Opinión

Tomato Farmers in Northern Italy Awarded Highest-Ever Purchase Price in Recent Framework Agreement

Jitomate (tomate) fresco
Italia
Publicado 19 de abr. de 2022
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On the 12th of April, tomato producers and manufacturers in Italy concluded a framework agreement outlining the sector price for tomatoes to be awarded to growers in Northern Italy. The reference price for tomatoes in Northern Italy is EUR 109.5/mt, 18% more than last year, the highest-ever yearly increase, and a 40% rise over the past four years. Negotiations are ongoing in Southern Italy, with the proposed price significantly higher than the one negotiated in the North due to higher overall costs. The elevated purchase prices negotiated by tomato farmers and processors in Italy could have a snowball effect throughout the supply chain.

On the 12th of April, tomato producers and manufacturers in Italy concluded a framework agreement outlining the sector price for tomatoes to be awarded to growers in Northern Italy. The average purchase prices were negotiated with farmers in cooperation with the Department of Agriculture Sciences at the University of Foggia to provide a fair price for about 300 producers and about 30 cooperatives in the country. Negotiations are still underway in the Southern basin and could be concluded in the coming weeks.

Discussions have taken longer than usual as tomato farmers requested higher average prices than in previous seasons due to rising production costs. The reference price for tomatoes in Northern Italy is EUR 109.5/mt, 18% more than last year, the highest-ever yearly increase, and a 40% rise over the past four years. This scenario is highly advantageous for tomato growers plagued with high overhead costs of production, along with rising fuel and raw material costs. On the other hand, the outcome of the negotiations is not ideal for tomato processors, who will have to pay considerably more to purchase fresh tomatoes from farms while shouldering the expense of rising shipping costs.

Severe drought conditions have also affected tomato production in the country, making these price negotiations significant for the sustainability of the Italian tomato industry. The levels of the Po River in the North have dropped significantly. This is a concern for tomato farmers as the river is used for irrigation in the areas along its banks. Reduced snowfall and low rainfall have decreased Dora Balta River water levels below those of last year. In Lombardy, snow reserves are 53% below average. The water levels of most rivers today are less than half of what they were at the same time last year, with rainfall levels dropping 87% below the seasonal average in February.

In Southern Italy, however, negotiations are ongoing but the proposed price is significantly higher than the one negotiated in the North due to higher overall costs. These costs include high raw material costs in primary and secondary packaging; and heightened energy prices on the back of the Russia-Ukraine conflict.

The elevated purchase prices negotiated by tomato farmers and processors in the country could lead to a snowball effect throughout the supply chain. The export prices of tomato products such as tomato sauce, paste, puree, and canned tomatoes are forecast to continue rising throughout the rest of the year. 

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