Lycopene makes tomatoes red and gives other orangey fruits and vegetables their color. Processed tomatoes have the highest amounts of lycopene, but watermelon, pink grapefruit, and fresh tomatoes are also good sources. Some studies suggest that eating processed tomatoes with some oil or fat (for instance, tomato sauce) makes it easier for your body to absorb lycopene, compared to drinking raw tomato juice.
Lycopene is a powerful antioxidant. Studies suggest that people who eat a lot of tomato products have a lower risk of cancer of the lungs, prostate, and stomach. Lycopene may also help protect against cancers of the cervix, breast, pancreas, colon, and esophagus, but that has not been proven yet.
But if you like tomatoes and don't have an allergy to them or other medical condition that prevents you from eating them, there's no downside to eating a diet full of tomatoes -- so enjoy.
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