The grapefruit was the pleasant surprise of the summer citruses market in 2015. Everything points to prices registering a very high level again this year, at least for good-sized fruits.
The summer season started on a clearer market than in 2015. Florida, with lighter volumes year on year, finished its campaign in the first half of May, to the distress of operators facing fruit shelf life problems. The Mediterranean suppliers began to wind down the campaign even earlier than in 2015. The last volumes available, which represent limited quantities, should all have been sold by the end of May.
South Africa, practically alone on the Community market since the beginning of the decade, is registering an export potential among the lowest for the past decade (12.4 million boxes, a level down by approximately 20 % from 2015 and the four-year average). While the fall does include a structural component (the cultivation area lost approximately 700 ha between 2012 and 2014), it can be explained above all by cyclical factors. On the one hand, 2016 is a negative alternate bearing year. On the other hand, and above all, it is this crop, 75 % of which is packed into the country’s northernmost provinces, which has been hardest hit by climate problems. The drought has been particularly pronounced in the country’s three main production areas (Letsitele, Onderberg and Hoedspruit, which was also hit by violent hailstorms). Furthermore, competition on the most lucrative markets in Asia will remain intense. True, Japan, where demand is highly elastic, is unreceptive to the trend of rising prices, and absorbs more limited volumes every year. Nonetheless, this country remains South Africa’s number one market for the grapefruit, and the big devaluation of the rand against the yen (greater than its devaluation against the euro) should restore some of the market’s sheen. Furthermore, other Asian markets have become major destinations, and more lucrative than Europe. There is a strong growth trend in shipments to China (28 000 t imported in 2015, including Hong Kong and Chinese Taipei, as opposed to less than 10 000 t in 2012). It is also the case for South Korea (10 000 t imported in 2015, as opposed to zero in 2012).
The fruit sizing will probably not fall as much as predicted. The spring rains seems to have compensated somewhat for the adverse effects of the drought. Selective harvesting should also help gain a few millimetres, as well as greater staggering of the incoming shipments (one of the keys to the success of the 2015 campaign). It will be particularly welcome in 2016, with the start of the Mexican season set for a steeper rise than in 2015. Let’s hope that the attractiveness of the prices does not disrupt this fine strategic planning...
Some additional volumes from Zimbabwe (production shortfall 10 %) and Swaziland (production increase of 10 %) will also be available.
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