Who wouldn’t want to gaze into a crystal ball to see how the market will be doing in a few years? In a recent report, the European Commission examined the developments in agriculture for a medium long period. A close look was taken at the market for apples, peaches and nectarines, among other products. This resulted in good news in general: a slight increase in consumption is predicted. But is this the case for all products?
“In the next ten years, the consumption of fruit and vegetables is expected to rise slightly,” the researchers concluded. The most important motives for the growing consumption are health motives and the increasing availability thanks to ‘new’ sales points such as filling stations and snack bars. Breaking down this general trend, a more nuanced image appears, and each individual product won’t find its way up according to that.
Organic continues growing
Expectations for organic production are positive. In recent years, the organic area increased considerably, and it’s expected that trend will continue in the coming years under influence of increasing demand. The fruit production is an important part of organic production. In 2016, six per cent of the apple area (30,000 hectares) was organic and another three per cent (15,000 hectares) was in the process of switching. The area increased particularly quickly in France, where 2,700 hectares became organically certified. A yield of 31 tonnes per hectare is reported in that country, which amounts to 70 per cent of the conventional yield per hectare.
All lights are also set to green for peaches and nectarines. In 2016, Europe had 3,000 hectares of organic peaches and nectarines, or 0.6 per cent of the area. Another 1,800 hectares was in the process of switching. Italy, with 1,500 hectares, takes the lead, followed by Spain (550 hectares) and France (500 hectares). In Spain and France, the area grew considerably between 2012 and 2016. These countries reported an increase of 26 and 41 per cent, respectively. In Spain, a yield of 14 tonnes per hectare is achieved, so that the total harvest amounts to about 4,000 tonnes. That is about 74 per cent of the yield of the conventional production.
The report, EU Agricultural Outlook for markets and income 2018-2030, makes careful predictions about the market in the coming years. Effects of Brexit and the new Agricultural Policy were not taken into account, because too much is still uncertain regarding both situations. Besides, the researchers assumed no unforeseen market disruptions, such as trade tariffs or extreme weather, would occur.
Apples – consumption under pressure
It’s expected that the apple production of the 2018/19 season will amount to 12.7 million tonnes, which corresponds to the five-year average. Poland, Italy, France and Germany combined are good for nearly 70 per cent of the production. Globally, the EU is in second place in the ranking, after China with nearly 50 per cent of the global production.
Production is expected to stabilise around 12.4 million tonnes around 2030. Even if the average yield is nine per cent higher than the five-year average, it will be insufficient to compensate for the declining area. It’s expected that the apple area will have reduced by ten per cent in 2030, compared to 2018. That reduction is mostly expected in Poland, where the sector is now undergoing a restructuring.
That restructuring mostly consists of grubbing up old orchards. Part of these orchards will be replanted with new varieties that meet new consumer requirements and new production methods. Varieties primarily meant for the Russian market will abandon the field to varieties that appeal to new markets.
The consumption of apples won’t continue to follow the positive trend followed by the sector as a whole. Consumers appear to choose new flavours and convenience products such as (pre-sliced) tropical fruit and soft fruit. These products are regularly offered in supermarkets besides well-known apples, although apples continue to be the best available fruit in winter months, and new varieties improve the segment. In the past eight years, consumption was under pressure. Annually, that figure dropped by one per cent. It’s expected the consumption of apples will remain stable at 13.2 kilograms per capita in the next ten years.
After Russia closed its borders in 2014, exporters started looking for new markets. Next year, the amount exported will be the same as before the Russians closed their borders. The Russian market had a market share of 40 per cent in the European export. About 33 per cent of the turnover was achieved on that market. In the years up to 2030, an annual export increase of 3.5 per cent is expected thanks to new destinations. Besides, the researchers assume Russia will lift the boycott after 2019. The import will continue the slightly decreasing trend (-0.6% per year).
Peaches and nectarines – opportunities for export
In 2018, 4.1 million tonnes of peaches and nectarines were harvested in the EU. The majority of that (85%) was meant for the fresh consumption. The remaining 15 per cent was processed. Spain, Italy, Greece and France combined are good for 96 per cent of the production. Of these producers, Spain and Greece are the most important producers for industrial processing.
The production of peaches and nectarines will remain stable in the coming year. Towards 2030, a production of four million tonnes is estimated. In the coming years, the average yield will rise by eight percent compared to the yield in the years 2012-2017. However, the area will decrease by 0.7 per cent per year. A restructuring of the sector is predicted. This will be noticeable particularly in Spain, where the production increased by 54 per cent between 2012 and 2017.
To meet demand for improved varieties, orchards are being replaced. The new varieties don’t just correspond to changing consumer preferences regarding quality, they’re also more productive and better equipped to deal with the consequences of climate change. Besides, the better resistance of these varieties will be more profitable for growers.
In recent years (2012-2017), consumption increased by three per cent per year on average. That was mostly the result of more availability and low prices. Pressure on prices was, in part, the result of Russia closing its borders in 2014, a large harvest and the overlap in harvest periods due to weather influences. In the coming years, this increase will be slightly lost again. The report estimates a decreasing trend of 0.4 per cent per year. That is mostly the result of a larger availability of summer fruit such as melons, tropical fruit and soft fruit, which is widely available. Additionally, consumers that were affected by changeable quality of the peaches in the past ten years are more likely to choose different fruit, which is available in ready-to-eat packaging.
The export has already received quite a blow, in part because the Russian market was lost in 2014. Between 2012 and 2017, export dropped by eight per cent. Due to the Russian boycott, Europe lost its most important export destination for this fruit. In 2014, more than half the peach and nectarine export was meant for Russia. The growing export to Switzerland, Belarus and Ukraine couldn’t compensate for the loss of Russia. The import, which mostly occurs outside of the season, remained stable in this period.
It’s looking better for the coming years. It’s expected export will improve, and that it will increase by one per cent on average per year. This improved situation is mostly thanks to new markets that are entered and the assumption that Russia will reopen its borders in 2019.
Tomatoes – growth thanks to snack segment
In 2018, the European tomato production amounted to more than 16 million tonnes, less than half of which (40%) was traded on the fresh market. The majority (60%) was processed. These are stand-alone production flows. Spain, Italy, the Netherlands, Poland and France combined produce 73 per cent of the tomatoes for the fresh market. For industry, Spain, Italy and Portugal are the biggest producers, with a combined market share of 90 per cent.
The production of tomatoes for the fresh market will remain practically stable. In the report, a decrease of 0.3 per cent per year is estimated until 2030. However, the production will increasingly focus on tomatoes with a higher added value, such as cherry, cocktail and other small tomato varieties. In the past ten years, the stability of the production went hand in hand with an increase in value. In France, Germany, Italy and Spain, the value of the tomato harvest even increased by 25 per cent between 2007 and 2017.
The average area for tomatoes is under pressure, but the average yield will increase. This is thanks to the illuminated production and the heated greenhouses, so that seasons are extended. This trend can be seen in all production regions, and growers are hoping for production during a longer part of the year because of it. The traditional summer season in the north of the continent is extended until autumn, while the winter season in southern countries is extended until spring. Because of the focus on small tomatoes, the average yield per hectare is decreasing, but that decrease is turned into a positive trend due to the extension of the season.
On average, Europeans consumed 14 kilograms of fresh tomatoes per year. This figure has been stable in the past ten years, and will remain practically stable. In 2030, the average consumption will be at 13.6 kilograms per capita. This is in part the result of the smaller tomatoes that are on the rise.
In contrast with the decreasing export figures of recent years, when a 0.3 per cent decrease was reported as a consequence of the Russian boycott, export will find its way up again in the next few years. With a growth figure of 1.6 per cent compared to the five-year average, the expected export will amount to 200,000 tonnes in 2030.
The EU depends on Morocco for the import. More than 70 per cent of all tomatoes imported by the EU come from this North African country. The remainder of the tomatoes is imported from Turkey. In the past ten years, the share of Moroccan tomatoes increased by 34 per cent. The import figures from Turkey, however, fluctuate considerably. In the past two years, import from Turkey increased as a result of the Russian boycott of Turkish tomatoes and a devaluation of the Turkish lira. It’s expected import will continue to rise by 0.4 per cent per year, and in 2030 it will amount to 500,000 tonnes.