Athens, Greece
July 24, 2007
USDA/FAS GAIN report GR 7009
Greece: tomatoes and products
annual
Report highlights
Greek industrial tomato production
is shrinking as a result of increased competition from imports,
of some extreme weather, and changes in coming changes in the
European Unions CAP. Greek tomato exports are holding up,
particularly within the EU.
Executive Summary
Production of Industrial Tomatoes
in 2007 is expected to be between 850,000 – 870,000 MT, about 5
percent below last year and much lower than the EU quota for
Greece, which is set at 1,211,241 MT. Tomato production for
fresh consumption this year will be in the neighborhood of
700,000 – 750,000 MT, making total Greek tomato production in
2007 1.5 million metric tons. Average annual production in the
late 90s was over 2.0 million tons. The reduction is mostly due
to fewer industrial tomato plantings as a result of stiff
competition from imports. Nevertheless, Greek processed tomato
products (both paste and whole tomatoes) are of high reliable
quality and this still keeps them in demand in traditional
foreign markets.
Spring weather conditions have not been favorable, with heavy
rains in late May and early June and then a heat wave that has
adversely affected most Greek field crops, both irrigated and
not. Reportedly, tomatoes have survived these extremes, but have
required intensive irrigation. In some regions where industrial
tomatoes are traditionally grown (the Prefectures of Ilia,
Fthiotis and Serres) acreage has been significantly reduced. A
few areas, like the prefecture of Larissa, have seen an increase
in planted acreage. In Larissa irrigated sugar beets were the
standard production choice for many farmers, but after the new
CAP for sugar, farmers changed to other irrigated crops
including industrial tomatoes, corn and forage crops. The total
acreage devoted to industrial tomatoes this year will be almost
82,000 hectares (similar acreage to 2006) but the distribution
of the crop is different as noted here.
Greek tomato processing facilities are also closing down. In The
Peloponnese, only three out of seven processing plants are in
operation. There are some 1,000 industrial tomato growers in the
region, but only 500 are producing in 2007. In central Greece
(Prefectures of Viotia, Fthiotis and Magnisia in Thessaly) two
key tomato processing companies (Nomikos and Kopais) merged,
while the large processing plant of ADELCAN S.A. in Magnisia was
sold to Israeli investors and is expected to operate this year
again after having closed down five
years ago (they process a range of vegetables). These changes
are directly connected to changes in the CAP for the
horticultural sector and the internationalization of tomato
products, particularly tomato paste imports into Europe from
China.
Greece has not lost its traditional foreign buyers of tomato
paste and canned tomatoes. In CY 2006 Greece exported over
135,000 MT of tomato paste valued at US $ 95.7 million compared
to 109 tons a year earlier. The EU absorbs 70 percent of the
Greek tomato paste exports, with the Netherlands and the UK
buying the bulk. Canned tomatoes exported in CY 2006 were almost
29,000 MT (similar to CY 2005) of which almost 15,000 MT were
shipped to the UK. The total value of canned tomatoes exported
in CY 2006 is estimated at US $14.2 million. Imports into Greece
of both tomato paste and canned tomatoes show a gradual increase
from year to year, but the amounts are not yet considered
significant and almost all still originate in the EU. This could
easily change with China’s exports growing.
The CAP reform of the horticultural sector is expected to
clarify during the Portuguese presidency in the second half of
2007. The GOG Ministry of Agriculture and representatives from
the farming community and the tomato processing sector, must
decide how they will implement the new CAP in January 1s t,
2008. The time remaining for these decisions is limited, and
yet, Greece has not yet identified what policies will be finally
implemented in the industrial tomato sector. All the involved
entities must agree on such policy by November 1st, 2007.
Important decisions include setting the reference period by
which tomato farmers will establish their rights for the single
payment, and the percentage of decoupled and coupled payments.
Farmers’ representatives have proposed a 3-year reference period
within the period of 2001 to 2007. On decoupling, there will be
considerable discussion and debate over how to use the 4 years
transitional period available to member states to keep certain
production coupled, provided it does not exceed 50 percent.
In view of these decisions that need making by November 2007,
the Greek industrial tomato
sector seems to be separated into three camps:
- The small producers who
want a full decoupling and a single payment,
- The larger farmers who
have invested heavily in the industrial tomato production
tending to support high levels of coupled payments,
- The processors want a
system that will result in adequate quality and quantity of
production to keep their plants operational.
Sources in the processing industry
believe that under a full decoupling system farmers will not
have any incentive to grow tomatoes and the processors may have
to close down their plants. Practically, farmers receive about €
42-45/mt from the processors plus a subsidy of € 34.5, for a
total of about € 80 Euros per ton. Production costs are
calculated to be somewhere between € 50-70/ton according to
location. Under full decoupling, farmers will
probably want the processors to cover their costs to keep them
producing industrial tomatoes. It is likely that only farmers
who have more acreage, are systematic and mechanized and
presumably have lower costs will stick with growing industrial
tomatoes under full decoupling.
Full report:
http://www.fas.usda.gov/gainfiles/200707/146291807.pdf
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