Tomatoes and Products Report 2011

An Expert's View about Agriculture and Animal Husbandry in Italy

Posted on: 12 Jan 2012

Italy is forecast to produce 6 million metric tons (MMT) of tomatoes.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Voluntary Public - Date: 12/16/2011 GAIN Report Number: IT1159 Italy Post: Rome Italy Tomatoes and Products Report 2011 Report Categories: Tomatoes and Products Approved By: Jim Dever Prepared By: Alessandra De Luca Report Highlights: Italy is the world’s third largest tomato producer and produces tomatoes throughout the year. Italy is forecast to produce 6 million metric tons (MMT) of tomatoes in MY 2011/12, of which 1 MMT will be consumed fresh and the remaining 5 MMT will be processed. Italy is a major exporter of processed tomato concentrate. General Information: According to World Processing Tomato Council (WPTC) data, the United States and China account for more than 50 percent of world tomato production (approximately 42 million tons). Italy’s tomato production in MY 2010/11 was 5.5 million MT, ranking as the world’s third largest producer. Generally, conditions in Italy allow for production of tomatoes throughout the year. However, the bulk of the processing takes place between the months of July and December. The cultivation of processed tomatoes is possible in many parts of Italy, but mainly in the regions of Puglia, Emilia- Romagna, and Campania. Growing conditions vary substantially between the different regions. In the south, water is plentiful, but expensive to use. Many farms utilize drip systems or sprinklers. Farm sizes range from ten hectares to several hundred hectares. Growers have set up cooperatives, which are part of larger producer organizations, whose main task is to make joint offers, sign contracts with processing firms, supply seeds, fertilizers and other treatments, and own harvesters. Production in the north is completely mechanized and hybrids are predominantly used. The majority of the plantings are plug-seeding transplants. Direct seeding is rare and only used for the cultivation of paste tomatoes, which are sown with precision, machines using coated seeds. For peeling tomatoes, the acreage is planted with plug seedlings. Tomatoes for paste are all machine harvested, but those for the production of canned tomatoes are mostly harvested manually. The Italian tomato processing industry produces passata, sauces, and pastes and, as in the United States, is entirely separate from the fresh-market industry. Specific characteristics differentiate the two types of tomatoes: fresh market varieties are juicier and harvested prior to being ripe, while processing varieties contain higher percentages of solids, are vine ripened, and typically have a thicker skin. Processed tomatoes are mainly produced on a contractual basis, with individual agreements between farmers and the industry. Each year producer associations and the Italian processing industry agree to a national fixed price. During MY2011/12, the fixed price was €88 per ton, which was an€18 per ton increase from the previous year. Production MY 2012/13 Italian tomato production is forecast at 6 MMT, of which 1 MMT will be fresh tomato and 5 MMT of tomatoes for processing. MY 2011/12 cultivated area for processed tomatoes was 67,586 hectares (Ha.), a 14.6 percent decrease from MY 2010/11. Despite a decrease in cultivated area, this year’s harvest was good due to favorable weather conditions even though industry sources estimate a slight decrease in yields to around 70 MT/ha. Consumption Six out of ten Italian families have changed eating habits due to significant food price increases. According to ISTAT, the average Italian family spent €467 per month on food in 2010--a 1.2 percent increase from 2009. In 2010, Italian consumption of fruit and vegetables fell by almost 3.4 percent compared to 2009. Italians consume about 1 MMT of fresh tomatoes Although Italian consume the bulk of tomatoes as processed products, fresh tomato consumption is expanding along with consumption of other fresh produce. One of Europe’s leading fruit and vegetable processors, Conserve Italia Group, is expanding their business in the fresh-cut sector. Trade Italy is both a major exporter and importer of tomato products, primarily because there is a tremendous amount of intra-industry trade. Italy imports a substantial quantity as inputs for further processing. After the United States China is a major source for these imports. Most of the tomato product Italy imports are reprocessed and re-exported. The 2004 labeling regulations (see discussion under Policy section), intended to favor domestic Italian production by identifying the source of the input tomato; have not resulted in any significant reduction of imports from China or elsewhere. Italy is one of the world’s leading exporters of processed tomato products, and in order to meet both domestic consumption requirements and a stable export demand, has increased imports. China’s emergence as a high-volume, low-cost producer is being felt as traditional exporters are being displaced in global markets. Interestingly, China’s largest paste market is Italy. Italy’s fresh tomato sector in MY 2010/11 was valued at €116 million. Most of Italy’s tomato exports are within the EU. In MY 2010/11, Italy imported 97,000 MT of tomatoes, a 27 percent decrease compared to 2009. Italian Exports of Fresh Tomatoes Jan-Jul Jan-Jul 2009 2010 2010 2011 ( ‘000 MT) EU 87 122 82 68 Germany 30 41 25 20 United Kingdom 9 12 7 6 Netherlands 6 10 8 5 France 5 9 6 4 Romania 3 7 5 6 Slovenia 6 6 4 4 Poland 3 5 3 3 Denmark 2 4 3 3 Austria 15 19 13 12 Extra EU 6 7 5 5 Switzerland 4 5 3 3 World 93 129 86 73 Source: Global Trade Atlas -GTA Italian Imports of Fresh Tomatoes Jan-Jul Jan-Jul 2009 2010 2010 2011 ( ‘000 MT) EU 118 87 50 74 Netherlands 49 40 21 22 Spain 31 21 14 32 France 22 13 8 13 Germany 10 9 5 5 Extra EU 14 10 8 6 World 132 97 58 80 Israel 8 7 6 5 Source: Global Trade Atlas –GTA Italian Exports of Prepared Tomatoes Jan-Jul Jan-Jul 2009 2010 2010 2011 ( ‘000 MT) EU 1,017 1,161 665 707 Germany 332 374 215 220 United Kingdom 259 309 176 178 France 149 153 92 99 Extra EU 571 625 363 368 United States 79 93 51 56 Japan 88 91 35 56 Australia 50 65 41 56 Belgium 53 63 35 56 Netherlands 59 63 35 40 Switzerland 37 39 22 22 Libya 38 36 0 0 World 1,588 1,785 1,028 1,075 Source: Global Trade Atlas -GTA Italian Imports of Prepared Tomatoes Jan-Jul Jan-Jul 2009 2010 2010 2011 ( ‘000 MT) EU 28 32 13 16 Spain 14 21 10 9 France 2 6 2 2 Greece 11 3 0 3 Extra EU 157 147 82 90 China 82 115 66 68 United States 70 31 16 20 World 184 179 95 105 Source: Global Trade Atlas -GTA Policy Italy does not provide any national subsidies (other than EU Single Payment Scheme) for processing- tomato producers. MY 2011/12 was the first year the complete decoupling for processing-tomato support entered into force after a three-year transitional period during which partial decoupling (50%) was applied. The Italian tomato SPS budget is estimated at €183 million per year for the next three years. Approximately 75 percent of the aid will be delivered to 15 percent of the Italian farmers. The tomato processing industry has recently agreed on a price with farmers in both the north and south of Italy for the MY 2011/12 crop. This price was set significantly higher than the previous year in order to balance the EU support “loss.” In order to remain competitive in international markets, Italian processors need to lower processing costs and direct production towards higher value added products. According to industry estimates, the €183 million in EU aid will only benefit approximately 1000 Italian companies. In Italy, about 6 thousand farms are eligible to receive decoupled aid. Seventy-five percent of Italian tomato production comes from large companies. This means that those companies that should receive the aid do not. In 2004, Italy implemented a labeling requirement in hopes of offsetting the growing increase of foreign imports.
Posted: 12 January 2012

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