Brazil's upcoming ginger season is strong, characterized by high volumes, uncertain demand, and price competition with Chinese and Peruvian ginger.
According to Andrew Percilios, Pommer Ginger's representative, the Brazilian company projects exports to grow compared to the previous season, with shipments concentrated mainly in Europe, its most strategic market, and the United States.
© Pommer Ginger
"Europe accounts for 70 percent of our exports, although the volume could decrease this season due to competition from China. It will all depend on our clients' commercial strategy and the type of product they decide to offer to the end consumer," he said.
Growth is no accident. Brazil increased its production by 20 to 30 percent for this year, creating both opportunities and challenges. "We have much more ginger this season, but that also means prices may fall due to a higher supply than demand," Percilios stated. This increase in volume is accompanied by a lower resistance of the start of the season's star product, baby ginger, which can only be shipped by air. "For now, we are shipping low volumes by plane because ginger is not fully mature, so it can't withstand the 25 or 26-day sea transport yet," he added.
© Pommer Ginger
"Currently, baby ginger prices remain high in the U.S. and Europe, but compared to last year it is lower already. The air ginger has a very high air freight cost which does not help." Percilios anticipates that prices could improve when maritime shipments, scheduled for mid-June, begin. "The return to the farmers may increase a little because of the savings on freight, but depending on the amount of offer, not much," he says.
© Pommer Ginger
"The biggest challenge will be sales, as our volume surpasses current demand," he stated. "However, Brazil could have a competitive advantage over Peru, a traditional competitor in this market, as the latter has had quality issues and has diverted its production to the United States. This year, there is almost no Peruvian ginger in Europe; instead, there is more Chinese product," Percilios added. "What differentiates our product, however, is its internal quality and size."
Pommer Ginger currently exports only fresh products, but it is already preparing to take a step towards derivatives. "We are testing some machines to produce powdered, crystallized, and dehydrated ginger," Percilios said. In addition, the company is exploring new crops such as avocado, lemon, and tangerine, with medium-term export plans. "Our avocado production is currently destined for the domestic market because it offers better prices than exports, but we already have all the necessary certifications to export," he said.
For more information:
Andrew Percilios
Pommer Ginger
Tel: +55 27 99968 5371
Email: [email protected]
www.pommerginger.com
