Consumer price index figures for the month of September have been announced by the Turkish Statistical Institute and, according to these figures, tomato is at the top of the list with the highest price increase from last month.
Tomato prices have increased by 35 % since August which was followed by green pepper with 31 % and eggplants with 24 %. In general prices have increased by 6.3 % in all products compared to previous month and 24.5 % compared to the same month of previous year which indicates a very high inflation rate in the current market place and tomato has become a public symbol of the high inflation rate.
The price of tomato is not only high in major markets such as Istanbul and Ankara but even in production regions such as Antalya which is also known as the center of the greenhouse production in Turkey. The price of tomatoes is around 1.1 USD per kg at the moment in Antalya which delights growers whilst causing frustration at the consumer side. Tomato harvest season is yet to start in Antalya and current products in the market are coming from mountain parts of Antalya. The growers also note high prices of chemicals and fertilizers as one of the reasons for high prices.
Another important production region for tomatoes is Tokat, a city located in northern Turkey where 90 % of the tomato production is exported to France, Austria, Germany and Belgium. Annual production volume in Tokat is around 459,000 tons which is grown in a production area of 6,000 hectares.
Tomato harvest has also started in Erdemli town of Mersin, a city located in southern border of Turkey and is also well-known for its agricultural production. The price at the grower is currently set at 0.65 USD per kg in the town where tomato production area is around 2,500 hectares. Annual production volume is around 350,000 tons and majority of the production is exported to Iraq, Saudi Arabia, Romania and Syria. High demand in the export market also brings growers into a stronger position in negotiating prices in domestic market with the wholesalers.
Speaking to the press, Erdemli Chamber of Agriculture Chairman Ahmet Caliskaner: “High tomato prices should not mislead the consumers about the profits gained by the growers. Growers continue to work with the same profit margins as before, the price increase is a result of the rise in production costs. Currently the production cost of 1 kg of tomato is around 0.40 USD due to increasing seedling, chemical and fertilizer prices. If the sale price is any lower than current level, our growers would be losing money. The prices are currently enough to satisfy the growers and we hope they will remain at this level.”
Whilst consumers continue to express their disappointment and frustration about high tomato prices, Turkey Greenhouse Investors and Manufacturers Association (SERA-BIR) Chairman Muslum Yanmaz offered his own view on why the prices are high and whether it will continue to remain at this level during winter months. Muslum Yanmaz: “Usually at the start of the harvest season, the prices can rise and drop very quickly and there is some expected volatility during these periods. Nevertheless current high prices are caused by following factors:
1) Tomato production in open field has finished earlier than expected due to tuta absoluta disease which is causing a shortage of supply in the domestic market.
2) Production costs have increased exponentially in the last 2 months.
3) Due to the loss of value of Turkish currency, export became a much attractive option for the growers and most growers started to sell their products to export markets.
4) The harvest of greenhouse tomatoes will start around the 1st week of November.
All these factors contribute heavily to the price increase. European buyers usually purchase tomato from us around 1.1 USD per kg every year which is very attractive for our growers right now. Furthermore the trade restrictions to Russia have been lifted which has been our most important buyer for tomatoes. That’s why growers who grow products according to the demands and requirements of export markets will naturally have a stronger position in these export markets.
If the value of Turkish currency has stabilized at this level, then we don’t expect tomato prices to go down this season. On the contrary the prices could increase even more in winter months.”
However there are contrary opinions about these predictions and some industry analysts in Aksu, Antalya where tomato harvest has just started, predict that the prices will go down once tomatoes from Aksu enter into the market. Currently tomato prices can go as high as 1.5 USD per kg in Istanbul but some predict with the start of the harvest period in Aksu and following harvest periods starting in other parts of Turkey, the prices will drop to 0.50 USD per kg. However growers are very much concerned about these predictions and remark that they would be selling at a loss at those predicted prices if the predictions indeed come true.
The growers added that the price will go down to a certain extent from current levels but 0.50 USD per kg is just too low of a price. Growers also pointed out the increasing production costs and noted that the production cost of tomato in a 1,000 square meter area was only 900 USD last year and 2,100 USD this year.
There are also some reports coming from Ankara about government officials exploring other options to drive down tomato prices which reflect poorly on the government and its economic policies. One of those options appear to be importing tomatoes from abroad however industry experts warn that this would result even more growers giving up tomato production and cause even a bigger shortage of supply in the upcoming seasons. Government officials had followed a similar path to lower down potato prices in summer.
Currently Turkey needs to grow around 1.6 million tons annually to satisfy local demand and export to other countries however due to diseases, heavy rain and hailstorms, the production volume this year has been around 1.1 million tons which causes a significant shortage of supply. This coupled with the increasing production costs drives up the prices at the market according to the industry insiders.
Insiders also point out that growers who didn’t grow tomatoes this year regret it and we may see more growers switching to tomato production next year. Nevertheless if the government’s plan to import tomatoes is actualized, then it will not scare away new growers, it may also push current growers out of tomato production. All these developments also underline the need for a master production plan in agriculture in Turkey, where local and export market demands are taken into account and production volumes are determined in accordance with that. This sort of master production plan will prevent common problems in the market such as shortages or oversupply.
Source: Haberturk / Haberturk / Bloomberg / Milliyet / Hurriyet / Haberturk / Hurriyet
