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2022 Season: about the situation of the agro-industry

15/09/2022 - François-Xavier Branthôme
Yannik Schultka (Food Industry Sales, Henry Lamotte Food), on processed tomato products: "The main criterion for our customers is not so much the price as the availability of the goods"

Henry Lamotte Food Ltd is a globally active and networked supplier of processed food products that has been operating since 1925. According to Yannik Schultka, the company's sales manager for the food industry, “there is currently a strong demand for tomatoes, as many origins are already sold out due to the harvest. Those who have not already stocked up on goods will also receive little or no more items until next year," Schultka said.
 Yannik Schultka (Henry Lamotte Food) at Biofach 2022
"We source tomatoes [tomato products, editor’s note] worldwide, and they are mainly of European origin, meaning Spain, Portugal and Italy. However, we also import Turkish tomatoes and partly goods from Chile, because the volumes have not been sufficient and the harvests are also staggered accordingly. We generally have global origins for all items, as we are also very broadly positioned." Other items in demand, he said, are peppers and chili peppers, as well as products such as grains, bulgur, quinoa, etc.

"In total, we have around 80 product groups that we source from over 60 countries, mainly of European origin. Our biggest market is German, but to some extent we also have customers from third countries. We mainly stock canned goods, but also raw goods such as bulgur and quinoa. Additionally, we work directly with the producers in the respective countries of origin and have global sourcing, in which the products are delivered to us in containers and transported on by us to the customers as required."

Occasional bottlenecks are to be expected
As a pure trading company, Henry Lamotte Food Ltd is not directly affected by high prices, but it must of course be able to pass on the producers' additional costs. "The main criterion for our customers, however, is not so much the price as the availability of the goods," Schultka says. "We fundamentally offer top quality, which is basically part of our corporate standard. As soon as we sign contracts, the top priority for our customers is just that." From tomato paste to dried goods and slices, Henry Lamotte offers it all. Customers for its products include the processed food industry, food retailers, wholesalers and private labels.
"There will definitely be shortages of certain products due to the harvest. Because as soon as the goods are used up, there will be nothing to follow up in time. After all, the crops have to be able to regenerate. However, we also purchase goods from countries that can guarantee a year-round supply due to their optimal climatic conditions, such as pineapples from Thailand," Schultka says.

Transport returning to normal - organic, vegan on the rise
In the meantime, transport is also starting up again better than in the last two years, he says. "It's only problematic when ports of call such as the port of Shanghai are closed for two weeks due to cases of Covid. We do feel the effects there, of course. But there are some signs of normalization already."(
See related articles below)

Some complementary data
From the Henri Lamotte’s Market Report published in June 2022
Tomato paste/diced tomato/pizza sauce
The war in Ukraine is having clear consequences. In all growing areas in Southern Europe, high market prices are driving up cultivation of wheat, sweet corn, rapeseed and sunflowers at the expense of tomatoes. A water shortage has greatly reduced the growing areas in Spain, by around 40% in Extremadura and as much as 60% in Andalusia. Some cooperatives there have decided to suspend production entirely this year. Overall, for EU origins, AMITOM currently expects a fall of around 13.5% to under 10 million mT, which we feel is still too optimistic. Sharply increasing costs in agriculture (fertilizer prices have tripled, diesel price, watering hoses) are driving the newly agreed raw material prices to a record level. A further escalation of the global situation is possible if the water shortage affects yields in California and the forecast for China also seems somewhat optimistic. Around 0.5 million mT of raw materials from Ukraine are missing this year. Producers are facing far higher costs in processing, in particular for energy and packaging materials. Great uncertainty prevails and we expect the initial offers only in the next few weeks, at least two months later than in normal times. Drastic price increases must be expected. The market is empty, demand is high and supplies from the new harvest will be significantly lower. Bold, fast decisions are required to secure requirements until access to the 2023 harvest.

Dried tomatoes
Fewer tomatoes are being grown this season in Turkey too and a greater proportion than usual is earmarked for tomato paste or the fresh market, due to attractive prices for farmers and the fact that time-consuming drying can be avoided. Leading producers are expecting a 1/3rd reduction in raw materials with prices around 30% higher (in EUR!) in comparison with last year. Prices of dried tomatoes will probably rise even further. There are no free surplus supplies from the last harvest, the market is empty. We expect the initial offers in mid-July, and once again fast decisions will be needed. It is still important to plan imports where possible for the start of 2023 to benefit from the EU quota. This was exhausted very early last year, shortly after the first quarter, and import duties of 14.7% have applied since then!”

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