“The 2004 Brazilian melon season will be better than 2003 as the weather has been favourable for production and melon prices are expected to be better all round,” says Fabio Ruzak, owner of Brazilian exporting company RZK Commercial.
From September to February, Ruzak will send 50 containers a month, mainly exporting the mass-produced yellow honeydew melon and three other varieties - Piel de Sapo, Cantaloupe and Galia. Out of Brazil’s total melon production, close to 110,000 tonnes in 2002, 30-40 per cent is exported to the US and 10-15 per cent to Europe. “Brazilian exporters prefer to sell to the US for various reasons; geographical proximity, volume and price negotiations with US buyers are easier, larger quantities are bought and paid for up-front in US dollars, usually at prices 10-20 per cent higher than Europe “ says Ruzak.
“In the UK, payment is received only after shipments have arrived.” Ruzak explains that marks on the flesh are no longer a problem and packaging has improved. “This season melon sizes are a little larger than last year, mainly 5s and 6s and shipment takes between nine and 14 days from Natal in north-east Brazil, to the ports of Sheerness and Dover.”
International sales manager for Universus Agricola, Dayson Castilhos, says that growers started planting later for the 2004 season because the rainy season lasted until the end of June. “From this week, taking into account all 36 melon growers from the area of Mossoro, global weekly exports are expected to be 15,000 tonnes,” says Castilhos. “Delays in planting were the only problem faced so far this season because of the prolonged rainy season and growers who tried to plant during this time suffered big losses. This year, growers have been more selective and tried to improve relationships with importers from the UK and EU. In the UK, there have been some successes with new fixed price agreements and some advance agreements with respect to volumes.”
Castilhos adds that Brazilian growers are beginning to realise that “importers drive Jaguars, while they still only drive VW Beetles and they want this to change. They want fair and better prices for melons, as well as investments from importers in their business.” Universus Agricola owns four farms in north-eastern Brazil dedicated to growing tropical fruit, and from 2004 the company is exporting independently rather than through a consortium of regional growers.
“Recently a partnership was formed with Utopia (UK). Utopia is a very important partner for us because they have recently agreed to supply our melons to Tesco, with a new focus on produce quality and technology,” says Castilhos. “There are no subsidies in Brazil to grow or export melons so good growers have focused on what they grow best. The only change has been for the longer-established growers to adopt EurepGAP rules and small improvements made to packhouses.” According to Castilhos, there is a shortage of Piel de Sapo melons this season because of higher production costs and lack of short-term credit available to growers to buy seed. “But growers expect a better year after last season’s 30 per cent loss in productivity.”
The UK market is viewed as important for the future and Castilhos sees the UK leading the category advancement for eastern Europe and Asia. In particular Cantaloupe is sought after and expected to grow. “I believe the UK is establishing itself commercially in the melon sector and not only as a consumer. Perhaps it may surpass the Netherlands in the future with respect to re-exportation of Cantaloupe. The Netherlands buys large quantities of Cantaloupe to re-export while the UK is more selective,” he says.
Managing director for George Hammond PLC Brian Madderson has been visiting Brazil for 15 years and knows melon exporters and importers well. For 12 years, melons were handled through the port of Dover, and George Hammond is the agent for LauCool at Sheerness, looking after three out of the four vessels arriving monthly in the UK. “During a season, average melon volumes that arrive are 60,000-65,000 pallets. The first vessel arrived in Sheerness on August 24 with 500-600 pallets and the second is expected on September 3 with 1,500 pallets.”
Melon shipments usually arrive in the UK from early September and continue through to early April. “Last season disappointed greatly and although volumes were good up until the New Year, heavy summer rains in late January in the growing region of Mossaro in Rio Grande do Norte, decimated the crops; soil was waterlogged and melons rotted - a disappointing end to the season,” says Madderson.
The growing community remains mainly unchanged with the same growers and exporters still operating this year. The short Spanish season has allowed Brazilian exporters to enter into a reasonable, firm-price season and the surge of non-honeydew yellow varieties continues. “Looking at year-on-year growth, Cantaloupe and Galia have galloped ahead,” says Madderson. “UK consumers are not adventurous and the best- eating melon, Piel de Sapo, has not taken off. In 2003-04 there was a 10 per cent rise in Brazilian melon volumes to 70,000 pallets over the previous year. This rise could have exceeded 20 per cent if not for the heavy rains that wiped out the crop in early February. In 2002-03, 8,000 pallets were received in the UK after February 1, whereas last season only 3,000 pallets were received.”
LauCool reefer ships dominate with 70 per cent of the market share sent to the UK and Seatrade reefers have a 25 per cent of share. “There was a major change last year in terms of exporters,” says Madderson. “Agricola Formosa accelerated into the number one exporter position to the UK with its brands of melons, and sold to a number of distributors rather than relying on one importer. Both Nolem and Del Monte reduced volumes by five per cent while Agricola took on the extra growth in volumes in a growing UK market, but also benefiting from the disappearance of Fazenda Sao João, which went into liquidation after years of crippling debt, despite being market leaders for a number of years.
“In its prime, Sao João would send 5,000-6,000 pallets to the UK. This is a usual scenario in Brazil; growers come and go as many are exposed heavily financially. In the UK, the receivers remain the same and all have improved their positions by bringing in more volumes,” explains Madderson.
“Brazilian growers are continuously improving quality and pricing of their varietal offer. When first arrivals came to the UK, honeydew melons had low sugar content and were very hard. Over time, growers have improved sugar levels, texture and range, and supermarkets are more confident in promoting the produce.
As recently as 2000-01, imports were 40,000 pallets a season compared to 70,000 received in 2003-04, an increase of 75 per cent in three years. This has come from the rapid development of non-yellow honeydew and growth of the UK processing sector,” continues Madderson. “Consumers buy fruit differently today with pre- packed fruit tubs such as a melon medley. Melon is a very good ingredient because it keeps its shape, colour, texture and sweetness for a relatively long shelf life. Due to this, the processing sector for pre packaged fruit has grown quickly.”
According to Madderson, growth in non-yellow varieties in the last three years has been over 200 per cent accounting for 25,000 of the 70,000 pallets received, with 20,000 pallets made up of Cantaloupe and Galia.
Senior buyer for Budgens Danny Grover is also positive about Brazilian produce as melon sourcing in the southern hemisphere is difficult because of the length of time required to get fruit from the field to the marketplace. “Our aim is to have the shortest journey time and a melon with good shelf life,” he says. Brazil has a journey time of less than a week and can develop melons with slightly less shelf life but with better flavour. It is important to develop a product with better eating qualities to get customers buying into the product and to return for repeat purchase.
“Selecting product for flavour is our number one concern. The focus in Brazil is no longer only to mass produce but is now more on the eating quality of fruit grown for the export market. Growers doing this are successful.”
There have also been improvements to shipping techniques; Galia is transported in modified atmosphere bags to protect the shelf life of the product. “It is important to prevent rotting during the sea journey. Melons sell by prominent visibility in store by offering customers plenty of fruit to choose from,” says Grover. Budgens promotes melons all year and outside the Spanish season, sources honeydew and Galia from Brazil. “When the product is right, we will stock Cantaloupe and Piel de Sapo - the best eating melon - but customers are put off by the green skin,” he says.
Budgens is appealing to the convenience sector and the size of its stores limits Grover to five melon lines in the summer and two varieties in the winter. Melons make up 3.5 per cent of Budgen’s overall take. “Melon sales are extremely weather sensitive and this year has been a struggle. We work with our supplier to plan our annual programme, and occasionally have pockets of opportunity to introduce some niche varieties. A lot of development work is being done with seed houses to develop new strains for all varieties to be better eats. Brazil has improved so much and we no longer see the rock-hard, inedible melons - this situation has changed completely.”
Madderson is optimistic about the 2004 season and thinks the crucial factor is to ensure growers receive a fair price to compensate for production and time. “Last season started well in terms of price and volume. But by mid-October demand had faltered and coincided with Brazilians sending too much fruit - no matter how many times we have told them to moderate sendings, they ignore the export programmes and send too much.
Melons cannot be stored so at maturity growers either export or throw them. The UK wholesale markets get flooded with melons during the mid-season dips in demand. However, demand tends to pick up pre-Christmas and prices can rise. Within a four-month spell, there are two strong periods of demand and one soft one, making it difficult to maintain fair prices.
“The future in the UK is positive for melons with the move to 5-a-day and fresh fruit initiatives. This is only good for melon as it is a clean fruit and good value for money, and the processing sector in the UK has much further to go - Brazilian melons too have further to run.”
