Increasing demand gives soft fruit market growing pains

OVERVIEW GLOBAL MARKET BERRIES

Berries are booming. In the search for superfoods and antioxidants, more and more consumers are finding their way to the soft fruit shelf. This has been revealed by research from the University of Palermo, for which 200 Germans were asked about their reasons for buying berries. This showed that their health benefits were the main reason for purchasing them. 29.5% of consumers buy soft fruit at the supermarket; another 23.5% goes to the local market.

Due to increasing demand, the supply volume is also on the rise. This has led to low prices in Mexico. Before the year 2000, growers were still paid $ 40 for a box of blackberries. Today the price stands at around $ 6 dollars. In Europe, the weather is taking a toll on soft fruit prices. Spain had an extremely mild winter, which allowed raspberries to grow very quickly and prices were significantly affected. British growers fear a predominance of small calibres, given how the mild winter has been followed by an unusually cold spring.



Peaks and lows
In Italy, raspberries are in the top five of the most profitable types of soft fruit. A plant costs an average of 1.40 Euro and remains productive for a period of over 6 years. With an average production of 25 to 30,000 Euro per 5,000 square metres, raspberry yields oscillate from about 1 to 1.2 tonnes per square kilometre, with prices ranging from 5 to 10 Euro per kilo and peaks of 12 to 14 Euro in direct trade with the hospitality industry.

Not surprisingly, more and more Italian companies are being attracted to soft fruit cultivation, especially raspberries. Most berries are grown in the area of Trentino, followed by Verona and Saluzzo. In the south, berry crops concentrate in Calabria and Sicily, and significant volumes are also produced in Romanga. Raspberries are being followed closely behind by blackberries, which are also expected to register a considerable increase in their cultivation over the next five years. Soft fruit prices had peaks and lows. Until August, prices stood at around 8 Euro per kilo, although they dropped quickly as a result of an overlap with the Spanish season.

Smaller calibres
The erratic weather in Great Britain remains an uncertainty-generating factor for soft fruit prices in the UK. "It is difficult to estimate what the impact of the mild winter and cold spring will be on berry crops. For example, there is a chance that calibres will be smaller, which may result in higher labour costs for the picking," explains a British trader. British consumers are also aware of the healthy properties of berries and are purchasing them more often. The price of raspberries had been under pressure in recent years, but this is now changing. "In recent times, there was a big supply of raspberries, but prices have been relatively good."

On the other side of the North Sea, increased demand for raspberries, blackberries and redcurrants has been recorded in the Netherlands. The redcurrant season is coming to an end a little earlier this year. Their storability is slightly worse, but the quality is good. There are some Chilean berries in the market, but for the rest, the Netherlands can do well without imports. Exports go mainly to France, Germany, Austria, Switzerland and the Middle East. The greenhouse blackberry season has only just started. Whenever there is pressure on prices, it becomes difficult to generate additional sales. The reason for this is that blackberries are not the sort of product that retailers use for promotions. Despite the supply from Portugal and Spain, raspberry prices are good. The volumes of Dutch raspberries are not yet too big and prices are certainly not under pressure.

Falling prices
Also in Mexico are the healthy properties of soft fruit helping in boosting their popularity. While the market share of blueberries is growing steadily, blackberries are also booming. In Mexico, the largest companies sell more than 4 tonnes of blackberries to over a thousand retailers across the country. Ten years ago, retailers would not even purchase a kilo and the sector now sees no limits to growth in the future. Soft fruit cultivation was first introduced 30 years ago and the greatest expansion took place between 2000 and 2008, when the acreage grew from 2,000 to 10,000 hectares. Up until 2011, Mexico itself was the largest exporter of blackberries, a position which has now been taken over by the United States. 

With the expansion of the acreage, prices have also fallen. Before the year 2000, approximately $ 40 were paid for a box of blackberries containing 12 170 gram containers. That figure has now fallen to $ 6. In addition to the expansion of the Mexican acreage, the growth of the crop worldwide is to blame for this decline.

So far, Mexicans had not been exporting so much, but the dependence on foreign investors will gradually change that. For now, most Mexican blackberries are shipped to the United States, where entrepreneurs sell the fruit in the local market or re-export it to other countries.

Mexican hailstorms
Mexican blackberries arrive via California, Texas and Arizona to the United States, where they are sold for prices ranging between 10.00 and 12.00 dollars. According to a US trader, the impact of frost and hail has caused issues to those looking for premium fruit. Florida imports blackberries from Guatemala for prices oscillating between $ 12.00 and $ 14.00. The Mexican blackberry season peaks in May and lasts until the middle of June, re-starting again in September. The US season kicks off in late May and runs until mid-July. The Arkansas harvest lasts from the second week of June until early autumn. In California, the season runs from summer to autumn.

Production volume doubled
In Australia, there are producers all over the country, with the exception of the Northern Territory and Western Australia. There is a total of 120 growers of blackberries (20%) and raspberries (80%). Over the last five years, the production volume has doubled and the value of the sector has increased from $ 40 million in 2013 to more than $ 50 million in 2014/15.

Most of the production concentrates in Victoria, New South Wales and many parts of Tasmania, although Queensland has also recorded a significant growth over the past five years. The sector has a unique mixture of medium-sized farms and large corporations, which grow most of their blackberries and raspberries indoors in both soil and water.

The Australian production is mainly intended for the domestic market and peaks traditionally between the summer and autumn. The indoor cultivation of berries, however, guarantees year-round availability. The 250 hectares devoted to blackberries and raspberries yielded nearly 2,000 tonnes of fruit between 2012 and 2013. Compared to 2010, the volume in 2014 has doubled and the sector, given the growing demand, expects the volume achieved in the 2013/14 campaign to double again by 2018.

High temperatures
The unusually high temperatures recorded early this year took a toll on the Spanish raspberry market. Raspberries grew very quickly and the surplus resulted in low prices. The situation is now stable, but prices remain low. The biggest threat is actually the growers who make the switch to raspberries after a bad strawberry campaign. "If Huelva does not keep its 7,000 hectares of strawberry crops, there will eventually be more raspberries grown than the market can absorb," stated a Spanish trader.

The main market for Spanish berries is Europe, but interest is also growing in Asia. If the necessary certificates are obtained, the biggest challenge will be overcoming the cultural differences. For now, the volumes shipped to the Far East are still negligible and will not have much of an impact on the market. 

A little further north, France is enjoying good market conditions, with a price of 17 Euro per kilo for its currants. The Dutch season is now coming to an end and will be followed by Chile and Portugal.

Every week, FreshPlaza and AGF.nl publish an overview of the market situation of a product in a global context. With these articles we aim to provide a view of a global market shrinking due to globalisation.

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