1. Weekly News

Europe

EC Proposes USD 131.6 Million Aid Package for Farmers Affected by Storm Boris

Following the devastating impacts of Storm Boris across Europe, the European Commission (EC) has proposed allocating USD 131.67 million from the agricultural reserve to directly support farmers affected in Bulgaria, Germany, Estonia, Italy, and Romania. The proposal includes USD 12 million for Bulgaria, USD 51.15 million for Germany, USD 3.63 million for Estonia, USD 41.14 million for Italy, and USD 23.76 million for Romania to compensate farmers who lost part of their production. In Poland, the Agriculture Minister announced that the government is assessing the extent of the destruction and has applied for European Union (EU) aid for farmers affected by the floods. Reports indicate that Polish producers of vegetables, particularly tomatoes, peppers, and potatoes, have suffered significant losses, especially for crops that still need to be harvested.

Egypt

Egypt Eyes USD 16 Billion in Tomato Exports by 2030

Egypt produces approximately 11 million metric tons (mmt) of tomatoes annually, making it the fourth-largest producer globally. The country plans to generate USD 16 billion by exporting 4 mmt of fresh or processed tomatoes, provided that these exports meet EU standards– specifically being free of fertilizer and pesticide residues. This potential aligns with the Egyptian government's 2030 strategy to achieve USD 100 billion in exports by adhering to EU criteria, particularly for markets in Spain, Germany, Portugal, England, and Italy, where tomatoes are essential for products like pizza. Egypt's year-round production gives it a competitive edge in the agricultural export market for organic tomatoes, especially against Morocco, which produces 4.2 mmt and exports about 2.8 mmt of organic tomatoes. From January 1, 2024, to September 18, Egypt ranked ninth in tomato exports, totaling 37,137 metric tons (mt) out of 6.4 mmt of agricultural products. The total area dedicated to tomato cultivation spans approximately 520 thousand acres across several governorates, including Beheira, Qena, Ismailia, Fayoum, Sohag, Beni Suef, Minya, Giza, Sharkia, and Alexandria.

India

Excessive Rainfall in India Disrupts Vegetable Markets in W39

Excessive rainfall in India caused significant damage to vegetable crops in W39, leading to a surge in vegetable prices at Azadpur Mandi, Asia's largest wholesale market for fruits and vegetables. This price rise primarily stems from decreased arrivals of essential vegetables, particularly tomatoes. The government plans to intervene by selling these vegetables through mobile vans to stabilize the market. However, the price increase is expected to persist due to sowing delays and heightened pest and disease levels in tomatoes. The government has started offloading onions from its buffer stock to mitigate the impact. However, lifting export restrictions has somewhat undermined this effort, maintaining upward pressure on prices.

Turkey

Tomato Yield Falls in Turkish Greenhouses, but Exports Remain Stable

Tomatoes from Turkish greenhouses in Deregümü village are exported to various countries, including Bulgaria, Greece, Russia, and Romania. However, this year's yield fell short of the targeted amount due to crop diseases. The President of the Isparta Chamber of Agriculture reported that the 2023 harvest was 15 thousand mt. Deregümü village reduced its production target for 2024 from the initial 30 thousand mt to 20 thousand mt. Moreover, farmers completed 85% of the tomato harvest as of W39. Although there has been a reduction in the overall yield, there has been no negative impact on exports, with 20% of the tomatoes going to the Middle East.

2. Weekly Pricing

Weekly Tomato Pricing Important Exporters (USD/kg)

Yearly Change in Tomato Pricing Important Exporters (W39 2023 to W39 2024)

Mexico

In W39, wholesale tomato prices in Mexico dropped by 5.83% week-on-week (WoW), 30.71% month-on-month(MoM), and 48.68% year-on-year (YoY), reaching USD 0.97 per kilogram (kg). The price decline is due to a forecasted 2% increase in Mexico's tomato production for 2024, expected to rise from 3.22 mmt in 2023 to 3.30 mmt. This projected increase has contributed to market stabilization and a bearish price trend. While some producers have invested in protected cultivation to reduce risks, a considerable portion of Mexico's production still relies on open-field farming, which is more vulnerable to weather conditions and typically results in lower yields.

Morocco

Moroccan tomato prices surged by 5.88% WoW and 20% MoM in W39, reaching USD 0.36/kg. Experts attribute this increase to declining production and rising demand, aggravated by a recent heatwave that impacted vital production areas, including Mohammedia, El Jadida, Oualidia, and Agadir. Despite ongoing price hikes, citizens remain hopeful for market stabilization, though achieving this appears unlikely under the current conditions. The government faces criticism for allegedly focusing more on economic pressures citizens face than on addressing the root causes of the price increases.

Spain

In W39, Spain's wholesale tomato prices surged by 19.57% WoW, climbing from USD 0.92/kg to USD 1.10/kg. This price increase represents a 74.60% rise MoM and a 34.15% increase YoY. Seasonal fluctuations primarily drive the sharp price rise as the summer tomato production cycle ends, and early autumn varieties have yet to enter the market. Additionally, extreme weather conditions, including heatwaves and irregular rainfall, have negatively impacted yields, further tightening supply and contributing to the upward price pressure.

Turkey

In W39, Turkey's tomato prices held steady WoW at USD 0.80/kg but saw a 4.76% YoY decline. This drop is driven mainly by an oversupply of fresh tomatoes, which has dampened demand. Despite ongoing drought conditions, the surplus results from higher production output this season, leading to market saturation and subsequent price reductions. However, farmers face rising production costs, particularly for diesel and transportation, which have increased disproportionately compared to the stagnant product prices. This imbalance has caused dissatisfaction among producers, sparking protests in critical agricultural regions.

France

In W39, tomato prices in France surged by 7.18% WoW, 12.97% MoM, and 16.11% YoY, reaching USD 2.09/kg, the highest compared to Mexico, Morocco, Spain, and Turkey. This spike is due to a significant shortage, especially in round tomatoes, primarily due to seasonal factors. Industry experts note that by mid-Sep-24, plants become fatigued, leading to reduced production. Despite delayed imports from southern countries like Spain and Morocco, they are gradually entering the French market. Despite moderate demand, prices remain strong due to a more significant production shortfall than last year.

3. Actionable Recommendations

Expand Organic Tomato Exports to Europe

Egypt has the potential to significantly enhance its agricultural export revenues by focusing on organic tomato exports to Germany, Italy, Spain, and England. By aligning with EU standards on organic farming practices, especially concerning pesticide and fertilizer residues, Egypt can effectively position itself as a premier exporter of organic tomatoes. The government and agricultural stakeholders should prioritize high-quality varieties like Bulgaria 23 and Sabrina, which are highly sought after in European markets. Investment in infrastructure, such as cold storage and transportation facilities, will be crucial to support this initiative. Expanding organic tomato production aligns with Egypt's 2030 vision of achieving USD 100 billion in exports and can significantly boost the economy by tapping into the lucrative organic food market.

Promote Protected Cultivation for Climate-Resilient Production

Poland should adopt protected cultivation systems to enhance resilience against climate-related challenges. This method, which includes greenhouses and high tunnels, allows for greater control over growing conditions, protecting crops from extreme weather events like flooding. Polish farmers can safeguard their production levels and stabilize supply chains by focusing on climate-resilient varieties such as Tropic Boy and Roma VF, which can thrive in these controlled environments. The Polish government should facilitate this transition by providing financial incentives and technical support for farmers willing to invest in protected cultivation. This approach mitigates the immediate impact of weather-related losses and strengthens the agricultural sector's capacity to adapt to changing climate conditions, ensuring food security and maintaining market competitiveness.

Invest in Protected Farming to Boost Tomato Exports

To combat the declining prices and stabilize its tomato market, Mexico should significantly invest in protected cultivation systems, particularly for high-demand varieties like Beefsteak and Roma. Moreover, embracing greenhouse technology can mitigate the risks associated with open-field farming, such as pests, diseases, and climate variability. By creating a more controlled growing environment, producers can achieve higher yields and maintain consistent quality, which is essential for export markets, particularly in the United States (US) and Canada, where demand for fresh tomatoes is robust. The Mexican government should support this initiative through subsidies, training programs, and research into the best practices for protected cultivation. By enhancing production reliability and quality, Mexico can stabilize domestic prices and strengthen its position as a leading exporter of tomatoes in North America, maximizing its economic potential in the agricultural sector.

Sources: Tridge, Akhbarelyom, Economic times, Sondakika, Agro Times, Almalnews, FreshPlaza