While the season starts only in May, prospects in New Zealand are positive. In California, the season has moved to another district, but expectations are also positive, as a longer season has been predicted due to the rains. In Latin America, the situation is much more uncertain. Estimates for Argentina are not yet available, but there are reports of plantations which have been flooded. In Brazil, the domestic political and economic situation is a source of uncertainty and Colombia has been barred from the U.S. market. Europe seems to be doing better. There are good vibes in France, Germany and Belgium. Spain has a smaller volume available, so prices are higher than last season. In South Africa, the outlook seems positive. Rainfall has been registered in the Eastern Cape which has replenished the reservoirs.
New Zealand expects good season
This year may be a good year for New Zealand's lemon exports. The growing conditions are good and the export market positive. The season kicks off in May, so real predictions are difficult to give. For the Meyer lemons, the first estimates look good. Prospects point to an increase in volume of up to twenty percent compared to last year. The U.S. and Japanese markets show particular interest in this variety. These two markets are the backbone of the export business. China is also an emerging market. The volume will continue to increase with new plantings coming into production.
Weather decisive in Australia
The different citrus growing areas in Australia have all had to contend with weather issues. The northwest of Western Australia is taking the impact of a drier summer into account. In Queensland, the fruit has been damaged by hailstorms. Some growers have had to endure two hailstorms in November and suffered significant losses in both volume and quality.
U.S.: Good season in the coming months
The three major lemon suppliers for the U.S. market are Mexico, Chile and Spain. The fruit that is currently being brought into the country, according to an importer, is of the same quality as the domestic crop in California, Florida and Arizona.
The season in California has shifted from the desert to the San Joaquin Valley. This season was a disappointment for the desert lemons, with reduced yields and lower quality. The San Joaquin Valley expects a better season. There has been a lot of rain and more showers are expected, which according to a trader is good for the harvest and result in better quality and bigger sizes. This will also lengthen the season. Normally, the campaign lasts until May, but due to the rains it may be extended until June. In the short term, though, there may be some supply issues, as the harvest cannot be carried out while it rains.
Fewer Spanish lemons leads to higher prices
Lemon volumes this season are 23 percent lower than last year. This is due to the heat waves and poor weather conditions during the growing season. Because of this lower volume, Spanish exports are focusing on the European market, which accounts for 90 percent of sales. Exports are going also to other markets, including Canada, Brazil, South Africa and the Middle East.
This smaller volume is leading to an upswing in prices, with higher averages than last year. This season, prices stand at around 60 cents per kilo, while last year this figure didn't exceed 20 cents. In Eastern Europe, Spanish exporters encounter less competition from Turkey. Turkey also has a smaller volume and higher prices. Spanish exporters are glad that Russia has not included Turkish lemons in the boycott. Traders are now waiting for the end of the Turkish season.
The temperature in Spain remains unnaturally high, above 20 degrees Celsius, so the Primafiori season will likely finish earlier. As for the late Verna, it is still uncertain how the quality and volumes will be affected by the higher temperatures.
French import mainly from Spain
The large majority of lemons in France are imported from Spain. For conventional lemons, prices stand at around 1.70 Euro, while organic lemons are 1 Euro more expensive. Additionally, there is some supply from Turkey. These lemons have the same price level as the Spanish, but French traders have a preference for the Spanish product.
Belgium looks back on good start
Since early October, Belgium has been importing lemons from Spain. There was room in the market then and the season had a good start, with high prices of around 2 Euro. With the increased supply from Turkey, prices have taken a dive. At the beginning of the season, there were concerns about the quality, states an importer. Lately, the quality is better and sales have been going well.
Germany: lemons for winter, limes for summer
The demand for lemons is high in the winter months. Besides the Spanish lemons, there are also organic lemons with leaf from Italy available on the wholesale markets. The supply is good and prices are reasonable. A 15 kilo box of lemons (100 pieces) costs 20 Euro on the wholesale markets. In general, traders have observed that the market prefers lemons in the winter months, while limes register a higher demand in the summer months.
Israel mainly for domestic market
While Israel is a major citrus producer, its lemon harvest is small. The production is often insufficient to meet demand in the domestic market. Therefore, the export is sporadic and mainly aims to fill gaps in the market.
This season, the country exported 261 MT of lemons, while last season this figure amounted to nearly 2,000 tonnes. A year earlier, exports amounted to 440 tonnes. The majority of exports are intended for the European market, with some small volumes going also to Japan and Singapore. The main obstacle for Israeli exporters is the lower quality of the fruit compared to that of the big players in the market. Often, the lemons are harvested green and then ripened to be able to fill gaps in the market, which, however, entails quality problems.
Prices in the domestic market have increased in recent years, since producers have not been able to keep up with the growing demand. The average price stands at around 6.91 shekels (1.60 Euro) per kilo; the minimum doesn't fall below 5.11 shekels (1.20 Euro) and the maximum reaches around 8.41 shekels (1.96 Euro). On average, prices are five percent higher than in the same period last year.
Argentinian crops possibly threatened by El Niño
Even though the start of the season is still far and there is little to report when it comes to production prospects, El Niño is likely to affect the campaign's development. In the north of the country, close to the border with Uruguay, plantations have been flooded; however, the extent of the damage is still unclear.
Brazil and Colombia await tough season
While Brazil produces lemons all year round, the domestic situation has become difficult. The rumbling political context is likely to lead to instability in the market. In Colombia, exporters are facing the closure of the U.S. borders to their fruit. There is, however, a lot of uncertainty about this situation, because there appears to be plenty of demand for lemons.
South Africa: welcome rain in Eastern Cape
Previously, there have been some reports of drought in South Africa, although in the weeks before Christmas there has been rainfall. According to a trader, the Eastern Cape has actually replenished its reservoirs. The Western Cape, which accounts for 20 to 25 percent of the citrus harvest, is still hit by drought. Demand has increased as well. Lemons are used as a substitute for limes, whose supply is unstable. The focus on the health properties of lemons has contributed to ensure a growing demand.
The African country expects growth in the coming years. Producers are satisfied with the positive results achieved by the crop and the good prices. The major export markets in 2013/2014 were the Middle East (34%), the Far East and Asia (22%), Europe (17%), Russia (16%), the United Kingdom (6%) and North America (4%).
Each week, FreshPlaza and AGF.nl publish an overview of the market situation of a given product in a global context. With these articles we offer a picture of a world market that is getting smaller by globalisation. Next week, we will focus on onions.
