Spanish tomatoes regularly hit the headlines in late August, when the town of Buñol plays host to the annual Tomatina festival. More than 40,000 revellers from all over the world see red as they gather to throw more than 100 tonnes of overripe tomatoes at each other in the Spanish town.
But on a more commercial note, the salad export sector begins gearing up for the new season in late September and October. Almería is the key salad producer exporting 1.5 million tonnes, followed by Seville, with 1.3mt, and Córdoba, Huelva, Cádiz, Málaga and Granada.
Insiders are forecasting slightly lower volumes this season. Morna Blair-Cornwell, managing director of SpaniaFresh Produce, confirms that major tomato-producing areas are anticipating reduced production. “In areas such as Nijar - historically a largetomato-growing area -there has been a reduction in tomato crops planted compared to last year,” she says.
José Hernandez of grower and importer Fortuna Frutos agrees that a drop in overall tomato volumes from both the Canary Islands and Spain is expected. However, cherry and on-the-vine varieties should remain consistent with last season’s levels.
Hernan Cortes from Cortes Ltd was in Spain in early September and he is looking forward to the new season. “This season’s production will be slightly delayed, but we are anticipating normal volumes and a good start,” he says. The supplier will begin importing Spanish tomatoes at the end of October and a percentage of growers are planting smaller sizes such as M and MM.
According to Cortes, the sector is always looking to secure more flavoursome varieties, but it is very hard to get the roundness required. “As an importer you need to move the right products into the right markets,” he says.
But rising domestic demand has meant that more volumes are being sold in Spain rather than being exported, says Blair-Cornwell.
Cucumbers are also a key earner for Spain and the country is able to supply volumes year-round. Fortuna Frutos produces cucumbers in the key growing provinces of Granada and Almería. “We enjoyed a good season last year and good yields, and we are expecting slightly higher volumes this season,” says Hernandez. “Our intention is to extend our season to the end of April instead of March. There is a good opportunity, as Dutch producers might delay their plantings this season.”
However, Blair-Cornwell says that on the whole, the 2007-08 season for cucumbers was disappointing and some growers may consider switching to peppers.
Abbey View Produce normally begins importing Spanish cucumbers during the first week of October and continues throughout the winter. “There are a lot of English cucumbers around at the moment but due to the rise in gas prices, some UK growers may finish earlier than normal,” says Abbey’s managing director Brian Hibberd.
It is early days, but he does not anticipate a major difference in quantities this season. “I’ve heard some producers are growing more cucumbers and less peppers, but as there are so many different co-operatives around, it is hard to get the true figures,” Hibberd tells FPJ.
The bulk of the Spanish cucumber crop is not grown in heated conditions, and Hibberd says that if there is an exceptionally cold or conversely mild winter, this will inevitably affect volumes.
Growers have made significant investments in their cucumber operations in recent years and there have also been changes in the way cucumbers are grown. A wide variety of cucumbers are available, but mildew-tolerant varieties are the preferred types.
“We have identified good demand for organic cucumbers and it is one sector that has developed reasonably well over the last two years,” Hernandez says. “There will be slightly more organic cucumbers from Spain this season.”
Recent reports that organic sales have suffered their sharpest fall for more than a decade could prove challenging for the industry. Blair-Cornwell says there will be more availability on organics from both Spain and the Canary Islands this season. However, she adds that there are conflicting views on the retail side. “We have tried to supply organics in tomatoes and cucumbers, but are being toldthere is not enough demand to supply two lines because ofthe small volumes involved,” she tells FPJ. In order to supply organics,some retailers are asking for a large range of lines.
As the sector gears up for the new season, it is mindful that Spain is not immune to the rise in fuel, fertiliser, packaging and transport costs that other producers are experiencing. “As costs are so high, I anticipate a very stable situation,” Cortes tells FPJ. “The cost of land, building material structures such as plastic and steel have all increased, not to mention fuel and feed.”
The fall of sterling against the euro is also putting pressure on the market. A strong euro is affecting the market and long term, Blair-Cornwell says the industry could witness aneven bigger impact if the current trend continues. “Given the choice, a lotof Spanish producers would rather deal in their own currency,” she says.“Financial organisations are speculatingthat we could see the euro trading at an equivalent to the sterling, which for us growing overseas would be disastrous. The consequences for UK importers would not be good either, with many growersopting to serve outlets on the continent instead. Having said that, they cannot disregard the UK as an important outlet asthe total supplyto the UK could notbe substitutedby other countries.”
Hibberd is also concerned about the exchange rate situation. “Since 2007, there has been a 17 per cent fall in the pound against the euro,” he says. “In the UK, fertiliser costs have risen, as have those for transport and fuel, so Spain is looking to be paid more for cucumbers to offset the higher costs.”
Observers say a 20-25 per cent rise in prices is needed. Whether this is achievable is debatable, but some believe that there is little alternative for the industry.
“We are all in the same boat,” says Hernandez. “Give or take five per cent and what is related to volumes, a price rise has to be achieved. If it isn’t, growers will either diversify into other products or decrease the amount of hectares they produce on.”
However, some producers are taking a more pessimistic stance. “Supermarkets are unwilling to pay more unless volumes are in short supply, so we won’t be getting the higher prices,” says one concerned insider, who declined to be named.
Spain is already feeling the pinch and there were concerns earlier this year when producer-exporters’ federation Fepex reported lower results for fresh produce export values in the January-April 2008 period. Earnings fell for all vegetables and salads, with the most notable declines in the major volume lines. Lettuce earnings fell by 28 per cent, while tomato volumes dropped 14 per cent, peppers sank by 16 per cent and cucumbers dipped by nine per cent.
“The decline in average prices could have a very negative impact on the ability of the sector to finance the processes necessary to improve the farms and marketing operations that are so vital to maintain competitiveness in EU markets,” says a Fepex spokeswoman.
Nevertheless, Blair-Cornwell says demand for Spanish salads has been good this year, though she acknowledges that most retailers would prefer British-grown product during the summer months. “In the past, we have had availability of Spanish and Canary Islands produce during the summer, but this would only be taken upby someretailers if it was cheaper than UK produce as an added-value line,” she says. “I don’t think demand for Spanish salads is increasing, but I think Spain does not rely as heavily on the UK as before. Demand from eastern European countries is increasing and thathas taken the emphasis off the UK.”
Meanwhile, on the pepper front, it is all systems go. Almería came under fire early last year when Spanish authorities warned that the supply of peppers from the region could be disrupted following the discovery of an unauthorised pesticide on crops. The presence of methyl-isofenphos was first discovered on Almerían-grown peppers in Germany in December 2006.
Since then, Spanish pepper producers have been working hard to improve their operations. Hernandez says that last season, some 75 per cent of growers adopted integrated crop management (ICM) practices. “It was a big challenge for growers and it went better than expected,” he tells FPJ. “We were very pleased with the result, yields and quality and, as a result, the remaining growers are expected to adopt ICM this season.”
The first peppers will be available in the first week of September. “It has been a good growing season, the quality looks good and we have high expectations this season,” Hernandez says.
Across all lines, the Spanish salad sector is confident that it can still make gains, despite the tough economic conditions. “Spain produces a high-quality product during the winter time and is very close to the UK logistically,” Hernandez says. “Yes, Morocco is looking to ship more, but Spain is still very competitive and flexible.”
Cortes says the UK market requires a huge commitment and can be more pernickety than other European markets. “You need to take a very long-term view and really want to be in the UK market, especially in December when transport costs rocket and you need high returns to cover the costs,” he explains.
But given the stringent demands and diminishing returns, some feel that the effort needed to supply the UK is not worth it. “Some producers are targeting other markets such as Germany and Poland, which want good but not exceptional quality,” Cortes says.
The emphasis has to be on quality, he insists. “Those that are marketing good but not superior product are likely to get much lower prices yet their input costs will be just as high in terms of labour and transport,” Cortes explains.
No doubt the credit crunch is causing some concern, but marketers hope that the Spanish deal will not be too affected. “Everyone still has to eat, and maybe retailers will use some of their profit margins to help out their suppliers and not pass on all the price costs to the consumers,” hopes one importer.
