<img alt="" src="https://secure.item0self.com/192027.png" style="display:none;"> Top Stories

European tomato prices soar as growers face rising input costs

March 15, 2022

1 mins read

Various input costs including fertiliser, energy and transportation have increased significantly over the past year amid supply shortages and growing demand. The problem is also being exacerbated by the ongoing Russia-Ukraine geopolitical conflict, which is currently a key driver for energy prices due to supply concerns, as Russia is a top global exporter of natural gas and crude oil. As a result, European vegetable producers continue to grapple with rising production costs, which is being directly reflected in pricing, particularly for EU tomatoes. According to market participants, the cost of tomato production across Northern Europe has risen up to 40% year-on-year (y-o-y).

Historically, Southern European tomato prices tend to decline in February in line with an increase in the volume of tomatoes available on the market from competitors. However, this year, prices have continued an upward trend amid growing production costs. The price of Daniela tomatoes in Spain rose by 26% month-on-month (m-o-m) in February 2022, and up by 95% y-o-y to EUR 1.44/Kg. Some producers are reportedly ceasing production amid these challenges, as it is no longer financially viable to continue. Industry body, Ausveg, are calling for improved prices for producers, to help cover the pressure of rising costs to ensure sustainable production can continue. Accordingly, this is likely to be passed along the value chain to consumers, which could keep prices well above 2021 levels.

High input costs led growers in some EU regions to negotiate a price rise, to reduce the risk of financial losses in the upcoming season. According to market sources, growers and processors in Extremadura, Spain, have agreed on a price rise of EUR 24/MT in 2022, an increase of 30% y-o-y. The rise is expected to help cover the cost of cultivation and mitigate the risk of financial losses for growers. However, in some areas, the rise will not be enough to incentivise producers to grow tomatoes, potentially causing a decline in planted areas for the upcoming season, and thus causing tighter supplies in the EU. This will be a watch-out factor in the 2021/22 MY, as tighter supplies could drive European tomato prices even higher.

Alice Witchalls
Alice Witchalls

/You May Also Like

Featured Image
Gas supplies from Russia via the Nord Stream 1 pipeline have...
Featured Image
Market participants surveyed by Mintec, ahead of the official release...