AUSTRALIA
338,000 tonnes of tomatoes have been contracted for processing in the season that is about to commence. This is approximately 10% less than was processed last year.

Specialist processing tomato growers have planted 3,650 hectares, 18% less than last year. In addition, fresh market growers will supply a small tonnage to processors.

To achieve the contracted tonnage, an average field yield of around 92 t/ha is required. This would be a record, but a higher incidence of drip irrigation makes it possible. Seasonal conditions will determine the actual outcome.

A significant reason for the reduced crop is the continuing drought that is affecting most of Australia.


2002 GLOBAL PROCESSING
Tomato news has published 2002 processing outcomes for all countries that they follow. There are some countries for which they don't have reliable information, but these countries don't appear to have a significant influence on the global market.

Production by regions compared with 2001 was as follows: -





2002 processing was up 15.3% on the previous year. However, as 2001 production was kept low in order to rid the globe of excess inventories, the lift in production in 2002 was appropriate.

In the EU, rains that damaged harvests in Italy, Greece and France but the non-EU Mediterranean region countries, particularly Turkey, did quite well. California had a bumper crop and China produced a record 2.3 million tonnes following a poor 2001 season.

Overall, global inventories seem to be in reasonably good balance. However, California has some surpluses, while the European Union is understocked. Hence California paste prices, as reported by The Food Institute,, remain low while Italian prices, particularly for peeled tomato products, have increased.

The Chinese production increase appears to have been readily absorbed by the market and there are reports that some Chinese suppliers are unable to satisfy all of their orders.


2003 PROCESSING OUTLOOK
Global production volumes have not been consistent year on year, partially through intent and partially owing to seasonal conditions. However, the trend line suggests a rate of consumption growth of about 2% per annum.




The trend line suggests that global inventories would maintain their current balance if 2003 production increased to about 27.5 - 26.0 million tonnes.

California processors have contracted 10.9 million short tons for 2003, marginally less than their 2002 harvest of 11.1 million tons.

Production in the EU will continue to be heavily influenced by the subsidy arrangements, which relate to a "threshold" volume of 8.25 million tonnes, 5.6% above 2002 production.

China appears to be making a significant investment in production assets for 2003 season with the potential to increase processing by up to one million tonnes! If China were to take up all of that capacity increase in 2003 it would have a significant impact on the global market. However, this may not be achievable.


CONFERENCES
Following the successful Istanbul industry congress and symposium held in Istanbul last year, Australia has been asked to host the next one scheduled for November 2004.

This would be quite a challenge for the Australian industry, which accounts for only 1.4% of global processing. The Australian industry is, however, respected around the world for its professionalism and its skill in dealing with challenging conditions and a 2004 conference in Australia would be assured of a sizeable attendance from North America in particular.

FoodNews, the UK market related food ingredients news service, is hosting a tomato forum in Lisbon for April 27th 28th. FoodNews has organised conferences on other commodities but this is their first venture into processing tomatoes. Inquiries may be addressed to conferences@agra-net.com.


ENTAPACK IN CALIFORNIA
We mentioned in the last newsletter that a patent preventing us from selling packaging with FranRica style fitments in the US had expired. This led to inquiries being received from two California companies, to whom we were pleased to supply limited volumes.

We have now tooled up to supply the 3" FranRica style barrier bag fitment that is widely used in California.

We are taking our entry into the California aseptic packaging market "gently-gently" as we prefer to focus on quality and service rather than volume. While we are new to California, Entapack has been supplying flexible packaging into other US States for several years.


Best regards, Vincent


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