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Covid-19: opportunities and challenges for the fruit and vegetable sector

Since late March, negative impacts of social distancing in Brazil, due to the coronavirus pandemic, have affected both the economy and the sector of fruits and vegetables. In June, measures have become less strict in many states, which can partially favor the consumption of fruits and vegetables.

 

However, it is important to consider that, from now onwards, we will face a period of economic difficulties and of mobility restrictions. The “new normal” may only occur after the discovery of a vaccine or an efficient drug to fight coronavirus. Then, when the “new normal” takes place, new consumption patterns, probably different from those adopted earlier by consumers, will be stablished.

 

As a result, the sector needs to reconsider its investments and decisions based on the fact that the “economic normality” will take a longer time to occur compared to the pandemic itself. Several consulting firms say that the “new normal” may only happen in 2022. In the short-term, the second semester is likely to present economic indicators that are more negative than the current ones, such as unemployment and the decrease in the purchase power of consumers.

 

OPPORTUNITIES DURING THE PANDEMIC – In spite of difficulties, the agribusiness, in general, has kept its activities because they are essential in economy. In general, people now have their meals at home, with more time to prepare food, which can boost sales of vegetables. Moreover, there is a strong appeal for the healthy eating, which can increase the demand for fruits and vegetables.

 

Even after the end of social distancing, the trend to prepare meals at home will remain, likewise the concern about having healthy habits. Another strong trend is to buy food online: supermarkets are innovating trades through apps, sellers are developing models to deliver at home or drive thru and farmers are delivering products directly to consumers, closing deals through social media.

 

Another opportunity is the international market. The fruit sector may take advantage of Real devaluation and the partial disorganization of the agriculture productive system in several countries in Europe and Mercosur and in the United States – for the vegetable sector, the opportunity is in Mercosur. Fruit exports, even during the pandemic, are moving at a good pace, except for papaya, due to the interruption of flights – mango, grape and lemon shipments registered a good performance in the first three months of social distancing in Brazil.

 

WHAT CHALLENGES WILL THE SECTOR FACE? – The decrease in the purchasing power for Brazilians and measures that limit activities for restaurants, schools and markets, in general, may reduce the demand for fruits and vegetables in the second semester. Moreover, during winter, the productivity of vegetables increases, but the fruit consumption reduces. Another negative aspect is that, even with less strict measures, schools and restaurants are not likely to operate normally in the second semester.

 

In addition, it is important to mention flowing difficulties of the productive chain, mainly through distribution centers. In general, the longer the chain, the more difficult it is to coordinate and flow the product. More perishable fruits and vegetables are mostly affected by social distancing measures because consumers are purchasing less.

 

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