Hungarian Traders Expect Higher Watermelon Prices and Increase in Export for the 2022 Season

Published 2022년 6월 22일

The 2022 watermelon season in Hungary started with increased production costs and reduced planted acreage, but also favorable weather conditions and solid demand. The harvested area under watermelon was reduced by 15.49% YoY to about 3,000 ha. According to Tridge, the current watermelon wholesale price ranges from USD 1.13-1.25/kg. Domestic consumption is expected to remain strong, with room for export increase. Traders hope to take advantage of the production reduction in Spain and Ukraine and compensate for the quantities of watermelon in markets such as Poland and Germany. The main advantage Hungarian traders have is the lower transport costs due to proximity to target markets. Demand increased in the hospitality industry due to increased tourism. On the other hand, farmers deal with higher input costs and lack of labor, hinting that prices should increase to maintain profitable production.

The watermelon season in Hungary is expected to start at the end of June this year. According to the first estimates, production is expected to decrease YoY. The area under the watermelon has decreased from 3,550 hectares to 3,000 ha, which makes it a decrease of 15.49% YoY. The beginning of the season was marked by favorable weather conditions for the production of watermelons with a warm spring without much precipitation. This was a significant improvement compared to 2021, which included low temperatures in April and unusual rain that accompanied the harvest in August 2021, leading to reduced quantities and lower quality watermelons. Traders expect an increase in watermelon prices and exports to neighboring countries.

There are several reasons implying higher watermelon prices. After the catastrophic season in 2021, producers have reduced the areas under watermelon, turning to crops they consider more profitable or less risky, such as cereals. Increased labor costs and the labor shortage, uncertain profitability of watermelons, and rising input costs such as fertilizers, fuels, and pesticides have forced producers to change crops. According to data from the Tridge platform, wholesale prices of watermelon in Hungary, depending on the variety, range from USD 1.13-1.25/kg.

The current high price is influenced by the domestic watermelon supply reduction in the market. The production is mostly consumed domestically, where the demand is driven by the hospitality sector. During good weather, the demand for tourism increases, which contributes to increased demand in the hospitality industry. Also, changes in consumer habits are noticeable, where the most sought-after varieties of watermelon are smaller in size and seedless, while still a smaller percentage of consumers is looking for larger types with seeds.

Regarding the export of watermelons from Hungary, the main markets in 2021 were the Czech Republic, 11,881 mt, Slovakia, and Poland, which imported 11,881 mt, 6,929 mt, and 5,366 mt respectively. The overall exports of Hungarian watermelons in 2021 was 27,485 mt in volume and USD 10.2M in value. Despite the announced production decrease, traders still see opportunities in the global market. As the largest producer and supplier of watermelon in the EU, Spain was significantly affected by adverse weather conditions such as sand haze, frost, and heavy rain. Due to the conflict, Ukraine cannot supply even 50% of the watermelon quantities from last year. With increasing transport costs, Hungarian traders hope that markets near Hungary will import Hungarian watermelons due to the geographical advantage. Trading with nearby countries may also improve their profit margin.

The biggest threats to these plans are in southern European countries such as Italy and Greece, where the watermelon season is longer due to warm weather. Also, the production of watermelon in Albania, Serbia, Bulgaria, and Romania is becoming increasingly important due to the modernization of production and the introduction of new watermelon varieties.

The optimal soil conditions for watermelon growing must be loose, well-structured, deeply plowed in autumn, on drained terrain. Alluvial soils where water is not retained and clay-sandy grounds are ideal. On the other hand, cold, compacted, moist soil is not suitable for watermelon production because the root of the watermelon is long, sometimes more than 2 m, and enormous mass. For the best quality watermelon production, soil acidity should be from pH 5.0 to 5.5. In Hungary, farmers combine foil tent production and open field, with the season starting in late June and lasting until September.

The export outcome for this season will depend on the supply of watermelon in the EU market. According to some estimates of producers and traders in Hungary, the retail price of watermelons should be at least USD 0.45/kg in the most substantial part of the season. Given the increase in inputs and other costs, such as transportation, manufacturers believe prices must rise to maintain profitable production.