Unless a miracle occurs or a permanent blockage of routes from Spain, peach prices have little chance of increasing significantly between now and the end of the season. Cédric Sabaté, a producer in the Pyrénées-Orientales expects a huge loss over the 2014 season. “The prices plummeted at the end of June. They have not gone up since. We ship at €1.10/kilo. We lose on average 40 cent per kilo harvested and packaged. We would need to sell at a price between €1.40-1.50 to cover the 85 cent production cost. But it is impossible today, when the Spanish are offering peaches at 58 cent at the Saint Charles de Perpignan market. They are also losing money, but they are turning over their production” explains the producer.
Like in other orchards in France, Cédric estimates that production costs reach €20,000/ha of which €15,000 is for manual labour. The peaches are sold within 3 days of harvest as they are nothing like the ‘pétanque balls’ from the South of Europe that can last a week in refrigerated trucks. Spain can produce for 40 cent less due to cheaper labour. “The Spanish are purely using a dumping strategy. At the start of the season, when the French orchards are not yet ripe, they sell their peaches a lot more expensively. This is when they have a profitable margin. And, when we arrive on the market, the prices collapse and when the French competition disappears, they will be able to margin all season!” says Patrice Vulpian.
The dumping is not a secret as the peaches sold for 58 cent in Perpignan are offered to wholesalers in Barcelona for 90 centimes, and even €1.10 in Madrid.
French producers have even thought up a strategy to buy the Spanish peaches in Perpignan at a small price, and then reintroduce them onto the market in Barcelona at an even lower price than the 90 centimes established and destabilise the market. A large French producer says that he had thought the plan through but regrets that they would need an operator in Spain to play along.