In 2024, the global tomato industry enters a critical period. The competitive landscape among major tomato-producing countries is undergoing profound adjustments due to changes in production costs, shifting market demands, and escalating environmental policies. This article provides a simple and accessible analysis of the current state and future development of the global tomato industry¹ from four perspectives: production costs, export patterns, industry challenges, and future trends.

Regions Best Suited for Tomato Cultivation

Tomato Production Costs: Who Holds the Advantage?

Tomato Prices in Key Regions

The production costs of tomato paste² are influenced by various factors, including labor, energy, raw materials, transportation, and packaging costs. Below are the characteristics of major producing countries:

1. China

   • Cost Advantage: Cheap labor and large-scale processing effectively lower overall costs.
   • Current Challenges: High energy costs, with export markets facing policy pressure from Europe and the U.S.

2. Italy

   • Product Characteristics: Focuses on high-value-added canned products.
   • Cost Status: Labor and energy costs are high, but the export strategy is flexible, relying on importing tomato paste for reprocessing before export.

3. United States

   • Cost Control: Large processing plants result in lower per-ton production costs, but the minimum wage standard is high.
   • Advantages: Low energy prices and a stable overall supply chain.

4. Turkey

   • Special Case: Affected by 60% inflation, resulting in significant fluctuations in raw material and labor costs.

5. Other European Countries (Spain, Greece)

   • Higher Costs: Labor and energy costs are the main factors limiting export competitiveness.

Global Tomato Paste Exports: Who Dominates the Market?

As of February 2024, the total global tomato paste export volume is about 3.8 million tons, with China holding 32% of the market share, maintaining its position as the leader.

1. Key Export Markets

   • China: Primarily exports to Iraq, several European countries, and the Middle East.
   • Italy: Imports tomato paste for canning and re-exports to North Africa and Europe.
   • Turkey, Iran: Exports continue to grow, primarily targeting markets in the Middle East and Russia.

2. Regional Market Analysis

   • Europe: Carbon emission policies are tightening (such as the EU's CBAM mechanism), which may increase the cost of imported tomato products.
   • Middle East and Africa: These regions have become fast-growing markets for global tomato paste exports, particularly with strong demand from Iraq and Libya.

Comparison of Export Markets for Italian and Chinese Tomato Products

Industry Challenges

As global tomato production increases and environmental policies³ intensify, the industry faces the following major challenges:

1. Impact of Carbon Emission Policies

   • The European Union will fully implement the Carbon Border Adjustment Mechanism (CBAM) in 2026, requiring importers to declare the carbon content of their products.
   • For products that have not paid carbon emission taxes, additional fees will be charged based on EU emission costs. This raises higher requirements for exports from China and other non-EU countries.

2. Inventory Pressure

   • Global tomato production is expected to increase by 3 million tons in 2024, leading to a global surplus and inventory buildup. Experts suggest a reduction in production by 16% to 32% in 2025 to restore market balance.

3. Production Cost Pressure

   • Energy Prices: European natural gas prices are higher than those in the U.S., and China's energy costs are relatively high.
   • Labor Costs: Although China's labor costs are lower, there is a need to improve production efficiency per unit to remain competitive.

Future Trends and Recommendations

To address the above challenges, the global tomato industry must adjust in the following ways:

1. Optimize Export Structure

   • China should adapt to Europe’s carbon emission policies⁴ by developing low-carbon products and actively expand into emerging markets such as Africa, the Middle East, and Southeast Asia
   • Reduce dependence on a single market to diversify export risks.

2. Improve Technology and Efficiency

   • Promote energy-saving and emission-reduction technologies to lower energy consumption and carbon emissions.
   • Increase investment in automated processing equipment to improve unit efficiency and reduce labor costs.

3. Develop Branding and High-Value Products

   • Increase investment in building independent brands and gradually shift from bulk exports to branded exports.
   • Produce small packaging, high-value-added tomato products that cater to high-end markets in Europe and the U.S.

4. Strengthen International Cooperation and Dialogue

   • Participate in international industry conferences to stay informed on global market dynamics and environmental policy trends⁵
   • Utilize multilateral platforms to address unjust trade barriers and improve international influence.

Conclusion

In 2024, the global tomato industry is facing dual challenges of cost and competitiveness, but this also presents an opportunity for industry upgrades. As the world’s largest tomato paste exporter, China needs to continue optimizing in areas such as environmental protection, technology, and market expansion to consolidate its position and lead the global tomato industry toward healthy development. Future success lies not only in cost competitiveness but also in comprehensive improvements in innovation, quality, and sustainable development.