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GLOBAL MARKET OVERVIEW MELONS AND WATERMELONS

With heat waves hitting much of Europe, and temperatures rising elsewhere on the northern hemisphere, melons and watermelons are enjoying a significant boost in popularity. There is one issue however: a poor season for the fruit last year has led to large decreases in production area in major melon growing country, Spain. Not only this, but the extreme hot weather in Spain and other growing regions has meant the crop peaked earlier than usual, leading to what will likely be an early end to the season. These factors have driven prices sky-high, which will hopefully compensate growers for any losses. Meanwhile in South Africa, growers of winter watermelon see increasing demand for their product too, providing them with increased opportunities for sales. And finally, various adverse growing conditions leading to decreased volumes on the North American market have inflated prices for melon and watermelon on this market considerably too.

Netherlands: Watermelon prices sky-high, but hardly any available due to low Spanish plantings
It is not too surprising that the demand for watermelons is high during this sunny period. However, the problem is that the supply is very limited this year. "Last year, August was a rough time for watermelons, so many growers decided not to plant any this year. As a result, there is now far too little fruit on the market," says a Dutch importer. "Prices for the watermelons are at a level of around 1.30 Euro per kilo. That has never been seen before in August. You can hardly get any watermelons though. The production - which currently comes from La Mancha - largely goes into the programmes. Given the low planting level in Spain, I don't see the situation changing immediately and I just see it getting crazier. Brazil will start loading next week, but that will not be full containers of watermelons either. Besides, with the doubled sea freight costs it is also the question of who will step in," Jacob continues. "The other types of melon are doing reasonably well, but the market is not as hot as for the watermelons. Galia and Cantaloupe are selling at around €6 and with this shortfall in the market, the yellow melons are also still selling well."

Belgium: Hot weather drives up demand, but slows production
The Belgian melon market is going through a very difficult time at the moment, due to the ongoing drought and heat in Southern Europe. This is according to a Belgian trader. "The French melons were a bit earlier and the Spanish a bit later, which is why we got a significant share on the market at the beginning of July. However, it means that we now have a big shortage. If I am to believe the rumours, the French melon season will also be over soon."

At the same time, the warm weather is ensuring that demand for the fruit is high. "The demand is through the roof, but because of the heat the plants are at a standstill. There is simply almost no supply. Of course we can never say that there is none, but it is really very limited. The difficulties actually apply to all melons, which means that the prices of, for example, the Charentais melons are very high. We have almost nothing of Galias and watermelons are also hard to come by."

Germany: Persistent heat affects Spanish melon campaign
Acute supply shortages in Spain and an unchanged high demand characterise the current melon and watermelon market, says an importer. "In some places we have had temperatures of up to 48-49 degrees, which has had a corresponding effect on crop availability. Especially for watermelons and sugar melons, exportable goods are scarce. As expected, the Spanish sugar melon campaign will end by week 34, the last watermelons will probably be available in week 35-36, so we have to expect a small supply gap until the start of the overseas season in week 36-37."

The shortage of goods will have a corresponding effect on the price level, he said. In the case of watermelons, quotations have almost doubled within the last two weeks, while sugar melon prices have also risen rapidly this week. "In general, the season in the early growing region of Murcia started two weeks earlier this year, which is why the harvest ended earlier. Then there was already a production gap until the start of the campaign in Ciudad/La Mancha. With Piel de Sapo and honeydew melons, we had the problem that the available calibres were either too small or too large for the German retail trade." The Spanish melon segment is rounded off by Galia and Cantaloupe, where there are always 'outliers upwards' in terms of pricing.

France: Prices down for melons and firm for watermelons
The melon campaign started in mid-February with imported melons. The French melon campaign started in mid-May and should end in late September. "This year, from mid-March to mid-May, there were low volumes and therefore higher prices, linked to a lack of production, particularly in Spain," according to a wholesaler. Some have therefore had to call on origins with which they are not used to working, such as Italy. If at the beginning of the campaign the prices were very high, the exceptional production made the prices drop. In July the market is gradually rebalancing, thanks to a consumption supported by the summer weather. On the production side, despite the decrease in surface areas, the production of melons in 2022 is estimated to be up sharply, at 301,000 tons, i.e. +31% compared to 2021. It would increase in all regions of France, up to 39% in the South-East. Melon crops benefited from high temperatures in May and June, favouring large fruit sizes.

Currently, the majority of watermelon volumes come from Spain, both black and zebra. There is also another variety, Zagora, which comes from Morocco and produces watermelons of 10-15kg. There is currently enough supply of the yellow watermelon (black on the outside and when sliced it is yellow), but due to the high demand, the prices are quite firm, higher than the previous year. 

Spain: Prices rise in Castilla-La Mancha following good ones in Almería
The melon and watermelon campaign has already started in Castilla-La Mancha. On July 21st, the first session of the Melon and Watermelon Price Table of the Castilla-La Mancha Horticultural and Hunting Market was held, collecting the prices for the beginning of this campaign, in which the melon and watermelon acreage in the community has decreased by around 10%, as confirmed several weeks ago by an industry body.

After starting with average prices of 28-30 cents/kilo for extra category melons and 35-38 cents/kilo for watermelons, both white and black seedless 1st category, the last session reflects a readjustment of prices, which on August 4 stood at 37-40 cents/kilo for extra melon and reached 43-45 cents/kilo in the case of 1st category white seedless watermelon; prices that are still well behind those reached this campaign in the province of Almería, which several months ago opened the campaign with its greenhouse fruit.

In the balance of the 2021/22 fruit and vegetable campaign, an agricultural organization reported that the average price of watermelon grown under cover, whose production has fallen by 41.7% this campaign, has stood at 64 cents/kilo, experiencing a notable increase of 204% compared to the previous campaign; the protected melon has registered an average price of 70 cents/kilo, increasing its price by 159% but with a 38.2% smaller harvest.

The loss of kilos due to a meteorologically unusual spring characterized by an exceptional episode of fog, has also been reflected in Almería’s open-air cultivation, where it is estimated that there has been a reduction in production of between 15,000 and 20,000 kilos (it must be remembered that the surface has receded by 10%); although there has also been a rebound in prices. It has been reported that open field watermelons would have reached an average price of 35 cents/kilo, positioning this campaign as one of ‘the best harvests in recent agricultural years in terms of prices.’

However, these attractive prices, which suggest that the watermelon acreage could increase again in the province next year, have also attracted thieves, who, seeing the profitability of the fruit, have carried out a worrying wave of thefts in the fields stealing thousands of kilos of watermelon for the informal market.

Although the high prices of fruit this year should not makes us forget the drop in production, which will lead to a significant contraction in profits which, in turn, will be cushioned by the rise in costs.

According to the sector's calculations, this increase would be around 30%; however, the Ministry of Agriculture, Fisheries and Food recently surprised us by reporting that the general index of prices paid for agricultural goods and services in April 2022 was 37.84% higher than that registered in the same month of 2021, and 2.03% above the index for the month of March 2022.

South Africa: Opportunities for winter watermelon cultivation
There are few watermelons on the market at the moment, as it is the middle of winter in South Africa, but there are growers who are seeing opportunity in being on the market year-round with watermelons.

A trader at the Johannesburg municipal market, where retailers also procure watermelons, says that for the past seven years he has been stocking watermelons from the far north of South Africa.

They are selling for R130 (7.7 euro) per watermelon at the moment, he says, with much of the demand coming from catering and retailers wishing to keep watermelon shelf space occupied throughout the year.

In fact, he says, he usually doesn’t have enough winter watermelon supply to keep up with demand. There is always the risk of frost, so planting watermelons to ripen during winter is a gamble, but it has paid off over the past six years, he says.

China: Watermelon prices rise as peak period begins
By the end of May, watermelon from the south had already started to come into the market in large quantities. At that time, the greenhouse watermelons from the north were also on the market. As a result, no matter what the characteristic varieties of watermelon products were, they were not sold well due to this excessive production. 

Recently, along with higher temperature, watermelon has entered the peak production period, where the market supply is sufficient. Each year, July and Aug are the best time for watermelon sales. Unlike previous years, at the moment the overall price of watermelon is rising rather than falling.

With regards to the price increase, the main reason is that the varieties that are popular, such as ice sugar melon, are entering the harvest period for the second crop. In the second crop, the volume of watermelons with the same high brix and crispy taste as the first crop of watermelons is decreasing, many people rushed to the field to buy these watermelons with better taste and higher quality, which has pushed up the market price.

In addition, when the second crop of watermelon was harvested, many production regions experienced a sudden increase in rainfall, which to a large extent led to a reduction in watermelon production. Meanwhile, it is now the traditional peak season of watermelon demand. If the output can't keep up with the demand, the price will rise.

North America: Lower availability and higher prices for melon and watermelon
Supplies of watermelons across the U.S. are down compared to 2021’s volumes. “In all regions, we’re seeing much more limited availability and record-high prices,” says one grower-shipper.

This comes as the result of a few combined factors--largely a reduction of acreage in some areas and/or poor yields in another. Indiana recently saw more than 20 inches of rain in a 10-day period which led to disease pressure in the fields. “There was flooding and acreage lost so now it’s yield loss and disease pressure,” he says. Other regions with both reduction in acreage and low yields include Maryland, Delaware, Texas and California. “Missouri and North Carolina are probably doing the best of the major growing regions and they’re just average. California also has a reduction of acreage this year as a result of poor markets last year.”

And while August is generally the weakest month in terms of consumer demand for watermelons due to things like vacations taking consumers out of their home (watermelon tends to not be an ‘on-the-go’ food consumers eat), demand has in fact elevated somewhat recently. “It’s slightly up because we’re hearing concerns about a recession and retailers are starting to report changes in consumer behaviour to where they are not buying as many discretionary items in the grocery store and instead focusing more on what they need,” he says. “In recessionary times, we typically see produce sales increase in retail because it’s a way for consumers to save money. Instead of eating out, they’ll eat at home.”

At the same time, perhaps also because of a potential recession, travel also seems to be less which could contribute to greater watermelon consumption. 

Altogether, this is leading to record high pricing, particularly in the last 10 days. “The market was disappointing in May and June,” says the grower-shipper, noting that movement in those months was average.

However in July, Georgia finished up its production early thanks to hot and dry temperatures that also pushed the season to start early. “Then there was a gap between Georgia and the next major growing regions which are Indiana, Illinois, Maryland and Delaware. That created a shortage and we just never really caught up. It drove the market high and it’s been well above average since mid-July,” he says.

That said, prices may moderate this week and possibly into next. “Following two weeks of rainy weather in Indiana, we’ll probably have one to two weeks where production will pick up,” Martori says, noting the domestic season will likely end earlier than usual. “But when production in Indiana, Delaware and Maryland starts declining, we’ll probably see more record-high pricing in September.”

For cantaloupe and honeydew melons supplies are good currently. “Across the board, shippers have product. There may be certain shippers who lean more heavily towards smaller sizes and others who lean more heavily to bigger sizes but supplies are good out of California,” says a grower-shipper

He notes that while volumes look generally similar to last year, there may be a little less overall because of water issues in California. “It’s been tough getting water allocated that you need in your district. That’s made it a little difficult for some growers,” he says. Production continues in California until approximately the end of September or the beginning of October and then production moves to Yuma, Arizona.

As for demand? “It’s not great right now, though we’re used to that going into August,” he says. “It’s an interesting time. We had some hot, humid weather at the start of the West side deal in early July which caused our fields to come on early. So we had limited supplies in July for a week or two and other shippers also had lighter supplies,” he says. “There was a time where demand was pretty good because supplies were low. Now in August, everybody has more supplies on hand and demand has gone down so it’s a perfect storm where good supplies and low demand mean prices are down.”

However that’s typical for August, as it’s a time when shippers historically have decreased prices to keep product moving. “For the most part, pricing is around $9-$10,” he says. “I don’t see anything ahead that will drive the market up. Supplies will be pretty steady for the rest of the West side summer deal.”

Australia: High hopes for melon quality improvement
A quality improvement project is underway to help boost the eating quality and consumer demand for Australian melons. Crop quality specialists, have been contracted by an industry body to lead a results-focused quality improvement project. It aims to overcome the current challenge of poor-quality fruit that is believed to be hindering sales and growth in both the domestic and export markets. After a report in August 2019, it was reported that 26% of their participants had a negative eating experience with melons.

An industry representative noted: “This project was identified as the highest priority for our industry in setting a bright future for Australian melons. We hope to get some actionable steps out of the project to improve melon quality across the board. We will be working across the supply chain to develop and adopt a set of minimum maturity standards that will ensure consistent quality. This will provide a more successful future for the industry by increasing demand. It's about improving the eating quality at the consumer point of sale for rockmelon, watermelon and honeydew. Once we get that right, we know naturally that demand and consumption will grow."

On the export front, Australian melons had a sharp correction in July-December 2021, but overall, the industry is tracking on par with last year. That is still down on where the industry has been (pre-COVID) and a long way from where it would like to be, but work is being done in the export space. Meanwhile, the Australian melon industry is considering the risks of importing fruit from Korea, after the federal government released a Draft Import Risk Assessment report, in response to a trade request from South Korea for market access for glasshouse-grown Rockmelon and Oriental Melon into Australia. The report has presented a full investigation into five pest risks and assessed many other pests and diseases that present a biosecurity risk to melon production.  

Next week: Global market overview Bell Peppers!


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