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Global Demand For Ketchup Stagnating

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Global Demand For Ketchup Stagnating

Global Demand For Ketchup Stagnating
November 04
09:55 2019
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Exports of tomato ketchup have declined in the first few months of 2019, as Canada drastically reduced its intake from the US following an anti-Heinz campaign, coupled with the trade spat between Ottowa and Washington, IHS Markit’s Agribusiness Intelligence reports.

Canada is the world’s largest importer of ketchup with an annual intake exceeding 200,000 tonnes, over 90% of which is sourced by the US. But the situation between the two countries has caused Canada to import 19.73% less in the first four months of 2019 than it did in the same period in 2018. The US is the supplier which most suffered from the imports’ contraction, which have recorded a double– digit drop since 2016.

Global demand for ketchup is also weakening, with countries such as Mexico, Japan, Saudi Arabia and South Korea dramatically reducing their intake from the US. Similarly, shipments from the Netherlands – the European hub of tomato sauce distribution and European headquarters of Heinz – have declined in the first four months of 2019. The Netherlands, the second largest exporter of ketchup after the US, shows a sharp drop in shipments to its main market destinations including Germany (-22.77%) and France (-11.88%). The consumption of ketchup in the UK, however, seems to be stable for the time being in the range of 33,000 tonnes, 1.5% more compared with 2018.

Yet global demand overall is currently stagnating, in large part due to high temperatures recorded across Europe this year, and evolving eating habits have caused global trade to be flat.

Cristina Nanni, Analyst, IHS Markit’s Agribusiness Intelligence, comments: “Millennials are keener to consume fresh products, organic and superfood, pulling consumers away from fast food restaurants. Ketchup giants such as Heinz and Conagra are investing in the launch of organic products, free-from or ranges inspired by teenagers’ celebrities to try and reconquer some market shares among millennials and youngster consumers.”

“Information collated by IHS Markit’s Agribusiness Intelligence suggest that in some countries the ketchup market has been taken over by local producers who import tomato paste to produce their own sauce, fuelling tomato paste demand. In the first four months of 2019, global trade for the overall tomato sector increased by 7.30% in volume and 11% in value to 1.11 million tonnes and US$1.00 billion, respectively. The tomato paste market has shown signs of recovery since 2018 when Chinese production dropped drastically, following the closure of some processing plants. The difficulties the tomato sector has gone through at large in the past have contributed to reshape ketchup’s geography. The dollar strength and production volatility in some historical processing countries have moved the pivot point of the ketchup market in the Mediterranean Sea with Italy, Spain, Portugal and Egypt recording an increase of shipments for this product.”


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