to us. It doesn’t harm us to know what’s happening, to hide things. So that’s why I’ve presented this.

Mike Montna: As you were looking through the data, did you see some that you thought might be consumption increase versus displacement? I know it doesn’t exactly tell you, but looking at the ins and outs, potentially?

Martin Stilwell: I think if we look at global exports, global exports have increased until the last, let’s say 24 months, where they appear to have flattened out. My initial reaction to that was that with the changing market, there was a move from stock being held at the user to stock being held at the producer. I argued that if we had a month’s change with production, that 40 million tons, that’s 2 or 3, possibly 4 million tons of product, which is moving from one side to the other and could create this apparent reduction in consumption. I think we need to wait a little bit, to see what happens next year and the year after. As to what China will do next year, I don’t know. I do know from these numbers that they still have a significant quantity of crop 2024 at home.

Antonio Casana: This morning, the representative of China at the meeting forecast said for next crop an increase in production from 6 to 7 million tons fresh raw materials processed because they want to rebalance this year. They decreased the number of companies operating from 196 to 82 or something like that. So they want to restart some factories or so but  we will see.

Martin Stilwell: I think we, I looked at that and we look at the average that China has over the last ten, 15 years. Even assuming that consumption is growing within China, my calculations suggest that they can tolerate production between somewhere around 7 million tons. Beyond that, they have to have additional exports in order to be able to balance their inventories, say, 4 or 5, which is this year, plus seven gives 12 an average of 6 in 2 years. There may be a little bit of 24 left still.

Antonio Casana: I also have a question for you, Martin. In your, analysis, you didn’t mention the exchange rate. Is it something that will affect probably in the future, because we see the dynamics as shown by Filippo in this, US against renminbi (RMB) and the US against Europe. What do you think it will be, the exit of this final rebalancing between the exchange rate for the flow of tomato paste?

Martin Stilwell: I think the renminbi (RMB) has tended in the last years to be a weak currency, whereas we got used to a period of seeing the dollar as a strong currency. At the moment, some of my American colleagues will remember the day we did an analysis on political, presidents, whether they were Republican or Democrat with the relationship to the strength of the dollar. And my analysis suggested that Republicans lead to a weak dollar, whereas Democrats lead to a strong dollar. So I think probably we will see another three years of a weak dollar that makes California already a formidable competitor, and more competitive.

Antonio Casana: And then after this unicorn season, that would be even more.

Martin Stilwell: We all, California in particular, but we all have, an interesting thing to think about is, has this apparent breaking of, I think most of us probably sitting here believed that California had plateaued its production, that it was unable to get more tons per acre. So this comes as a real surprise. I think it’s inevitably due to the varieties, because if the varieties didn’t have the potential to produce this volume, they wouldn’t have. But then, of course, the climatic conditions of the year must also have contributed. It wouldn’t surprise me to see California yields next year drop, but probably not drop so far. But you know, who knows?

Participant: In your opinion, the strategy that China appears to have taken on their exports into Central and South America as well as other areas. Do you think that it is a strategy or more of a product of having such a large 2024 crop? Nearly 30% over what you believe is the right number that they should be producing, and therefore they’re in these markets that is not necessarily sustainable.

Martin Stilwell: I believe and I feel awkward in replying to China and obviously I reply for myself and not for China. And I think China has been hit very hard by its decreasing ability to sell into Europe, and it’s therefore being forced to look for other markets. It obviously produces; it consumes something like they claim a million tons. I suspect it’s not as much as a million tons internally, but still a significant amount internally, and the rest is exported.

So with the 11 million, they had to look everywhere. And they were extremely successful with Africa. So it doesn’t surprise me to see them try to push into South America and Central America. Obviously, they’ve done the same in Southeast Asia. They’re very close to them and they’ve pushed very hard. The Philippines, for instance, now buys almost exclusively from China. And it didn’t in the past.