Tomato Processors Set to Pay Unprecedented Prices for Raw Tomatoes in 2022

Global prices of raw tomatoes have risen significantly in 2022 as growers continue to battle with bullish drivers. Limited water supply to irrigate fields, adverse weather conditions, and rising input costs are putting unbearable pressure on fresh tomato production. Average prices of fresh tomatoes in most countries have exceeded 3-year average price levels: leading tomato growers such as the US, Spain, Greece, Portugal, and France, witnessed price gains of 24%, 23%, 16%, 14%, and 9%, respectively. Reference prices of tomatoes set between growers and processors have also risen significantly, averaging USD 107/mt. Industrial processors will need to spend 15% more on raw tomatoes compared to last year and 21% more than the average of the past three years.

In the EU and the US, reference prices are significantly higher than the global average and exceeded the prices negotiated in the past decade. The highest reference price in Q1 was set in the US, at USD 120/mt, a 15% YoY increase. In the EU, tomato processors will have to pay USD 116/mt for tomatoes, 24% more than the previous year. Raw tomatoes from Northern Italy are the most expensive in the bloc, at USD 121.8/mt, followed by Greece, Spain, and France, at USD 119.6/mt, USD 113.5/mt, and USD 109.3/mt, respectively. Rising production costs were the main driving factor in setting the reference price in Italy, while a prolonged drought in Portugal has pushed prices up by 14%.

The impact was however less in China. processors paid USD 78/mt, considerably lower than the global benchmark. Despite this, the reference price in China went up by 9% compared to the previous year, keeping up with the upward trend witnessed globally. In Tunisia, tomatoes remain fairly priced at USD 68/mt, just below the 10-year average of USD 69.4/mt. The case for Turkish processors is consistent with the global trend, with raw tomatoes costing USD 95.7/mt, a 20% YoY increase and 11% more than the two-year average.

The elevated cost of raw materials globally has made tomato processing considerably more expensive and resulted in high export prices of tomato products such as tomato paste. The most significant export price has been witnessed in the US, at USD 1668/mt, compared to USD 1046/mt last April. Italy, China, and Chile have also seen elevated tomato paste prices over the past year, increasing by 37%, 20%, and 11%, respectively.