Europe and the United States rely so heavily on the supply of pineapple from Costa Rica that a disappointing first half caused a dip in the worldwide supply immediately. After heavy rainfall and a disorderly growing period the supply from the Central American country was slow. The result: low volumes and high prices in Europe and the United States. The industry also paid good prices, which further pressured the supply to the fresh market. The situation is expected to improve over the next few weeks. Other production areas, such as Colombia and Ghana, are investing in the pineapple cultivation, but Costa Rica remains the dominant player for the Western markets. China mainly imports from countries from the region, with the Philippines and Taiwan as purveyors. Australia grows the fruit for the domestic market, high costs make export unprofitable. The United States have a limited cultivation in Hawaii.
Delayed Costa Rican harvest influences global market
The weather is playing tricks on the harvest, which means there are less volumes on the market. Due to the heavy rainfall the quality isn't always optimal. Last year the fruit was shipped to Europe anyway, but this year the industry is also paying a good price. This is why the companies are choosing the industry as a sales market more often. America is also demanding a lot of pineapple and the multinationals give the American importers precedence. The growing period this year was disorderly, says an exporter. There were various blooming periods due to the low temperature between week 35 last year and week 8 this year. This caused the supply to be unstructured and created problems with the volumes.
The growers also had difficulty controlling the colouring of the fruit and the pressure of diseases, which meant that more volumes that would normally be meant for export markets were brought to the internal market.
The crownless pineapple is on the rise, more and more buyers are asking for the pineapple. Motivation is the cost efficiency, a simple maths sum shows that more fruit fits in a container if the crown isn't with it. The development of the volume is going slowly and more buyers are active in the processing industry. That sector bought more this year due to the growers' above mentioned problems.
The prices were bad this year. In Europe low prices were made at the start of the year, although the situation has improved recently. The problem for the Costa Rican sector is that it is difficult to buy for low prices due to the high production costs. On average the prices are between 6 and 6.50 dollars this year. In other years the prices fluctuated more. The prices are high again at the moment, although they could be called stable compared to the previous five years.
In the area of transport most pineapple is still shipped. Airfreight is only interesting for a number of exclusive markets. The biggest disadvantage is the high price. A market that is interested in airfreight is the Middle East.
Colombia exports 1.7 million kilo in first semester of 2015
People are less bothered by climatological changes in the South American country. A grower says that the pineapple plantations are in a zone where the temperature during the day doesn't rise above 32 degrees on average and cools to around 18 degrees at night. In this way the growers are trying to keep the production stable and prevent delays. The largest concentration of blossoming took place between November and February. In that period the temperatures were higher than average, which meant that the production between April and June was higher than average and a dip was noted for August and September.
The averages were at 110 to 130 tonnes per hectare, of which 80 percent of the fruit met the ideal export characteristics, explains a grower.
The crownless pineapple isn't taking off yet in Colombia. 90 percent of the sales of pineapple are still intended for fresh consumption and the rest for the industry. The fact that many growers don't have the infrastructure to offer the pineapple without a crown also plays a role. According to the official government statistics almost 1.7 million kilo was exporter in the first semester of 2015, with a FOB of 939,676 dollars. This corresponds to a FOB per box of 12 kilo between 7 and 7.50 dollars.
Ghana enters market with white fleshed pineapple
In collaboration with a Belgian business a project for the cultivation of white fleshed pineapple started in May this year. The variety, green on the outside and white inside, is very sweet and contains a lot of vitamin C. On the other side of the ocean growers know that the colour of the flesh is important for the consumer. Yellow fruit flesh is generally associated with a ripe pineapple.
Pineapple relatively unknown in China
The Chinese importers mainly source the pineapple from the Philippines, Taiwan and Thailand, with the Philippines and Taiwan as the main suppliers. The import season lasts from May to June. At the moment the volumes available are small.
On an annual basis China imports 45,000 boxes of pineapple, which is equal to 30 containers, from the Philippines and 8000 tonnes from Taiwan. The pineapple doesn't yet enjoy widespread familiarity among Chinese consumers, but the popularity is slowly increasing. In a number of supermarkets the pineapple is offered gift wrapped with a guide to peeling and consuming the fruit. The mini pineapple from Thailand is popular. The size of these minis is equal to that of an apple.
Ethylene to keep Hawaiian production level
The bad weather in Costa Rica is choking the supply to the United States. Importers who can keep the supply level can count on high sales prices. An importer says that it is estimated there will be a decrease of 15 to 20 percent compared to last year. Whereas a box of pineapple cost between 8 and 9 dollars last year, the prices are now between 14 and 15 dollars. "The supply could be normal again in three weeks, until then we have a strong market," says an importer.
Within the United States pineapple is grown in Hawaii. With the help of ethylene the production is kept level. The harvest takes place in the summer and winter. The growers try to extend the season using hormones, so as to guarantee a year round supply. Besides this ethylene is used to colour the pineapple, but rain can be detrimental to this and spread the ethylene unevenly over the field, leaving some of the fruit green. The appearance of the pineapple is important in sales. Although the crown isn't eaten, it is unlikely that a fruit with a bad crown would end up in the retail shelves.
Europe
German market sees high prices
The demand will remain larger than the supply over the next few weeks, expects a large German importer. The shortage in supply from Costa Rica also has consequences for the German market. As of week 41 an improvement in the market is expected. The prices for the large calibres of pineapple are between 12 and 13 Euro, and between 10 and 11 Euro for the smaller sizes. Despite the shortage of pineapple the quality and the calibres are good. According to the official PROCOMER statistics, less pineapple was exported this year. in the first quarter the export decreased by 15 percent compared to the same period in 2014.
The Netherlands: "pineapple isn't touching the ground"
The low supply from Costa Rica and the large demand have been pushing the prices for pineapple to great heights for weeks. A trader describes the situation as follows: "There is little pineapple coming this way and what does come barely reaches the ground." This illustrates the speed with which the fruit is traded. The situation is expected to remain this way until week 42. In the recent summer months there was also little supply, but pineapple was competing with other summer fruit then. The consumption was also lower due to the holiday period. Now that stonefruit is off of the market, the demand is rising. This translates into an increased price. The supply of Brazilian melons is also slow, which further pushes up the demand for pineapple. Importers are looking at other countries, such as Panama, Ecuador and the Dominican Republic, but there isn't an ample supply there either. The prices in the Netherlands are comparable to those in Germany. Size 5-7 is sold for 12.50, size 8 around 10.50 and the smaller calibres leave for around 9 to 10 Euro.
British importers don't foresee improvement until New Year
The British importers are calculating a shortage of pineapple from Costa Rica of 15 percent for the period up to Christmas. The traders are open to the possibility that the shortages will continue into the start of next year. Panama, Ecuador and Colombia have a small supply, and the supply from South Africa is also limited. Ivory Coast is supplying France.
The main variety on the British market is the MD2, the market is stable with high prices and is expected to stay this way. The crownless pineapple is mainly imported for the processing industry, because no transport has to be paid for the crown, the pineapple is more cost efficient. In the supermarkets the crownless pineapple doesn't do well. ASDA and Tesco have made an attempt, but the consumer wasn't convinced. "They didn't understand why the crown was lacking," explains a British trader. The demand for fresh pineapple is growing, but this growth is mainly due to the supermarkets who offer deals on the prices.
Italian market blooms after years of low prices
In recent years the demand for pineapple has been structurally under the supply, which has pushed prices under the break-even point. The price pressure pushed through to Costa Rica, where small growers had to close their doors. In Italy 95% of the pineapple comes from this Central American country. This year the situation has improved, with higher prices that could make up for the negative influence of the exchange rate. The consumption of pineapple juice rose at the expense of orange juice, which caused industry prices to rise. This caused many traders to supply to the industry, which caused the pressure on the fresh market to reduce.
Spain deals with shortage in supply
Like in the rest of Europe, Spain saw the supply of pineapple from Costa Rica almost dry up. A trader says that he advised his customers to not buy pineapple, because the fruit wasn't ripe. The pineapple doesn't ripen further after the harvest and due to the weather conditions in Costa Rica the ripening process was delayed. This created a shortage in the market, with high prices as a result. As of week 40 the situation is supposed to be normal again. "Then we'll get all the pineapple that couldn't be harvest over the last few weeks, so we don't expect problems in the supply towards Christmas," according to a Spanish importer.
France: African pineapple can't replace Costa Rican
The French importers are also being confronted with shortages in the supply from Costa Rica. There are also a number of importers who import from African countries. Benin, Cameroon, Ivory Coast and Ghana, for instance. But the supply from Africa is expensive. The pineapple, of the Cayenne variety, is only flown. And although the fruit is less sweet than its Costa Rican competitor, the scent is better. "It's a better product than the Costa Rican, but mainly for consumers with a fat wallet," says a French importer. "The flavour is also different, less sweet than the Extra Sweet pineapple from Costa Rica."
High import charges for pineapples from Israel
A number of small growers are testing the cultivation of baby pineapple and organic cultivation methods. Because there is domestic cultivation, the pineapple falls under strict import conditions. The import of competing fruits and vegetables isn't allowed, which means pineapple has to be imported crownless or cut. This has consequences for the taste. The price is also much higher than that of the domestic cultivation.
Australian growers afraid of the import of 'Ghost Disease'
In Australia people aren't bothered by the smaller volumes, the country produces pineapple for the domestic market. Demand and supply are well balanced. "We have had good weather during the pineapple season in recent years," says a trader. "It's a breather after three very wet seasons between 2011 and 2013." The pineapple is only sold on the domestic market. The labour costs are too high to be able to compete on the world market and the transport time is also too long. Even with shortages of pineapple in Europe, it isn't profitable to ship the pineapple from Australia. Growers feared the undesired import of the 'Ghost Disease' through import from Malaysia, but this fear proved unfounded. Strict import demands should prevent the disease from coming into the country. Growers warned that the disease is uncontrollable and there is no existing crop protection to fight the disease. In the first half of the this year the cultivation in Australia was tormented by bad weather. A cyclone and rain had a negative impact in Queenslands, whilst drought influenced the cultivation in North Queensland.
Low harvest Philippines drought in May-June
It is low season between August and October. Due to the weather the pineapples are small, while the demand for large calibers has actually increased in Europe and the Middle East. "We expect that in November the calibers will be big again," said a Philippine exporter. Dry weather in May and June has affected the harvest at this moment. In July there was plenty of rain, so the expectation is that the calibres and volumes will be back to normal in November. The Middle East, Kuwait, Dubai, Saudi Arabia, Iran, is a large market for the Philippine pineapple.
The cultivation in the Philippines is almost entirely owned by Del Monte and Dole Philippines. These plantations, however, also offer pineapples to small exporters, who ship them under their own label.
Every week FreshPlaza and AGF.nl publish an oversight of the market situation of a product in a global context. With these articles we want to show an image of the global market shrinking through globalisation. Next week grapefruit will be central.
