European processing tomato industry has not overcome its problems since 2009

European processing tomato industry

This work “photo” is a derivative of “Gorgeous tomatoes”  by Pauline Mak, used under CC BY. Licensed under CC BY by [agrotypos]

Mr. Dimitrios Nomikos, the President of the company “D. Nomikos – Kopais S.A.” talked to AgroTypos about the European processing tomato industry. The manufacturing industry that he is leading is one of the largest and most reliable in Greece and Mr. Nomikos is considered one of those who know very well this sector in Europe. Mr. Nomikos mentioned that this year, everything will depend on the quantity produced: “In case the world production is higher than it is expected then it would be problem because the production will be higher than the demand. On the other hand if the produced quantities are not higher than the estimated ones and moreover there are not changes in the euro / dollar exchange rate, then things would be positive in Europe for this sector”.

European industry faces problems

Nevertheless, according to Mr. Nomikos, the manufacturing sector of canned tomatoes in Europe has been facing problems since 2009, which could not overcome. “The situation of European tomato industry is not good. The problems began in 2009 when a global overproduction of tomato happened. This coincided with the economic crisis, not only in Greece but also in other European countries (Spain, Portugal etc.). From then on the industries almost “collapsed”. Fortunately the situation has changed, but I also recall that all these years the euro – dollar parity did not help. Moreover, Chinese and American companies sold to Europe at prices which did not exceed the cost of European industries. All this resulted in many companies being in a difficult financial situation. For example, I have in mind a specific cooperative Italian company and a private one. I mentioned this country, because Italy used to have a important pruduction” Mr. Nomikos said.

The canned tomato production in Europe

Mr. Nomikos also referred to the numbers of canned tomato production in Europe: “In Europe, Italy is the largest producer of canned tomato (5 mil tonnes), followed by Spain (2.5 mil. tonnes), Portugal (1.2 mil. tonnes) and Greece (500,000 tonnes, while in previous years Greek production reached the 1.2 – 1.3 mil. tonnes and Spanish the 700,000 tonnes)”.

He added: “The Greek production of canned tomato is mainly exported to Europe, Middle East and Far East. There is always tomato demand, because it is an important and basic fruit of human diet. However, we could not say that Greece is a competitive producer compared with Italy, Spain and Portugal. Our non-competitiveness has mainly to do with the particularly high energy cost.

The advantages of Spain and Portugal

Furthermore, Mr. Nomikos, talked about the geographical advantages of some tomato-producing countries that are near to large tomato-importer European countries such as Great Britain or France. “The fact that Greece is far from these countries is a disadvantage, because there is a competitor country with lower transport costs close to large importer European countries. For example near to Great Britain is Portugal, to France is Spain and near to Germany is Italy. On the contrary Greece has the advantage of the Piraeus port to reach the ports of northern countries such as Poland, the Netherlands and Scandinavia”.

Low cost production in Spain and Portugal and the imports in the EU

Comparing the cost production of Greece to other European countries Mr. Nomikos said: “Certainly the most competitive countries to Greece are Spain and Portugal, as they have lower prices of raw material, lower labor and energy costs”.

Finally he talked about the imports in Europe of industrial tomatoes: “Countries that traditionally export large quantities to Europe are USA and China. But this year these imports are significantly reduced due to the euro / dollar exchange rate. So, although industry in southern Italy (mainly driven to buy cheap low raw material and export the repackaged product to various countries eg. South Africa) used to buy cheap raw material from USA and China, this April was signed a contract with Spain for more than 150,000 tonnes tomato paste (corresponding to about 1.5 mil. tonnes of fresh tomatoes)”.

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