"Limes by air: "Interesting phenomenon in Europe"

During the first three weeks of May, the European market was such that it allowed for air-shipped limes from Mexico to Europe. “Market circumstances that make it interesting to fly limes are quite unique and this year’s May was one of those fascinating windows. Prices ranged from 11 to 13 euro per box. The variables at play which define the availability are so unpredictable, that there is really no saying when this opportunity will happen and if it is going to return,” says Don Limon limes trader Diego Morales.

Times when limes are flown in are typically short windows and they have no connection with the seasonality of fruit. “What causes price peaks that allow for air transport are combinations of availability in Mexico, prices and stock movements inside the country, combined with price levels in Europe and the availability of space in the freightliners,” Morales explains. “Limes by air are unlike ready to eat mangoes, which are picked when ripe and flown for optimal taste. And while the quality of limes is more susceptible to harm compared to lemons and oranges, the delivered quality is still pretty much on the same level whether they come by sea or by air. The choice for air transport is motivated by shortages and price levels.”

To have limes by air when there is little fruit means availability of fruit for customers. “We’re primarily giving our customers good service when they can have fruit with us while the market is really short. As soon as more ample supply by sea arrives and prices drop below 11 euro per box, the air shipments are halted and the customers receive the regular sea freight fruit.” Market prices of limes are generally between 4 and 10 euro’s per box, while being between 4 and 8 most of the time. “When prices go above 9 euro, this is considered a great market. At levels between 4 and 6, this creates pressure in the chain. A rough count will give a cost price around 4 euro per box in Mexico. Added to that roughly 1 euro for logistics and 50 cents for trade margin, this results in a minimum delivered price of 5.50 euro. As prices move up and down below or above this level, the operators in the chain need to break a profit on average. But it’s a volatile market,” Diego explains.

The dynamics of the limes market are influenced by what happens in the United States. “Between 400 and 600 trucks of Mexican limes are loaded for the USA every week. Values for these loads may vary between 6k to 100k USD per truck. In 2015 there was one particular month when prices averaged around 50k USD per truck. But most of the times the value is between 6 to 15k USD. The volumes to Europe are much smaller, comparatively, with 60 to 80 containers per week. Yet the
average value of these containers are considerably higher than to the US, with 20 to 60k euro per container. With its smaller market size, Europe has more stability to offer,” says Diego Morales in closing.

One element that has been driving demand for the limes that Diego provides, is the co-branding strategy with Havana Club. “When people can have their mojito made with Havana Club rum together with a Havana Club lime, this will always attract fans. It’s been a really exciting time to market both Don Limon branded limes along with Havana Club branded limes. But if anybody is looking to hear more about this, they better contact me themselves,” says Morales.

For more information:
Diego Morales
Don Limon GmbH
Tel: +49 (0)40 3095499 50
Email: DMorales@don-limon.com
www.don-limon.de