Things could hardly have been tougher for tomato producers last year. As if it wasn’t enough that a poor European supply-demand balance put downward pressure on prices, the industry suffered with the devastating pest Tuta absoluta, pushing growers to the brink and leading everyone to question the value of supply. Nowhere was the pressure felt more keenly than in the Canary Islands, where the long months of warmth and sunshine turned from a blessing to a curse as producers were unable to get respite from the rapidly-multiplying pest.
A year ago overproduction by Spanish growers, combined with an overhang of Dutch and English tomatoes into the winter months, made life a headache for producers, and that was only compounded by the troublesome pest issue. “Last year was very difficult, especially with the problem of Tuta absoluta in the Canaries,” says Ismael López Falcón, president of the Las Palmas Horticultural Exporters’ Association (Fedex). “There hadn’t previously been good pest controls in the Canaries, and we have the climate that the pest likes with summer all year round and no cold breaks.”
López Falcón estimates that as much as 20 to 30 per cent of the island’s tomato crops were lost last year as a result of Tuta. “It’s a big problem. And yet prices were better after Christmas because of Tuta.”
Producers have now put in measures to ensure similar crop losses are not suffered this season, according to López Falcón, with natural predators favoured by many growers, and others resorting to chemicals. That is leaving a general belief that the worst of the problem is behind them, and with a better supply balance ahead optimism is high that this winter will be a more profitable season.
“Last year was a poor start with a total oversupply of tomatoes in the UK,” affirms Martin Halliwell, managing director of importer JV White (Northern) Ltd. “The main problem last year was Tuta, but the government and the growers have got their heads together and the government has given excellent advice so we hope it’ll be a controlled problem.” The response to the crisis has been superb, he adds, raising hopes for a good winter.
“It will be a better season,” agrees Hernan Cortes, director of supplier Cortes. “Last season was very imbalanced with a lot of fruit from Spain and Morocco leaving a huge accumulation of tomatoes on the market. This season is a bit of the reverse, with a very wet August and flowering not very good. There’s not been much Dutch left either.”
There is also a feeling that pricing is set to improve. “I think there needs to be an equilibrium in price so that people at least break even,” says López Falcón. “People can’t survive [on last year’s prices], which is a big problem, as is the large production of tomatoes coming out of Morocco at the moment.”
Cortes has actually increased production this season having picked up some extra growers, and is also benefiting from a new packhouse built in Almería last year and upgraded infrastructure that includes multi-tunnels and specialist heating equipment. It is all part of a strategy of maintaining high-end supply, with 90 per cent of the company’s output sold to the UK.
The tomato market has been tough for everybody over the past year - not least as witnessed by some of the financial results of some UK suppliers - and Cortes believes that to be successful in this climate you either need to be a major supplier or a small to medium sized one with complete control over its own operations. “We’ll see some companies falling by the wayside or being bought out,” he predicts. “But this looks like being a much better balanced season. It will be strong at the beginning, but all you need is four days of rain and cold weather and a lot of product is affected.”
Echoing the mood of positivity that seems to be reverberating around the Canary Islands this season is José Hernández, managing director of Fortuna Frutos, who reports that crops are looking healthy and volumes will be better than last year. “Despite the current climate and the fact the percentage of growers keeps coming down, we will retain the same volumes as last year and we are seeing more interest than ever before.
“Although we are in a difficult situation [with the economy], customers do realise that there is a need to pay more for their products,” he says.
Certainly the confidence that the Canaries has overcome the worst and is well-placed to push ahead is underlined by the level of investment going on all across the islands. Fortuna Frutos, for instance, has just made two major investments in 4-5m high structures in a move aimed at producing more class one fruit, bringing as much as 65 per cent of the company’s production under the technique. As well as bringing higher yields, the structures also have the benefit of prolonging the season.
Salad specialist Victoria Trading, which is celebrating its 75th anniversary this year, is also investing in higher greenhouses, as well as keeping up its commitment to alternative energy with the installation of four wind turbines that produce more than enough electricity to meet the company’s needs. These are backed up with a raft of photo voltaic installations, which entirely cover one of the company’s packhouses, and a commitment to seafreighting produce to the UK. It all gives Victoria Trading a strong environmental story. “Despite the financial pressure supermarkets are still very much looking at carbon footprints and energy costs being factored in properly,” says the company’s general manager Andrew Zerpa-Falcon.
Parent company Bonny is the island’s biggest cucumber supplier with as much as 80 per cent of the production, and Zerpa-Falcon says the season is shaping up well for Canaries producers with Dutch and Polish supply coming to an abrupt end. The company’s first shipment was sold last week and pricing looks promising for the season, he says.
The company is the largest private employer in the Canaries with 2,500 staff, and is celebrating its anniversary by throwing a party for all its employees in the holiday hotspot in November.
Elsewhere on the investment front, Allfruit, which takes fruit from the co-operatives Guia De Isora, Luz Teno, La Paz and Abona, is reporting a 15 to 20 per cent increase in output this season as it looks to capitalise on competitors falling by the wayside and its own investment in new facilities. Luz Teno has re-covered plantations and added exterior perimeter tunnels for loading, as well as adding extra doors and entry systems to keep out Tuta. Teno now has a fully operating de-salination plant that can produce up to 42,000 litres per hour and supply all the water needed to irrigate the plantations. It has also completed a six-turbine wind farm which produces 10 times the requirements of the area and feeds the rest into the national grid.
One of the biggest investments in the Spanish industry in the last year has come from Bonnysa, which is ploughing €28 million into projects in Murcia and Alicante to increase its yields and re-use CO2. The Murcian investment in 14ha of plastic tunnels is expected to be ready within a year, with the 40ha Alicante project just a few months behind. Added to that is a further €10m spent on a new cut fruit factory in Alicante, underlining the company’s commitment to improving its output. Benefiting from government subsidies, there are also further investments planned, president Jorge Brotons Campillo reveals. “To be successful you must be of a significant size and be able to invest,” he says.
Bonnysa is backing its investments by developing a number of fresh convenience lines such as its new Pícaro brand of fresh tomato and pomegranate juices introduced for the export market. Discussions are already underway with UK supermarkets for the extra-fresh, non-heat treated brand, with listings expected to be confirmed shortly.
Canary Islands producers are also benefiting from a concerted effort by the government to modernise the industry, with large grants available to producers for the improvement of structures. Officials are particularly keen to help with new co-generation projects whereby energy from horticultural production is fed back into the national grid. Although not a new concept in countries such as the Netherlands and the UK, co-generation is relatively rare in Spain, and even less so in the Canaries where the heat of the sun has always been considered sufficient.
It all adds to the mood of optimism surrounding producers this season. With supply in balance and fruit of good quality, all the ducks would appear to be in line for a profitable winter.
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