Research
Dried Plum Market Shows Healthy Price Perspectives
The global prune industry relies largely on production and exports from Chile, the US, France, and Argentina. While production in Chile has rebounded and output in California is likely to grow marginally, it will not be enough to compensate for the decline in production in France and Argentina (impacted by frosts). Moreover, inventories are low as the demand for prunes as a healthy alternative has steadied. Against this backdrop, the price outlook is favorable, but margins remain exposed to supply chain challenges and input cost increases.
A Few Countries Dominate the Dried Plum Industry
Dried plums, or prunes, make a healthy snack and a versatile food ingredient. Prune consumption contributes to gut health, bone health, and more, according to industry sources.
World prune production in 2020/21 was at around 140,000 metric tons, a production level that sits below the average for the past decade as yields were impacted by weather shocks in various growing regions. Industry statistics show that the US accounts for almost 40% of global prune production, followed by Chile with about 25%. Other countries with relevant prune production are France, with roughly 23% of global output, and Argentina with a 9% share.
The largest exporters include Chile, the US, France, Argentina and Spain. These countries account for around three-quarters of global prune exports.
In terms of consumption, the highest per capita disappearance occurs in France, Poland, Greece, Portugal, Belarus, Italy and Australia, in that order, ranging from 0.5 kg in France to 0.16 kg in Australia.
A Bump in Chilean Plum Production, but Still Below Record Years
After unseasonal rains, in early February 2021 significantly affected plum production for the 2020/21 season, the Chilean crop rebounded in 2021/22 to the historical average.
Chilean prunes are an important part of the domestic dehydrated fruit industry, complemented by raisins and dehydrated apples. The share of prunes relative to exports in the Chilean dehydrated fruit industry has been increasing, reaching a maximum of 54% in 2017. However, in the last five years it has decreased, reaching 40% in 2021.
Chilean prune exports started to rise in the late nineties (see Figure 2), with a steady growth during the first decade of the 21st century (CAGR 11.2%). However, in the second decade, growth stalled (CAGR 1.2%) due to factors such as weather issues and competition from other fruits, among others. Particularly in the last five years, we have seen a declining trend in dried plum exports, mainly due to the increased exports of fresh plums to China (particularly D’agen and Sugarplums), which has limited the availability of fruit for the dried market.
The drop in production and exports in 2021, increased the unit export value and the average prices obtained by Chilean producers to the highest levels in seven years (see Figure 3). For 2022, the export volume is expected to increase, as Chilean fresh plums ended the export season with a new record, mainly supported by the increase in D’Agen and Sugarplums. However, logistical disruptions will put pressure on exports in 2022, which could return to levels observed in 2020, around 62,000 metric tons. It is likely that exports will see a similar market distribution as in the past five years: primarily going to Europe followed by Latin America (see Figure 4).
New Equilibrium in the US?
While US prune production has fluctuated during the past decade, consumption has remained relatively stable. Exports typically account for more than half of US domestic production (see Figure 5).
US per capita consumption has remained relatively low. Recent research related to the health benefits of dried plum consumption have helped to stop the downward trend in consumption at around 0.3 pounds per person per year.
With an industry that includes about 800 growers and 28 packers, California accounts for about 40% of the world’s supply of prunes and 99% of US production. US prune and plum bearing area has declined by about 60% during the past two decades, as the industry strategically reduced supplies (see Figure 6). Consequently, prices improved over the past decade. Recently, prices have hovered at around USD 2,000 per metric ton (see Figure 7). For 2022, the price outlook is favorable, as global availability is limited.
The value of US prune exports reached USD 160m, a 31% increase YOY, reaching a multi-year high value of exports, as both volume and prices increased. Main destination markets, in value include Japan, Mexico, Canada and Germany. US prune export volume increased by 22% YOY in 2021 to roughly 39,000 metric tons, the highest export volume since 2015. The difference in volume ranking and value ranking provides an implicit measure of quality by destination market (see Figures 8 and 9). US prune import volumes have historically been low. Imports in 2021 were over 2,100 metric tons, coming primarily from Chile.
Elevated Prices Are the New Normal
The global dried plum market is set to continue with tight supplies given a combination of factors. First, inventories were low given the short output in 2020/21 combined with a healthy demand. Second, production in France is expected to be significantly lower for the second consecutive year due to freeze impacts. Moreover, production in Argentina is also down in 2021/22 due to cold temperatures. Increases in production in Chile and California will not compensate for the lower production in France and Argentina, which will continue to support prices.
On the other hand, growers are also facing higher production costs and transportation issues that are likely to continue. The downside of elevated prune prices is that it may create the incentive for food manufacturers to find more affordable alternatives. However, the unique healthful attributes of prunes will remain as a competitive advantage that will limit their substitutability.