August 2024 Outlook Report: Vegetables

- Key Indicators: The Freightos Baltic Index (FBX) averaged USD 5,081.75 in Jul-24, an 18.69% increase from USD 4,281.67 in Jun-24. The World Bank’s fertilizer index rebounded, rising for the second consecutive month, increasing by 10.96% from 108.45 points in May-24 to 129.34 points in Jul-24. The 1.81% month-on-month (MoM) increase observed in Jul-24 was primarily driven by a 1.86% rise in urea prices, which more than offset the declines in potassium chloride (-3.02% MoM) and diammonium phosphate (DAP, -0.66% MoM).

- Potato: In Jul-24, potato prices in France, Germany, and Egypt exhibited an upward trend, each driven by distinct challenges. In France, the price increase was primarily due to a decrease in yield estimates, with the Monitoring and Agricultural Resources (MARS) lowering the average yield to 39.4 metric tons (mt) per hectare (ha), coupled with adverse weather conditions. Germany faced similar issues, with yield estimates dropping to 41.1 mt/ha and heavy rainfall causing planting delays and crop losses, particularly in Bavaria, contributing to higher prices. In Egypt, the increase in potato prices was driven by a significant reduction in imported potato seeds, monopolistic practices, and rising cultivation costs, all of which tightened supply and pushed prices higher.

- Tomato: In Jul-24, tomato prices in Mexico and Spain increased MoM, while Moroccan prices declined. In Mexico, tomato prices have increased due to a severe water crisis impacting yields, adverse weather conditions, reduced supply from crop transitions, high demand, and broader economic inflation. Spanish tomato prices have increased primarily due to persistent drought conditions reducing water availability for irrigation, higher production costs, and market dynamics, including reduced planting volumes and increased input costs. On the contrary, the decrease in Moroccan tomato prices is primarily due to an increased supply from various regions, the impact of the Tuta absoluta pest on quality, competitive pricing in the global market, and government seed subsidies boosting production.

- Onion: In Jul-24, onion prices increased MoM in India and Mexico, while Egypt saw a decline. India's price hike stemmed from a 20% year-on-year (YoY) production drop due to inadequate rainfall, coupled with market pressures despite efforts to expand Kharif acreage. The government's procurement drive and export restrictions aimed to stabilize supply. In Mexico, extreme weather and inflation disrupted supply chains, pushing prices higher despite an earlier seasonal increase in supply. In contrast, Egypt's prices fell sharply due to high stock levels, suspended exports to Saudi Arabia, and competition from cheaper European onions, leading to a surplus and price drop.