Last years’ Spanish garlic crop was double the average yield which resulted in oversupply and carryover into 2004.
Alexis Mul of Ibergarlic says: “There are still enormous quantities of old-crop garlic in cold stores in Spain which are likely to be dumped after the start of the sale of new harvest garlic, sparking a falling market.”
This is bad news for Spanish garlic growers who last season due to excess volume saw farm-gate returns at below the cost of production.
The 23,000 hectares of garlic - grown mainly in three major areas: Castilla-La Mancha, Andalusía and Castilla and León - are expected to yield over 160,000 tonnes of garlic when harvesting starts later this month. With good growing conditions and little pest and disease to contend with, exporters expect a high quality crop ready for the European market in June.
Spain exports around 60,000t of garlic each year with a market value of e77.6 million. It continues to be the largest garlic producer in Europe and a supplier of high-quality garlic to European and African markets.
In spite of a year of oversupply, Ibergarlic - Spain’s largest garlic exporter and the first garlic producer in Spain to be certified under EurepGAP - does not have enough garlic to fulfil its requirements for garlic plaits and on-the-stem, as the issues of oversupply relate to the cut-garlic sector. “Most garlic is stored as cut garlic as it requires less space. People who store garlic for plaits are normally producers of either plaits or on-the-stem themselves, and will only sell if they somehow stored too much”, says Mul.
China is an aggressive competitor in the international market, and has increased exports to Europe. With a crop based on over 600,000ha and an average yield of over 8 million tonnes, the Spanish are rightly worried about the long-term impact to European markets.
Garlic consumption is increasing worldwide driven by traditionally non-garlic eaters incorporating garlic into their everyday cooking, thanks to the insatiable appetite created by celebrity chefs. The increasingly accepted medicinal properties of garlic have also helped increase demand.
Despite this increase in consumption in one of the oldest herbs, the Spanish industry remains concerned about the decrease in demand for its product.
Marisa Saiz Cantarero of Coopaman says: “The overall consumption for garlic worldwide has increased, but demand for Spanish garlic is decreasing because of the competition from China.”
Growing varieties that provide the consumer with additional benefits will help drive sales of Spanish garlic, a driving factor behind Coopaman’s r&d programme.
Coopaman - a cooperative organisation that provides producers with technical advice on growing, integrated crop management skills as well as funding an r&d programme into varietal development - is marketing a red garlic variety under a protected geographical indicator label. Red garlic has high levels of alicine, a volatile medicinal property, which purports to reduce the incidence of diabetes, cancer and cardiovascular diseases.
In the fight against Chinese imports, the Spanish industry believes Morado garlic has a stronger more superior taste, is of higher quality with longer storability and shelf life, which are major quality attributes in comparison to Chinese garlic. The industry believes traditional consumers - the Spanish, French, Italians, Germans and North Africans - will continue to buy Spanish garlic, as they “understand the properties of garlic”.
The biggest threat to Spain’s long-term market expansion is the new consumers who are price sensitive and do not understand quality, and are as yet not loyal customers. “Chinese garlic looks good but doesn’t last, something that most UK consumers are not aware of yet,” says Mul.
Regardless of this view, Chinese garlic is in demand not only to price sensitive consumers. Beacon Foods managing director Edward Gough says the company has incorporated Chinese garlic into their product lines. “Chinese garlic has a completely different flavour and texture to Spanish garlic and we are finding that it is more suitable for products requiring a subtle flavour.”
With such oversupply and international competition there has been little requirement for the UK to produce its own garlic in any significant quantity.
However with increasing pressure on retailers to source locally, there has been some research in this area. Brian Thomas of Horticulture Research International says: “Although there has not been anything significant in variety development, there has been some progress in understanding what limits garlic flowering in terms of environmental factors.” But until UK researchers have a complete understanding of these factors, there will be little investment in an efficient garlic-breeding programme.
In all, UK consumers are not yet savvy enough to favour quality over price. With increasing competition from Chinese garlic, Spanish growers and exporters need to offer something more. Product innovation and certification are two areas Spain excels in over Chinese competition. With top-grade warehousing and cool-store facilities, EurepGAP certification and registration with major UK retailers the Spanish hope to beat their competition at a wholesale level.
UK importers can expect top quality onions from this year’s Spanish crop. With the Spanish harvest commencing in May, growers and exporters alike are confident the crop has recovered from the lower yields caused by unusually high summer temperatures last year.
The 22,000ha crop is expected to yield in excess of 990,000t of onions.
Adriaan van Belzen, the export manager for Mulder Onions based in the Netherlands believes the 2004 crop will be of record size. He says “Weather conditions so far this season have been favourable so growers will have the quality as well as quantity.”
David Miston, sales director of Davis of Louth, also notes the Spanish onion crop is looking good. “Growers in the Valencia area are happy with quality and the smaller sized onions,” says Miston. He predicts the harvest will be five to eight per cent up on last year. This is good news for exporters with plenty of quality product likely to be available.
In the Valencia region, harvesting has started. There has been recent rain, causing some minor quality problems and a drop in prices, but demand from processors has been consistent.
A good quality harvest is predicted in the La Mancha region, with an additional 18 per cent planted this year. Rain has been consistent and timely, leading to fewer disease issues.
Andalusian growers predict the crop to harvest 15 per cent more than last year because of good weather conditions.
As seen in the last few years, weather is an important factor when predicting harvest and quality. With quality and quantity problems last year because of the hot summer, buyers are looking to protect their markets by sourcing from areas north of Valencia as the product is expected to be better in that area.
Major markets for Spanish onion exporters continue to be the UK, Germany, Denmark, Austria and Switzerland. The top four markets have shown growth in recent years. Switzerland however has an import quota system so exporters cannot rely on this market.
New markets include the Czech Republic, Slovakia, Hungary, and Romania. Export quantities are small but consistent, and exporters are keen to exploit these markets. Bad payment dogs trade with Romania so until this is resolved and a reliable payment system is in place, it is unlikely that exporters will continue to pursue this particular market.
Lithuania and Estonia have proved interesting niche markets for Spanish onions, with Davis of Louth testing the market by exporting 20-40t this year.
The UK remains an important market for Spain, with demand for Spanish onions constant. Fluctuations in the market relate to supply rather than demand. The UK is expected to import around 100,000t of Spanish onions this year.
Although demand has been consistent over the last few years, prices have increased due to the increased cost of transport. Miston says: “In August last year, transport from Spain to the UK cost £1.40 per bag, compared to a grower return of £1.10 per bag. If costs continue to increase, Spanish exporters will be looking for other cheaper markets to supply.”
Because of the continuing demand for Spanish onions, the Allium Alliance has increased its plantings and works closely with progressive growers to become EurepGAP registered. They are also investing in storage. Managing director Malcolm Gray says: “We have installed new grading machinery and now have cold-storage facilities for 5,000t of onions, with atmospheric storage.”
Spain produces the typical salad onion - a large, sweet, single centred, onion - and with a trend leaning towards sweeter onions Spain is well placed to remain a serious contender in world markets.
However, a threat to exports is the move by UK retailers to buy local and support UK agriculture. But home-grown onions are harsher bulbs, multi-centred and have not fared well in taste tests against their Spanish cousins.
To ensure the UK does not continue to lose out to imports, the industry has invested in r&d to develop a single-centred coloured onion with good storability. Several new varieties of sweet onions are being tested in growing regions in the UK in the hope that these varieties will supersede Spanish onions in the future.
The Spanish industry - wary of competition from outside Europe - is constantly searching to introduce new varieties.
Davis of Louth is keen to maintain market share so is working with a US seed company to introduce a new variety with longer storability properties. With trials underway in Spain, Miston says: “To date the results have been good with no growth and little breakdown during storage.” The trial is limited with only 9ha planted, however these varieties are already grown in the US and show promising prospects for Spain.”
The Spanish industry is not without its issues. Agricultural wages are out of step with urban rates, therefore encouraging a rural-urban drift for a better lifestyle. A decline in traditional agricultural workers, leading to a shortfall in both skilled and unskilled labour, has seen the development of mechanical harvesters. Without this technology and adequate labour, growers will not be able to harvest on time. If growers are not able to harvest on time they are likely to lose quality and sales.
Van Belzen says: “Smaller companies who have not invested in technology will not be able to compete against companies who invest in speed and efficiency, resulting in more product and fewer packhouses and export companies, but better returns for those who remain in the sector.”
Packaging and storage are important for any exporter. Traditionally Spain has been unimpressive in this area with much product being dumped due to poor storage and product degrading. However Spain now boasts state-of-the-art storage facilities. Most facilities pre-grade before storing to cut down on wastage, and early varieties are no longer stored. Other varieties are stored for a maximum of five days to ensure peak quality at retail end.
To safeguard quality, there is a trend for exporters to co-opt packhouses. In such a case, Mulder Onions has aligned themselves with Loewen España in La Mancha because of its investment in technology. Loewen España has the latest grading and packing machinery, enabling a quality crop to be packed for export.
Another important issue for Spanish growers is the ever-increasing purchasing power of the supermarket. With an estimated 25 per cent increase in turnover, Spanish supermarkets have become powerful players in the fruit and vegetable market. To meet supermarket requirements growers are looking to produce smaller sized onions, which are more suitable to pre-packing. More and more the supermarkets in Spain, as elsewhere, will determine the size and variety Spanish growers will produce.
Spanish growers have some medium-term issues to contend with. But with a large harvest and great quality for 2004, the Spanish onion industry can be confident about regaining its reputation as a supplier of top-quality product, and put last years problems behind them.
