Spanish salad growers begin planting their crops in July for autumn deliveries and even though there are still a few weeks before exports begin, producers are hoping for a better season than in recent years. Harvesting will take place this month in Murcia, followed by Almería in October, and the first tomato exports are set to begin later that month.
“It is still early days, but the plants are growing well and crop conditions are good,” says Hernan Cortes, managing director of Cortes Ltd.
Fortuna Frutos will begin exporting Spanish salads towards the end of the month and expects production to be in full flow by mid- to late October, according to managing director José Hernandez. “We will produce on the same number of hectares as the previous season,” he says.
Producers do not anticipate any supply issues this season. “Unless there is some unexpected, freak weather, in principle we do not predict any significant problems,” says María José Pardo Losilla, managing director of Hortyfruta. In recent months, Hortyfruta growers have increased their farmed area under biological pest control and are modernising faming methods. “We are working to achieve recognition for Andalusian fresh produce,” Pardo Losilla tells FPJ. However, she says that farmers are restricted financially, as they have seen a fall in profits over the past few years.
The Unica Group has been busy working on new salad varieties, in particular tomato lines, and will increase its volumes slightly this season. “The first exports will begin at the start of September and the dates are very similar to last year, maybe a bit earlier,” says general manager Enrique de los Rios. “We hope to be able to provide UK consumers with products and offers that make the consumption of salads more appealing.”
Unica’s most significant investments and initiatives over the past year include specialised warehouses, improved quality controls and product standardisation.
Growers need a good season following a challenging two years and there have been fears that some Spanish growers will abandon salad production due to the low prices achieved. “Last season was very tough and the industry experienced a decline in yields due to the cold weather and poor prices,” Cortes tells FPJ. “Furthermore, input costs rocketed and the weak sterling also took a toll on anyone exporting to the UK.”
Due to these hurdles, Cortes forecasts a period of stagnation in tomato production and perhaps even a decline in volumes this season.
Indeed, according to recent reports, tomato acreage in Almería is predicted to be lower compared to last year and hectarage in the Nijar region is expected to fall by between 300 hectares and 450ha. Vine, loose and beef tomatoes account for more than 80 per cent of tomatoes grown in Spain, although plum tomato production is increasing.
Cortes says that the financially stronger companies that have good outlets and customers are faring better, but insists that it is a very tough market. “Everyone is right at their limit,” he adds.
The restrictions being placed on borrowing are further compounding the situation. “Banks are not lending unless they are very confident that they will get their money back,” Cortes explains. “Also, it used to be that there would be six months’ grace to pay back fertiliser and feed suppliers, but this line of credit has been tightened.”
Cortes says that huge investment is needed but even then, growers may also have to face crop viruses and volatile market prices, and there is no guarantee that growers will achieve a good, profitable price. “Inevitably, this makes the situation tricky for investment, whether that is in new structures and increasing hectares and/or modernisation,” he adds.
Others agree that producers are facing difficult times. “The prices paid to producers have not risen in the past years, but they have dropped while production costs keep rising,” Pardo Losillo says.
Earlier in the year, Valencian growers’ association Ava-Asaja claimed that the prices offered for peppers and aubergines by retailers and wholesalers were failing to cover harvest and transportation costs. Indeed, Ava-Asaja president Cristóbal Aguado claimed that prices have been so low that some farmers have not been able to deliver products to the market.
Given the challenges facing the sector, some growers have switched to cheaper crops with a shorter life span. According to Cortes, the tomato season runs from November until May, while other salads such as cucumbers and peppers can be produced in four to five months.
Hernandez says everyone is under immense pressure to perform. “More companies keep going out of business and due to the lack of support from the banks, there are fewer companies going forward,” he says. “There are many challenges ahead to survive until we manage to come out of the recession, which will possibly take at least more than a year to do so.”
A number of producers have invested in their operations and Fortuna Frutos has fine-tuned its logistics in preparation for the winter season. The firm will open two new depots in Murcia and Alicante this month and aims to cover the most important growing areas around the coast of the Iberian peninsula, from Alicante to Granada. Hernandez says the opening of the depots will enable Fortuna Frutos to pack to its customers’ specifications at source and deliver directly, without incurring extra costs within the UK.
“This way, we can provide a better service, be more competitive and offer a fresher product,” Hernandez explains. “As a group of growers, we are also encouraging customers to buy from us in advance because we can grow exactly to their specifications and volume if they commit to us early enough in the season.”
As growers continue to face challenging times, de los Rios anticipates further consolidation among producers in the future. “It is an unstoppable process that has only just begun,” he tells FPJ.
Hernandez agrees that consolidation among growers and exporters is rising and he says that there are fewer companies to choose from.
A good reputation is important in these challenging times and Hernandez is confident that Fortuna Frutos has a proven track record and aims to maintain volume, commitment, quality and service during the course of the season. In order to remain in the marketplace and increase UK salad consumption further, de los Rios says that the industry needs to listen to UK consumers and meet their needs.
Hortyfruta is keen on more consumer-directed promotions to drive growth. “Our goal is to be able to offer the best fruits and vegetables daily to an increasingly knowledgeable and demanding consumer,” says Pardo Losilla. “Knowledge of the health benefits of fruit and vegetables is key, as well as awareness of provenance and the methods of production.”
When questioned about new varieties, Pardo Losilla claims that thousands of new varieties are tested each year, although few reach the commercial stage. “Spain’s top international seed houses are located in Andalusia and new varieties are adapted to the area’s geographic conditions and are of a higher quality,” she says.
Due to the recession, Hernandez says it is very difficult to introduce speciality varieties that have a higher cost to the market. Nevertheless, the industry is moving slowly towards varieties that have a better flavour and shelf life.
Even through these difficult times, Cortes believes that there will be some room for optimism - once the global economy recovers from the recession. “At some point in the future, I predict there will be stronger demand, particularly from the former Eastern Bloc and Russia,” he tells FPJ.
When it comes to the competition, Cortes is not overly concerned that the Thanet Earth project will result in diminished market share for Spain. “Thanet is geared up for speciality salad products and will supply the supermarkets,” Cortes says. “Although it is a large project, it is not big enough to be a major competitor to Spain. Yes, it’s another issue we will face, but I do not think production there will break Spanish growers.”
Hernandez says there has been an incredibly high investment in Thanet Earth. “Although it is growing local produce, there is an extra cost the customers will have to pay in a very difficult and competitive market,” Hernandez tells FPJ. “Even including freight charges, I feel we can still produce in the winter in Spain at a more competitive cost.”
Meanwhile, the Spanish and Moroccan tomato spat rumbles on. Talks have been ongoing following Spain’s growing anger over Moroccan tomato imports. According to Spanish authorities, Morocco exports more tomatoes to the EU than are allowed under the bilateral trade agreement. Indeed, Spanish horticultural body Fepex claims that Moroccan tomato exports have increased significantly in recent years, from 191,310 tonnes in 2004 to more than 305,000t in 2008.
However, when it comes to supplying UK retailers, Cortes does not feel that Morocco represents a major threat to Spanish suppliers, even though Morocco has increased its exports to the EU in the last five years.
Nevertheless, due to the economic crisis, de los Rios argues that more UK consumers are lowering their standards. “Unica’s growers are not opposed to imports of Moroccan tomatoes, but we are opposed to [Moroccan producers] not respecting the regulations,” he adds.
As growers and exporters prepare to deliver their goods, the industry is keeping its fingers crossed that 2009 could be the season when it finally enjoys some good fortune.
