The international marketing magazine for fresh produce buyers in Europe
Paco Borrás

BY PACO BORRáS

Analysis: The cost of coronavirus

Who is bearing the extra costs of keeping produce workers safe and stores well stocked amid the pandemic?

Analysis: The cost of coronavirus

Paco Borrás

Related Articles

It’s now more than two weeks since a state of emergency was declared in Spain and a week since all non-essential industries were shut down.

Throughout that time the fruit and vegetable sector has continued to deliver and overcome all the challenges that the coronavirus pandemic has thrown up. The internal market has been perfectly supplied and weekly export levels are practically normal for this time of year.

Let’s take a look at how the crisis has impacted the different parts of the supply chain:

Harvesting

In general, there has been no labour shortage up to now, since a large proportion of Spanish pickers are a fixed workforce that rotate from region to region and from crop to crop. However, in a few weeks we’ll need labour for the new stonefruit campaign. Some of this will come from other parts of Spain where seasonal crops are finishing, such as Almería or different citrus producing areas.

Moving these workers from one part of the country to another will be a challenges, however, partly because of the limits on how many people are allowed to travel in each vehicle, and also because changing residence has become a problem since the lockdown. This will also make the transfer of workers more costly.

Moreover, provision will have to be made for the tens of thousands of migrant workers from Northern Africa, Eastern Europe and South America who come to harvest key crops like stonefruit and berries but who are currently prevented from entering Spain.

Packhouses

These are operating normally, and there are no known cases in which packhouses have become focal points for contagion, which would have forced them to shut down. However, most packhouses have had to reduce their operational level and extend their hours of work in order to comply with distancing measures. This pushes costs up, but is essential to safeguard workers.

It’s also important to note that suppliers of packaging materials, post-harvest products are all functioning normally with no serious problems.

Deliveries

Output has decrease slightly this past week – not due to lack of demand but because storms in the Mediterranean coastal regions have prevented normal harvesting. Demand in general has been good for most Spanish products, with the exception of soft fruit, which has seen a drop in sales across almost every country. Certain exotic fruits have also seen a fall in demand.

Transportation

As other industries have ground to a halt, many trucks are being forced to return empty to Spain in order to maintain loading rates. As a result we are paying 20-25 per cent more on haulage freight than before the crisis. Right now it costs between €1,000 and €1,200 more to send a truckload of produce to Central Europe. This is a day-to-day problem that we face.

Customer response

So far we’re seeing a mixed response from our customers. Some, seeing that Spain has been able to keep markets well supplied, refuse to accept that this has required a lot of additional effort and costs, part of which has already been borne by the producer/packer.

It’s a little disappointing that they do not value the industry’s efforts to find a way through the present challenges and keep consumer demand satisfied.

Nevertheless, suppliers will continue to talk to their customers to help them understand and appreciate the work they do, and the value that Spanish fruit and vegetable production brings to the European Union.

Spring and summer campaigns

April is a key month in Spain as it denotes the end of the greenhouse vegetable campaign and the start of the melon, watermelon and stonefruit seasons. The main problem will be finding enough pickers to plug the gap left by tens of thousands of migrant workers unable to get into Spain, as well as moving the workforce already in Spain from one area to the next, with all the legal and cost challenges this implies.

On the other hand, the change of season means new packhouses will have to get up and running as new programmes put in place to ensure that these products reach supermarket shelves in a timely manner.

 

 

 

comments powered by Disqus

Keep informed...

Google+