The fruit and vegetable sector warns of new increases in the price of fruit and vegetables due to the Iran war: "Everything has a limit"

BarcelonaThe effects of the war in Iran continue to tighten the screws on the fruit and vegetable sector, which finds it increasingly difficult to contain the costs of fruit and vegetables. This Wednesday, companies in the sector - through a survey by the main association of manufacturers and distributors in the State (Aecoc) - have warned of the possibility of new price increases in the not-too-distant future if the conflict in the Middle East drags on.

"Our cost containment limit is near. No matter how much magic we apply, everything has a limit [...] and we are not far from that point," acknowledged the president of Aecoc's Fruit and Vegetable Committee, Enrique de los Ríos, at the presentation of the organization's study on the sector's prospects in the current context. For the also general director of the Unica group, the increase in costs is the main risk associated with an escalation of tensions, a statement that the rest of the sector also subscribes to. According to the analysis presented this Wednesday, eight out of ten companies maintain that the rise in costs is the main impact derived from the current geopolitical scenario.

Although the executive believes that the value chain still has "a cushion" to maintain prices, he also observes that everything will depend on the evolution of the open conflicts. In this regard, he is confident that the situation in the Strait of Hormuz – through which large volumes of fertilizerspass – "will calm down" and he wishes for an end to the conflict between Russia and Ukraine. "We hope that the easing of tensions coincides with our limit [for cost containment] and that this will be just another crisis," he summarized.

Despite everything, De los Ríos pointed out that Spanish consumers "are lucky" to live in a country where fruit and vegetables can still be bought "very affordably" and where supply chain management "is very efficient." However, he also issued the following warning: "Efficiency moves more slowly than geopolitics."

Moderate optimism

Despite concerns about the possible increase in the cost of the shopping basket, all sector agents are "moderately optimistic" regarding business growth. As indicated by the Aecoc survey, four out of ten executives predict that the fruit and vegetable sector will continue to grow despite geopolitical tensions, while half anticipate "some stagnation." Only 10% believe it will be necessary to prepare for a future recession or do not dare to make forecasts.

Good proof of this attitude is reflected in the sales recorded during the first quarter. Even with more strained supply chains, nine out of ten companies have maintained or increased their revenue compared to the same period last year. Profitability, on the other hand, has not suffered either: 86% of companies have grown or stabilized in this aspect.

Although inflation is manifesting as the biggest worry, Aecoc completely dismisses product shortages, a specter that, on the other hand, has manifested in sectors such as aviation due to a possible lack of kerosene.a possible lack of kerosene. In this regard, the existence of surpluses is an indicator. In Spain, for one out of every three manufacturing companies, exports represent more than 50% of their sales.