Pandemic affects vegetable and fruit market in 2020

Sector should resume investments in 2021

14.12.2020 | 20:59 (UTC -3)
Cepea

Even with the essentiality of the food chain and without major interruptions in production, the fruit and vegetable sector was affected by the covid-19 pandemic in 2020, mainly due to the drop in economic activity, the partial restriction of commercialization and changes in Consumption habits. This is what the 2020-2021 Hortifruti Brasil Yearbook (December/20-January/21 edition) indicates, a publication by Cepea (Center for Advanced Studies in Applied Economics), from Esalq/USP. According to researchers from the HF Brasil team, these factors had a greater or lesser impact at different times throughout 2020.

In terms of restrictions on domestic sales, it was most evident during the period of greatest social isolation (between the end of March and May), when wholesalers worked on a limited basis, some street markets were suspended, and some restaurants were closed. The population's lower mobility also restricted the flow of sales of more perishable products, such as hardwoods and some fruits (which have a shorter shelf life). At the end of 2020, the sector is still feeling the effects of interruptions in sales to important customers, such as hotels, schools and some restaurants.

In the case of export-oriented chains, sales of Brazilian fresh fruit performed well throughout the pandemic, favored by the high dollar, strong external demand and the fact that competitors in Brazil have less fruit availability. Overall, the product most affected was papaya, especially at the beginning of the quarantine, due to the reduced availability of air transport.

In terms of consumption habits, the demand for fresh fruits and vegetables was stronger at the beginning of the pandemic (end of March and April), as many consumers sought to strengthen their immunity against the virus. After a few months, indulgent and ultra-processed products once again took over. A positive behavior throughout the pandemic was that, with the recommendation of home isolation, more people started to prepare their own meals, resulting in a steady demand for fresh and semi-processed foods.

Investments in 2021

In the vegetable group, investments in the area are expected to resume, largely offsetting the reductions in 2020. The highlights are the potato and tomato industrial segments. In the case of pre-fried potatoes, there was once again a resumption of area growth in 2021 (in 2020, due to partial activity in the food service sector, investments were contained). For the tomato industry, the increase in plantings should compensate for part of the reduction in 2018 and 2019.

As for the fruit area in 2021, the most visible investments are in the mango and table grape area in the Northeast. In the rest, the forecast is for stability. The good profitability obtained from exports in 2020 can encourage investments. Another crop that should resume in 2021 is watermelon, aiming to recover from the decline in 2020. It is worth remembering that, as several fruits analyzed by Hortifruti/Cepea are perennial, the effect of the area reduction due to the pandemic was smaller when compared to observed for vegetables.

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