fresh tomatoes in poland 0

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Fresh tomatoes 1 in

Poland

If you want to export tomatoes to Germany, you

should adapt to the trends regarding the

preferences of German consumers Also, take

into account that the buyer requirements in

Germany are very strict Read this fact sheet and

determine if you are ready to compete with EU

producers.

Content:

1 Market size

2 Market trends and developments

3 Opportunities in the trade & distribution channel

4 Prices - segments and developments

5 Long term prospects

Annex: Buyer requirements

SWOT analysis for exporters from Armenia, Georgia and Moldova

Strength

 Low labour costs compared to EU suppliers

 Moldova is exempted from import tariffs

Weakness

 Abundant and year round supply from EU

producers

 Armenian and Georgian need to pay import

tariffs

 Buyers not familiar with products from

your country

Opportunity

 Poland has shown economic growth even during the global economic crisis

 Consumer expenditure is growing, causing a demand for healthy food products such as tomatoes

 Consumption trend is upwards

Threat

 Armenia, Georgia and Moldova are not recorded to trade in tomatoes with Poland

 National production is large and increasing

Market size

Consumption

Consumption of tomatoes in Poland was 660 thousand tones in 2009 Consumption has increased by 4.2% on average per year since 2005

Import: sharp increase

In 2010, imports of tomatoes accounted for 105 thousand tonnes, or € 119 million in value Poland is the6th largest importer in the EU accounting for 3.5% of total imported value

1 For this fact sheet we used the statistics of HS code 2011: 07020000 (Tomatoes, Fresh Or Chilled) There is no change in the HS code for 2012 for tomatoes

Imports increased by 14% per year between 2005 and 2010 In comparison, EU imports increased by 4.4%

Armenia, Georgia and Moldavia are not recorded to export to Poland

In 2010, Poland imported 10.6 thousand tonnes of tomatoes from low-income countries or

€ 10 million (a share of 2.6% of all imports from low-income countries to the EU) This makes Poland the 7th largest importer from low-income

countries in value in the EU Armenia, Georgia and

Moldavia are not recorded to export to Poland

EU competition barrier for imports

Tomatoes are grown in the EU year round (due to the

greenhouses) There is some production in the Baltic

States and most tomatoes are imported from within the

EU The parallel growing seasons with EU producers are a

major challenge for Armenia, Georgia and Moldova

CBI’s projection for the future: Poland was the only EU member state to achieve growth as

the global crisis battered other economies With Polish GDP expected to grow by 2.5% in

2012 and 2.8% in 2013 (European Commission, autumn 2011) the market conditions favour growth in demand and imports Projections should be considered carefully as the

economic climate in Europe is unstable The best thing to do to stay up to date is closely monitor the economic developments and talk to Polish buyers

2 Market trends and developments

Increasing part for developing countries in global trade

There is a growing importance of developing countries in world trade This is the result of a wider use of containerized or express cargo and the growing importance of online purchasing The extra accent that is put on prices may very well accelerate the opportunity for low-cost suppliers such as Armenia, Georgia and Moldova

Currency fluctuations have been heavy and may continue in 2012, challenging even the most well-planned export strategy The Polish monetary unit is the zloty (€ 0.25) In

2008, the Polish government set an aggressive timetable to adopt the Euro, but the recent global financial crisis pushed that target back somewhat Most observers believe Poland will eventually meet the Maastricht requirements necessary for Euro-adoption but few expect this to happen before 2015

Poland notes increasing consciousness for health

Tomatoes may be classified into four commercial types, depending on colour, shape, weight, size and cultivation method:

o Round (spherical) tomatoes: these are the most widely used, round, smooth, generally red tomatoes intended for fresh consumption

o Beef tomatoes: these are larger than round tomatoes and, some varieties, because of their shape are sometimes called ribbed tomatoes

o Cherry tomatoes: the name points to the similarity in shape and size to cherries Small plum or tomatoes shaped tomatoes are also available

o Plum tomatoes: a thick-fleshed variety, low in seeds, used both for fresh consumption and processing

Any or all of these tomato types may be sold loose as individual fruits, as clusters on vines, or pre-packed into retail sized packages

Polish consumers are becoming increasingly health conscious, a trend that is induced

by vast mass media coverage More attention is being paid to balanced diets and healthier food choices which encourages more consumers to modify their daily diets

Table 1

EU production of tomatoes (1,000 tonnes)

Netherlands 815

Lithuania 2.5

As a result, health and wellness positioned food products such as tomatoes are enjoying growing popularity

Increased market share of supermarkets pressures prices

The best way to enter the Polish market is through importers or agents, either independent or related to wholesalers or supermarket chains Retailers typically buy their fresh fruit and vegetables from importers or preferred suppliers Supermarkets either have their own import facilities or imports are organised by the parent company

Independent small companies are still an important part of the retail environment in Poland, but the trend is towards expansion of the leading chains throughout Poland

A large amount of fruit and vegetables in Poland are sold in local markets (40%) The share of specialized wholesale markets is 20%, while the sale in traditional stores represents 15% and in supermarkets is around 10%

Considerations for actions

Make absolutely sure you comply with the food quality and safety standards that apply (see Annex) If you can not comply, don’t enter this market Contact international operating certification bodies that certify GlobalGAP as well as GOST to find out more

on how to comply Examples are SGS (http://www.sgs.com) and DIN GOST TÜV (http://www.din-gost.de)

Use pre-cooling and cold storage (also during transport) to ensure quality and a long shelf-life

Make sure to have confirmed buyers before investing in niche markets

Contact your potential buyer prior to your investment in sustainable products See the checklist for importers to check whether you meet organic requirements:

http://www.bio-siegel.de/english/users-products/checklist-for-importers

See the Annex at the end of this document for more information on buyer

requirements

Box 1 How to acquire a health control label - example: GlobalGAP

1 Check the standards: http://www.globalgap.org

2 If you want your products to be certified, your compliance has to be inspected by an independent and approved body GlobalGAP Certification Bodies include: AB Cert, EUROCERT, ICM, Lloyds Register QA and SGS AgroControl More accredited bodies can be found on the GlobalGAP website

3 Make investments Although the GlobalGAP-certification is demanded by EU retailers, the costs of compliance are at your expense as an exporter or producer

4 Note that for small producers, GlobalGAP developed a smallholder guide on plant protection modules:

http://www.globalgap.org/cms/upload/Documents/QMS_Manual-Final-1.pdf

3 Opportunities in the trade and distribution channel

Find below an overview of the distribution chain of tomatoes to Poland and some tips to make the most of exporting to this market

Opportunities regarding…

Know your competitive

environment The production of

tomatoes in Poland is

concentrated in the southern and

eastern part of Poland Annual

production was 678 thousand in

2010 Standard round and beef

tomatoes cover the vast majority

of Polish tomato production

The EU is the world's largest

producer of the tomatoes The

largest competitors for you as a

exporter from Armenia, Georgia

and Moldova are countries from

within the European Union (see

table 2) The EU is able to provide

all year round supply due to the

greenhouses in the Netherlands

Poland imports tomatoes mostly

from within the EU There is also

some imported from Turkey (10

thousand tonnes) Morocco (144

tonnes), Syria (1.6 tonnes) Russia

(18,700 kilo) and Ukraine (3,500

kilo) are also importing to

Poland

The best way to enter the Polish market is through importers or agents, either independent or related to wholesalers or supermarket chains Some important Polish importers are:

Silvi Cola -

http://www.silvicola.pl - leading Polish fresh produce exporter, supplying Eastern and Central European markets;

Arc Polska -

http://www.benson24.co

m - importer and exporter

of fruits and vegetables in wholesale amounts;

Tropicana -

http://www.tropicana.pl - engaged in import, export, distribution and packaging of fresh fruit and vegetables;

Import-Export Company -

http://www.impo-expo.pl

- importer and distributor

of fruits and vegetables in Poland

Enjoy the opportunities of the fragmented import market The top five grocers in Poland only hold a share of 25% The top players operating in retailing in 2011 were Jeronimo Martins Dystrybucja, Tesco Polska, Carrefour Polska and Auchan

Box 2 How to find Polish buyers?

associations and databases (see useful sources) To get into contact with them you can visit specialised trade fairs or contact them via phone or email

approach is looking for tomatoes and preferably is active already in your country or region This will make it easier for him to personally inspect your facilities By browsing their website you will learn a lot about the company

suppliers from your region They want to know more about your company and your

country regarding varieties, quality, price, supply seasons, delivery times and health and safety control

4 Adapt to the Polish business culture: Poland is a rather formal and hierarchical

culture As a result first names are rarely used initially in the business context For more information about the Polish business culture refer to the website of Kwintessential ( http://www.kwintessential.co.uk/resources/global-etiquette/poland.html)

5 Prices - segments and developments

The driver of profitability for tomatoes is scale

Margins are tight, so either a scale or a premium play (increasingly difficult) is important to survive in this business This is, for the most part, a commodity industry where scale is the driver Small producer countries such as Armenia, Georgia and Moldova will have difficulty competing

China’s producer prices of tomatoes are well beneath production price level in the EU This oversupply caused the price of tomato paste per tonne set by cooperatives to be reduced from € 72.00 to just € 35 00 Buyers are now looking for cheaper alternatives

Competitive prices are crucial to gain market share

Purchasing power in Poland is lower than the EU average This fact, together with the growth of modern distribution in the country, creates a real pressure on prices, with a strong impact on margins It is estimated that European importers apply a trade margin of 5-10%

Also for importers, pricing remains the most critical factor in positioning a product or service for sale in Poland Access to capital is difficult for most Polish firms and business transactions are typically self-financed

Information on tariff and price regulations is vital to make a convincing offer

Moldova has a free trade agreement with the EU and therefore does not pay import tariffs at all This makes it possible to compete with EU producers directly For Armenia and Georgia import tariffs are 14.4% during EU tomato season making it harder to compete in times of abundant supply In the future further economic integration might lead to a free trade agreement but

this will take time

The Entry Price (EP) and import tariffs for tomatoes determined by the EU can be found in table 2 If your EP is lower than this price you will have to pay an additional duty

Considerations for actions

Use the EU Export Helpdesk (http://exporthelp.europa.eu) to determine the import tariffs and entry price Use this price in your offer to potential buyers (see Action Plan in Box 2)

Closely monitor for bad harvests in EU producing countries A shortage will force importers to buy outside the EU despite the higher price

In case you are not able to compete on price with EU producers than you may want to focus on countries with which your country has a regional trade agreement such as other Commonwealth of Independent States (CIS): Kazakhstan, Russia, Turkmenistan, Ukraine and Kyrgyzstan Armenia, Georgia and Moldova are also part of this region

Box 3 How to determine your market price?

1 To determine a reasonable market price at the moment you want to sell, do your own market research first You can do this by quoting your prices to potential importers After, you can compare their reactions Also, websites such as CIRAD and Freshplaza show European prices for fruits and vegetables

2 For higher volumes, the price is usually less per product compared to those sold in small volumes This does not mean you should not sell in small quantities

Sometimes a buyer will want to buy more quantity of your harvest if the cooperation has been positive (a pallet of 600-700 kilos is the minimum to transport to the EU)

Table 2 Import tarifs for tomatoes

Price Ad valorem tax

€ 84.60 or more 8.8%

€ 82.90 - 84.60 8.8% + € 1.70/100 kg

€ 81.20 - 82.90 8.8% + € 3.40 /100 kg

€ 79.50 - 81.20 8.8% + € 5.10 /100 kg

€ 77.80 - 79.50 8.8% + € 6.80 /100 kg

€ 0.00 - 77.80 8.8% + € 29.80 /100 kg

3 Make sure to include the Incoterm (the terms on which you agree with your buyer who pays fro transport and insurance; see

http://www.iccwbo.org/Incoterms/index.html?id=40772 ) and whether you are

sending a firm offer or a quotation

4 In some cases it is convenient to enclose a period of validity in your offer, especially when the market price is highly fluctuating

5 Long-term prospects

Future prospects may favour the importance of low-income countries in global fruit trade Within the next five to ten years, CBI expects that:

Arable land will become scarcer while world population grows and therefore the pressure on prices and margins will relax Michael Porter has written a visionary article about it: ‘Creating shared value’ See http://hbr.org/2011/01/the-big-idea-creating-shared-value/ar/1

Internationalisation of large companies will increase This means that many (EU-) firms will have their own production sites in low-income countries from where they export into their home countries

As emerging countries gain voting power in the WTO, the EU’s trade agreements regarding agricultural products will likely involve less trade barriers for countries outside the EU

Considerations for actions

Monitor closely whether changes are made in agreements between your country and the EU These are advertised on this website: http://ec.europa.eu/trade/creating-opportunities/eu-and-wto

Consider partnerships with Polish companies looking to invest across their borders

Useful sources

Polagra-Food - http://www.polagra-food.pl - largest and most popular international food industry fair in Poland Takes place every year in Poznań Next event: 12-15 September 2011;

Poland-Export.com - http://www.poland-export.com - B2B platform with a database

of Polish exporters interested in cooperating with foreign suppliers  select ‘Food and drinks’;

Polish Chamber of Commerce - http://www.kig.pl  go to ‘Find a Partner’;

Europages - http://www.europages.com - used to find contact details and information

on the activities of importers  search in category ‘Agriculture & Livestock’, subcategory ‘Fruits and Vegetables’;

Warsaw Business Journal - http://www.wbj.pl - leading daily international business publication in Poland;

Fresh Market - http://www.fresh-market.pl - Polish news source for fruit and vegetables professionals

This survey was compiled for CBI by CREM B.V

Disclaimer CBI market information tools: http://www.cbi.eu/disclaimer

Annex: Buyer requirements

Poland follows EU legislation regarding the

marketing of apples and has not set any

additional requirements

See the CBI’s module ‘Compliance with

buyer requirements for vegetables’ for more

information

Supermarkets chains in Poland are becoming stricter regarding their food health and safety requirements

GlobalGAP and/or IFS or Q&S certification is increasingly important on the Polish market, especially when supplying large retail chains

The EU, thus Poland, has committed to the

Tomato Standard of the Codex Alimentarius

Refer to the website

(http://www.codexalimentarius.net/search/adv

anced.do?lang=en) and type ‘tomatoes’ as a

search word in ‘Text in Title’

There are three quality classes: Extra class, Class

I and Class II For example for Class I tomatoes

the following criteria apply:

They must be free of cracks and visible greenback

The following slight defects, however, may be allowed, a slight defect in shape and development, colouring; slight skin defects and very slight bruises



Retailers mostly take Class I tomatoes

Class II tomatoes are sold mostly to the

processing industry

Tomatoes shall be packed in each container in compliance with the Recommended International Code of Practice for Packaging and Transport of Fresh Fruit and Vegetables (CAC/RCP 44-1995) Refer

to the FAO website (http://www.fao.org/ag/agn/CDfruits_en/others/do cs/CAC-RCP44-1995.PDF) The standards include: Tomatoes must be packed in such a way as to protect the produce properly

The materials used inside the package must be new, clean, and of a quality such as to avoid causing any external or internal damage to the produce

The use of materials, particularly of paper or stamps bearing trade specifications is allowed, provided the printing or labelling has been done with non-toxic ink or glue

Tomatoes are packed in open and closed fruit cartons and trays, and sometimes packed into retail size plastic or fibreboard boxes (also known as punnets or clamshells)