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News

Brazil: sharp rise in costs and risk of shortage

03/02/2022 - François-Xavier Branthôme - 2022 Season - Lire en français

Tomate BR, the Brazilian Association of Tomato Processors and Industrial Users, represents about 80% of the sector's industrial operators and more than 80% of the Brazilian tomato market. The organization's main focus is reporting on the industry and promoting its production and supply chain.

Tomate Br aims to provide partners and consumers with clear and accurate information on the importance of tomato products, as well as on the problems faced by the Brazilian industry, from the different stages of obtaining the products (agricultural production and industrial processing) to their arrival on supermarket shelves and in millions of households.

The association recently drew attention to "factors of concern that are the increase in production costs within the sector, estimated to potentially reach +40%, and the risk of product shortages in 2022." It has stated that "the very strong inflationary pressure impacting all supply sectors of the industry, combined with restrictions on the supply of basic inputs such as fertilizers and the substantial increase in freight costs (both sea and land), are all difficulties caused by the pandemic that have severely undermined the industry. Strong international demand for steel, flexible packaging, paperboard and other inputs is putting pressure on the costs of packaging and materials needed for production, leading to higher prices for finished products." The association believes that "at present, Brazil's production of raw materials is below the country's requirements, so there is a risk of shortage."

Brazil ranks 6th or 7th in the world ranking of tomato processing countries and "a significant part of national demand is met by means of imports from Chile, the USA or China, all countries with current stock deficits, a situation that is causing prices in the paste sector to rise to levels never before seen on the market."

"In fact, a substantial increase in the price of raw materials will eventually be inevitable and will lead to a significant rise in the production costs of finished products. These increases will also be reflected in the final price of essential products for consumers, as they are also one of the most important elements in the strategic mix on supermarket shelves."

In this context of great challenges, Tomate BR believes that "a collaboration between manufacturers and retailers is increasingly necessary for the sector to establish a sustainable and economically viable development, reducing impacts and seeking solutions that can be beneficial to all parties involved."

Some additional information
The Tomato Br Association website can be consulted at:
http://www.tomatebrasil.com.br/

Source: noticiasagricolas.com.br

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