What to expect in 2010?
Wednesday, 17th February 2010
The important question being asked by everyone in the industry at the outset of this year is of course related to production forecasts for 2010. The record volumes processed during the 2009 season fell short of satisfying processors and, instead, can be said to weigh heavily both on stocks and on the current commercial climate. The noticeable drop in prices that naturally followed has left operators with a bitter aftertaste. According to the experts, the exceptionally good weather conditions are the guilty party, as they contributed to enhanced harvests around the globe. The outcome, however, is being borne by processors, who are suffering the effect of considerably more expensive raw materials in 2009, as well as inventories that have dropped in value and have turned out to be difficult to sell, given the overabundance of product on offer.
One of the predictable effects has been the understandable downward trend of production volumes. For the moment, the tone has been given by the Californian industry, which recently declared processing intentions that are 5% below last year's operations. This drop has been explained as the result of a foreseeable but preoccupying increase in available stocks at Dec 1st, 2009. No figures have yet been published concerning the processing intentions of Mediterranean operators, so it is necessary to make do with the declarations of recent months, which imply that European processors might adopt an approach that is similar to that of their American counterparts. In South America, the start of the harvest has been delayed, but local sources indicate satisfying prospects for the tomato season. As usual, the big unknown for 2010 remains Chinese processing intentions. Although it may seem reasonable to count on a moderate drop in volumes for 2010, the general context of the season has rarely seemed so difficult to determine, although the year is well underway and discussions between growers and processors have already started.
This topic is all the more strategic in terms of quality and prices for raw materials (particularly in Europe) for the fact that the season is due to be the last one before the switchover to the new system of European subsidies.
Source: Tomato News/February 2010
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