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Extremadura: Good prospects for the current season

04/09/2019 - François-Xavier Branthôme - 2019 Season - Lire en français
The industry has stated its satisfaction at the drop in worldwide production 

According to the regional daily newspaper Hoy (23 August 2019), the decrease in unsold inventories remaining from previous years is a positive factor for the food industry sector, which is constantly looking for new outlets and products.

Launched several weeks ago in the context of a reasoned decrease in worldwide production, the harvest season of one of Extremadura's main crops has been unfolding in satisfactory conditions until now, with planted acreage covering about the same surface as in 2018. This year, growers have not suffered from bad weather conditions and have been able to benefit, throughout the region, from a slight increase in the price of raw materials in the context of a notable drop in worldwide stocks, with the industry investing efforts into improving its productivity and quality. The Technological Forum, which gathers operators from the processing sector and companies involved in information technology, was set up with this in mind at the end of last year, under the coordination of the CTAEX (Extremadura Center for Food Technology).

Tomato growers in this region have planted slightly less than 23 000 hectares this year, for a crop that is expected to touch about 2 million tonnes. Extremadura accounts for 68% of Spain's processing tomato crop. The region is host to twenty producers' organizations and fourteen industrial processing plants where diverse products are made, like powdered tomato, pastes, chopped tomato, etc. Five other processing plants in the region make tomato-based sauces. The industry includes 1 140 active growers and generates thousands of direct and indirect jobs each season.
This sector is not only important at the national level, but also at the worldwide level thanks to its export activities – with a 10% increase in its activities for the 2018/2019 season compared to the 2017/2018 season, and a 25% increase compared to the three previous marketing years. This dynamic justifies the close interest that local operators have been showing in the results of other major leading countries of the industry, like Italy, China or the USA...

 Harvesting tomatoes in a field near Badajoz

For the time-being, Extremaduran growers have expressed their satisfaction at the excellent ripening conditions of tomatoes. "We produce some of the best quality tomatoes in Europe. Our growers are very professional and our industry is also working on improving its performances. For this reason, it is necessary to focus on improving the competitiveness of the sector, because the quality of raw materials and of agricultural practices has already been established," explained Manuel Vázquez Calleja, CEO of the Conesa food group, founded in 1976, which today is among the biggest food industry groups of the Mediterranean rim.
"We continue to be national and worldwide points of reference because all industry partners play their respective roles. We hope that growers, after years of seeing prices drop, will start receiving what they are owed," summed up Ignacio Huertas, General Secretary of the UPA-UCE Extremadura. According to the Hoy newspaper, the price has only climbed slightly, but is now within a bracket of EUR 73 to 75 per tonne of tomato, with a slight improvement for tomatoes intended for paste production. "Weather conditions have been optimal, and the start of the harvest was not delayed like in 2018. There is demand for tomato products, and stocks have been disappearing more and more. It is reasonable to expect that all of these good conditions should benefit growers," stated Huertas.

For Domingo Fernández, the President of the tomato sector of the agricultural and food cooperatives that are part of ACOPAEX, "ripening during springtime and at the beginning of summer was very satisfactory. Very good indeed. The absence of rainfall, with normal temperatures and no major heatwave for a very long period of time, has meant that very few plant health issues have affected the tomatoes. (...) This will also lead to good yields, likely to exceed 90 000 kg per hectare." "The price of paste is going to go up, whereas costs remain stable. And, given that smaller harvests are expected in the USA and in China, I think that we can expect good things from this season in Extremadura," he pursued, also pointing out the importance of shifts in currency exchange rates between the euro and the dollar (see weekly updates in our Exchange Rates feature), which "are currently making the results of international trade much more interesting for Extremaduran industry operators."

In his analysis of the worldwide processing tomato situation, the President of cooperative group ACOPAEX also mentioned neighboring Andalusia, which is proving to be an increasingly active competitor for Extremadura's operators, even if "their spread in terms of hectares has slowed this year" stated Domingo Fernández. In 2012, slightly more than 1 800 hectares of tomatoes were grown throughout Andalusia. In 2017, these surfaces reached 8 800 hectares, before dropping to approximately 5 700 hectares last year, which is similar to this year's planted surfaces. However, Andalusian fields have been recording yields that are considerably higher (approximately 105 mT/ha) than those recorded in Extremadura (approximately 90 mT/ha).

In Extremadura, planted surfaces have remained fairly stable since 2014, with a very slight downward trend. In 2018, 21 495 hectares of tomatoes were planted, for a crop that was estimated at 1.918 million tonnes. "This year, there will be no major discrepancy between contracted quantities and those that are expected to be harvested, which is very positive in and of itself," stated the Conesa CEO, making reference to the damage caused by storms last year to the region's crops, when harvested surfaces were reduced from 23 145 hectares to only 21 495 hectares.
He further pointed out the very positive effect of the drop in inventories of unsold products at a worldwide level, which has been a boost to the way this season has unfolded. Manuel Vázquez Calleja underlines the fact that the tomato industry is increasingly globalized and now includes competitors from very diverse regions throughout the world, notably Italy, the United States and China. "It is necessary to be increasingly competitive and to offer distinctive features like extra quality, sustainability and the promotion of biodiversity."

The Technological Forum was set up precisely with the aim of meeting that need, in order to help companies and products stand out better: "Such a major industrial sector must considerably increase its yields while maintaining its commitments to environmental sustainability, assisting processing companies in their search for efficiency and finding new opportunities for using by-products," explained José Luis Llerena, who leads the CTAEX. Among the research projects being carried out by the CTAEX, it is important to mention the Tomprint projects that aim at reducing the carbon footprint of processing tomato, Tommar, which is attempting to replace salt by seawater in tomato products in order to improve the nutritional quality, and Ecohir, whose objective is to enhance the value of processing sub-products based on waste materials from the manufacturing process.


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