What was apparent from attempts and trial runs to market a Sweet air-freight supply alongside a less expensive sea-freight supply is now becoming reality. Cayenne, hitherto well-established in the air-freight segment, has opened up the way to Sweet due to the irregularity of the supply from certain origins, in terms of quality and presentation. The arrival of small Sweet batches since the last campaign has now become commonplace, and it is no longer one but several origins which have ventured into in this lucrative niche, with varying degrees of success.
The decision by the Beninese authorities to ban all shipments of coloured pineapple, pending the resolution of the ethephon problem, helped Cameroon to consolidate its position on the air-freight market. Unfortunately, this origin, which hitherto shared with Benin the majority of the air-freight market, experienced quality concerns over several months, varying according to the brands marketed (rapid development of fruits, heterogeneous coloration), which it would so facilitated the establishment of the air-freight Sweet supply.
The first Sweet batches from Cuba and thereafter the Dominican Republic, placed on the market in 2016, sold astonishingly quickly and well, at much higher rates than for Cayenne. However, these were sporadic and limited shipments. Several origins now seem to be interested in this niche. Those with most frequent market availability are Cuba, the Dominican Republic, Panama, Colombia, Costa Rica, and to a lesser degree Ghana and Côte d’Ivoire.
All the Central American origins offer superior quality produce, meeting the expectations of European air-freight market purchasers, who are prepared to pay a premium price for this type of product. While the average rate for the Cayenne supply fluctuates between 1.80 and 2.20 euros/kg depending on the origins and brands, the Sweet air-freight supply from Central America sees its prices vary between 2.40 and 2.60 euros/kg depending on availability.
For the moment, several factors seem to be facilitating the establishment of the Sweet supply from Central America. It is highly regular in terms of quality, and highly coloured. The fruits are very well worked and well presented. And, crucially, it remains limited for now since the operators are making sure to safeguard the profitability of this niche. Given the fairly high cost prices, importers rather tend to restrict their supply. Hence for a good part of the summer, these fruits were absent from shelves because of the high availability of seasonal fruits at low prices. So the high price levels paid for these fruits are down to the niche nature of this supply. On a market such as the Netherlands, which has seen a proliferation of operators offering air-freight Sweet, rates have dipped and for the moment seem to be stabilising at between 2.20 and 2.50 euros/kg, whereas they were previously stable at 2.50 euros/kg.
The trial runs from Africa (Ghana and Côte d’Ivoire) do not seem sufficiently conclusive for the moment, since the differentiation between the sea-freight and air-freight supplies is not clear. Is it a problem of image, presentation or simply quality? The fact remains that the African air-freight Sweet supply seems to be struggling to find a position.
The Sweet supply is now established and is part of the regular air-freight supply. Will it suffer the same fate as the sea-freight supply, and see its prices wane as batches of increasingly heterogeneous quality are placed on the market? The question remains open.
In the absence of Beninese Cayenne from December 2016, the air-freight market had a lighter fruit load, and sales were more fluid overall. Volumes on the market found takers fairly easily, although at times some quality concerns could be observed here and there (on certain batches from Cameroon in particular).
From the beginning of 2017, Côte d’Ivoire seemed to be the origin best able to take advantage of the absence of Benin to enhance its position via specialised retailers. The Ghanaian supply, top of the pile in terms of price, remained very limited in terms of volume. Only a few operators agree to work with this origin, given the high transport costs.
We might have thought that the disappearance of one player would create a shortage, and quite possibly a spectacular increase in rates, but this was not the case. Prices for fruits from Benin’s competitors strengthened, and gradually purchasers became accustomed to no longer procuring from this origin. We also saw the development of a top-up supply of highly coloured Sweet from Cuba, Panama and the Dominican Republic, which although it remained limited, sold on a stable footing at between 2.40 and 2.70 euros/kg!
Weeks 18 to 26 were marked by flat demand. The operators rapidly opted to scale back their imports, to bring them into line with demand. Unfortunately, despite a fall in volumes, sales remained quiet, since demand was primarily captured by seasonal fruits, available in abundance at fairly low prices. The Cameroonian supply, dominating the air-freight market in the absence of Benin, was highly heterogeneous because of rains in the production zone. Hence the absence of Benin was of most benefit to Ghanaian and Ivorian fruits, which enjoyed higher availability and above all better regularity in terms of quality.
On the Sugarloaf market, sales volumes of green batches from Benin fell constantly, while more coloured fruits from Togo and Ghana enjoyed steadier sales. Green fruits from Benin struggled to reach 2.00 euros/kg, while more coloured fruits from Ghana and Togo managed to sell at up to 2.30 euros/kg. Meanwhile, top-up batches of air-freight Sweet from Central America (Cuba, the Dominican Republic and Panama), still very limited in terms of volume, sold at between 2.20 and 2.60 euros/kg during this period.
Throughout the summer (weeks 27 to 35), the air-freight market quietened down. Demand, less lively because of the mass holiday season, once again forced operators into scaling down their volumes to market. The weakness of demand affected the entire air-freight market, even sales of top-up Sweet batches. So operators opted to suspend procurement, waiting for the market conditions to improve. The situation remained practically unchanged on the Sugarloaf market, with a supply of Beninese green fruits selling less and less well, and a coloured supply, especially from Ghana, which was making a little more headway on this niche. In mid-summer, the Beninese authorities adopted inspection procedures, enabling them to lift the ban in place on coloured pineapples since January 1st 2017.
Weeks 36 to 39 saw the return to the market of the first Beninese coloured fruits, with fairly limited volumes which made no major difference to the Cayenne market, still dominated by a fairly heterogeneous Cameroonian supply. These fruits, which initially sold at fairly high prices (up to 2.10 euros/kg), saw their rates stabilise at the end of the period on a more regular footing (between 1.80 and 2.00 euros/kg). It was above all for the Sugarloaf market that the return of the Beninese supply led to a change. Several batches received were highly coloured, without breaching the ethephon MRL. Availability of a coloured Beninese supply alongside a green supply really blurred the message which certain operators were trying to convey. This coloured supply marginalised the green Beninese supply a little more, further reducing purchaser interest in green Sugarloaf batches. Quality concerns experienced by certain coloured Sugarloaf batches from Benin led to a number of commercial disputes (cancelled sales, credits), and ended up putting purchasers off the origin.
We must hope that the solution found to obtain coloured Sugarloafs, while adhering to the MRL, was not achieved to the detriment of the intrinsic quality of the fruit; in which case we might unfortunately be looking at a Pyrrhic victory.
Thierry Paqui, consultant
paqui@club-internet.fr
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