The growth period was characterisedby extreme drought. As expected, the shortage of rain has had a negative effect on the available volumes of peas and broadbeans. At the start of the harvest, the results were even 35% below expectations, although the results improved slightly as more rain fell later in the season. Unfortunately, this late rainfall was not enough to make up for the very poor start. The final result is about 10% below the planned harvest volumes.
This situation is fairly consistent throughout Europe. It is clear that these lower harvest results have caused a general shortage of peas and broad beans on the market. Demand is high and volumes are limited. The sharp increase in pea production costs caused by the underutilised capacity of the processing plants has madea drastic price increase necessary. Most pea contracts have now been signed with a price increase, and in some cases offers were withdrawn and renegotiations were required.
It is clear that the period leading up to the new 2021 harvest will be difficult. Ardo will evaluate the situation in the coming months and will pro-vide early harvests in the southern regions of Europe sooner if necessary to cover the gap until the new harvest.
Beans are another problem area in ourcultivation programme. The first harvestsstarted a few weeks ago. As with the peas, the initial results were very poor and we are seeing yields that are up to 40% below normal harvest years. The reasons for this were the lack of rainwater and the extremely high temperatures.
Many growing fields are equipped with sufficient irrigation systems, but even then, the temperatures over 32°C caused so much evaporation that the water supply could not offer enough sprinkler irrigation. We hope that the second part of the harvest will improve the situation somewhat. We do know that it will not be possible to achieve the planned yields, even with an excellent second half of the harvest. Furthermore, European bean cultivation is mainly concentrated in France and Belgium. There are few European alternatives that can compensate for any shortfalls. The lead-up to the new harvest of 2021 will also be difficult for beans, and price increases will be inevitable.
Other harvests are still very much ongoing. We will communicate about them in more detail in the coming months. It will be an exciting journey to continue to meet the ever-increasing demand for fresh-frozen vegetables and herbs.
As far as the impact of coronavirus isconcerned, we have seen that the initial shift from FoodService sales to Retail and Food Industry sales is gradually getting back to normal. The FoodService segment has clearly lost the most sales. Northern Europe, is recovering very quickly. Southern Europe, however, is only very gradually getting back onits feet. The tourism sector has been severely affected. The hospitality industry in particular accounts for a significant part of food service consumption.
Recent studies of these segments show that sales of fresh-frozen produce have clearly increased and that this increase is continuing. This may indicate that consumers at home have (re)discovered the advantages of fresh-frozen foods.
Above all, let us stay positive and healthy.
