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Drewry: Exotic fruits to drive future reefer trade growth

Drewry: Exotic fruits to drive future reefer trade growth
Global seaborne exotic fruit trade by commodity. Source: Drewry

Future reefer shipping growth will come from accelerating trade in exotic fruits according to Drewry, with new technology lengthening potential shipping distances and opening up markets where discretionary spend is rising.

Growth in the reefer shipping trade has largely been driven by soaring demand for proteins into swine flu-ravaged Asia, but this trend is expected to recede as domestic pig stocks recover, noted the analyst’s latest report.

Seaborne reefer trade growth has broadly matched that of dry cargo over the past 10 years, expanding at an average annual rate of 3.8%, with proteins and bananas accounting for 52% of traffic last year.

Meat has been the driver of growth over the last 12-18 months due to significant imports into China following the effects of African Swine Flu.

However, according to Drewry, while the recovery of Asian pig stocks is likely to lead to a drop in import demand, exotic fruits are the “rising star” of the trade.

Over the past ten years, seaborne trade in exotic fruits outgrew that of all other major commodity groups, rising at an average annual rate of 5%.

While trade in pineapples has slowed, mangos, persimmons, durians and particularly avocados have seen soaring demand.

Mangos are now the second largest exotic fruit in volume terms after pineapples, with over 1.3m tonnes of seaborne traffic recorded in 2019 and an average annual growth rate of 5.2% over the prior ten year period.

This category is also benefiting from strong investment in growing regions, with larger orchards aimed at export markets rather than the small grower with a couple of trees and an ad-hoc approach to exports.

In some producing areas, mangos share the supply chain of avocados, such as packing facilities, while in end-markets there is commonality in the use of ripening rooms for the ‘ready-to-eat’ experience.

However, the avocado has become ubiquitous thanks to improved agriculture, new post-harvest processes and supply chain innovations that enable ready-to-eat availability for end-consumers across North America, Northern Europe and Asia.

Technological advances in reefer shipping containers have benefited the avocado trade, noted Drewry, particularly their improved reliability and wider controlled atmosphere options, enabling the product to travel further and extend its shelf life.

The fruit is the third largest import produce handled by the Port of Rotterdam after bananas and grapes, where avocado imports leapt by a third in the first half of 2020 to reach 244,000 tonnes.

In the near term, some mature exotic fruits such as pineapples will continue to experience slowing trade according to Drewry as they are vulnerable to the downturn in the Covid-19 ravaged food service business.

Nonetheless, over the medium-term, prospects for the exotics fruit trade remain promising with Drewry forecasting average annual growth of more than 6% over the next four years.