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Counter-season melons, a model for the future

  • Counter-season melons, a model for the future

    by Market Insider

    Tuesday, 24 Feb. 2015

    The 2013-14 season for off-season melons seems to have marked a hiatus in the structural difficulties experienced over the past few seasons thanks to the small respite brought by the Brazilian shortfall at the end of 2013 and the highly buoyant spring of 2014 boosted by the early arrival of favourable climate conditions and the church calendar.  The 2014-15 season started very hesitantly, with a gloomy end to the year, however there are no questions about the foundations, with progressive trends seen in production which will ensure continuity of supply without destabilising the market.

    The years roll by in the melons trade confirmed the reduction in volumes during the first part of the season in autumn, or even during the end-of-year holiday period, and a well-established recovery from February to establish a firm presence starting in spring for the Easter holidays. European imports overall rediscovered their cruising speed at 325,000 tons.

    Exports from Brazil now actually seem to be stabilising at around 155,000 tons while the rise of Honduras (37,000 tons) is continuing to offset the slowdown from Costa Rica, which however took advantage of the relatively low Brazilian performance in 2013-14 to achieve a good performance in the European market (57,000 tons); Guatemala confirmed its break-through with volumes which, though still modest, have more than doubled from the previous season.The Mediterranean sources are still ebbing on the European market with their market share worn away in the early season by Senegal and in the late season by Spain.

    In spite of the economic difficulties, Brazilian melons are holding their position not only in Europe but also on the world market. The devaluation of the Real against the Euro has helped Brazilian melons retain their competitiveness in spite of the rising production and transport costs. Hence shipments exports dipped only slightly last year remaining near-average (177,000 tons, e.g. -3% on 2012-13) primarily because of the climate conditions which hit the Sao Francisco zone particularly hard. However, operators were reckoning on a better result in view of the expanding surface areas in this zone (2.950 ha, e.g. + 18% on 2013) although they are stable in the most northern zones (Rio Grande do Norte, Ceara) extending over 12,000 ha. In particular, they were counting on the growth of shipments to the Middle East (United Arab Emirates and Saudi Arabia), Turkey and Asia (Singapore, Hong Kong) to increase their volumes. Even though they are expanding these outlets are still modest, so Europe remains essential for Brazil in spite of the increasing customs duty (the country is leaving the generalised tariff preferences scheme: 8.8% instead of 5.3%). Exporters are also targeting the nearby markets and shipments to Chile should expand following the partnership signed in 2013.

    In Honduras production is still rising at the tempo of the small expansion in surface areas but particularly thanks to the efforts made to improve yields. Exports increased by 7% in the last season (276,000 tons) with the bulk of volumes aimed at the United States market (160.000 tons); since shipments to the United States are stagnating exporters are developing their customer portfolio toward Europe as well as Japan and Taiwan, with which Honduras has obtained an agreement. They are also hoping to break into other markets in the medium term (especially Saudi Arabia, Dubai and Hong Kong) and are reckoning on another volume increase of around 11% starting this season.
    Similarly, Guatemala is continuing its development: with the bulk of volumes aimed at the United States market (97% of the 400,000 tons exported by this source) it is expanding its customer portfolio to Europe. The vast majority of production is located in the central eastern part of the country (86% of the 1.2 million tons produced).

    Conversely, the fall in Costa Rican surface areas is continuing, under real estate pressure and competition from other exporting countries; exports seem to have stabilised at around 120,000 to 140,000 tons and are in the main aimed at Europe and North America (66,000 and 69,000 tons respectively in 2014).

    The Caribbean sources remain dear to the Mediterranean countries as in the case of the FWI production which is holding up with an export potential of 2000 tons for Guadeloupe and 3,500 tons for Martinique and a few flows should continue to emerge from the Dominican Republic, whose production extends from December to March.

    These sources are nevertheless present primarily on the North European markets. Agreements are sometimes hard to find in spring so that more and more operators, especially in the Southern European markets, are leaning toward African sources to top up their procurement calendars.

    Volumes out of Senegal are increasing year on year: European imports increased again last season (15,000 tons, e.g. + 30%). The season began in November to cover the end-of-year holidays; there were less follow-on flows in January but volumes grow again in February and reach a production peak in the second half of March. Surfaces areas should further expand this year, driven by French, Italian and Spanish operators.

    Conversely, surface areas are shrinking slightly in Morocco, down to just 1.730 ha in Charentais; exports to Europe went down by approximately 10% in 2014 (42,000 tons) which helped the product obtain decent values in a context of booming demand. Yet, the end of the Moroccan season overlaps with the start of the European seasons and the distinct growth of certain production areas in Spain and their export potential of approximately 200,000 tons across all varieties represents a serious factor of competitiveness. So Morocco must play its cards right to maintain its market shares.

    Source: Fruitrop

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