Summer 2021 Regional Market Report News

Major Weather Conditions

PERU

Crops affected – Artichoke

This past year, Peru has experienced several cost increases due to:

• New labor laws that went into effect on January 1, 2021, which drove product labor costs up 30%
• Implementation of Covid-19 safety precautions in manufacturing facilities
• Global inflationary pressures on commodities that have affected cost of raw inputs and packaging materials

ECUADOR

Crops affected – Hearts of Palm

Ecuador, which produces 2/3 of the world’s supply of canned hearts of palm, is seeing significant raw material shortages for cultivated hearts of palm due to:

• A long and unusual drought that occurred at the end of 2021, which reduced the crop by ~30%
• Pricing pressures that have forced many farmers to shift to cultivating more profitable crops, which reduced the overall cultivation area by an estimated 15%

Both factors, coupled with cost increases on global packaging commodities, are causing a significant cost increase in cultivated hearts of palm.

CHINA

Crops affected – Lychee

The 2021 lychee harvest was abnormally low due to cooler weather in the primary growing regions of China. Harvested during a very short 3–4-week window, the delicate fruit cannot be held in ambient temperatures for long periods of time due to a risk of discoloration and off flavors. Therefore, the fruit either needs to be packed immediately after harvest or sold to the fresh market. The unseasonal climate has resulted in market price elevation of 15-20%.

ITALY

Crops affected – Pesto

Pesto products are made with a high percentage of sunflower and olive oil, both of which have been affected by cost increases. Sunflower oil costs are driven by the rising price of sunflower seeds, caused by cold weather in growing regions. The increase in olive oil is due to an increased international demand, which has exceeded this year’s aggregated production. These costs, in turn, have caused the cost of the finished goods to increase by 10-15%.