The tomato market roller coaster continues to cast terror into the hearts of all those who dare ride it.
The hangover of shortages from the 2020 harvest will impact availability for the new season, coupled with the additional market disruption caused by the widespread boycott of tomato products from the Xinjiang region of China.
2020 Tomato Market Influences
New season volume is expected to be slightly higher than in 2020 however, for the last five years, consumption has outstripped supply resulting in a net deficit of 4mt at the end of 2020.
This is expected to have increased to a deficit of 5.5mt by the time the new season crop is available. As a result, producers need to utilise new season products to satisfy 2020 contracts reducing new season availability and increasing prices.
World Production vs Consumption
| Million Tons | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 Prelim |
| Opening stock | 2.065 | 5.005 | 4.451 | 3.429 | -755 | -2.58 | -3.987 |
| Production | 41.374 | 38.072 | 37.797 | 34.83 | 37.383 | 38.39 | 38.916 |
| Consumption | 38.434 | 38.626 | 38.819 | 39.013 | 39.208 | 39.797 | 40.393 |
| Closing stock | 5.005 | 4.451 | 3.429 | -755 | -2.58 | -3.987 | -5.464 |
The human rights abuses taking place in the Xinjiang area of China has led many UK businesses to stop importing product from this region.
Xinjiang region is the largest tomato production area in China (which accounts for approximately 12% of global tomato supply) and historically has been a big supplier of tomato paste to Europe.
This combined with the overall deficit position will put particular pressure on tomato paste availability as everyone scrambles to secure European supply. Â On average you need around 6 mt of fresh tomatoes to create 1mt of 28/30 paste.
Raw Materials Price Pressures
This season has seen a range of price increases on raw materials and logistics. Fresh tomato prices with farmers are up €7-9/mt.
Energy prices have continued to increase, the cost of hot rolled steel for drum making is up over 50% compared to August 2020, new rules on CO2 emissions in 2021 will see a reduction in free rights and logistics costs have been on a continuous upward trend for the last six months.
These market influences have already seen price increases of between 18-21% in Northern and Southern American markets. The expectation is for price increases in Europe between 10-15%,
What do we Recommend?Â
Many large-volume users of tomatoes were quick to contract for the new season due to concerns about availability and price. We are urging all customers to move quickly and secure supply, particularly for paste products which will be particularly hard hit this year.
In addition, we would encourage customers to look at alternative products which may help offset some of the price inflation this year. For example, switching to an Extrusso product in place of traditional chopped tomato will save around £25/mt.
Similarly, where production allows using drums over bag in box format will deliver around a £45/mt cost saving.
Get in touch
The Brusco team is always available to answer any of your questions about new-season tomatoes so please get in touch on info@brusco.co.uk or 01386 761 555 should you wish to discuss.
