Citruses will be an expensive product in Europe during the summer 2016 season! The export forecasts for the main Southern Hemisphere supplier countries indicated lower levels than last season, or lower than expected. To blame is the El Niño phenomenon, which has been intense this year, causing a severe drought in certain parts of Southern Africa and heavy rains in certain South American countries. In addition, the European market is set to be very open. Volumes of Mediterranean citruses available at the start of the summer campaign are distinctly below normal, and often limited to a few leftovers, as the major shortfalls from key players such as Spain have caused volumes on the market to wane early. Furthermore, the supply of competing summer fruits should be rather lean. Hence it is the tension rather than the pressure that will need to be managed for a good part of the citruses in the range.
The Southern Hemisphere’s main citrus exporter, which controls two thirds of the world citrus trade on its own during the summer period, has for the first time since the beginning of the decade registered downward export forecasts (- 6 % according to the Citrus Growers Association). This fall is the consequence of particularly unfavourable weather in the north of the country (Limpopo and Mpumalanga). The decrease in precipitation, which is frequent in this part of Africa during an intense El Niño phenomenon, was particularly marked, while temperatures were well above normal for the season. Furthermore, hailstorms of extreme intensity hit the Hoedspruit region. Hence production of Valencia and the grapefruit, flagship crops for the north of the country, should see a considerable fall. The sizing should also decrease, although the fall could ultimately be smaller than predicted thanks to some good spring rain. This production shortfall will play a structuring role on the world market for these two specialities, very much controlled by South Africa during the summer period. Conversely, productions in the south of the country suffered less. The export potential is set to be near average for the past two seasons for Navel. It should actually see a considerable rise to reach a historic level for the lemon (14 % above average) and easy peelers (11 % above average), varietal groups for which planting has increased greatly in recent years.
The distribution of South African volumes is a more pointed issue every year, such is the diversification trend of the country’s export outlets. With 650 000 to 700 000 t per year, the EU-28 remains a key market, but now has Asia on its heels (550 000 t in 2015), followed a little further back by the Middle East (approximately 380 000 t in 2015) and North America (approximately 90 000 t). True, the Community market has assets to offer this season (prices probably high, and a favourable exchange context), although management of sanitary problems remains complex. Nonetheless, South African exporters should not neglect these alternative outlets, generally lucrative and strategic by virtue of their growth potential, with perhaps a slight cyclical cloud this season over the Middle East, where the economic situation has been damaged by the weakness of oil prices. Russia’s position seems less solid, and redistribution to the EU-28 of some of the 90 000 to 100 000 tonnes allocated to it annually is a possibility.
Will 2016 mark the end of a nightmarish period for Argentinean citrus exports? Probably, though volumes aimed at the international market, which have halved in less than ten years, should only see a modest climb. True, the harvest is at a higher level than in 2014 and 2015, but it has still not regained its full potential. The wounds of the severe frost of 2013 and the drought of 2014 have eased, but they have left their mark, especially on old orchards. In addition, the rainfall has been excessive and impeded production, a rotten spring having followed a very wet winter (indeed major floods hit the country’s coastal region in April). This abnormal rainfall will also have multiple adverse consequences for exports. Most obviously, an increased propensity to sanitary problems, in a context of very high vigilance from the European authorities, especially with regard to black spot. Clearly, the reinforced inspection measures adopted by the Argentinean phytosanitary protection body (SENASA) will have some impact on volumes bound for the EU-28. Furthermore, a larger proportion of fruits than usual could be oversized or not meet the requisite quality criteria for export (raised in recent years for the lemon by the “All lemon” charter). Furthermore, we should highlight that the juice and derivatives market is less lucrative than in 2014 or 2015, but it is still highly lucrative. True, the more export-friendly economic policy recently implemented by the Macri government, is restoring hope to professionals (end of the 5 % tax on exports, decoupling of the peso from the dollar). Nonetheless, the recovery will be only gradual: inflation is continuing to soar (increase of approximately 30 % this year in wages and energy), and is partially wiping out the gains from the exchange rate. A very significant proportion of orange and easy peeler exporters remain in a highly precarious economic situation, after a succession of very difficult campaigns, as they were unable to register their orchards for exports due to lack of resources to apply the sanitary protocols. So exports of these two varietal groups might not see the moderate increase trend in exports expected for the lemon.
No production forecasts have been issued at the time of going to press. Nonetheless, it appears that the weather here has also been highly atypical. The north of the country, where the vast majority of production is based (particularly easy peelers and orange), was very wet, with the south conversely remaining particularly dry. Just like in Argentina, the country’s authorities reinforced the black spot inspection measures, after a 2015 season when 70 positive batches were intercepted on the Community’s borders. Nonetheless, the sanitary risk seems to be relatively high this season, whereas inspections will be particularly strict. Hence exports to the EU-28 could well hardly rise at all from last season, especially for the country’s big speciality, Valencia. It is a pity that these adverse cyclical conditions are overshadowing the sector’s ongoing renovation trend. The process of varietal conversion, supported since 2010 via the “plan citricola” is still progressing (old orchards of Ellendale and Valencia being uprooted in favour of certified plants of more competitive varieties), and irrigation is slowly gaining ground (approximately 75 % of export orchards equipped). Furthermore, the diversification trend of export outlets will follow its course, in favour of the US market which has been open since 2013.
After a 2015 with practically no changes, Peruvian exports should recover the high growth tempo seen since the middle of the last decade. Volumes on the international market should reach 130 000 t in 2016, a level marking a rise of approximately 15 % from the previous season. There is no surprise in this, since the cultivation area is expanding by approximately 1 000 ha per year according to ProCitrus. As usual, exports will be more than 80 % easy peelers. W. Murcott will continue its rise to prominence, alongside Satsuma and Tangelo (especially Minneola), which form the basis of the varietal range. Nonetheless, shipments to the EU-28 should not see a considerable rise. Just like their Argentinean and Uruguayan counterparts, Peruvian exporters should continue moves to diversify their outlets. This is a necessity given the growth prospects for production (approximately 8 000 ha of young plantations in place for the export sector). The bulk of development efforts should involve the US market, just as lucrative as the EU-28, because of its proximity and interesting growth prospects. The Asian markets are also among the strategic avenues, as are neighbouring Latin American countries.
The summer market supplier with the biggest shortfall this season is without doubt the Mediterranean. As a general rule, some late Northern Hemisphere produce remains available during the first part of summer. This trend has been considerably reinforced in recent years for certain products, with in particular the development of a wide range of super late Navel oranges (Powell, Chislett, Barnfield, etc.), and more recently regained interest in planting Verna lemon in Spain. However, the shortfall from the key Mediterranean players such as Spain has been such that the European market should be practically empty this season from the beginning of June. Hence the Southern Hemisphere campaign is opening in a context of particularly high prices for the last of the Mediterranean produce.
The competition from the last pip fruits and star summer fruits (peach, nectarine, apricot, etc.) should be weaker than usual. True, the European apple stocks registered in early April a level approximately 20 % above average. However, sales accelerated in April, especially because of the delay in European stone fruit production. They fell behind their early schedule because of an often cold and rainy spring, which could well have adverse consequences on production levels. The fall has been confirmed for the apricot (- 11 % on the average European level, with more pronounced drops in France and Italy). It is strongly suspected for the peach, although we are still awaiting the official figures for confirmation
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