Year Overview - February

Fruit Logistica: Company acquisitions and more weird weather



February is of course Fruit Logistica month, when the fresh produce industry descends en masse on the Berlin Messe. As always, the whole FreshPlaza team were there, photographing and interviewing the standholders and visitors. 2016 saw a new record of more than 70,000 trade visitors from over 130 countries. FreshPlaza had the customary photo report of the event

At the event Zespri and T&G signed a Memorandum of Understanding (MOU) confirming their intention to work together to create value for their respective growers and shareholders. Zespri Chairman Peter McBride and BayWa Chief Executive Professor Klaus Josef Lutz signed the MOU.

Also announced in Berlin was that Capespan had acquired a 35% stake in the Yupaa Group, a family owned business based in Mumbai, which is one of India’s largest and most diversified fruit importers and distributors.



The 2016 Innovation Award was won by Genuine Coconut, an easy-to-drink organic coconut with a patented opening and a straw.

On the last day of the event the WAPA figures were announced after they held their AGM in Berlin. The prognosis was for an increase in apple exports with pear volumes slightly down.

Spain shipped its first apples to India in January, just two weeks after the opening of the Indian market for both Spanish apples and kakis. Kakis will have to wait until the next campaign. The creation of this new trade route was possible thanks to the joint work, over many months, of Afrucat, the Ministry of Agriculture, MINECO and FEPEX.

Although potato prices in Europe were higher in January 2016 than they were the previous year at this time, the continent's potato growers were reluctant to sell large amounts of their stocks. The reason being that, although the market was very favorable, they believed prices would be even higher in the future.

Total Produce was in the news when they acquired 65% of US produce company, Progressive Produce, a grower, packer and distributor of conventional and organic produce to the retail, wholesale and foodservice sectors in the US and Canada.

Weather
The effects of January's heavy rainfall in the Southern part of Florida could stretch into Easter. The downpour kept growers out of the fields. This was the latest downpour in a winter with lots of rain, and the production setbacks from the weather could affect supplies of vegetables all the way up to Easter.

New Zealand has also seen wet weather, while Western Australia experienced wildfires which led to an avocado shortage and subsequently an increase in prices. It was thought that avocado prices would not return to normal until April, despite the fact that 225,000 trays were currently on their way to retailers to temporarily ease prices.



Things were still difficult in the vegetable trade, one Dutch grower said, "In 45 years I've never experienced such a terrible, prolonged period for lettuce." He stated that things had been difficult since the second week of December. It is not that there was too much supply, but some growers had no lettuce due to problems with fusarium, and the overproduction of other vegetables was not creating the best market conditions.

In Italy the warm February was also causing problems for vegetables growers. "The winter season has practically skipped Apulia. I would have thought that there would have been a gap in supplies this or next week, but I was wrong. There is a lot of produce around, maybe there will only be less cauliflowers available around late March," said a producer from Bari.

In the Taranto area almond trees were already in bloom as were peach and apricot trees. Strawberries were also already available.



Drought in South Africa
The drought in South Africa was causing high prices in the European grape market as the prices had increased considerably in a few weeks. South Africa was expecting a record harvest, but it didn't come as the later production areas suffered from high temperatures and drought.

The situation in South Africa gave rise to a good demand and prices for Indian grapes in Europe. The Indian grape harvest started early with initial demand from Russia, which remained steady.

Despite the challenging growing conditions in some of the major production areas, the estimate of topfruit exports from South Africa was expected to increase slightly by 3% (for both apples and pears). The main driver behind this was new plantings coming into commercial volumes and the Langkloof production area yielding a normal harvest for the first time in more than 3 seasons.

Also in South Africa grapefruit volumes were almost halved due to hail and drought. Hoedspruit and Letsitele, where about 60% of South Africa's grapefruit is grown, were in a serious drought situation, to add to the woes of the growers, the area was also hit by hail the previous November, which made predictions for the coming season even lower. Some growers saw a total loss but the average was around a 30-50% drop in volumes from the area.

In Spain frost had damaged 80% of early stonefruit production. Frosts recorded in different regions of Murcia also damaged artichokes, citrus fruits and leafy vegetables. The flowering of stonefruit trees was already at an advanced stage due to prolonged spring temperatures during the autumn and winter. "The damage to the trees that were already in bloom is very serious, with losses for extra-early varieties ranging between 40 and 80%, depending on the area, and temperatures that have oscillated between -2 and -7 degrees Celsius.

While Spain was assessing the damage caused by frost on the early varieties, Italy was hopeful as winter hadn't been particularly cold. Early peach and nectarine varieties were already blossoming.

Also in California they were hopeful of a good cherry crop. Though California's cherry harvest is still several months away, the state's cherry growers saw promising signs. Plenty of chill hours and more rain than in previous years provided good conditions for this season's crop.












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