While Brazil has a year-round production of papayas, there are periods with higher and lower supply. This time of year, it's peak season with volumes being highest from September through November. Despite supply being high, current production is about 20 percent lower compared to the same time last year. "This is caused by more humid growing conditions in combination with a smaller planted acreage," says Fred Tavares with UGBP USA / Crown Global.
The company grows the Golden papaya - specifically the Aliança variety - in the north of Espirito Santo state, in municipalities like Linhares, Jaguaré, São Mateus, Sooretama, Pedro Canário, Pinheiros, and Montanha. The Formosa papaya (Tainung variety) is also sourced from Espírito Santo on the Central Coast as well as from the Northeast of Brazil, specifically Rio Grande do Norte and Ceará.
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The majority of Brazilian papayas make their way over to the United States, where they are facing a steady demand. "U.S. consumers continue to value Brazilian papayas for their flavor, nutrition, and availability year-round." Despite a 50 percent import tariff that became effective on August 6 of this year, the demand pattern hasn't significantly changed. "We have not faced significant barriers because the papayas are mostly shipped by air," commented Tavares. Import duties are calculated on the FOB value of the product. "Given that freight cost is a large part of the total landed cost, it softens the impact of the tariff." Nevertheless, freight costs and tariff effects represent a challenge and add pressure on margins.
The increases in freight costs and tariff effects have resulted in higher prices at retail level. "This is limiting our papayas' ability to compete with other fruit items. Ultimately, Brazilian papays are less competitive in the marketplace now." Despite these hurdles, the country is set on continuing to deliver consistent quality and availability that meet U.S. consumer demand.
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Fruit Attraction
This week, UGBP USA / Crown Global will be exhibiting at Fruit Attraction in Madrid. Visit the company in Hall 12, stands D02, E02, and F02.
For more information:
Fred Tavares
UGBP / Crown Global
Tel: +1 305 365 7811
[email protected]
www.ugbp.com