"Chinese tomato paste loses price advantage in international market as the cost price of tomato plantation rises"
“The cost price of tomato plantation in China has gone up since the outbreak of Covid-19. As a result, the price of processed tomato paste has gone up as well”. These are the words used by manager Wang of Shangzhuo Food, who recently talked about current conditions in the export market for tomato paste. Shandong Shangzhuo Food Co., Ltd. is a specialized exporter of tomato paste. The company buys tomatoes from production areas in China and then processes them into tomato paste for the export market.
"Our main export markets are in the Middle East and Africa. We export around 700-800 shipping containers per year. We sell about 50% of our products via domestic trading companies, and the other half is sold directly to local clients," said manager Wang.
"Our export of tomato paste has been stable for the last few years. Although we have not significantly expanded, we also did not see our export volume decline during the pandemic. As for the price, we generally provide clients with the FOB price, so the rising cost of shipping has not significantly affected our export volume," said manager Wang. "The main problem that we currently deal with is the uncertainty of shipping and its effect on the international market during the pandemic. Ships are often delayed, which causes difficulties with distribution for our clients."
Source : TDM
Since 2011, Chinese tomato paste exports have followed a downward trend that has reduced total activity by around a third in ten years. The main markets remain the countries of West Africa, of Far East and, to a lesser extent, Western EU, Middle East and Eurasia.
"The Middle East and Africa consume large amounts of tomato paste. Apart from China, these markets primarily import tomato paste from the USA and Italy. The main advantage for Chinese tomato paste exporters is the relatively low price. However, the cost price of tomato plantation has gone up during the pandemic. The price of tomatoes as raw material for tomato paste has gone up so much that Chinese exporters lose the price advantage in the international market".
"Tomato producers deal with the rising cost of energy, tomato seeds, fertilizer, and labor. That is why the price of tomatoes is rising. Moreover, processing itself has become more expensive too because energy and labor are more expensive. As a result, the price of tomato paste is now around 980 USD per ton. That is 5% higher than in previous years," explained manager Wang. "Although the price is still low compared to other exporters, the difference is not as significant anymore."
In addition to tomato paste, Shangzhuo Food also exports garlic and ginger.
Source : TDM
The unit value of Chinese tomato paste (customs codes 200290) exported in February 2022 was 13% higher than in February 2021, 11% higher than in February 2020 and 18% higher than in February 2019. The differences were more significant for products exported under codes 20029011 (weighing less than 5 kg) than for those registered under codes 20029019 (weighing more than 5 kg).
Some complementary data
Evolution of Chinese exports of tomato paste (200290) over past ten years.
Sources: freshplaza.com, TDM
