Guayaquil, Ecuador
February 28, 2003

Ecuador, the world leader in the exports of yellow passion fruit juice and concentrate, processed during 2002 a total of 102.000 MT of passion fruits, compared to 125.000 MT in 2001. That is a further reduction of 18 % year over year as expected.

The final crop figures of the second half of 2002, came at the mid range of our estimates at 56.542 MT, compared to our previous forecast of 50.000 to 60.000 MT of fruit as per our last August 7th report.

Crop forecast for the first half of 2003

According to the consensus gathered among the main local processors, for the first half of 2003 the crop is expected to yield between 55.000 MT to 60.000 MT of fruit for juice processing(*), that is, an increase between 20 % and 30 % compared to the 45.580 MT of fruit processed during the same period in 2002.

It is important to mention that despite the expected improvement in the coming crop, this is only the first step of a comeback if we consider the sharp declines we saw in 2001 (50% less than 2.000 crop) and 2002 (another 18 % less than 2001), so anyone assuming a bumper crop will be completely misled.

As detailed in our August report, the increased production expected is a direct consequense of 1) increased demand for fruit 2) higher fruit prices, and 3) the promotion of new plantations and effective renewals of traditional farms.

To determine how effective these renewals or new farms will be in the short term is again difficult to predict, as most of the passion fruit plantations in Ecuador are very small in size and scattered around several production areas.

Weather will also continue to play a significant role during these first 6 months of the year, as we still have an "el niño" weather warning into effect. As we all know, rain plays a vital element in the fruit-forming stage of the crop but excess water can be equally devastating to the production in the very short term. Therefore, only the final numbers of these first 6 months will give us more data to allow us offer a near accurate forecast for the remaining of this year.

Needless to say, the Ecuadorian passion fruit industry continues to build solid steps towards maintaining its leadership in the market by providing clear and timely information about the crop through the EPPA as well as securing adequate levels of supply year round by careful planning.

Despite the traditional ups and downs known to the trade, our industry has clearly succeeded in providing the world juice bottling industry the confidence they need to continue increasing the usage of passion fruit juice in their products. Most would agree today that the traditional shortages and extreme price peaks of passion fruit juice as seen for years is now a thing of the past.

In conclusion, as we had anticipated in our last August report, we matched our total crop guidance of 95.580 to 105.580 MT of fruit for 2002 with pinpoint accurancy, and we further expect production to continue improving to near-normal levels for the remaining of the year and all through 2004.

Actual crop figures for the first half and estimates for the remaining of the 2003 crop will be released by new EPPA report around July of this year.

Therefore for this particular report we are not giving any guidance for the full year yet.

Sincerely,

EPPA, The Ecuadorian Passion Fruit Processor's Association.

Disclaimer: EPPA, The Ecuadorian Passion Fruit Processor's Association, is an informal, non-profit association that solely relies on its current members who willingly and voluntarily agree to supply the information to make this report. EPPA, nor any of its members, writers, friends or anyone involved directly or indirectly with EPPA can guarantee or verify the aunthenticity of this information, and they are therefore not liable or held responsible of any claim arising from of its past, current or future use or misuse by anyone. We reserve the right to make any changes of this report at any time.

For more information please contact us by tel +5934-4-2681989 (fax: 2681987)

(*) Above data figures are approximate and correspond only to fruit processed for the industrial production of passion fruit juice and concentrate in Ecuador. It takes in average 12 kilograms of fresh fruit to produce one kilo of 50 brix concentrate.