Last Wednesday, the Association of Young Growers of Almeria gave their take to the media on why the prices at origin of courgettes and aubergines sank in just a few weeks. According to the organization, everything points, in the first place, to the manoeuvres made by the large food distribution chains that dominate the European market, and in second place, to the "comfort that a situation like the current one, with lower prices at origin, gives to local companies."
The fact, according to Francisco Vargas, is that the situation of high prices recorded during a short period, from late December and part of January until week four, made it difficult for supermarkets to earn money, as they were forced to reduce their profit margins due to the high prices at origin.
Given the circumstances, "the distribution chains put in place a strategy to reduce demand and, therefore, cause the prices at origin to fall." In Vargas' opinion, "neither supermarkets nor local companies are interested in producers being paid high prices," since the intermediaries who buy at source and supply the chains "don't care, because they obtain the same profits for their operations at all times."
In order to make the value fall from week four, "they reduced the number of orders and the volume purchased," said Vargas, adding that, in turn, "they increased the retail price, not in order to obtain higher profits, but to stop consumption and thus cause a decline in demand." The organization also noted that, in this context, "they took advantage of the publication of the CPI of the different EU countries, announced that their increase was due to the increase in vegetable prices and noted that this was dangerous, because it could take a toll on the prices of other foods." They consequently found allies in the governments and managed to "cause prices to sink in a few weeks, especially for the products with the highest prices, such as aubergines, courgettes and red tomatoes."
According to Francisco Vargas, the production continues to be "scarce," despite the fact that there have been increases of up to 30% in the last weeks. And yet, "it is still a volume well below the levels reached in this same period last year."
This situation only damages the producers, and at a time when, due to the impact of rains and cold weather in December, the European market is highly dependent on the vegetables supplied by Almeria. "Precisely now, when we dominate the supply, we have the worst prices in Europe," said the head of the Almerian agricultural organization.
The situation, however, "could still be reversed," said Vargas. "Everything depends on the Ministry, which must investigate the situation, and on local businesses, which should exert their force against supermarkets."
