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Year Overview July

Bad weather brings shortages of key fruits and veg

Weather woes continued into July as growers in the States were hit with rain and hailstorms around the 4th of July, causing increased demand for peppers. It was reported that the US market was tight in July for larger pepper sizes. According to a trend report from US Foods at the end of June, excessive heat and rains put an early end to Georgia’s pepper crops. North Carolina is in full production and South Carolina has approximately another three weeks left in production.

According to Hans Derks from Dutch exporter Harvest House, "Except for the high demand from the US, there are no exciting things happening in the export business. "We definitely missed the Russian market this spring, but destinations such as the United Kingdom, Germany, and Scandinavia, are doing well. In addition, the trading parties are short in supply. This results in retail prices of €2.00 for yellow and orange peppers, €1.35 for red peppers, and even better prices for green peppers. Last week, the retail prices were far below €1.00 and now the larger sizes are somewhat above a euro per piece."

Twitter picture: The French supermarket Carrefour has plumped for duo-packs with yellow and green peppers. It is said that is because of a shortage of red peppers from Murcia. This originates from the harvesting of green product because of the good prices for green peppers.

The US was not alone, as supplies in the Netherlands had been hit by hail at the end of June, damaging different types of vegetables. Cucumber prices had risen in the middle of July due to hail damage. European pepper-prices also increased significantly. Higher prices were seen in Spain and the Netherlands. The issue was made worse once the Israeli supply was no longer available.

Bad weather leads to banana shortage in S. America
Adverse climate conditions caused banana production to stall in a couple of key banana-producing countries in South America. As a result of light supplies, prices for bananas on the open market were higher than normal in July.

Winter temperature changes affecting the banana fields in Peru, with banana production decreasing each week. Even though July is typically a low production period, the reduction in the harvest had been more noticeable. Associations and cooperatives were working hard to implement soil management, training and technical advice to producers, in order to mitigate the effects of the weather. The goal is to exceed the exports achieved in 2015 by 15%.

When Colombia and Ecuador suffered some weather issues during this period, it ended up being a good year for Costa Rica.

The California grape demand was good at the start of harvest in the San Joaquin Valley, with growers reporting excellent quality and condition.

Consumers also couldn't get enough in Europe, where Spanish producers shared that there wasn't enough supply to meet all of the demand.

According to Cristina Gutierrez from Grupo El Ciruelo; "Volumes are normal but they are not enough to meet the high demand right now. "Consumption is very fast, as the European market for table grapes is hungry. Egypt and Morocco have ended their season earlier than usual and with difficulties. Most European operators want to start buying Spanish grapes when our campaign begins because of our quality and food safety. At present, we have trouble meeting all the demand there is, it's crazy."

Egypt ran into some problems during the season after their were claims that growers had used too much ethephon for colouring their red grapes, leading to many batches unable to be sold.

These claims were quickly met with a response from Mohamed AF Ragab from Ragab Farms, who said that this claims were entirely untrue.

“In Egypt, we’ve been monitoring our residue levels for over 20 years to comply with European standards. So there haven’t been any issues in this regard. What could have happened is that has been maybe one exporter with one problem with one container. Maybe he has made a mistake or maybe his inspections weren’t thorough enough. But this was most probably a one-off incident. This is not some systematic problem of the Egyptian fruit sector, as we haven’t had these issues in over ten years.”

July also brought some big company news, with Chinese fruit exporter Golden Wing Mau Agricultural Produce obtaining 19.99 percent of T&G shares. With this purchase, Golden Wing Mau became the second largest shareholder of the New Zealand company.

Alastair Hulbert CEO at T&G responded a few days later saying; "This was completely independent from BayWa and T&G and is purely a transaction between Golden Wing Mau and two other shareholders in the company. T&G were not involved in the transaction, for us it is business as usual. We have done business with Golden Wing Mau for many years and we will be exploring any relationship there is to be had over time. Hopefully their holding will give us more opportunities in China."

It was also announced that the Ahold-Delhaize merger between Ahold and Delhaize was expected to be completed by the end of July. The company unveiled its new logo after the merger was completed, which encompassed both the 'crown' emblem used historically by Ahold and the 'lion' insignia formerly part of Delhaize's logo. In a statement, Ahold Delhaize said that the new company 'is a leader in supermarkets and e-commerce – 22 market-leading local brands with 6,500 stores in 11 countries'.

Greenyard Foods' Fresh division also announced the closing of a joint venture with Bardsley Farms Ltd., in which it will take a minority stake at the end of July. Greenyard Foods said that it would obtain a minority stake via a capital increase, which would be used for investments in machinery and storage capacity.