After last season’s glut in tomato supply, growers have scaled back plantings dramatically – so consumers face higher prices, says Mintec’s Robert Miles

As the British love of Italian food has grown in the UK, so has the demand for canned tomatoes. Yet with lower yields expected in Italy and other tomato-growing regions this year, shoppers look set to be left paying the price for their Continental tastes.

Last season, a global glut of 42.1 million tonnes of processing tomatoes was harvested, leading to a 15% year-on-year decline in the wholesale price of processed tomato products. As a result, the contract price of plum tomatoes used for processing has fallen 11% in Italy alone this year and further plantings are now less likely to occur.

Globally, processed stocks are already in steep decline and the 39.5 million tonne forecast for processing tomato production in 2010/11 is down 7% year-on-year.

Italy is expecting a production decline of about 13% in 2010, from 5.7 million tonnes in 2009/10 to five million tonnes in 2010/11. This year's price declines, after the record global production last year, has disincentivised producers, and last winter's cold, wet weather has also hurt production.

As Italy is responsible for about 75% of the world's canned tomato exports, by both sales and volume, the anticipated shortfall is unlikely to be topped up from elsewhere. Those other EU countries that do grow tomatoes for canning are also facing production declines. In total, European production is expected to be nine million tonnes, which is 11% less than the 10 million tonnes produced last year.

A Spanish processing tomato crop of about two million tonnes is expected in 2010/11, down 40% on last year, as Spain, like Italy, has opted for a 50% decoupling of EU subsidies and a transition period of three years.

Portugal has a transition period of four years for the decoupling of subsidies and will not complete this process until the 2011/2012 season. It is expected to have a significant competitive advantage by 2011 but this year the Portuguese forecast is 1.1 million tonnes, the same as last year.

Forecasts for Greece's 2010 crop are 0.71 million tonnes, a 12% reduction on 0.81 million tonnes last year. The 2009 French crop, which pales in comparison with the Italian, is expected to be 0.215 millon tonnes, down 2% on 2009.

UK shoppers are particularly exposed because the UK is currently the largest importer of canned tomatoes in the world, and approximately 80% of UK processed tomato imports come out of Italy.

Increasing demand for processed tomato products around the globe, particularly over the past three years, in areas such as Russia, Eastern Europe, the Middle East and Africa, will further compound the global squeeze on supply. Rising energy costs and a steep rise in the price of steel (by far the main component in tin plate's raw material price) all threaten to further inflate the price of canned tomatoes.

Fortunately, after bumper cereal crops in the past few years, there's a large amount of durum wheat available. Shoppers should therefore be able to have a larger helping of pasta. But with less sauce.