In response to unprecedented production cost pressure, Central America’s leading melon and watermelon-producing nations are requesting impartial and fair distribution of costs across the whole supply chain.
Melons and watermelons from Central America are one of the main winter-time supplies for Europeans and North Americans. The melon industry directly supports around 60,000 families and indirectly supports around 200,000 families.
Watermelon and melon exporters and producers in Costa Rica, Panama, Guatemala and Honduras said that they are “facing one of the greatest risks and threats to the sustainability of the business as it faces the highest percentage increase in the cost of essential supplies and raw materials in its history as a result of the collateral effects of the Covid-19 pandemic on global production, supply and logistics chains.”
A similar statement was issued just weeks ago by Latin America’s leading banana producers criticizing the unfair distribution of production costs.
In the second and third quarter of 2021, Kraft paper, the primary material used to make cardboard boxes, the price raised by 40-50 per cent, and the cost of Modified Atmosphere Packaging bags, plastic mulch, irrigation drip tape, and fertilizers also raised by significant amounts. There is also a significant increase in the labour cost as the pandemic has brought in the need of implementation of additional safety measures which adds to the production cost.
“Today, melons and watermelons are already highly expensive to produce due to the high standards and certifications required to export to global markets.”
They further elaborate “As if this situation was not serious enough, the global logistics crisis has caused a shortage of spaces and containers that consequently has led to an unprecedented increase in the logistics costs (rate per 40-foot container) of importing raw materials and exporting our products,”.
They warned that some of the businesses might go out of business by the year 2022 if this trend continues.
“All these [factors], together with the increases described above, have a direct negative impact on the competitiveness and economic sustainability of the melon and watermelon industry, which is already suffering strong effects of climate change, forcing many producers to close operations,” They add.
In the end they all urge the supply chain partners to rethink the cost distribution and assist the producers and exporters “consequently ensuring the sustainability of our business in the long term”
