Weather conditions in Spain have led to an early start of the tomato harvest in Extremadura, a key tomato-producing region responsible for up to 90% of Spain's processing tomato production. High temperatures and rains in May and June, followed by heatwaves in July, have meant an adjustment in forecasts, with yields declining by 10% from the initial predictions of 92 tonnes/hectare, according to a market source.

Despite the challenges, market sources expect the tomato crop in the region to increase to 21000 tonnes, up by 12% compared to 2022. However, according to market sources, this is still below normal production levels for the region as some areas faced irrigation restrictions due to the ongoing drought in Spain.

In Italy, another significant processing tomato production country, the hectarage has increased by 5% since 2022, reaching 68,000 hectares, with an estimated production of 5.6 million tonnes reported by ANICAV. According to market sources, the impacts of adverse weather, such as the heatwave, remain uncertain and may reduce production.

The contract price for processing tomatoes has increased by 47% year-on-year, reaching €150/tonne. Throughout the tomato processing industry, there are challenges of increasing costs in production, particularly raw materials and packaging, as well as contraction in consumption generated by inflation. Market sources have said that this will negatively affect processing company margins.

Source - https://www.freshplaza.com