Architecture of world trade in 2020/2021
Between the rock of the pandemic and the hard place of stocks
Only four times during the past seven years, and probably going much further back in the history of our industry, have global monthly exports of tomato paste exceeded the 300,000-tonne threshold. These four exceptional months all occurred in 2020, the first two in March and April (328,000 mT and 318,000 mT respectively), and the last two in October and November (306,000 mT and 308,000 mT). After two years of relatively modest production on a global scale in 2018 and 2019, these spectacular episodes linked to the Covid pandemic made 2020 an historic year, but above all largely contributed to almost completely drying up global stocks of tomato paste.
The dynamics that appeared during the health crisis, compounded by an increasingly tense situation in terms of product availability, have seemingly raised demand for the 2019/2020 marketing year to a record level without being able to fully satisfy it. Just a few weeks off the end of the 2021 campaign, while the pandemic is now in the process of being controlled if not resolved, the dynamic effects on consumption and trade are gradually fading, but without necessarily returning to a "pre-Covid" situation (see Tomato News conference in June 2021). As the monthly reports published on the TomatoNews website have shown in recent months, the high monthly levels of global "export" operations recorded at the end of 2020 and at the start of 2021 are now giving way to a return to levels that are closer to those of previous years.
So by the end of the marketing year ending in June 2021, the final result was quite logically lower than that of 2019/2020, yet at the same time in clear progression compared to the three previous years (2017/2018, 2018/2019 and 2019/2020). Regarding trade of the world's TOP12 paste exporting countries as a whole (pending figures to complete the final overall performance of 2020/2021), the quantities exported (HS codes 200290) amounted during the last marketing year to just over 3.12 million metric tonnes (mT) of finished products (all product categories and packs combined). During the previous marketing year (2019/2020), this same group of twelve leading countries in the sector exported 3.21 million tonnes of finished products, representing a decrease in results for 2020/2021 at around 3% (just over 92,000 mT). On the other hand, the result of the last marketing year recorded an increase of 1% (a little more than 29,000 mT) compared to the average performance of the three previous years, thus consolidating the "progression", thanks to the upward trend observed over the past two years.
With nearly 1.8 million mT exported between July 2020 and June 2021, the total result for marketing year 2020/2021 for exports of canned tomatoes (HS codes 200210) from the twelve main countries involved in the sector is also down (-88,000 mT of finished products approximately) compared to the figure recorded for the previous year, and a very slight increase compared to the average performance over the three previous years (2017/2018, 2018/2019 and 2019/2020). Like for pastes, these "mixed" results are more the consequence of the strong growth recorded in 2019/2020 than of an actual "slowdown" in overall activity, even though the year also saw some serious disruptions in maritime traffic linked to a shortage of containers, slowdowns due to the congestion of several major international ports and, locally, to some labor conflicts, in the very restrictive context of the Covid pandemic (see related articles at the end of this report).
Despite these limiting factors, the quantities of tomato sauces and ketchup (HS codes 210320) absorbed by exports from the twelve main exporting countries recorded substantial increases of some 35,000 mT of finished products compared to the 2019/2020 marketing year (+3%) and close on 75,000 mT (almost 7%) compared to the average level of trade over the three previous years. Sauces and ketchup exports have been less impacted by the difficulties of maritime traffic because they are less dependent on intercontinental trade. They have benefited from a spectacular increase in demand due to the boom in home catering due to the current situation: the quantities exchanged at the level of the TOP12 over the last marketing year amounted to around 1.18 million mT of finished products.
Subject to modifications when all the final export figures are known for all declaring countries, the volumes traded in 2020/2021 on a global scale are estimated at around 3.33 million mT of pastes (all qualities and conditionings combined, HS codes 200290), 1.82 million mT of canned tomatoes (HS codes 200210) and 1.53 million mT of sauces and ketchup (HS codes 210320).
As it stands, the quantities of tomato as a raw material absorbed by export operations around the world during the last marketing year ending 1 July 2021 can be estimated at some 28 million tonnes. However approximate it may be, this estimate bears witness to a slight decrease (-470,000 mT of raw tomato equivalent, i.e. -1.5%) compared to the quantities exported during the 2019/2020 marketing year, but also a significant increase (+700,000 mT, i.e. +2.5%) compared to the average export activity of the three previous years.
In the difficult context created by the Covid pandemic and impacted by the multiple imbalances and upheavals accompanying recovery on a global scale, it is probably appropriate to consider the 2020/2021 marketing year as a period of adjustment occurring after a year 2019/2020, which was indeed exceptional, but the result of which was artificially "inflated" by the economic situation and which will no doubt not be repeated.
Tomato pastes: performance clearly impacted by a general readjustment
Even if the slowdown remains measured, at just a few tens of thousands of tonnes and less than 3% compared to the result for marketing year 20219/2020, the 2020/2021 report features several significant changes and some notable down-scaled performances, illustrating the sudden and temporary variations that have appeared in the wake of the Covid pandemic.
As already indicated in the latest monthly reports regarding exports, published on the TomatoNews website, Chilean foreign trade recorded a significant drop between the last two years: the decline has amounted to about 48,000 mT of finished products, or nearly a quarter of the exceptional result recorded in 2019/2020, placing Chilean trade levels for 2020/2021 (149,000 mT) in line with those of previous years (see tables and histograms in the additional information at the end of this article). The outlets that have been most affected by the decline are the Far East (Thailand), Central America (responsible for a large part of the increase recorded the previous year) (Mexico and Costa Rica), Eurasia (Turkey, Russia), as well as the Dutch and Italian markets.
A similar decrease (around 45,000 mT) affected Spanish foreign sales, for a result almost 10% lower than the previous year; the slowdowns recorded in Europe (EU and outside the EU), the Middle East and Mediterranean Africa partially rectify the spectacular increase that took place in 2019/2020, but the momentum in this instance also consolidates the performances achieved in recent years by placing the result of the past marketing year in the exact continuation of the three previous years, at just over 416,000 mT exported.
The foreign operations of the Italian and Turkish sectors were also subject to declines last year, of some 16,000 mT for Italy and 14,000 mT for Turkey. In the case of Italy, whose situation is similar to that of Spain, it is paradoxically the EU markets (Germany, Belgium, the Netherlands) that have shrunk, while the region as a whole has seen its imports increase. Likewise, foreign purchases of the African Mediterranean region, in particular those of Libya, have significantly decreased. This decline in Libyan imports of tomato pastes (known to be extremely variable from one year to the next) was the main cause of the decline in foreign operations of the Turkish industry, and could not compensate for the good performances achieved on the market outlets of Western EU (Italy, Germany, France).
In this uncertain context of redefined demand, conversely, a number of countries have improved their annual performance, though not necessarily permanently. First and foremost is Greece, whose foreign sales of tomato paste (40,000 mT in 2020/2021) increased by almost a third compared to the previous year. This increase was mainly due to demand from European outlets (Austria, Belgium, Poland, United Kingdom), in a context only affected by two very slight slowdowns (Japan and Australia), the total of which does not even reach 90 mT.
It is also worth mentioning US results, the importance of which is less linked to the tonnage involved (313,000 mT) than to the respite that it signals in the uninterrupted decline of paste exports from the world's largest processor over the past six years. Although weakened by mediocre results in the Middle East, the Far East and Eurasia, the US momentum clearly increased over 2020/2021 thanks to the progression recorded on the markets of the Western EU (Italy), Mediterranean Africa (Libya) and especially Central America (Mexico, Costa Rica, Dominican Republic, Honduras, Panama).
Among the usual players of the world's TOP12 paste processing and exporting countries, several recorded only minimal variations in their foreign operations in 2020/2021. Among these are China (-4,800 mT, a drop of less than one half of a percentage point), Portugal (+3,000 mT, a 1% increase), Ukraine (+2,935 mT, nearly a 5% increase) and Poland (-300 mT, -2%). Two countries, however, recorded strong variations in their annual performance: Peru, whose exports jumped by more than 3,300 mT and nearly 21%, and France, whose foreign sales fell sharply, with a 2020/2021 result that is more than 30% lower (-4,600 mT) than in 2019/2020 (see tables and histograms in the additional information at the end of this article).
Canned tomatoes: the leaders are in trouble
Although the leading positions of Italy and Spain are rarely contested in the canned tomatoes sector, these countries similarly concentrate the supply of world markets as well as the annual vagaries of the sector.
It is a fact that by disrupting the patterns and rhythms of consumption and supply, the Covid pandemic has curbed – at least temporarily – a growth dynamic that had been in place for many years. Steady development had brought the quantities traded worldwide in 2019/2020 to around 1.91 million tonnes, at the end of a year marked by an exceptional increase of nearly 117,000 mT (+7%!) compared to the previous marketing year. Over 2020/2021, the volumes traded logically lost a significant proportion of the growth achieved, for a result over the year as a whole that is 4.5% lower than the previous one. However, a significant part of the gain recorded during the pandemic was maintained last year, so global exports of canned tomatoes (peeled, unpeeled, whole or chopped) were recorded in 2020/2021 in line with the average levels of the three previous marketing years (2017/2018 to 2019/2020).
Paradoxically, the two leaders of the sector did not take advantage of this improvement: by dropping by almost 97,000 mT over the last marketing year, Italian operations declined not only compared to the previous year (-6%) but also in comparison with the three previous years (-2%). The situation is similar for Spanish operations which, on a much smaller scale, "gave up" over the same periods 5% and 1% of their results, respectively.
There is no indication at this time how this situation will develop. For the time being, this last marketing year has resulted in an accumulated decrease of around 23,000 mT from the two leading countries, compared to the average of the three previous years (-1.5%), while at the same time recording an increase of more than 26,000 mT (12%) in the overall activity of the other TOP10 countries for the canned tomatoes sector (see tables and histograms in the additional information at the end of this article).
In this rather unprecedented context, good performances were recorded for Greece and Turkey. The gains are all the more remarkable in that they were mainly achieved despite the general trend, at the expense of the leading countries, and on European markets (Western EU and non-EU Europe) that had declined quite markedly over the previous marketing year. Although these changes did not fundamentally upset the overall balance in the distribution of market shares, 2020/2021 was nevertheless marked by a notable increase in the participation of the "other countries" of the TOP10, in the wake of canned tomato exports from Greece (+18%) and Turkey (+37%).
Some additional information
Evolution of sector components (pastes, canned tomatoes, sauces) of total exports (expressed in estimates of raw material equivalent) of the TOP12 exporting countries.
2020/2021 export result of the twelve main processing countries exporting tomato paste over the marketing year 2020/2021, for the 16 destination regions.
Evolution of the overall market shares of pastes of the twelve main exporting countries in the sector.
2020/2021 export results of the ten main processing countries exporting canned tomatoes over the marketing year 2020/2021, for the 16 destination regions.
Evolution of the global canned tomatoes market shares of the five main exporting countries in the sector.
Tomato sauces and ketchup: the recovery is mainly driven by the "smaller" players
Contrary to what has been observed in other sectors (pastes and canned tomatoes), the dynamics driving global trade in the tomato sauces and ketchup sector in 2020/2021 revived a sector that had been "dormant" for five or six years. After an already significant increase in world trade in 2019/2020 (+7%), the "boost" effect of the pandemic on consumption was reflected in 2020/2021, not by a readjustment similar to those recorded for pastes or canned tomatoes, but by a second consecutive year of solid growth in trade (+3%). While the average annual growth rate (CAGR) of exports from the TOP14 countries remained below 0.1% between 2014/2015 and 2018/2019, the increase over the last two years was measured in tens of thousands of tonnes (close to 46,000 mT) and the 2020/2021 export balance was nearly 90,000 mT (+8%) higher than the average for the period running (2017/2018-2019/2020).
But once again, not all industry leaders contributed equally to this new momentum. This is evidenced by the clear contrasts between the performances of the three countries that supplied practically half of the worldwide market for several years: in 2020/2021, on a global market that nonetheless recorded heavy demand, US foreign sales (299,000 mT) fell slightly (-1%) under the influence of the continuous erosion that has been affecting exports of sauces to Canada since the trade peaks reached in 2015/2016. US foreign performances also slackened with regard to destinations such as the Emirates, Saudi Arabia, the United Kingdom and a few other countries, to the extent that these decreases in the annual results could not be compensated by the significant increases recorded in sales to Mexico, the Dominican Republic, and Guatemala.
The contrast is striking with the performance of the world's #2 operator in the sector – the Netherlands, whose exports of sauces increased by 16,000 mT (+7%) compared to the previous year, for a result of 256,000 mT in 2020/2021. The Dutch progression is more than consistent with the increase in global movements (+4%) compared to the 2019/2020 marketing year. It relied on the good results obtained on the markets of Turkey, Russia, Saudi Arabia, and above all France, Spain and Denmark, to name only the main ones.
The Italian performance over the past marketing year (180,000 mT) remained surprisingly close to the previous one (178,000 mT), with a very slight increase mainly driven by the French and Polish markets. The end result is a composite of recorded progressions (Greece, Denmark, Netherlands, Portugal, etc.) and slowdowns (Israel, Sweden, Australia, Ireland, Austria, etc.), most of which did not exceed a few hundred tonnes except in the case of Belgium (-1,000 mT) and Germany (-3,100 mT).
This observation of stability also applies to Spain, whose exports (95,000 mT) practically mirrored those of the previous year, in a group marked only by a few changes, the most important of which was recorded for sales in Italy (-1,600 mT), Portugal (-1,100 mT) and the United Kingdom (-1,000 mT) as well as the Netherlands (+900 mT) and Morocco (+2,600 mT).
The originality of the past marketing year for the sauces and ketchup category stems from the notable development of supply flows provided by the countries that are considered as "secondary" players in the sector. In this regard, special mention should be made of Poland, Belgium, Portugal, China, Egypt, Costa Rica, and Russia. Increases in foreign sales of all these countries only gave way to the Netherlands, with increases in tonnages that ranged from 2,000 mT (China) to more than 8,000 mT (Costa Rica) and growth ratios almost all above 10%.
During the marketing year 2020/2021, most regional markets recorded increases in their supplies. Three regions were exceptions to the general dynamic, among which mention should be made of North American markets (the decline of which affected US and Mexican exports), as well as those of the Australia-New Zealand region and Southern Africa. All other importing regions saw an increase in demand to varying degrees. The most important ones were recorded in countries of Central America (Guatemala, Mexico, Belize) (+18,000 mT), which benefited US and Costa Rican products. The increase in British purchases (non-EC Europe, +8,600 mT), although it did little to help Italian or Dutch foreign trade, largely contributed to improving the Belgian and Portuguese performances. The Western EU market, by far the largest in the world in terms of imports (454,000 mT), also recorded significant growth, the effects of which were mainly beneficial to Dutch foreign sales (French, Danish and Spanish markets) as well as Polish and Belgian ones. On this same market, however, Spanish products have lost ground (Italian, Portuguese and German markets), as have Portuguese products (German, Belgian and Italian markets) (see tables and histograms in the additional information at the end of this article).
The positioning in terms of market shares of the various countries involved in the global supply of sauces and ketchup reflects the progress or decline recorded in 2020/2021. Unsurprisingly, the rather disappointing performance of US exports led to a decline in the influence of the world's n°1 operator, currently only holding around 20% of the volumes traded during the past marketing year. Closer to US results, the Netherlands last year maintained their share of global activity with around 17% of the worldwide market and a return to the average position of the three previous years. A little further on, Italian products almost confirmed the substantial gain in ranking achieved over the previous marketing year, with around 12% of total global volumes. Beyond this first half of the worldwide supplies provided by the three leading countries, competition opposes in a relatively narrow range Spain (around 6% of the total but slightly down last year), Germany (5% of the total, and also slightly down) and Poland (also 5%, but up over the 2020/2021 marketing year). Next come Belgian (4%) and Portuguese (3%) products, which increased last year, followed by products from China, Egypt, Costa Rica, Russia, etc. The sauces market is sufficiently open for the remaining 80 countries (more than ten of which exported between 10,000 mT and 20,000 mT in 2020/2021) to still hold 18% of the worldwide market.
2020/2021 exports: Spain has consolidated its third place in the world
In conclusion, an approximate assessment of the quantities of raw material absorbed by exports of the main primary processing countries as well as by countries that export for remanufacturing underlines the importance of European operators in the global tomato industry. Six of them (Italy, Spain, Portugal, Greece, Poland and France) appear in the TOP20 list of countries which, in one or other of the sectors considered (pastes, canned tomatoes, sauces), are heavily involved in worldwide supply flows. The 2020/2021 marketing year did not bring any noticeable change in the global ranking of these countries, which is largely dominated by Italy and China.
It should be noted, however, that Spanish foreign trade has confirmed its rank in third place worldwide, gradually gaining this position at the expense of the US over the last four years. The decrease in US foreign trade and the concomitant rise in Spanish exports over the period running 2017/2018-2019/2020 led to a reversal of positions, with Spain confirming its rank in 2020/2021 with the estimated equivalent of 3.1 million mT of raw tomato exported in the form of industrially processed products, while the quantities mobilized by US players amounted to around 2.95 million mT. For information, the estimated volumes of raw tomato absorbed by exports from these two countries in 2017/2018 amounted to around 2.75 million mT for Spain and around 3.32 million mT for the United States.
Finally, the 2020/2021 marketing year confirmed the rise of European exports of tomato products, driven by the decisive developments in foreign operations over the last five or six years, in particular in Italy, Spain and Portugal, while the quantities mobilized over the same period by the other "TOP20" processing countries have rather suffered a gradual erosion.
Some additional information
2020/2021 export results of the fourteen main processing countries exporting tomato sauces and ketchup over the marketing year 2020/2021, for the 16 destination regions.
Distribution of global trade in tomato sauces and ketchup in 2020/2021.
A detailed breakdown of the 2020/2021 performances for each of the countries mentioned is available on request from the TomatoNews team.
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