The results of the latest Spanish orange season deserve an in-depth analysis, since by segmenting the data on production, the market, consumption and prices at origin supplied by various official agencies, important conclusions can be drawn for the new season that is just starting.
The citrus production prospects from the Spanish Ministry of Agriculture, Fisheries and Food (MAPA) for the 2021/22 campaign estimated the production at 6.705 million tons; 4.8% less than in the previous season, and 2.1% below the average of the last five years. This year, a further contraction in the production will bring the volume of the 2022/23 season below 6 million tons, the lowest figure in the last 7 seasons.
In total, almost 1.1 million tons less is expected to be produced compared to last season, with oranges as the type of citrus fruit that will experience the biggest drop. In fact, the orange production will fall by almost 750,000 tons compared to the 2021/22 season.
Last year, with the impact of imports always in the spotlight, marketing in Andalusia both nationally and internationally started at a slower pace than in previous campaigns. "This was due, in part, to the presence of citrus from South Africa or Argentina in the European market, and, in part also, to the warm temperatures recorded, which do not favor the consumption of citrus fruits," said the Prices and Markets Observatory in its initial report of the campaign. "The large-sized fruit is the one that tends to have a niche in the market these days," said the Andalusian agency a year ago, referring to the reduction of calibers due to the impact of drought. "Meanwhile, there were hardly any buying and selling operations for the fruit of medium or small size. However, the rate is expected to increase as the overseas fruit disappears from commercial establishments."
And that is what appears to have happened, if we look into the export data. Certainly a contrast with the slow pace of operations observed throughout the campaign.
The volume exported increased by 27%, but domestic consumption fell by 9.6%
Focusing on Andalusia, between October 2021 and July 2022, orange exports, which accounted for 79% of Andalusian citrus shipments during the first 10 months of the season, increased by 27% in terms of volume and by 19% in terms of value compared to the previous season. However, while shipments increased in the foreign market, the situation in the domestic market showed a very different development.
With data up to July, and in a similar fashion as the export figures, the consumption of oranges in Spanish households has fallen by 9.6% in one year (from July 2021 to July 2022). It is a considerable drop for a fruit that remains one the most consumed in the country, but also lower than the 10.6% drop experienced by all fruits as a whole, according to the latest consumption data shared by the MAPA, and also less than the (more concerning) fall in the value of the oranges consumed within that period, which is estimated at 13.2%.
Prices at origin that invite reflection
The fact is that the value reached by oranges, especially at origin, made things difficult last season. Already at the beginning of the 2021/22 campaign, the average prices of top quality Navelina oranges reached in the Andalusian fields (in week 41 of 2021, 0.21 €/kg) were 12.5% lower than the first prices recorded in the 2020/21 campaign and stood 2% below the average initial value of the last eight campaigns. In week 24 of 2022, the orange campaign came to an end with average prices of 0.11 €/kg, a value 70% lower than the average price of the last 5 campaigns.
Such low prices in a context of lower production and an unprecedented increase in costs is something that invites reflection. The same can be said about the first citrus prices of the campaign, given the drop in the production and even higher costs than the previous one, as reported by MAPA in its weekly bulletin of fruit and vegetable prices.
In week 39, "after two consecutive weeks of increases, the price at origin of Navel type oranges fell by 2%, standing at 19.45 €/100 kg (0.19 €/kg), 3.2% less than at this time last season and 9.5% below the average of the previous five."
