The promising future of Uruguayan citrus in the U.S. market

After 20 years with no access to the U.S. market for Uruguay, the company Cítricos Caputto has started exporting clementines and Navel oranges.

The U.S. market has received 15% of the company's exports so far this year, while another 50% was exported to the EU, almost 20% to Russia and the rest to different countries.

"The situation in Europe is bizarre. The Russian veto should have led to a drop in prices in the EU and shortages in Russia, allowing us to ship our citrus to the latter at a higher price. However, this has not really been the case," says the economist Martín Mandressi, General Manager of the Industrial Department of Cítricos Caputto. 

While the Valencia orange harvest will still last for a month, the last large shipment of Uruguayan citrus was made this week, which seeks to arrive prior to the traditional rise in tariffs of 15 October in the EU, enforced every year when their citrus season starts. The remainder of Caputto's harvest will be shipped mostly to Brazil and Russia.

South Africa, one of Uruguay's main competitors, has a very strong presence in Europe. Favoured by a FTA, it manages to introduce its products to the European market with prices ​​between 15% and 20% lower. But the frequent sanitary problems, such as the current outbreak of Black Spot, forced them to stop exporting their oranges. 

"The halt in South African orange imports came when the season was already at a very advanced stage, thus making it near impossible to react," explains Martín. 

Uruguayan Valencia oranges have different characteristics to those of the Brazilian produce. It has a more sour taste, which allows us to export to different niche markets. Brazilian oranges are more suitable for the production of fruit juices, where sweetness is most appreciated, and the Uruguayan fruit is normally used in the manufacture of beverages with a lower percentage of fruit juice.

The Caputto group has been producing fruit nectars under its own brand for two years, becoming a leading name in the Uruguayan market.

Its plants process 35,000 tonnes of fruit per year, mostly oranges and mandarins, generating about 2,700 tonnes of juice concentrate per year. 

"Nowadays citrus processing accounts for almost 20% of Caputto's operations, but the idea is to increase this share by adding value and gaining new markets," affirms Martín.

The season has been really good for Caputto, highlighting how important it has been to return to the U.S. market. The future is full of opportunities for growth, but also great challenges to overcome. 

"One of the biggest problems we face is the rising cost of labour. In recent years, wages have sharply increased, but what is more concerning is the loss in productivity. It is hard to find skilled labourers or with prior experience," states Martin. "All salary increases above inflation should go hand in hand with a growth in productivity," he adds.