"This year the price of all four coloured paprika's remained far below average. This is not only the case with us, but for growers as well, at all growers associations," said Wouter Willems, who is the business unit manager of paprika at ZON fruit & vegetables.
Competition from Spain
"For the colours the start was quite reasonable, although there was a lot of competition from Spain and Israel. In week 22/23 there was a lot of pressure on the market for all the colours," said Wouter Willems when looking back at the season. "After the Russian market fell away due to the embargo stable demand for the product in Europe was picked up by the German market. In the meantime there has been a lot of competition coming from Spain." The quality of the Spanish products is decreasing each year and the Spanish season is starting earlier and being lengthened. This year competition from Spain was already occurring in week 36 and 37. "We are having a difficult time with that here in the Netherlands. They are counting on 30 to 50 cents and due to the limited capacity the difference in price is determining the choices of the retailers," confirms Willems. "For the most part German retailers have already switched over, or they will be doing so soon."
It has an impact on the Dutch prices. Thursday morning the green paprika's were going for 40 cents, the red were 75 cents and the orange and yellow were 80 cents. "Compared with the actual prices that the paprika's are going for, which varies between 1.20 and 1.40." This is a typical end for the Dutch season that still has a few weeks left. "This year the price for all four colours is far below average, not only for us, but also for all growers at every growers association."
Provided that the boycott continues, the expectation is that most of Israeli's paprika's will go to Russia. Will there be room next year? Willems cannot say. "We are hearing that the product will be planted later in Spain. If that is the case it would put more pressure on spring time. The question is what will happen in the winter. It is too early to make any conclusions at this point." It is also not clear how the area in the Netherlands will develop. "We know that the water is high for a lot of growers. But right now there is no major shift visible. Next week this will become clearer when the product will be planted for the new season." But these are not the only factors that will determine what happens next year. "There is too much supply, too much fragmentation in sales and the distinctiveness of our product and that of other countries is limited. The only thing being determined now is the price. The trick is to get out of that downward spiral."
A lot of attention was given to repositioning the clock this year. How has that affected the season? "In regards to day trading we concentrate on the hours between 7:30am and 8:00am - that is the moment to buy. Thereby creating less phone traffic and fewer negotiations throughout the day. This has had a positive impact on our payout," finds Willems. "But that is still insufficient. We see that we are not doing worse than our neighbours, but, just like everyone else in the sector, we are left with the strategic issue of how to come to a good business model that offers our members continuity."
For more information:
ZON Fruit and Vegetables
5928 RH VENLO
T: +31 (0)77 3239999
F: +31 (0)77 3239719
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