Terry Watts, CEO of UK melon and pineapple importer Vidafresh, says artificially high freight rates are damaging the health of the nation and the fresh produce industry
We all know that sales of fresh produce are based on supply and demand. There has been no shortage of supply of melons or pineapples, but demand has been impacted by high retail prices, mainly due to shipping lines financially [taking advantage of] importers with artificially high freight rates and UK port costs which, based on their record profits, are totally indefensible.
This was recently confirmed in a speech by President Biden where he accused the world’s nine major shipping lines, which comprise of three alliances, of making a combined US$190 billion profit in 2021, which was seven times higher than in 2020. They will make even higher profits in 2022!
These completely unjustified freight increases are greatly contributing to the highest rate of inflation the UK has seen in many years and are pushing the cost of fresh produce beyond the reach of many consumers, which is a major concern for the health of the nation and indeed our industry.
In view of the above, while we are currently enjoying a huge demand for both melons and pineapples, driven by the very hot weather we are all enjoying, it is difficult to plan too far ahead as we are unsure how consumers will react to even higher retail prices during the coming winter. There are no signs that freight rates will come down anytime soon.
While pineapples are produced year-round, for Brazilian and Central American melon growers the problem is compounded by the fact that they have to plan their production at least three months in advance. This leaves them – and, indeed, importers – completely exposed for the coming winter season as we have no idea what the demand will be due to what will no doubt be high retail prices. It will be a winter of discontent for everyone except, it seems, the shipping lines.
With the number of new builds [of container ships] nearing completion, the shipping lines know that this situation cannot last, but, in the meantime, we will all continue to suffer from the monopoly these shipping lines have.
But as I state, this situation will not last, so we continue to invest in R&D, innovation and varietal development together with our partner growers around the world.