Melon exports from Brazil are unlikely to increase this season and could decline in future campaigns as prices remain flat on the European market.
Industry pundits say current returns are failing to cover the rise in production and labour costs in Brazil where strong domestic demand is prompting suppliers to increasingly sell to the local market.
“I think last year’s melon export volume was high, but I expect the figure will be less in the coming season,” noted Roland Brandes of Brazilian supplier RBR Trading.
“Prices last year were positive only few weeks, but most of the time they were below cost level.”
Terry Watts from key European importer VIDAfresh told Eurofruit that melon producers in Brazil are going through a “transitional period”.
“There is no doubt that some will cease or at the very least reduce export production due to increased costs which are not being covered by the depressed European market,” he explained.
Watts anticipates another challenging marketing campaign in Europe this year, particularly for the first part of the deal, given the negative impact on demand caused by wet weather in the UK and record high temperatures in southern Europe.
There are also suggestions within the trade of potential production losses following an unusually dry Brazilian summer during which rainfall normally covers the Mossoro growing area.
The full report will be published in the September issue of Eurofruit Magazine.
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