Category: Featured Articles July – August 2020

Avocado prices are slowly dropping on the European market. In general, prices are expected to fall sharply in July and August compared to previous months. This is due to the fact that some countries continue to buy smaller volumes than usual because the coronavirus is still having a huge impact. For example, part of the food service in the US is not yet back to its old level. Peru, the world’s largest producer, is therefore selling more volumes on the European market. Other production countries and regions are Mexico, Colombia, California, South Africa, Kenya, Tanzania and Uganda. Peru has a strong presence in both China and India. South African companies are currently also sourcing Peruvian avocados to supplement their own volumes, as they’ve had smaller home-grown volumes than expected. In China, imports are still on the rise; Colombia is perceived as a nice addition to fill the gap between the Chilean and Peruvian seasons. People are also increasingly working on their own production.

Belgium: Low prices for the Hass; Greenskins at their usual price
There is currently a great supply of Hass avocados, as different countries are in production, says a Belgian trader. The demand is at a fairly normal level. As a result, prices for the Hass are quite low and don’t differ much from those of the greenskins. The greenskins are currently imported from Peru and South Africa and the supply is normal.

Alittle creature has been the cause of much destruction in the ornamental and horticultural industry recently. This fuss is all about the False Codling Moth (FCM –Thaumatotibia leucotreta). Three years ago, False Codling Moth was classified by Europe as a quarantine pest and member countries were recommended to regulate its presence. So, what is going on? Are we looking at a serious threat to the ornamental and horticultural sector?

No. Not at all, thanks to Madumbi Kenya Limited. Farmers preparing their spray programs can now include Cryptex® a cutting edge granulovirus technology for the suppression of False Codling Moth (FCM).

Let us examine some of the mid to long-term impacts of COVID-19 on the air freight market. Many shippers and forwarders are wondering when we might return to a “normal” market condition and there are many factors that will come in to play. One of the most significant is demand for travel.

Capacity Impact
Each lane is different, but passenger flights make up a large portion of air freight capacity globally. As demand for air travel steadily increased over the years, airlines have responded with more passenger aircraft to support this demand. This additional equipment increased cargo capacity, even in years where demand for air cargo did not increase at a corresponding level.

With cargo capacity (supply) increasing faster than demand, many airlines operating both passenger and freighter aircraft reconsidered their need for freighters. Some airlines got out of the freighter aircraft market altogether, while others chose to let aging cargo aircraft retire without replacing them.

The clarion call at this time of Corvid-19 is minimal touch points hence a strong box. SoilQ is the solution as it will keep the product safe and will remain neat on arrival. The box is constructed using reinforcement band within the box, under patented technology.

Packaging might be the unsung hero of the fresh produce industry. It might not be the sexiest part of the supply chain. It is a sector that might be perceived – wrongly – as a less glamorous component of the supply chain. But without adequate solutions that work up and down the chain, produce will never arrive for presentation at the right quality.

However, behind the scene as Mr. Masila Kanyingi found out in a thirty minutes tour of Silpack Industries Ltd, there exists a wealth of innovation and dynamism within fresh-produce packaging. Silpack the introducers of SoliQ brand in Kenya has been exploring innovative methods to boost sustainability, increase efficiency, reduce costs and improve packaging as a marketing medium. Though introduced in their R&D department over six years ago “SoliQ”, is still the next generation packaging solution as Mr. Parit Shah, a Director with Silpack Industries Ltd, proudly refers it.

The Covid-19 pandemic is highlighting the supply chain problems which can arise when border clearance arrangements come under stress from increased demands and reduced capacities. This is bringing into question the future commercial viability of existing ACP triangular supply chains for short shelf life products in serving the UK market.

This needs to be seen in the light of the border clearance challenges and associated transportation disruptions which are likely to arise as a result of the UK governments’ current approach to future trade relations once it leaves the EU customs union and single market. Current policy responses to transportation disruptions associated with border clearance problems linked to the Covid-19 pandemic, could provide a basis for longer term arrangements to facilitate the continued smooth functioning of triangular supply chains. In the absence of such initiatives ACP exporters will need to explore opportunities for direct exports to the UK or diversification away from the UK market.

The floriculture is hit hard by the COVID-19 crisis, but when looking at the past, present and future, how is the industry expected to develop and recover? Rabobank tried to predict the global economic impacts and the effects on the floriculture industry. Lambert van Horen, Analyst – Fresh Produce at Rabobank, a Dutch bank with clients all over the world, was present at the PMA Virtual Town Hall*, to give an insight in the scenario they outlined.

Western world hit hard
When looking at the macro-economic baseline scenario, it is expected that a lockdown in a country takes about 3 months, that countries will reopen gradually – for many this will start in May -, and that it will take about 3 quarters to get back to the ‘normal’, without restrictions, van Horen explains.

When looking at the global GDP, the impact for 2020 is expected to be -2.6%, with The Western world being hit hard. “China and Asia (excl. China) are the only ones expected to have a (small) positive economic growth in 2020. Fortunately, for 2021, Rabobank expects the global GDP to grow with +5.3%.”