High Energy Costs Still Affecting Dutch Greenhouse Tomato Production and Trade

Comparison of Dutch Tomato Export Volume and Energy Prices from 2018-2022

Source: Tridge and Statistic Netherlands

In 2022, the Netherlands' production of greenhouse vegetables declined 7.9% YoY to 1.8M MT. The most significant fall was recorded for tomatoes (12.5%) and cucumbers (9.1%), mainly due to the high energy cost required for heating the glasshouses. Electricity cost reached a record high in August 2022, at over EUR 447/MWh. The high energy costs are primarily due to the country's heavy reliance on imported natural gas and government taxes and levies on energy use.

Dutch tomato production fell by 110M kg to 770M kg in 2022 compared to the previous year. Cucumber production was 400M kg last year, 40M kg less than in 2021. Because of high energy prices, cultivation of these crops began later and ended earlier. As a summer crop, Tomatoes require a specific temperature range, humidity, and light levels to grow appropriately, and any fluctuations in these conditions can lead to lower yields and lower-quality tomatoes. Using less energy for heating equals longer production. At the same time, farmers miss out on early entering market spots when the price is highest due to a lack of available quantities.

Germany remained the Netherlands' largest export market in 2022, with a total value of USD 0.85B of fresh tomatoes, an 17.47% YoY drop. On the other hand, exports of fresh tomatoes to Italy and Spain skyrocketed in terms of value by 46.22% and 30.51% YoY, up to USD 7.9M and USD 2.7M due to drought and high temperatures consequences in these countries.

By late 2021, energy costs were already so high that Dutch growers decided to plant later. As a result, supply was lower than in 2021, particularly at the start of 2022. Dutch farmers have shifted their focus to crops such as bell peppers and aubergines, which can be grown more energy-efficiently in the winter. Recently, energy prices have fallen, and the average wholesale electricity price in the Netherlands in January 2023 was EUR 126.13/MhW, a 33% YoY decrease. Tridge predicts that greenhouse tomato production in the Netherlands will continue to decline in 2023 due to uncertainty about the price of electricity, which will increase opportunities for Morocco and Türkiye to expand in the EU market.