Fruit prices at origin are sinking, with growers barely managing to cover the production costs, despite the fact that this year, the weather has reduced the production by about 20%. Meanwhile, prices have continued to rise in supermarkets, with a year-on-year increase of 13% in July, making fruit prices one of the main factors behind the rise in inflation.
It is also not the first time that this happens. "We have been denouncing it for years," says Vicente López, head for the fruit sector at the agrarian organization Uaga, which is part of COAG. He criticises the ineffectiveness of regulations on commercial margins. "They are useless. There is a law, but it does affect all links in the food production and distribution chain," he explains.
López points to large food distribution chains as responsible for the situation. "Eight out of ten kilos of fruit consumed in Europe are sold by supermarket chains, which can easily reach agreements and set the same prices," he says.
According to the latest IPOD (Index of Food Prices at Origin and Destination), the retail price of melons is almost ten times greater than the price paid at origin, going from 18 cents per kilo to 1.77 Euro, while the retail price of plums is more than seven times more expensive than that at origin (going from 0.40 Euro to 3.06 Euro). Also, those of cherries and apricots increase by more than six times (from 0.81 and 0.45 to 5.12 and 2.91 Euro) and peaches become more than five times more expensive (from 0.52 to 2.62 Euro). Lastly, watermelon prices increase from 0.23 at origin to 1.31 Euro on the shelves, and nectarines see their prices rise from 0.51 to 2.76 Euro.
This happens when, due to the collapse of production, the fruit comes quickly to market and there are no reserve stocks, although "this is not reflected in better prices for the grower or in lower prices for the consumer," says Uaga.
Cheaper at origin, same margin in the store
According to the IPOD, prices of agricultural products become up to five times more expensive when going from field to the retail store.
A few days ago, another agrarian organization, the Union of Agricultural Producer and Cattle Rancher Unions, asked the Ministry of Agriculture for measures to bring balance to the market and prevent these differences between the price paid for the fruit at origin and the price charged in to the public in stores.
"This problem is being observed across Europe"
In areas such as the Jerte Valley, in Extremadura, whose economic structure is based on cherry production, producers have barely been able to cover half of their costs this campaign as a result of low prices.
"This problem is being observed across Europe," explains López, since "the fruit market is very global. There is a lack of balance between supply and demand, because the former is not taken into account, and that means that many producers only manage to cover their production costs, and often not even that."
A product that becomes more expensive when there is more of it
This imbalance between prices at origin and destination is, however, recorded year after year in summer, which is also the time when there is a greater demand and production of fruit. In 2018, the sector is suffering this in addition to the losses caused by four years of the Russian ban on its products.
In those four and a half years, and while the EU has withdrawn hundreds of thousands of tonnes to allocate them to social actions in order to alleviate the collapse of prices, the retail prices of fresh fruit have registered an increase of over 22 points, according to the INE (National Institute of Statistics).
The main increases, just like in 2015 (+14%), 2016 (+19.5%) and 2018 (+17.5%), coincide with the spring months (starting in April) and the beginning of summer, when both the supply and the demand are higher. The exception was last year, with an increase of fifteen points between August and October.
However, López argues that "there is a kind of psychosis on the part of the consumer, who considers that the fruit is expensive, when eating it is cheaper here than in Europe."
"While the INE points to a 13% increase in the CPI of the fruit, the producer is receiving prices that barely cover the production costs. Meanwhile, the consumer is paying 13% more than last year. Who is making that profit? Who sets the prices? Who is the boss in the market?" asks the union.
Source: publico.es
