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Supply shocks due to Limpopo frost sends tomato price down 35% in one week

Business Insider SA
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  • Thanks to an oversupply of the fruit, tomato prices are on a decline, caused by delays caused by frost in Limpopo.
  • Limpopo, one of South Africa's critical tomato-producing regions experienced excessive frost, which put a dent in tomato harvests.
  • In the past week, prices decreased over 30%; they had decreased 24% during the prior week.
  • For more stories, go to www.BusinessInsider.co.za.

Prices for tomatoes have seen steep declines over the past week following supply shocks created by excessive frost in the Limpopo central producing region.

During the past couple of weeks, frost in Limpopo left some crops damaged, which translated in farmers sending lower volumes to the fresh produce markets, and in turn, causing a spike in prices.

With volumes for tomatoes now increasing, causing excess supply of the fruit, prices for tomatoes are now decreasing significantly. The latest price dropped by 35% in one week to R3.98 per kilogram, Johnny van der Merwe, managing director of agricultural information group Agrimark Trends (AMT), said in his weekly video that tracks market prices for fresh produce.

"…The colder weather a month or so ago resulted in a supply delay to the market, which is entering into the markets as we speak," Van der Merwe said.

"The past week’s volumes increased by 30% and resulted in a more downward pressure on these prices," he said.

During the prior week, tomato prices decreased by 24% to R6.16 as volumes for the fruit began to pick up.

Directly after the recent frost, the price of tomatoes, which had begun to stabilise from earlier highs caused by excessive rainfall that damaged crops at the start of the year, shot up by more than 20%, even though still much lower than it was in April when it reached R19.52 per kilogram.

Pieter van Zyl, the regular fresh produce market analyst for AMT, said prices for tomatoes might remain under pressure for the next couple of weeks.

"Last week was the third week in a row that tomato volumes have risen; because of the higher volumes, prices have fallen sharply, and I think we can expect that this trend will probably last another week or two," Van Zyl said.

(Compiled by Ntando Thukwana)

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