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The Philippines, India, and Indonesia Dominate the $35B-Worth Global Coconut Market

coconut

The Philippines, India, and Indonesia Dominate the $35B-Worth Global Coconut Market

IndexBox has just published a new report: ‘World – Coconut – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

In 2019, after two years of growth, there was decline in the global coconut market, when its value decreased by -3.2% to $35.2B. Overall, consumption, however, saw a relatively flat trend pattern. The pace of growth appeared the most rapid in 2018 when the market value increased by 7.9% year-to-year. As a result, consumption reached a peak level of $36.4B, and then dropped modestly in the following year.

Consumption By Country

The countries with the highest volumes of coconut consumption in 2019 were Indonesia (18M tonnes), the Philippines (15M tonnes) and India (12M tonnes), together accounting for 71% of global consumption. These countries were followed by Sri Lanka, Brazil, Viet Nam, Papua New Guinea, Mexico and Thailand, which together accounted for a further 16%.

From 2013 to 2019, the most notable rate of growth in terms of coconut consumption, amongst the main consuming countries, was attained by Viet Nam, while coconut consumption for the other global leaders experienced mixed trends in the consumption figures.

In value terms, the largest coconut markets worldwide were the Philippines ($9.8B), India ($6.8B) and Indonesia ($4.8B), together comprising 61% of the global market. These countries were followed by Sri Lanka, Brazil, Thailand, Viet Nam, Papua New Guinea and Mexico, which together accounted for a further 18%.

The countries with the highest levels of coconut per capita consumption in 2019 were Papua New Guinea (140 kg per person), the Philippines (136 kg per person) and Sri Lanka (125 kg per person).

Production

In 2019, the number of coconuts produced worldwide reached 62M tonnes, approximately reflecting the previous year. Overall, production, however, continues to indicate a relatively flat trend pattern. The pace of growth was the most pronounced in 2018 when the production volume increased by 2.4% year-to-year. Global production peaked at 62M tonnes in 2013; however, from 2014 to 2019, production stood at a somewhat lower figure.

Production by Country

The countries with the highest volumes of coconut production in 2019 were Indonesia (18M tonnes), the Philippines (15M tonnes) and India (12M tonnes), together accounting for 72% of global production. Sri Lanka, Brazil, Viet Nam, Papua New Guinea and Mexico lagged somewhat behind, together comprising a further 14%.

From 2013 to 2019, the biggest increases were in Viet Nam, while coconut production for the other global leaders experienced more modest paces of growth.

Harvested Area and Yield

In 2019, the global harvested area of coconuts amounted to 13M ha, approximately equating the previous year. Over the period under review, the harvested area recorded a relatively flat trend pattern. In 2019, the global average coconut yield declined to 5 tonnes per ha, standing approx. at the previous year’s figure.

Exports

For the fourth consecutive year, the global market recorded growth in overseas shipments of coconuts, which increased by 11% to 1.1M tonnes in 2019. Over the period under review, exports posted a prominent increase. Over the period under review, global exports attained the maximum in 2019 and are expected to retain growth in the immediate term. In value terms, coconut exports rose significantly to $527M (IndexBox estimates) in 2019.

Exports by Country

Indonesia represented the major exporter of coconuts in the world, with the volume of exports resulting at 474K tonnes, which was approx. 44% of total exports in 2019. Thailand (178K tonnes) ranks second in terms of the total exports with a 16% share, followed by Viet Nam (16%) and India (9.9%). Guyana (27K tonnes), Hong Kong SAR (25K tonnes) and Sri Lanka (21K tonnes) held a little share of total exports.

From 2013 to 2019, the average annual rates of growth with regard to coconut exports from Indonesia stood at +29.1%. At the same time, Hong Kong SAR (+47.5%), Thailand (+26.7%), Guyana (+17.3%), India (+13.6%) and Viet Nam (+6.2%) displayed positive paces of growth. By contrast, Sri Lanka (-14.7%) illustrated a downward trend over the same period.

In value terms, Thailand ($151M), Indonesia ($115M) and Viet Nam ($88M) appeared to be the countries with the highest levels of exports in 2019, together comprising 67% of global exports. India, Sri Lanka and Guyana lagged somewhat behind, together accounting for a further 18%.

Export Prices by Country

The average coconut export price stood at $487 per tonne in 2019, with an increase of 1.9% against the previous year. Overall, the export price, however, continues to indicate a relatively flat trend pattern. The growth pace was the most rapid in 2015 an increase of 11% y-o-y. Over the period under review, average export prices attained the maximum at $528 per tonne in 2017; however, from 2018 to 2019, export prices stood at a somewhat lower figure.

There were significant differences in the average prices amongst the major exporting countries. In 2019, the country with the highest price was Sri Lanka ($852 per tonne), while Indonesia ($242 per tonne) was amongst the lowest.

From 2013 to 2019, the most notable rate of growth in terms of prices was attained by Sri Lanka, while the other global leaders experienced more modest paces of growth.

Source: IndexBox AI Platform

agriculture

USTR, DOC, and Department of Agriculture Issue Plan to Investigate Foreign Imports of Certain Perishable Produce

On September 1, 2020 the Office of the United States Trade Representative (USTR), Department of Agriculture, and Department of Commerce issued a 32-page report outlining the Trump Administration’s plan to address increased foreign imports of perishable fruits and vegetables. Following the public hearings held in August, the Administration published this report in hopes to open a dialogue with senior Mexican Government officials over the next 90 days regarding specific produce.

The USTR requested that the U.S. International Trade Commission (ITC) formally initiate an investigation under Section 201of the Trade Act of 1974 (Global Safeguard Investigation) with respect to imports of blueberries. Additionally, USTR intends to request that the ITC monitor and investigate imports of strawberries and bell peppers, which could lead to an expedited Section 201 investigations later this year.

The USTR is separately pursuing negotiations with the Mexican government to address U.S. industry concerns over imports of strawberries, bell peppers, and other perishable products. Section 201 investigations occur when a country experiences an unexpected surge in the import quantity of a certain product. The most recent Section 201 investigation was used to limit imports of solar panels and washing machines in 2018.

Other initiatives include the Department of Commerce improving communication with U.S. farmers responsible for growing the subject produce and assisting them in understanding trade remedy laws and procedures.

Similarly, the Department of Agriculture will develop a market promotion strategy for domestically produced produce and work with producers to maximize the use of existing agriculture programs. USTR, the Department of Commerce, and the Department of Agriculture will establish an interagency working group to monitor seasonal and perishable fruit and vegetable products, coordinate as appropriate regarding future investigations and trade actions, and provide technical assistance to Congress in developing legislation on this issue.

The interagency announcement regarding imports of certain fruits and vegetables follows media reports that U.S. farmers are on track to receive a record $37.2 billion in subsidies from the government this year.

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Stephen Brophy is an attorney in Husch Blackwell LLP’s Washington, D.C. office focusing on international trade.

Turner Kim is an Assistant Trade Analyst in Husch Blackwell LLP’s Washington, D.C. office.

Camron Greer is an Assistant Trade Analyst in Husch Blackwell LLP’s Washington, D.C. office.

frozen fish

Germany, the UK, and France Dominate the European Frozen Fish Fillet Market

IndexBox has just published a new report: ‘EU – Frozen Fish Fillet – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

The EU frozen fish fillet market totaled $6.6B in 2019 (IndexBox estimates), surging by 5.1% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price). The market value increased at an average annual rate of +2.0% from 2013 to 2019; the trend pattern remained consistent, with only minor fluctuations being recorded throughout the analyzed period. The pace of growth appeared the most rapid in 2018 with an increase of 7.7% year-to-year. Over the period under review, the market reached the maximum level in 2019 and is likely to see gradual growth in years to come.

Consumption by Country

The countries with the highest volumes of frozen fish fillet consumption in 2019 were Germany (275K tonnes), the UK (193K tonnes) and France (155K tonnes), together comprising 48% of total consumption. Spain, Poland, Italy, Sweden, the Netherlands, Malta, Austria, Belgium, and Hungary lagged somewhat behind, together comprising a further 42%.

From 2013 to 2019, the most notable rate of growth in terms of frozen fish fillet consumption, amongst the main consuming countries, was attained by Malta, while frozen fish fillet consumption for the other leaders experienced more modest paces of growth.

In value terms, Germany ($1.2B), the UK ($1.2B), and France ($901M) were the countries with the highest levels of market value in 2019, together accounting for 51% of the total market. These countries were followed by Spain, Italy, Poland, Sweden, Austria, the Netherlands, Hungary, Belgium, and Malta, which together accounted for a further 40%.

In 2019, the highest levels of frozen fish fillet per capita consumption were registered in Malta (77 kg per person), followed by Sweden (3.71 kg per person), Austria (3.43 kg per person) and Germany (3.35 kg per person), while the world average per capita consumption of frozen fish fillet was estimated at 2.55 kg per person.

In Malta, frozen fish fillet per capita consumption increased at an average annual rate of +6.7% over the period from 2013-2019. In other countries, the average annual rates were as follows: Sweden (-4.9% per year) and Austria (-0.8% per year).

Imports in the EU

In 2019, the amount of frozen fish fillet imported in the European Union was estimated at 1.4M tonnes, remaining relatively unchanged against the previous year’s figure. In general, imports recorded a relatively flat trend pattern. The most prominent rate of growth was recorded in 2016 with an increase of 4.5% against the previous year. In value terms, frozen fish fillet imports amounted to $7.1B (IndexBox estimates) in 2019.

Imports by Country

In 2019, Germany (339K tonnes), distantly followed by the UK (162K tonnes), Poland (155K tonnes), France (154K tonnes), Spain (143K tonnes), the Netherlands (105K tonnes) and Italy (89K tonnes) were the largest importers of frozen fish fillet, together comprising 82% of total imports.

Germany experienced a relatively flat trend pattern with regard to the volume of imports of frozen fish fillet. At the same time, Poland (+2.0%) and Italy (+1.6%) displayed positive paces of growth. Moreover, Poland emerged as the fastest-growing importer imported in the European Union, with a CAGR of +2.0% from 2013-2019. Spain, the Netherlands, France, and the UK experienced a relatively flat trend pattern. The shares of the largest importers remained relatively stable throughout the analyzed period.

In value terms, the largest frozen fish fillet importing markets in the European Union were Germany ($1.5B), the UK ($1B), and France ($897M), with a combined 49% share of total imports. Spain, Poland, Italy, and the Netherlands lagged somewhat behind, together comprising a further 32%.

Among the main importing countries, Spain saw the highest growth rate of the value of imports, over the period under review, while purchases for the other leaders experienced more modest paces of growth.

Import Prices by Country

In 2019, the frozen fish fillet import price in the European Union amounted to $5,096 per tonne, growing by 4.4% against the previous year. Over the last six years, it increased at an average annual rate of +2.1%. The pace of growth was the most pronounced in 2017 when the import price increased by 5.3% year-to-year. Over the period under review, import prices attained the maximum in 2019 and are likely to continue growing in years to come.

Prices varied noticeably by the country of destination; the country with the highest price was the UK ($6,351 per tonne), while Poland ($3,415 per tonne) was amongst the lowest.

From 2013 to 2019, the most notable rate of growth in terms of prices was attained by Spain, while the other leaders experienced more modest paces of growth.

Source: IndexBox AI Platform

heirloom tomato

ALL THE WORLD TREASURES AN HEIRLOOM – TOMATO, THAT IS

Everyone Can Enjoy an Heirloom

Spring weather heralds the start of weekend farmers markets offering colorful fruits and vegetables, artisanal cheeses, and home-made baked goods. Along the east coast, tomatoes play a starring role at the local farmers markets. Green, yellow, orange, brown, grape tomatoes, cherry tomatoes, large, small – the variety seems endless.

Farmers markets are a great way to shop fresh and seasonal, but if you can’t get there, you can still find an increasingly impressive selection of tomatoes at your local grocery store. Are the tomatoes in the organic corner market the same tomatoes you get from the farmer? Unlikely. For the most part local farmers cannot sustain supply to large grocery chains where consumers are demand tomatoes year round. To meet that demand, the business of the heirloom tomato has grown global.

Pimp my Tomato

Italians made tomatoes a kitchen staple, but the tomato didn’t originate in Europe. Researchers have traced its origin to the “pimp,” a pea-sized red fruit that grows naturally in Peru and Southern Ecuador. As with so many foods we love, the Mexicans domesticated the tomato and Spanish explorers brought it home, where locals created a sweeter and tastier, but also more vulnerable, tomato.

Whether due to the preferences of grocers or their shoppers, the market overwhelmingly demands that growers focus on the few breeds of tomatoes that dominate our grocery shelves today. Producers worked to change the characteristics of tomatoes through cross-pollination in order to increase yield, to produce uniform shapes and sizes with smooth skin, and to render the tomatoes hardier for transport. Tomatoes are picked while green and artificially ripened with ethylene gas, sacrificing better taste for better looks (the flavor comes from the sugars that develop as the tomato ripens naturally).

partial-dg-pimp-tomato-graphic-for-web

Photo: The pimp fruit by David Griffen, Smithsonian.com

The New (Old) Tomato

The strict definition of heirloom tomato is a variety of tomato that has been openly pollinated for more than 50 years. Today, most experts would consider heirlooms as any non-hybrid tomato. Unlike heirlooms, many hybrid vegetables and fruits, while resilient and uniform, produce seeds that cannot reproduce. Therefore, the open pollination principle for heirlooms is key. As a result, it is the seed savers and gardeners with a flair for history that helped propel heirloom tomatoes to their elite status.

In the last decade, consumers started going back to the tomato’s heirloom roots. Top restaurants, prominent chefs, cooking magazines, the farm-to-table movement, and the proliferation of farmers markets have all put heirloom tomato flavor on display. Americans have become more tomato-curious than ever.

Regional is the New Local

Generally speaking, the entire world loves a tomato. As the most consumed vegetable in the world, we devour 130 million tons of tomatoes every year, of which 88 million are sold fresh. The remaining 42 million tons are destined for processing into tomato sauce and other products. China, the European Union, India, the United States, and Turkey are the world’s top producers.

Trade in tomatoes tends to be regional. Asia, Europe, and Africa represent 45 percent, 22 percent, and 12 percent, respectively, of global production, and much of what’s grown in one region is traded there. France, for example, is the fifth largest producer of tomatoes in Europe, exporting one quarter of its production across the European continent, primarily to Germany.

North American Tomato Trade – A Tasty NAFTA Product

About half of fresh tomatoes consumed in the United States are imported. The government applies tariffs to fresh tomatoes from countries we don’t have a free trade agreement with, and the tariffs fluctuate based on the timing of the U.S. growing season. From March 1 to July 14 (when Florida’s volume is highest and California and southeastern producing states begin to ship commercial tomatoes), it’s 3.9 cents per kilogram. Between July 15 until August 31, it goes down to 2.8 cents per kilogram (availability of locally grown tomatoes is highest). September 1 to November 14, it goes up again to 3.9 cents per kilogram. For the remainder of our winter, November 15 until March 1, it goes back down to 2.8 cents per kilogram.

Nearly all of fresh tomatoes we import into the United States come from Mexico (89 percent) and Canada (10 percent) duty-free under NAFTA. NAFTA partners are also the primary destinations for exported American tomatoes, with 77 percent of our exports going to Canada and 20 percent to Mexico. (The United States manufactures 96 percent of the tomatoes it uses in processing.)

Even though they enter the United States duty-free, tomatoes from Mexico are subject to minimum prices that vary based on the season; the price floor for winter tomatoes ranges from 31 cents to 59 cents, while summer tomato prices vary between 24.6 to 46.8 cents, depending on the tomato category. This is because Mexico has gotten very efficient at producing tomatoes year-round, which concerns some segments of American growers, particularly in Florida.

Florida growers are seeking changes to U.S. antidumping and countervailing duty proceedings in the current renegotiations of NAFTA to allow them to pursue dumping cases based on pricing in one specific season versus relying on three years of data, as is currently required. This proposal has created rifts among U.S. growers – primarily Southeast growers who support it and Western growers who fear its consequences. Mexico has also expressed strong opposition. American producers of other fruits and vegetables have also publicly opposed the proposal. They worry Mexico could use the same approach against American exporters of perishable produce.

Global, Regional, Local – It’s All Good

Our love for tomatoes will not recede any time soon. Improvements in technology are helping farmers increase their yields while maintaining or even reducing the acreage they are devoting to tomatoes. But even as trade routes for tomatoes are increasing and broadening, the allure and specialness of a locally-grown fresh tomato remains.

Tomatoes are the most popular plant for amateur home gardeners like myself. And with spring in full bloom, it’s only a matter of time before local tomatoes explode onto the scene in our neighborhood farmers market, exhibiting their versatility and flavor. The heirloom tomato has once again returned to prominence – just sprinkle a little salt on it, and take a satisfying bite. Trust me, you won’t regret it.

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Ayelet Haran

Ayelet Haran is a contributor to TradeVistas. She is a government affairs and policy executive in the life sciences industry. She holds a Master’s of Public Administration degree in International Economic Policy from Columbia University.

This article originally appeared on TradeVistas.org. Republished with permission.

local

“BUY LOCAL” WOULD EVEN SPOIL FARMERS MARKETS

The Locavore’s Dilemma

I live in Madison, Wisconsin, home of the exceedingly vibrant and sort-of-famous Dane County Farmers’ Market. Every Wednesday and Saturday, thousands of people—myself included—descend on downtown Madison to peruse and purchase fresh fruits and vegetables, baked goods, meats, cheeses, canned jams and pickles, arts and crafts, and even artisanal soaps. The city prides itself on its loyalty to local farmers and merchants.

Yet what at first blush seems a quintessential expedition of “buy local” greatness isn’t actually local at all. The Dane County Farmers’ Market belies its titular jurisdictional limits. Purveyors arrive in the wee hours of the morning from all corners of the state. Take, for instance, the Door County Fruit Markets company, which sells apricots, raspberries, strawberries, and blackberries. They hail from Door County, a three-hour drive across the state from Dane County. There’s also Canopy Gardens, producers of four varieties of salsa, whose home base is in the north central part of the state, separated from Madison by no fewer than six county lines. These are but two of many examples. Indeed, only a modest percentage of the venders come from within Dane County.

And then there are the buyers. Young people, old people, families, and businesses drive from all over Wisconsin to pick out the perfect tomato or to sample some of Stella’s famous cheese bread. Neighbors from Minnesota, Iowa, and Illinois likewise frequent the market. (Don’t forget, either, about the innumerable inputs that go into the farming process — tractors, irrigation systems, gasoline, the farmer’s morning coffee, and so on — that originate beyond the county boundary.)

 

The market’s popularity, variety, energy owe themselves to trade and to quality—not to locality.

 

If the Dane County Farmers’ Market were truly limited to local, its vivacity would be severely diminished. Plump, juicy cherries from three-hour-away Door County? Forget it. Salsa from Canopy Gardens? Sorry, they’re not “local.” Thankfully, we all recognize this as absurd. And we all recognize that drawing the line at the county is arbitrary. The market’s popularity, variety, energy owe themselves to trade and to quality—not to locality.

Foodstuffs—and in particular, produce—present fertile ground for undue emphasis on “buy local.” Often, the farmers relatively close to us will be able to provide higher quality produce, simply because of the short transportation time between harvest and market. Of course, soil and climate also influence quality, and nearby corn might be better than corn from a half a world away. Then again, though, you don’t hear anyone in Wisconsin championing local bananas.

Buy Best

The farmers’ market anecdote illustrates the crucial distinction between “buy local” and “buy best.” At first glance, the distinction appears merely semantic. Buying local because local is the best makes complete sense economically and socially. But buying local for the sake of buying local presents a philosophy steeped in isolation that falls dangerously close to tribalism. It advocates the contraction of trade and flies in the face of two centuries of liberalization and globalization of the economy.

 

Like the county line, the national boundary is completely arbitrary from an economic perspective.

 

Liberal, global trade has led to the vastest prosperity the world has ever seen. Adam Smith once wrote, “In every country it always is and must be the interest of the great body of the people to buy whatever they want of those who sell it cheapest.” The less trade is restricted between individuals and across borders, the more “the body of people” can “buy whatever they want” the “cheapest.” In the 240 years since, increased trade and globalization has corresponded with a never-before-seen rise in prosperity. As society becomes more integrated, its members can leverage the division of labor, leading to lower prices, better goods and services, and a higher standard of living for everyone. It’s true that free trade and globalization make the rich richer. But they also make the poor richer. Trade provides cell phones to people in developing countries. It increases wages. It fosters international peace. As I have written before here and here, trade has made our modern lives what they are.

So it is one thing to personally live according the “buy local” rhetoric, boxing yourself in with higher prices and lower quality. But is quite another thing when the “buy local” rhetoric becomes enacted in law. The obvious harms that would befall a county-only farmers’ market are the same exact harms that policies of protectionism inflict upon nations and their residents. Like the county line, the national boundary is completely arbitrary from an economic perspective. National protectionism is simply “buy local” on a larger scale.

The original article can be accessed at FEE.org.

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Joseph S. Diedrich is a student at the University of Wisconsin.

This article originally appeared on TradeVistas.org. Republished with permission.

cassava

Global Cassava Market Is Expected to Successfully Resist the COVID Pandemic

IndexBox has just published a new report: ‘World – Cassava – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

Since Cassava Constitutes a Staple Food in Tropical Countries, the Market Should Remain Stable Even Amid the Pandemic

Cassava (Manihot esculenta), also known as manioc, yuca, macaxeira, mandioca, aipim, and agbeli, is a plant native to South America which is extensively cultivated as a staple crop in tropical and subtropical regions in Africa and Asia for its edible starchy tuberous root, a major source of carbohydrates. Cassava, along with rice and maize, is one of the largest sources of calories in the tropics, thereby constituting a major staple food in the developing world, providing a basic diet for millions of people.

In 2019, the global cassava market increased by 0.4% to $164.1B (IndexBox estimates), rising for the third consecutive year after two years of decline. Overall, consumption continues to indicate a relatively flat trend pattern. The pace of growth was the most pronounced in 2014 with an increase of 7.8% y-o-y. As a result, consumption attained a peak level of $172.1B. From 2015 to 2019, the growth of the global market remained at a somewhat lower figure.

The countries with the highest volumes of cassava consumption in 2019 were Nigeria (61M tonnes), the Democratic Republic of the Congo (32M tonnes) and Thailand (32M tonnes), with a combined 42% share of global consumption. Ghana, Brazil, Indonesia, Angola, Viet Nam, Cambodia, Mozambique, China, and Malawi lagged somewhat behind, together comprising a further 37%.

The countries with the highest levels of cassava per capita consumption in 2019 were Ghana (646 kg per person), Cambodia (572 kg per person), and Angola (494 kg per person).

From 2013 to 2019, the most notable rate of growth in terms of cassava per capita consumption, amongst the leading consuming countries, was attained by Mozambique, while cassava per capita consumption for the other global leaders experienced more modest paces of growth.

Since cassava constitutes a well-established product in tropical countries of Africa and South America, as well as in some countries of South-Eastern Asia, the patterns of cassava consumption and the overall market demand should remain stable. Therefore, the growth of the population of tropical countries in Africa, Asia, and Latin America, and, consequently, the demand for food products will remain the key driver of the market in the medium term.

As cassava is one of the most drought-tolerant crops, capable of growing on poor soils, it is less sensitive to the risk of adverse weather conditions as many other crops. Accordingly, political instability in African countries, which hampers economic development, remains the main constraint on market growth.

Moreover, in early 2020, the global economy entered a period of the crisis caused by the outbreak of the COVID-19 pandemic. In order to battle the spread of the virus, most countries in the world implemented quarantine measures that put on halt production and transport activity. The combination of those factors hampers economic growth heavily throughout the world and disrupts the international supply chains. The result will be a drop in GDP relative to previous years which is to cut consumer spending.

Cassava, however, features among staple food products which are rather tolerant to crisis periods in terms of consumption. Given the fact that cassava is largely consumed in countries with low incomes and where it constitutes an affordable and important diet item, it is not expected that the COVID crisis will lead to a deep decrease in cassava consumption. It is more likely that people would cut the consumption of more expensive food items on the backdrop of lower incomes but keep the main diet element. In the medium term, therefore, population growth will continue to stimulate growth in demand for cassava.

Driven by increasing demand for cassava in major consuming countries, the market is expected to continue an upward consumption trend over the next decade. Market performance, however, is forecast to expand with an anticipated CAGR of +0.8% for the period from 2019 to 2030, which is projected to bring the market volume to 326M tonnes by the end of 2030.

Tropical Countries of Africa, Asia, and Latin America Remain the Largest Producers of Cassava

The countries with the highest volumes of cassava production in 2019 were Nigeria (61M tonnes), Thailand (32M tonnes), and the Democratic Republic of the Congo (32M tonnes), with a combined 42% share of global production. Ghana, Brazil, Indonesia, Angola, Cambodia, Viet Nam, Mozambique, Malawi, and Cote d’Ivoire lagged somewhat behind, together comprising a further 37%.

From 2013 to 2019, the biggest increases were in Cote d’Ivoire, while cassava production for the other global leaders experienced more modest paces of growth.

In 2019, the total area harvested in terms of cassava production worldwide rose to 26M ha, increasing by 3.3% on the previous year’s figure. Over the period under review, the harvested area, however, saw a relatively flat trend pattern. The global harvested area peaked at 26M ha in 2017; however, from 2018 to 2019, the harvested area failed to regain the momentum.

In 2019, the global average cassava yield dropped slightly to 12 tonnes per ha, leveling off at the previous year’s figure. The yield figure increased at an average annual rate of +1.2% over the period from 2013 to 2019; the trend pattern remained consistent, with somewhat noticeable fluctuations being recorded throughout the analyzed period. The pace of growth was the most pronounced in 2014 with an increase of 6.4% year-to-year. Over the period under review, the average cassava yield hit record highs at 12 tonnes per ha in 2018 and then dropped in the following year.

China, Thailand and Viet Nam Constitute the Largest Importers of Cassava

In 2019, the amount of cassava imported worldwide reduced to 6.6M tonnes, declining by -14.9% against the previous year. Overall, imports recorded a pronounced descent. The growth pace was the most rapid in 2015 when imports increased by 15% y-o-y. Global imports peaked at 10M tonnes in 2017; however, from 2018 to 2019, imports failed to regain momentum. In value terms, cassava imports dropped significantly to $1.3B (IndexBox estimates) in 2019.

The purchases of the three major importers of cassava, namely China, Thailand, and Viet Nam, represented more than two-thirds of total imports. South Korea (239K tonnes) took a relatively small share of total imports.

From 2013 to 2019, the most notable rate of growth in terms of purchases, amongst the key importing countries, was attained by Thailand, while imports for the other global leaders experienced mixed trends in the import figures.

In value terms, China ($531M), Viet Nam ($285M), and Thailand ($267M) constituted the countries with the highest levels of imports in 2019, together accounting for 83% of global imports.

In terms of the main importing countries, Thailand saw the highest rates of growth with regard to the value of imports, over the period under review, while purchases for the other global leaders experienced mixed trends in the import figures.

The average cassava import price stood at $198 per tonne in 2019, which is down by -11.4% against the previous year. Overall, the import price recorded a pronounced curtailment. The growth pace was the most rapid in 2018 when the average import price increased by 2.9% against the previous year. Over the period under review, average import prices attained the peak figure at $270 per tonne in 2014; however, from 2015 to 2019, import prices remained at a lower figure.

There were significant differences in the average prices amongst the major importing countries. In 2019, the country with the highest price was China ($219 per tonne), while Thailand ($124 per tonne) was amongst the lowest.

From 2013 to 2019, the most notable rate of growth in terms of prices was attained by South Korea, while the other global leaders experienced a decline in the import price figures.

Source: IndexBox AI Platform

tomato

Tomato Market in the Middle East Posted Solid Gains Over the Last Decade

IndexBox has just published a new report: ‘Middle East – Tomatoes – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

The Middle Eastern tomato market declined to $15.9B in 2019, which is down by -13.6% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price). In general, consumption saw a relatively flat trend pattern. The pace of growth appeared the most rapid in 2017 with an increase of 21% year-to-year. As a result, consumption attained a peak level of $19.8B. From 2018 to 2019, the growth of the market failed to regain momentum.

Consumption by Country

The countries with the highest volumes of tomato consumption in 2019 were Turkey (12M tonnes), Iran (6.7M tonnes), and the Syrian Arab Republic (651K tonnes), together accounting for 86% of total consumption. These countries were followed by Jordan, Saudi Arabia, and Israel, which together accounted for a further 6.6%.

From 2013 to 2019, the biggest increases were in Jordan, while tomato consumption for the other leaders experienced more modest paces of growth.

In value terms, Turkey ($7.8B), Iran ($5.3B) and Israel ($501M) constituted the countries with the highest levels of market value in 2019, with a combined 86% share of the total market. Jordan, the Syrian Arab Republic, and Saudi Arabia lagged somewhat behind, together comprising a further 5.1%.

The countries with the highest levels of tomato per capita consumption in 2019 were Turkey (143 kg per person), Iran (80 kg per person), and Jordan (59 kg per person).

From 2013 to 2019, the biggest increases were in Jordan, while tomato per capita consumption for the other leaders experienced more modest paces of growth.

Production in the Middle East

Tomato production was estimated at 23M tonnes in 2019, remaining stable against the year before. In general, production continues to indicate a relatively flat trend pattern. The pace of growth appeared the most rapid in 2017 when the production volume increased by 2.3% against the previous year. Over the period under review, production reached the peak volume in 2019. The generally positive trend in terms output was largely conditioned by a relatively flat trend pattern of the harvested area and a pronounced increase in yield figures.

Production by Country

The countries with the highest volumes of tomato production in 2019 were Turkey (12M tonnes), Iran (6.7M tonnes), and Jordan (864K tonnes), together accounting for 89% of total production. These countries were followed by the Syrian Arab Republic and Israel, which together accounted for a further 4.3%.

From 2013 to 2019, the most notable rate of growth in terms of tomato production, amongst the key producing countries, was attained by the Syrian Arab Republic, while tomato production for the other leaders experienced more modest paces of growth.

Harvested Area in the Middle East

In 2019, the total area harvested in terms of tomatoes production in the Middle East reduced slightly to 413K ha, stabilizing at the previous year’s figure. Over the period under review, the harvested area dedicated to tomato production attained the maximum at 465K ha in 2013; however, from 2014 to 2019, the harvested area stood at a somewhat lower figure.

Yield in the Middle East

The average tomato yield rose to 54 tonnes per ha in 2019, growing by 2% against 2018. The yield figure increased at an average annual rate of +2.6% from 2013 to 2019; the trend pattern remained relatively stable, with only minor fluctuations in certain years. The most prominent rate of growth was recorded in 2014 when the yield increased by 6.3% year-to-year. Over the period under review, the tomato yield hit record highs in 2019 and is expected to retain growth in years to come.

Exports in the Middle East

In 2019, overseas shipments of tomatoes increased by 19% to 883K tonnes, rising for the second year in a row after four years of decline. Over the period under review, exports, however, continue to indicate a deep downturn. Over the period under review, exports reached a maximum of 1.3M tonnes in 2013; however, from 2014 to 2019, exports remained at a lower figure. In value terms, tomato exports shrank to $482M (IndexBox estimates) in 2019.

Exports by Country

Turkey was the key exporting country with an export of about 535K tonnes, which reached 61% of total exports. It was distantly followed by Jordan (240K tonnes), making up a 27% share of total exports. The following exporters – Oman (30K tonnes), Iran (28K tonnes), and the Syrian Arab Republic (26K tonnes) – each finished at a 9.6% share of total exports.

From 2013 to 2019, the average annual rates of growth with regard to tomato exports from Turkey stood at +1.7%. At the same time, Iran (+23.7%) and Oman (+2.3%) displayed positive paces of growth. Moreover, Iran emerged as the fastest-growing exporter exported in the Middle East, with a CAGR of +23.7% from 2013-2019. By contrast, Jordan (-14.4%) and the Syrian Arab Republic (-22.8%) illustrated a downward trend over the same period. Turkey (+5.9 p.p.) and Iran (+2.3 p.p.) significantly strengthened its position in terms of the total exports, while the Syrian Arab Republic and Jordan saw its share reduced by -10.9% and -42.1% from 2013 to 2019, respectively. The shares of the other countries remained relatively stable throughout the analyzed period.

In value terms, Turkey ($303M) remains the largest tomato supplier in the Middle East, comprising 63% of total exports. The second position in the ranking was occupied by Jordan ($120M), with a 25% share of total exports. It was followed by Iran, with a 5.2% share.

In Turkey, tomato exports shrank by an average annual rate of -4.2% over the period from 2013-2019. The remaining exporting countries recorded the following average annual rates of export growth: Jordan (-14.9% per year) and Iran (+45.8% per year).

Export Prices by Country

The tomato export price in the Middle East stood at $546 per tonne in 2019, which is down by -28.1% against the previous year. In general, the export price recorded a pronounced decrease. The growth pace was the most rapid in 2017 an increase of 23% year-to-year. As a result, the export price reached a peak level of $791 per tonne. From 2018 to 2019, the growth in terms of the export prices remained at a somewhat lower figure.

Prices varied noticeably by the country of origin; the country with the highest price was Iran ($874 per tonne), while Oman ($95 per tonne) was amongst the lowest.

From 2013 to 2019, the most notable rate of growth in terms of prices was attained by Iran, while the other leaders experienced mixed trends in the export price figures.

Source: IndexBox AI Platform

plantain market

Despite the Pandemic, the Global Plantain Market is to Grow Steadily, Driven by Rising Population in Africa

IndexBox has just published a new report: ‘World – Plantains – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

Rising Population in Africa to Buoy Market Growth

The global plantain market rose to $31.9B in 2019 (IndexBox estimates), surging by 2.6% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price). The market value increased at an average annual rate of +3.5% from 2013 to 2019; the trend pattern remained relatively stable, with only minor fluctuations throughout the analyzed period. The pace of growth appeared the most rapid in 2014 with an increase of 6.9% y-o-y. Global consumption peaked in 2019 and is likely to see steady growth in the near future.

In physical terms, global plantain consumption experienced a similar trend pattern, increasing from 37M tonnes in 2013 to approx. 43M tonnes in 2019. Over the last two years, the market rebounded after a slight contraction of 2016 which was caused by the escalation of civil armed conflict in the Democratic Republic of the Congo which is the largest plantain consuming country.

The countries with the highest volumes of plantain consumption in 2019 were the Democratic Republic of the Congo (5.7M tonnes), Cameroon (5.2M tonnes), and Ghana (4.2M tonnes), together comprising 36% of global consumption.

In value terms, the largest plantain markets worldwide were the Democratic Republic of the Congo ($5.4B), Cameroon ($4.5B), and Nigeria ($2.7B), together accounting for 39% of the global market. Peru, Myanmar, Colombia, the Philippines, Uganda, Ghana, Cote d’Ivoire, the Dominican Republic, and Cuba lagged somewhat behind, together accounting for a further 40%.

The countries with the highest levels of plantain per capita consumption in 2019 were Cameroon (205 kg per person), Ghana (141 kg per person), and the Dominican Republic (94 kg per person).

Plantains remain a staple food in African countries incl. those with low incomes, as their population has limited opportunities to opt for new alternatives in their local cuisine. Rising population and incomes in Africa, therefore, constitute major fundamentals behind the growth of the plantain market. Similar factors are relevant for some Latin American and Asian countries where plantains are also consumed at a noticeable scale.

In early 2020, the global economy entered a period of the crisis caused by the outbreak of the COVID-19 pandemic. Quarantine measures implemented worldwide to battle the spread of the virus hamper economic growth heavily throughout the world and disrupt the international supply chains. The result will be a drop in GDP which is to decrease consumer incomes.

Plantains, however, constitute a staple food, the consumption of which is rather insensitive to crisis periods. Given the fact that plantains are largely consumed in countries with low incomes and where they are only affordable mass food, it is not expected that the COVID crisis will lead to a deep decrease in plantain consumption. It is more likely that people would cut the consumption of more expensive food items on the backdrop of lower incomes. In the medium term, therefore, population growth will continue to drive growth in demand for plantains.

Accordingly, the plantain market is expected to continue an upward consumption trend, increasing with an anticipated CAGR of +2.4% for the period from 2019 to 2030, which is projected to bring the market volume to 55M tonnes by the end of 2030.

The U.S. Remains the Largest Importer of Plantains

In 2019, global imports of plantains increased by 2.3% to 1.3M tonnes, rising for the second year in a row after two years of decline. The total import volume increased at an average annual rate of +1.7% over the period from 2013 to 2019; the trend pattern remained relatively stable, with only minor fluctuations throughout the analyzed period. The growth pace was the most rapid in 2015 with an increase of 7.9% against the previous year. Global imports peaked in 2019 and are likely to continue growing in the immediate term.

In value terms, plantain imports stood at $855M (IndexBox estimates) in 2019. The total import value increased at an average annual rate of +2.2% from 2013 to 2019; the trend pattern remained relatively stable, with somewhat noticeable fluctuations throughout the analyzed period. The most prominent rate of growth was recorded in 2015 with an increase of 8.7% against the previous year. Over the period under review, global imports reached the maximum in 2019 and are expected to retain growth in years to come.

Imports by Country

The U.S. represented the key importing country with an import of about 359K tonnes, which amounted to 27% of total imports. Saudi Arabia (145K tonnes) held an 11% share (based on tonnes) of total imports, which put it in second place, followed by South Africa (8.3%), the Netherlands (5.3%), and Romania (5.1%). The following importers – the UK (52K tonnes), El Salvador (44K tonnes), the United Arab Emirates (42K tonnes), Belgium (33K tonnes), Jordan (32K tonnes), Spain (29K tonnes) and Macedonia (26K tonnes) – together made up 19% of total imports.

From 2013 to 2019, average annual rates of growth with regard to plantain imports into the U.S. stood at +2.6%. At the same time, the United Arab Emirates (+24.7%), the Netherlands (+17.2%), the UK (+10.2%), Macedonia (+9.3%), Romania (+6.4%), South Africa (+5.6%), Saudi Arabia (+4.1%) and Jordan (+1.4%) displayed positive paces of growth. Moreover, the United Arab Emirates emerged as the fastest-growing importer imported in the world, with a CAGR of +24.7% from 2013-2019. By contrast, El Salvador (-7.2%), Spain (-7.3%) and Belgium (-8.4%) illustrated a downward trend over the same period.

In value terms, the U.S. ($230M) constitutes the largest market for imported plantains worldwide, comprising 27% of global imports. The second position in the ranking was occupied by Saudi Arabia ($99M), with a 12% share of global imports. It was followed by the Netherlands, with an 8.6% share.

From 2013 to 2019, the average annual growth rate of value in the U.S. stood at +4.9%. The remaining importing countries recorded the following average annual rates of import growth: Saudi Arabia (+9.1% per year) and the Netherlands (+16.7% per year).

Import Prices by Country

In 2019, the average plantain import price amounted to $634 per tonne, almost unchanged from the previous year. In general, the import price recorded a relatively flat trend pattern. The pace of growth appeared the most rapid in 2017 when the average import price increased by 8.1% year-to-year. As a result, import price attained the peak level of $679 per tonne. From 2018 to 2019, the growth in terms of the average import prices failed to regain the momentum.

Prices varied noticeably by the country of destination; the country with the highest price was the Netherlands ($1,032 per tonne), while El Salvador ($206 per tonne) was amongst the lowest.

From 2013 to 2019, the most notable rate of growth in terms of prices was attained by El Salvador, while the other global leaders experienced more modest paces of growth.

Source: IndexBox AI Platform

asia

Asia’s Beef Market 2020 – Positive Outlook for China, Negative Expectations for India

IndexBox has just published a new report: ‘Asia – Beef (Cattle Meat) – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

The coronavirus pandemic continues to negatively impact the Asian beef market, holding back production and international trade. However, it can be predicted that the strength of the impact will depend on how quickly countries return to normalcy. In China, which was the first to recover from the pandemic, positive dynamics are expected in the second half of the year. In contrast, India, the second-largest beef producer after China, will face significant losses in production and exports.

The expected increase in China’s beef production is driven by rising cattle herds, particularly on large farms, and strong domestic demand to offset the ongoing pork shortage. In addition, China will continue to increase its imports, fueled by new accreditations granted to meatpacking plants in Brazil, Argentina, and Uruguay, as well as new trade agreements with these countries.

In India, cattle production may be reduced due to a pandemic shutdown, especially since collection of animals is usually carried out in the form of home visits. Given that most of the production is destined for foreign markets, slowing economic growth in many countries could further undermine the Indian cattle sector.

Import growth is likely to slow in almost all other Asian markets, as widespread recession restricts consumption in middle- and low-income households, while restrictions and physical distancing reduce restaurant turnover, dampening demand for high-quality meat products.

Beef Consumption by Country in Asia

China (7.5M tonnes) continues to be the largest cattle meat market in Asia, accounting for 35% of the total volume. Moreover, beef consumption in China exceeded the figures recorded by the second-largest consumer, Pakistan (1.9M tonnes), fourfold. India (1.5M tonnes) ranked third in terms of total consumption with a 7.1% share.

From 2009 to 2019, the average annual growth rate of beef consumption in Сhina was +1.5%. Pakistan enjoys the highest growth (+3.2% per year), while India suffers from decreasing demand (-2.8% per year).

In value terms, China ($93.3B) led the market, alone. The second position in the ranking was occupied by Turkey ($7.5B). It was followed by Pakistan.

The countries with the highest levels of beef per capita consumption in 2019 were Uzbekistan (29 kg per person), Kazakhstan (27 kg per person), and South Korea (14 kg per person).

From 2009 to 2019, the biggest increases were in Turkey, while beef per capita consumption for the other leaders experienced more modest paces of growth.

Production in Asia

In 2019, Asia’s production of cattle meat expanded modestly to 19M tonnes, with an increase of 2% on the previous year’s figure. The total output volume increased at an average annual rate of +1.7% from 2009 to 2019; the trend pattern remained consistent, with only minor fluctuations throughout the analyzed period. The pace of growth appeared the most rapid in 2010 when the production volume increased by 3.8% y-o-y. Over the period under review, production reached the peak volume in 2019 and is likely to continue growing in the immediate term. The generally positive trend in terms output was largely conditioned by a mild increase in the number of producing animals and a relatively flat trend pattern in yield figures.

Production by Country in Asia

China (6.5M tonnes) is the largest cattle meat producer in the region, accounting for 34% of the total output. Moreover, beef production in China exceeded the figures recorded by the second-largest producer, India (2.6M tonnes), twofold. Pakistan (2M tonnes) ranked third in terms of total production with an 11% share.

In China, beef production was relatively stable over the past decade. The remaining producing countries recorded the following average annual rates of production growth: India (+0.6% per year) and Pakistan (+3.4% per year).

Producing Animals in Asia

In 2019, the number of animals slaughtered for beef production in Asia reached 116M heads, standing approx. at 2018. This number increased at an average annual rate of +1.1% from 2009 to 2019. The pace of growth appeared the most rapid in 2010 when the number of producing animals increased by 2.9% year-to-year. Over the period under review, this number hit record highs in 2019 and is expected to retain growth in the near future.

Exports in Asia

In 2019, the amount of cattle meat exported in Asia totaled 1.3M tonnes, approximately equating 2018. In general, exports continue to indicate a prominent expansion. The most prominent rate of growth was recorded in 2011 when exports increased by 67% against the previous year. Over the period under review, exports hit record highs at 1.7M tonnes in 2013; however, from 2014 to 2019, exports remained at a lower figure.

In value terms, beef exports declined to $4.1B (IndexBox estimates) in 2019.

Exports by Country

India dominates beef trade, accounting for 1.1M tonnes, which was near 85% of total Asian exports in 2019. Hong Kong (84K tonnes) held a 6.6% share (based on tonnes) of total exports, which put it in second place, followed by Pakistan (4.5%).

From 2009 to 2019, the average annual rates of growth with regard to beef exports from India stood at +9.5%. At the same time, Pakistan (+9.8%) and Hong Kong  (+8.1%) displayed positive paces of growth. Moreover, Pakistan emerged as the fastest-growing exporter exported in Asia, with a CAGR of +9.8% from 2009-2019. While the share of India (+51 p.p.), Hong Kong  (+3.6 p.p.) and Pakistan (+2.8 p.p.) increased significantly, the shares of the other countries remained relatively stable throughout the analyzed period.

In value terms, India ($3.1B) remains the largest beef supplier in Asia, comprising 77% of total exports. The second position in the ranking was occupied by Hong Kong  ($289M), with a 7.1% share of total exports.

In India, beef exports expanded at an average annual rate of +12.0% over the period from 2009-2019. The remaining exporting countries recorded the following average annual rates of export growth: Hong Kong  (+10.9% per year) and Pakistan (+15.2% per year).

Export Prices by Country

The beef export price in Asia stood at $3,158 per tonne in 2019, falling by -4.5% against the previous year. Over the period from 2009 to 2019, it increased at an average annual rate of +2.6%. The most prominent rate of growth was recorded in 2011 when the export price increased by 21% year-to-year. The level of export peaked at $3,306 per tonne in 2018 and then shrank in the following year.

Average prices varied somewhat amongst the major exporting countries. In 2019, the country with the highest price was Pakistan ($3,815 per tonne), while India ($2,831 per tonne) was amongst the lowest.

From 2009 to 2019, the most notable rate of growth in terms of prices was attained by Pakistan, while the other leaders experienced more modest paces of growth.

Imports in Asia

In 2019, purchases abroad of cattle meat decreased by -12.7% to 3.9M tonnes for the first time since 2008, thus ending a ten-year rising trend.

In value terms, beef imports contracted to $19.9B (IndexBox estimates) in 2019. In general, imports, however, enjoyed prominent growth. The most prominent rate of growth was recorded in 2010 when imports increased by 22% y-o-y. Over the period under review, imports attained the maximum at $21.3B in 2018 and then shrank in the following year.

Imports by Country

In 2019, China (1.1M tonnes), distantly followed by Japan (617K tonnes), South Korea (444K tonnes), and Hong Kong  (365K tonnes) were the major importers of cattle meat, together committing 63% of total imports. The following importers – Malaysia (147K tonnes), Indonesia (141K tonnes), Taiwan (137K tonnes), the United Arab Emirates (133K tonnes), the Philippines (125K tonnes), Iran (119K tonnes), Israel (114K tonnes) and Saudi Arabia (86K tonnes) – together made up 25% of total imports.

From 2009 to 2019, the biggest increases were in China, while purchases for the other leaders experienced more modest paces of growth.

In value terms, the largest beef importing markets in Asia were China ($5B), Japan ($3.5B), and South Korea ($2.9B), with a combined 57% share of total imports.

Import Prices by Country

The beef import price in Asia stood at $5,039 per tonne in 2019, rising by 6.9% against the previous year.

Prices varied noticeably by the country of destination; the country with the highest price was Taiwan ($7,898 per tonne), while Malaysia ($3,172 per tonne) was amongst the lowest.

From 2009 to 2019, the most notable rate of growth in terms of prices was attained by South Korea, while the other leaders experienced more modest paces of growth.

Source: IndexBox AI Platform

pasta

The European Pasta Market Calms Down after the Strike of the Pandemic

IndexBox has just published a new report: ‘EU – Uncooked Pasta – Market Analysis, Forecast, Size, Trends And Insights’. Here is a summary of the report’s key findings.

The Hit of the Pandemic in Early 2020: Hype in Retail Demand against Disrupted Supply Chains

In 2019, the EU uncooked pasta market decreased by -2.5% to $5.2B (IndexBox estimates) for the first time since 2016, thus ending a two-year rising trend. Over the period under review, consumption, however, showed a relatively flat trend pattern. The growth pace was the most rapid in 2018 with an increase of 7% against the previous year. As a result, consumption attained a peak level of $5.3B, and then reduced slightly in the following year.

Population growth and disposable income growth remain the main market drivers, as well as rising international tourism. These factors, taking into account the general dynamics of the country’s economy, determine the development of the HoReCa sector, which also contributes to the growth of the market.

Until 2020, the European economy has been developing steadily for five years, although at a slower pace than in the previous decade. The slowdown in European economic growth was caused by a slowdown in the world’s economy, increased political uncertainty in the world, and trade wars between the United States and China. According to the World Bank outlook from January 2020, the European economy was expected to pick up the growth momentum and increase by from +2.5% to +2.7% per year in the medium term.

In early 2020, however, the European economy entered a period of the crisis caused by the outbreak of the COVID-19 pandemic. In order to battle the spread of the virus, most countries in the world implemented quarantine measures that put on halt production and transport activity. The result will be a drop in GDP relative to previous years and a sharp fall in the demand for oil, which led to extremely low prices and heavy oil production cuts. The combination of those factors disrupts economic growth heavily throughout the world, increases unemployment, and lowers consumer spending. The European uncooked pasta market also faces challenges due to the pandemic, however, the market impact varies widely from the consumer level and through the supply chain.

Against the backdrop of the introduction of quarantine restrictions which lead to the closure of production, a halt in transport activity, and a drop in incomes, over March-April of 2020 many countries experienced a booming consumer demand for long-term storage food products, including pasta. This is quite typical: during any crisis, consumers buy more non-perishable products for the future, which applies primarily to cereals and pasta.

The closure of HoReCa threatens pasta suppliers with a loss of sales and forces them to seek new sales channels; however, the drop in demand from restaurants and cafes is to be partially offset by a spike in retail sales. With the onset of the coronavirus pandemic, there was an overwhelming demand for long-term essentials including cereals and pasta for a couple of months. Accordingly, increased demand for retail packaging against lower demand for bulk packages for HoReCa. On the other hand, as consumers buy more pasta for the future, there is an increasing need for retail packaging of a larger size.

Quarantine measures and the risk of mass illness of employees can lead to a temporary reduction in pasta production. In addition, a major COVID-related risk comes from the disruption of established international supply chains between durum wheat growers, importers, pasta producers, distributors, and retailers due to asynchronous quarantine measures and restricted transport activity. Problems with the export of paste due to asynchronous transport and cross-border restrictions can lead to overstocking of manufacturers’ warehouses, while the rush demand in retail in case of problems with transport and border crossings can lead to interruptions in supply. On the other hand, grain cultivation is less affected by the virus than the production of fruits and vegetables due to its high mechanization and less dependence on immigrant workers. This will contribute to the stability of the supply of durum wheat for the production of pasta.

With the weakening of quarantine measures and the creation of certain stocks, consumer demand is gradually normalizing, and the market is looking for a new balance of supply and demand. As shown below, gradual stabilization in pasta production and re-establishing cross-border supplies show a sign for the market is gradually finding the ‘new normality’.

Countries which Increased Their Local Output amid the Temporary Disruption of International Supply Chains Are Now Likely to Return to the Italian Pasta

In 2019, the amount of uncooked pasta produced in the European Union rose slightly to 5.5M tonnes, picking up by 1.8% compared with 2018 (IndexBox estimates). The total output volume increased at an average annual rate of +1.6% over the period from 2012 to 2019; the trend pattern remained relatively stable, with somewhat noticeable fluctuations being observed in certain years. The most prominent rate of growth was recorded in 2015 with an increase of 4% against the previous year. The volume of production peaked in 2019 and is expected to retain growth in the immediate term.

Italy (3.5M tonnes) remains the largest uncooked pasta producing country in the European Union, comprising approx. 64% of the total volume. Moreover, uncooked pasta production in Italy exceeded the figures recorded by the second-largest producer, Spain (344K tonnes), tenfold. The third position in this ranking was occupied by Poland (268K tonnes), with a 4.9% share.

From 2012 to 2019, the average annual rate of growth in terms of volume in Italy amounted to +1.9%. The remaining producing countries recorded the following average annual rates of production growth: Spain (+3.3% per year) and Poland (+4.3% per year).

Italy also dominates uncooked pasta exports structure, recording 2M tonnes, which was near 76% of total exports in 2019. It was distantly followed by Spain (125K tonnes), committing a 4.9% share of total exports. Belgium (109K tonnes), Greece (61K tonnes), Germany (55K tonnes) and France (39K tonnes) took a little share of total exports.

On the other hand, the largest uncooked pasta importing markets (in value terms) in the European Union were Germany ($421M), France ($366M) and the UK ($205M), together accounting for 53% of total imports. The Netherlands, Belgium, Spain, Sweden, Italy, Poland, Austria, the Czech Republic, and Denmark lagged somewhat behind, together comprising a further 34%.

At the beginning of 2020, certain shifts occurred in key market indicators. Thus, the coronavirus pandemic led to a strong increase in production in the pasta industry, which was caused by the rush of consumer demand for long-term storage products against the background of quarantine restrictions. At the same time, in Germany, France, and Spain, which constitute large importers of pasta, production increased even more than in Italy, due to a possible violation of the supply chain due to border closures and transport restrictions.

At the same time, in May, there was a decrease in production volumes in these countries, which indicates the stabilization of demand against the backdrop of easing quarantine restrictions and re-establishing the supply chains. If this trend continues, a significant decrease in imports from Italy is unlikely, and the most likely scenario is a gradual return to the usual supply chains and a gradual stabilization of the market.

The COVID Pandemic Did Not Bull the Producer Prices, Therefore the Pasta Prices in Major Consuming Countries Balance Out as the Rush in Demand Wanes

Against the background of production growth, at the beginning of 2020, there is a slight increase in the prices of pasta producers, but there are no extraordinary rates of price growth. Thus, producer prices rise slightly in Germany; in Italy and Spain, the prices show a stabilization sign after a slight increase in February-April, and in France, they even decline after rising in March-April.

Thus, the crisis of the COVID pandemic does not yet lead to a significant increase in prices, and the market is trying to find a new balance after the rush in March-April and the resulting increase in pasta production. Further price dynamics will depend on the situation with durum wheat supplies and the degree of threat of a new wave of quarantine restrictions. However, since some transport and cross-border restrictions still remain, local small price fluctuations are possible due to the current supply and demand conditions.

As for the prices of durum wheat, they have also been growing since the beginning of the year in almost all of the supplying countries. The only exception is Canada, where prices remained near the same level until April. Further price dynamics are subject to significant uncertainty due to the ongoing pandemic and the threat of worsening weather conditions and abnormal droughts, especially in Eastern Europe. If price increases continue, this will create an additional burden on pasta producers and force them to raise prices or lower margins in order to save consumers.

As for consumer prices for pasta products, their dynamics are largely determined by the same circumstances as the dynamics of production. Thus, with the onset of the pandemic in March-April, there has been a sharp increase in consumer prices for pasta, although producer prices during this period grew much less pronouncedly. This was due to the rush of demand for long-term retail products against the backdrop of strict quarantine restrictions, which, together with disruptions in supply chains, led to temporary local shortages of products. In May-June, as the situation improves and quarantine measures gradually soften, consumer prices stabilized or even decline.

Thus, the factor of consumer excitement is gradually disappearing, and in the future a stabilization or even some decrease in prices can be expected against the background of increased production, finding a new balance of demand and supply. However, due to the fact that some restrictions on transport activity persist, small price fluctuations in local markets due to disruptions in the supply chain are also possible.

Source: IndexBox AI Platform