Good prices and gap between South Africa and Florida season expected

Worldwide, the cultivation of grapefruit is under pressure. Disappointing results encourage Mexican growers to uproot plantations, scientific studies showing a negative correlation between grapefruit and the efficiency of certain medication put pressure on consumption, and Citrus Greening poses an extra challenge for the growers. Still, the market at the moment is good. Growers in South Africa and traders in Europe are pleased with the good prices.

One of the factors contributing to the decreasing consumption are a number of scientific studies, the first of which published as early as the 1970s, which concluded that grapefruit can influence the effects of medication. Medications reportedly affected by grapefruit included those against high cholesterol, high blood pressure and anti-anxiety drugs. An additional disadvantage is that grapefruit is most popular among the elderly, which is also the group that most likely uses one of these medications.

On the production side, the acreage is down in virtually all US states, both for red and white varieties a decreasing acreage is noticeable. The cultivation of white grapefruit is losing ground faster than the red varieties though. Within the red varieties, demand for the darker coloured grapefruit is highest. At a variety level, this concerns Star Ruby, Flame and Rio Red.

In Texas alone, the acreage in 2014-2015 was further expanded compared to the previous season. In California, the acreage remained stable. This acreage growth, however, doesn't translate to a larger production volume calculated in boxes. Those figures show a decrease compared to the previous year.

Citrus Greening appears to be less disastrous for grapefruit than for other citrus, however. That doesn't mean the production isn't threatened by the disease, but the consequences for orange and mandarin growers are bigger.

Season Florida delayed
Florida, one of the most well-known production regions in the world, has had a relatively hot and humid summer. This causes the fruit to ripen slower, and the season to start later than normal. A delay of two to three weeks is expected, and more small calibres will enter the market. Growers that do meet the minimum requirements for Brix have started with the harvest, with a price of 30 dollars per box they receive a good price. At the height of the season, the prices generally fluctuate between 12 and 14 dollars per box.

On the domestic market, Florida competes with the growers in Texas, where the acreage of the Rio Red is increasing. On the export markets, Florida has a firmer foothold. In the Indian River region, famous for its good quality grapefruit, the season is expected to start on October 5. January and February are the high season months in fruit quality, but demand peaks in the weeks around Thanksgiving and in the run-up to Christmas.

Grapefruit sector Israel recovers after years of losses
The grapefruit export recovered last season, after a dip in 2013/2014. In week 22 (ending May 30), the peak of the export season, the counter was at 5263 tonnes. This means the volume ended up 37 percent higher than in the previous season.

In the past four years, the acreage did decrease, but in the past season that seems to have bounced back a little. The reversal also seems to be caused by the markets in the Far East, where demand is increasing, and the younger generation is also interested in the fruit again.

This season, the export is expected to end up on similar levels as the previous one. The start has been good, and positive results are expected for the growers.

Europe
Between November and April, Florida is still the biggest supplier of grapefruit for the European markets. There is competition though, from Israel, Turkey, Mexico and Spain. France is one of the biggest European markets for this citrus. Other major markets are the Netherlands, Belgium and the United Kingdom. Poland, Sweden, Denmark and Switzerland also buy a lot of grapefruit from Florida.

Spanish harvest -12%
Spain is expecting a grapefruit harvest of 72,000 tonnes this year, that's 12 percent less than in the previous season, when 81,900 tonnes were harvested. The decreasing yields are, like for other citrus, caused by the weather. In addition, in some regions the grapefruit is replaced by lemon cultivation. The export figure is expected to amount to 60,000 tonnes. Last year, the export amounted to 63,156 tonnes, 61,000 tonnes of which were within Europe. Major markets are Germany, France and the United Kingdom. A small volume was exported to third countries, with Saudi Arabia and the United Arab Emirates being major buyers of the citrus.

The Southern European country has attained a good position in Europe at the expense of Turkey. One Spanish grower says quality problems and abundant use of crop protection products have caused Turkey's declining market share.

The French consumption is under pressure, and yet the market wasn't that bad this year, one trader says. Prices for grapefruit were high, partly because of a virtually empty market. The first Mexican grapefruit were imported at the beginning of the month, but one importer reports favouring the South African ones. According to the importer, Mexican grapefruit are too green, and the flavour is not as good as that of the South African counterpart.

One importer also blames the decreasing demand on the changing market. The grapefruit doesn't shine when it comes to convenience, and consumers more often prefer an easy peeler or other convenience product, he claims. Demand for grapefruit peaks in spring and in September/October. For the import, there's a clear ranking, led by Florida as a 'preferred supplier' because of quality. South Africa is a good alternative as a supplier of produce from the southern hemisphere. Israeli grapefruit are of average quality and have an average price, and are thus also suitable for the French market. Turkish, Egyptian and Spanish grapefruit, this importer says, have a low price, but are also of lower quality. In addition, grapefruit are grown on a small acreage on the Southern French island of Corsica. The production is intended completely for the French market.

The British market has had a strong season with South African grapefruit. The Star Ruby did well in particular, prices are around 14 to 15 pounds (19-20 Euro). The last South African grapefruit are entering the market, after which there's a gap in supplies before the Turkish, Israeli and Spanish products enter the market. There are some limited supplies from Mexico.

In the past, the Netherlands had several importers of Florida Grapefruit, but the number of specialists has gone down in recent years. These specialists only have words of praise for the Florida Grapefruit: "Not everyone has customers for it. True specialists are still able to value the grapefruit from Florida. Florida grapefruit has a bit more skin damage, true, but it is the tastiest, with twice as much juice, a thinner peel and a much higher brix than an orange." Prices for the grapefruit are good, at 17 to 18 Euro and high demand. Importers talk of 'gold prices' like they haven't seen in years.

At Belgian traders, only small volumes of grapefruit can be found. Trade awaits the start of the season in Florida, because the consumer has a clear preference for these grapefruit. The high prices, up to 18 Euro, with which South Africa ended the season, are interpreted by trade as a sign of changes in the global market. Europe is no longer the only market for the citrus. The start of the Florida season will go well, traders expect. With high prices for South African grapefruit and a nearly empty market at the start of the season, things are looking positive.

The prices in Germany are good, and are expected to remain good for a while. Traders are expecting a positive season. During the last season, prices were still below the cost price, this year the South African and Mexican grapefruit will yield more. Demand peaks during the winter months. The German consumer has a clear preference for the red varieties, there is no demand for the white ones. According to the German trader, demand for white grapefruit is highest in Japan and Italy.

The harvest is expected to begin in week 43, two weeks later the harvest of white grapefruit starts. During the season, the Star Ruby, Ruby Red, Rio Red and White Marsh varieties are harvested. Major export markets are Commonwealth of Independent States (CIS; former Soviet republics), with Russia as the most important market, followed by Europe, the Middle East and Asia. Spreading the export to different markets is important, one trader says, because every market has its own preferences for sizes and varieties.

The season is nearing its end, at the end of this month the last grapefruit are harvested. The export to Europe had ended already, however. Exporters look back on the season with satisfaction, all markets yielded good results. That the grapefruit export went well this season too, generally grapefruit is problematic, is partly thanks to a more spread out export, one exporter explains. "We've had a dry summer during the rain season, so there were concerns about the sizes of the grapefruit," one exporter says. "Large calibres are most popular." Many citrus growers want to have the grapefruit packaged as quickly as possible, to clear the lines for the Valencias. This year, there was a group named 'TASTES', keeping an eye on the export and managing the available volume. They looked at demand, rather than just putting the products on the market. Often a large volume is just put onto the market at once, causing prices to plummet, while supplies were more even now.

South Korea is a promising market. The borders have now been open to South African grapefruit for the third year in a row, the Korean market bought about 600,000 to 700,000 boxes. The Chinese market is also showing positive signals. In Asia, there is no competition of the pomelos, apart from it being a different product, the seasons don't overlap.

Australia smells export opportunities
In the southern part of the country, South Australia, Victoria and New South Wales, the harvest is in full swing. Growers are pleased with the size 40 (100 mm) and the quality of the fruit. Demand for grapefruit is expected to go up with the temperature rising and the supply of mandarins going down. On the export markets, Australia also sees opportunities, with a gap between the South African season and the start of Florida. The export opportunities are mainly found in China, Japan and India. The signed trade agreements contribute to the potential, but in Japan, for instance, there is also the negative link between grapefruit and certain medication. That could inhibit trade.

Asia growth market
The Asian market still has an increasing interest in the grapefruit. The popularity in China is particularly high surrounding the Chinese New Year.

The Chinese market depends on import. There is a small production, but most consumers prefer the (honey) pomelo. The import mainly comes from Thailand, Israel, Argentina, Peru, Spain, Cyprus, South Africa and Australia. The import from South Africa is expected to amount to 1.4 million boxes this year. On the Chinese market, however, the grapefruit can also cause confusion: the Chinese word for pomelo is often translated as grapefruit, and vice versa.

Egypt mainly exports to Belarus
Belarus is the main buyer of Egyptian grapefruit, according to an Egyptian trader, particularly for the white varieties. The Ruby is popular in Dubai and the other countries in the Middle East. Other buyers are the Netherlands, Poland and East Asia. Egyptian consumption is low.

Every week, FreshPlaza publishes an overview of the market situation of a product in a worldwide context. With these articles, we're aiming to give an idea of a global market that's becoming ever smaller as a result of globalization. Next week, the spotlight is on melons.