CURRENT SITUATION AND MEDIUM-TERM OUTLOOK FOR TROPICAL FRUITS

Transcription

1 CURRENT SITUATION AND MEDIUM-TERM OUTLOOK FOR TROPICAL FRUITS Prepared by the Sugar and Beverages Group Raw Materials, Tropical and Horticultural Products Service Commodities and Trade Division Food and Agriculture Organization of the United Nations

2 Table of Contents I. INTRODUCTION 1 Page II. CURRENT SITUATION 1 A. PRODUCTION 1 B. EXPORTS 1 C. IMPORTS 2 D. PRICE TRENDS IN MAJOR IMPORT MARKETS 3 III. MEDIUM-TERM OUTLOOK 3 A. PRODUCTION 4 B. IMPORT DEMAND 4 IV. CONCLUDING REMARKS 5

3 Current Situation and Medium-Term Outlook 1 I. INTRODUCTION This document provides an assessment of the current market situation and medium term projections to 2014 for tropical fruits. Statistical tables are annexed and a statistical compendium on production, imports, exports, consumption and prices is also available on the web (please see Tropical Fruits Compendium). The information used in this document was mainly compiled from the responses to a questionnaire on tropical fruits, supplemented by data from the FAO database, FAOSTAT. Secondary data from desk research were also considered. II. CURRENT SITUATION A. PRODUCTION World production of tropical fruits was estimated at 67.7 million tonnes in 2004, about 2.5 percent more than in 2003 (Table 1). Mango was the dominant variety with a global output of 24.3 million tonnes and comprised 36 percent of world tropical fruit production (Table 1). World production of pineapples reached 15.5 million tonnes or 23 percent of tropical fruit production, followed by papaya at 8.5 million tonnes (12.6 percent) and avocado at 3.3 million tonnes (4.8 percent). The minor tropical fruits, i.e. those that were traded in smaller volumes, such as lychees (litchis), durian, rambutan, guavas and passion fruit, recorded an output of 16 million tonnes in 2004, representing an annual growth rate of 3 percent in 2004 and accounted for 24 percent of total tropical fruit production. The Far East dominated mango, pineapple and papaya production in 2004, accounting for 72 percent, 52 percent and 46 percent, respectively of world production of these fruits. The region also accounted for the major share of minor tropical fruits output globally. Latin America and the Caribbean was the next major tropical fruit producing region, accounting for 62 percent of global avocado output, 37 percent of world papaya production, 29 percent of pineapple and 17 percent of mango production. Africa comes a distant third accounting for 16 percent of world pineapple and papaya production and 11 percent of global mango and 10 percent of avocado output. Data on minor tropical fruits remain scarce because most countries do not routinely record or collect them. Some producing countries have begun recording data. From these and other sources an assessment of the current situation of minor tropical fruit production was made. Production of minor tropical fruits expanded by 3 percent in 2004 totalling 16 million tonnes, of which durian accounted for an estimated 1.79 million tonnes (Table 13 in the compendium). The major durian producing countries included Thailand with an output of tonnes, Malaysia at tonnes and Indonesia at tonnes. An estimated 1.15 million tonnes of rambutan was produced globally in 2004, roughly the same quantity as in The major producing countries were Thailand with an estimated output of tonnes, Indonesia with tonnes and Malaysia with tonnes. Guava production is also increasing in importance as production in 2004 reached an estimated 4 million tonnes. B. EXPORTS Tropical fruits are important to the food security of developing countries from both a nutritional standpoint and through their contribution to export earnings and incomes. The bulk of the tropical fruits produced (about 90 percent) is consumed domestically. A further 5 percent is traded as fresh fruits, and a similar proportion traded as processed products. Despite the proportionately small quantities traded internationally, the value of trade is significant. In 2003, the latest year for which a complete data set on the value of trade is available, fresh tropical fruit exports generated about US$ 2.3 billion, and processed fruits represented an additional US$ 1.6 billion (US$ 1.1 billion for pineapples alone). Comparative data for other fresh fruit traded internationally included US$ 4.8 billion for bananas, US$ 3.4 billion for apples, US$ 2.5 billion

4 2 Current Situation and Medium-Term Outlook for oranges and US$ 1.1billion for pears. The value of international trade of tropical fruits (fresh and processed) is estimated at a little more than US$4 billion in Preliminary returns for 2004 indicate greater exports of pineapples and avocados, modest growth for mangoes after record shipments in the previous year and relatively unchanged volumes for papayas. Pineapple exports were estimated to reach 1.37 million tonnes in 2004, a 15 percent growth mainly due to the surge in exports from Costa Rica underpinned by demand for the newly developed MD-2 pineapple (Table 2). Costa Rica accounted for 50 percent of the volume of pineapples exported globally in Other significant exporters include the Philippines which accounted for 14 percent of the world total and Côte d Ivoire (13 percent). Other notable exporters include Ecuador and Ghana with reported exports of tonnes or 4 percent of the world total. Thailand remained the world s largest processed pineapple exporter. Exports of avocadoes increased by 21 percent to reach tonnes in 2004, recovering from the 7 percent decline in The major growth occurred in the Latin America and Caribbean region where Chile has surpassed Mexico to become the largest avocado exporter in the world. Major investments by several multinational firms in the fruit sub-sector have contributed to this development. Mango exports in 2004 increased by a modest 5 percent, following a massive increase of 41 percent in 2003, to reach tonnes. Latin America and the Caribbean continued to dominate fresh mango exports accounting for more than 50 percent of the world total in Mexico with an export volume of tonnes was the largest exporter, followed by Brazil at tonnes. The other major exporting region was the Far East, where shipments were dominated by India at tonnes, the second largest mango exporting country in the world in India also dominated the processed mango trade. Papaya exports increased significantly by 47 percent in volumes to tonnes in Mexico was the largest exporter shipping tonnes during the year, followed by Malaysia at tonnes and Brazil a distant third at tonnes. Latin America and the Caribbean and the Far East continued to dominate supplies with market shares of 62 percent and 35 percent, respectively. Trade volumes for 2004 indicate that Latin America and the Caribbean accounted for about 61 percent of world exports of major fresh tropical fruits (Tables 5 to 8 in the compendium). The Far East and Africa accounted for 22 percent and 10 percent, respectively. However, the Far East remains the dominant supplier of processed tropical fruits, accounting for an estimated share of 75 percent of world exports (based on 2003 data). C. IMPORTS Provisional data for 2004 indicate increased world imports for all the major tropical fruits pineapples, avocados, mangoes and papayas. The difference between export and import volumes may be attributed to the usual reporting inconsistencies, as well as products in transit. The United States, the European Community and Japan remain the largest import markets for fresh tropical fruit, while significant volumes are also imported by Canada, several countries in Asia such as Singapore, the Republic of Korea, China and Hong Kong Special Administrative Region (SAR). Developed countries imported more than 81 percent of major tropical fruits in The United States, accounted for 41 percent of imports, followed by Europe at 32 percent. The EC and the United States each imported 36 percent of the pineapples traded internationally in 2004 and Japan 10 percent (Table 3). The United States was the major market for mangoes, importing 35 percent of the world total in 2004, while the EC accounted for 20 percent. The United States was the major importer of avocado, importing around 40 percent of global avocado imports, with the EC at 34 percent. The United States was also the major importer of papaya, accounting for 50 percent of the global total, followed by Singapore at 11 percent, while the EC and Japan imported 16 and 2 percent, respectively.

5 Current Situation and Medium-Term Outlook 3 Pineapple imports, at 1.43 million tonnes, accounted for more than 45 percent of world imports of tropical fruits in 2004, with the EC and the United States accounting for 72 percent of import demand. Pineapple imports by Japan stood at thousand tonnes in 2004, or 10 percent of total pineapple imports worldwide, and the balance was largely accounted for by imports by emerging markets of Canada, the Republic of Korea and Singapore. Mango imports, at tonnes for 2004, were dominated by the United States and the EC together accounting for more than 55 percent of total imports. Emerging markets with significant imports in 2004 include Saudi Arabia and the United Arab Emirates, as well as Bangladesh, Hong Kong SAR and Malaysia. D. PRICE TRENDS IN MAJOR IMPORT MARKETS Price information varies widely depending on variety and quality standards. Hence, fruits which received premium prices were listed with those that did not - resulting in average prices that may not accurately reflect true prices received. An effort has been made to differentiate between fruit shipped via airfreight (assumed to be premium) and sea freight. The most complete set of price data available on this basis was for Europe, and therefore, discussion has been focused on this market. Price patterns in general show seasonality, more pronounced for certain products, such as mango, which is driven by non-regular supply and peaks in demand during particular periods. In fact, marketing strategies from trade operators are reportedly being focussed on improved regularity in supply flows. A good example is papaya, where increased imports in developed markets has been triggered by larger and more constant availability from major exporting countries in Latin America and the Far East. In the United Kingdom, average annual wholesale prices of all the major fruits, pineapples, mangoes, avocados and papayas declined in 2004 in Euro terms but increased significantly in US dollar terms, almost exclusively due to the Euro/Dollar exchange rate (Tables 16 to 19 in the Compendium). Similarly in France, prices fell for all except papaya, which remained unchanged at 2.73 per Kg, but increased in dollar terms. The weaker Euro prices reflected the larger quantities of fruit which are sourced from Africa in the overall import mix by both the United Kingdom and France. By contrast, the bulk of the tropical fruits imported into Germany is sourced from Latin America, particularly the sea freighted fruits, which are imported with the banana shipments from that region. Hence, in Germany the annual average wholesale price of pineapples and mangoes increased between 2003 and 2004, but declined for avocados and papayas. The increase in the price of pineapples reflected the strength in demand for MD-2 pineapples originating from Costa Rica. III. MEDIUM-TERM OUTLOOK Dynamic time series models were used to project world production and import trade of fresh tropical fruits to The projections assumed normal weather conditions would prevail and past trends in planted areas, yields, GDP growth and population would continue. The dynamic nature of the global tropical fresh fruit market was captured utilizing autoregressive distributed lag ADL models, while the forecast results were obtained from an s-step a-head ADL model, where s is the forecast horizon or final year of projections (2014). The market prospects for production and import demand of the four major fresh fruits were analyzed and adjustments made to the forecast results to reflect current trends, policies and future market prospects. The forecasting model captured the numerous fluctuations in import trade and production to a satisfactory level for the four fresh fruits analyzed. However, the projections do not account for processed fruit production and trade, for which trade information is limited and appropriate conversion factors between fresh and processed forms of fruit are not

6 4 Current Situation and Medium-Term Outlook readily available. Although data on minor tropical fruits were limited an attempt was made at projections of these fruits to 2014 (Table 12). A. PRODUCTION World production of tropical fruits is estimated to reach 82.1 million tonnes by 2014, an annual increase of 1.7 percent from the base period ( ). Major fruits would comprise 78 percent of this total and minor fruits would make up the other 22 percent. Mango production is projected to reach 28.8 million tonnes by 2014, accounting for 35 percent of world tropical fruit production, of which 69 percent would be produced in Asia and the Pacific, 14 percent in Latin America and the Caribbean and 9 percent in Africa (Table 4). India is expected to remain the world s largest mango producing nation, accounting for 40 percent of total global output, with production forecast at 11.6 million tonnes. Production in Mexico, the largest mango producing nation in Latin America and the Caribbean, is forecast to increase to 1.9 million tonnes from 1.5 million tonnes in Pineapple production is expected to reach 18.7 million tonnes by 2014, about 23 percent of world tropical fruit production (Table 5). Asia and the Pacific should continue to account for the largest share of world production at 46 percent. However, most of this production will be geared to processing rather than for fresh fruit export, which is dominated by Latin America, and where 29 percent of the world s pineapples are produced. Costa Rica is the major supplier of fresh pineapple exports from Latin America and the Caribbean. Similarly, pineapple production in Africa is largely grown for fresh fruit export. The region is expected to account for 16 percent of the global total, with Côte d Ivoire being the dominant exporter. The declining trend in pineapple production in developed countries is expected to continue as the fall in output in the United States is expected to be too large to be offset by gains in Australia and South Africa, resulting in an overall annual decline of 2.1 percent from to Papaya production expanded faster than any of the other major tropical fruits over the last decade, underpinned by strong annual growth rates in India and Brazil, of 18.6 percent and 6.1 percent, respectively. Output is expected to continue expanding strongly to 2014 when production should reach 13 million tonnes (Table 6). Production in Latin America and the Caribbean is expected to account for 30 percent of the world total, Asia and the Pacific 20 percent and 15 percent in Africa. The projected annual growth rate for papaya is 4.5 percent over the projections period. Avocado production is projected to reach 3.9 million tonnes by 2014, with developing countries accounting for slightly more than 86 percent (Table 7). Latin America and the Caribbean is expected to continue to dominate world production, underpinned by a major expansion in Chile over the past 10 years as large investments were made in the fruit sub-sector aimed specifically for exports. Chile became the largest exporter of avocados in B. IMPORT DEMAND Demand prospects for fresh tropical fruits over the next decade are expected to be favourable as import volumes of major fruits are expected to expand by 24 percent over the projections period. Global imports are forecast to reach 3.6 million tonnes by 2014 with 81 percent or 2.6 million tonnes destined for developed country markets. The United States is expected to remain the world s largest import market, followed by the European Community, together accounting for 70 percent of import demand. Projections to 2014 indicate increased import volumes for all four major tropical fruits, with the largest proportional increase projected for papaya at 5.6 percent. The United States, the European Community and Japan remain the largest import markets for fresh tropical fruit. World trade should continue to be dominated by pineapples although significant growth in exports has been recorded for other tropical fruits.

7 Current Situation and Medium-Term Outlook 5 World pineapple imports are forecast to increase by 1.7 percent over the projections period and will account for 43 percent of total global imports of tropical fruits by 2014 (Table 8). The United States is expected to remain the world s largest importer of fresh pineapple, accounting for 38 percent of global imports. However, net imports by the EC are expected to overtake imports by the United Sates with the expansion of the Community membership to 25. Unfortunately, time series data for the EC 25 were not available for these projections. World mango imports are projected to increase by 1.4 percent annually to reach tonnes by 2014 (Table 9). The United States and the EC are expected to dominate imports. Net imports by the EC are projected to grow by 2.5 percent annually to reach tonnes in 2014, while for the United States, growth is projected at 1 percent annually reaching tonnes in There is a pronounced seasonality to the European market, with large quantities imported during the second (April-June) and fourth (October-December) quarters. Although France, the Netherlands and the United Kingdom should continue to be the primary import markets, Spain may emerge as a more important import market player. World avocado imports are projected to reach tonnes by 2014, representing a growth rate of 2 percent annually (Table 10). Developed country markets maintained their market share, accounting for more than 86 percent of global avocado imports. After growing by more than 12 percent yearly over the past decade, growth rates of avocado imports by developing countries are expected to slow to 2 percent annually to maintain their share of the world avocado import market. The United States and France are expected to be the world s largest importers of avocado by 2014, at 41 and 27 percent of total world imports, respectively. Global papaya imports are projected to expand by 5.6 percent to reach tonnes over the projections period (Table 11). The United States is expected to remain the largest import market in the world, with forecast volume at tonnes, accounting for 37 percent of global papaya trade, followed by the EC at 12 percent. IV. CONCLUDING REMARKS Data collection, particularly on prices and minor fruits, continues to be a major constraint in the analysis of supply and demand trends of the world tropical fruit market. Prices are difficult to compare across markets because of the lack of international standards. As for production and trade data of minor fruits, approaches were made to the World Customs Organization to obtain disaggregated data. However, strict criteria for creating subheadings under the harmonized system meant that unless the value of trade of an individual fruit exceeded US$50 million, statistics will continue to be aggregated. Although tropical fruits have traditionally been an important source of nutrition to developing countries where 98 percent of these fruits are produced, their importance in trade cannot be over emphasized. The current market assesment of tropical fruits estimates the value of international trade for both fresh and processed fruits at a little more than US$4 billion in 2004, and an assessment over the past decade indicates an annual growth rate of 2.4 percent in export values. Hence, their contribution to food security, employment and income generation, and overall poverty reduction is significant. A significant development in the trade of tropical fruits has been the increasing share of fresh fruit traded compared to processed fruits, taking advantage of advances in post harvest technology particularly in packaging and cool storage, as well as highly efficient logistics. These developments have enabled tropical fruits to compete at the upper end of the market, maximising earnings through the sales of fresh fruit in a segment where unit prices are at a premium. Hence, contributing to the rapid rise in trade values despite a proportionately small (5 percent of production) volume. The tropical fruit market has evolved significantly since the 1980s, and with increasing maturity, price premiums based on novelty have virtually disappeared, to be replaced by quality based premiums. However, recent hikes in oil prices and their subsequent effect on

8 6 Current Situation and Medium-Term Outlook freight rates have eroded profit margins somewhat. Traders are reluctant to pass on the costs to retailers because of the intense competition in the fruit trade where demand elasticities could easily result in tropical fruits being substituted by other fruits if prices are subject to sudden increases. In the medium term, the projections to 2014 suggest that demand will continue to grow strongly, albeit at a slower rate than the last decade. Supply per se is not a major constraint to international trade, as only 5 percent of production is actually exported. However, the importance of quality in an increasingly crowded international fruit market has led to major initiatives by several multinationals to establish orchards with the necessary post harvest infrastructure to produce and pack fruit for specific export markets. Major challenges for future market growth appear to be associated with a co-ordinated approach to managing the field-to-market-supply chain, for both fresh and processed products, particularly food safety, pest and disease control as well as quality requirements. Policy issues of major concern are those related to phytosanitary measures, although market access and sanitary issues are also important. Several exporting countries have actively challenged phytosanitary measures in major importing countries on scientif ic and equivalency grounds. In addition, the costs and benefits of implementing alternative treatment to methyl bromide fumigation, are clearly linked to supply volumes. As the capital investment required for installing alternative phytosanitry treatment infrastructure is large, potential exporters would have to be producing larger volumes to attain economies of scale and hence, could be a limiting factor to smaller producing/exporting countries.

9 Current Situation and Medium-Term Outlook 7 Table 1 - Production of tropical fruits - thousand tonnes * MAJOR FRUITS Mangoes India Thailand Mexico Pineapples Philippines Thailand China Avocados Mexico Indonesia USA Papaya India Brazil Mexico MINOR FRUITS Philippines Indonesia India TOTAL PRODUCTION * Provisional. Table 2 - Exports of fresh tropical fruits thousand tonnes 1/ * MAJOR FRUITS Mangoes Mexico India Brazil Pineapples Costa Rica Philippines Côte d'ivoire Avocados Chile Mexico Israel Papaya Mexico Malaysia Brazil MINOR FRUITS Hong Kong SAR Thailand Malaysia TOTAL EXPORTS / Excluding intra-ec trade * Provisional.

10 8 Current Situation and Medium-Term Outlook Table 3 - Imports of fresh tropical fruits thousand tonnes 1/ * MAJOR FRUITS Mangoes USA EC U.A.E Pineapples EC USA Japan Avocados USA EC Japan Papaya USA EC Hong Kong SAR MINOR FRUITS Hong Kong SAR China, Mainland Singapore TOTAL IMPORTS / Excluding intra-ec trade * Provisional. Table 4 - Actual and projected mango production - thousand tonnes Actual Projected Annual Growth Rates to to World Developing Africa Latin America and Caribbean Brazil Mexico Asia and Pacific India China Pakistan Philippines Thailand Developed USA Israel South Africa

11 Current Situation and Medium-Term Outlook 9 Table 5 - Actual and projected pineapple production - thousand tonnes Actual Projected Annual Growth Rates to to 2014 World Developing Africa Côte d'ivoire Kenya Latin America and Caribbean Brazil Costa Rica Mexico Far East Philippines Thailand Developed EC (15) USA South Africa Japan Australia Table 6 - Actual and projected papaya production - thousand tonnes Actual Projected Annual Growth Rates to to 2014 World Developing Africa Nigeria Latin America and Caribbean Brazil Mexico Peru Far East India Indonesia Thailand Developed USA South Africa

12 10 Current Situation and Medium-Term Outlook Table 7 - Actual and projected avocado production - thousand tonnes Actual Projected Annual Growth Rates to to World Developing Africa Latin America and Caribbean Chile Brazil Peru Mexico Far East Indonesia Developed Spain USA Israel South Africa Table 8 - Actual and projected pineapple imports - thousand tonnes Actual Projected Annual Growth Rates Country/Region to to World Developing Countries Africa Latin America & the Caribbean Near East Far East Developed Countries Europe EC (15) Incl.Intra -Trade EC (15) Excl.Intra-Trade France Germany United Kingdom USA Japan Australia

13 Current Situation and Medium-Term Outlook 11 Table 9 Actual and projected mango imports thousand tonnes Actual Projected Annual Growth Rates Country/Region to to World Developing Countries Africa Latin A merica & the Caribbean Near East Far East & Pacific Developed Countries Europe EC (15) Incl.Intra -Trade EC (15) Excl.Intra-Trade Netherlands France United Kingdom USA Japan Table 10 - Actual and projected avocado imports - thousand tonnes Actual Projected Annual Growth Rates Country/Region to to World Developing Countries Africa Latin America & the Caribbean Near East Far East & Pacific Developed Countries EC (15) Incl.Intra -Trade EC (15) Excl.Intra-Trade France United Kingdom North America United States of America Japan Australia

14 12 Current Situation and Medium-Term Outlook Table 11 Actual and projected papaya imports thousand tonnes Actual Projected Growth Rates Country/Region to to World Developing Countries Africa Latin America & the Caribbean Near East Far East & Pacific Developed Countries Europe EC (15) Incl.Intra -Trade EC (15) Excl.Intra-Trade France Germany United States of America Japan Table 12 - Actual and Projected production and mports of minor tropical fruits - thousand tonnes Annual Growth Actual Projected Rates to to 2014 MINOR TROPCIAL FRUITS - PRODUCTION World Developing Developed MINOR TROPCIAL FRUITS - IMPORTS* World Developing Developed