Andres Ribas, Vientosur: “A good citrus import-season expected in Europe”
“Even if all the citrus from the southern hemisphere will be ready to export a few weeks earlier, the northern hemisphere is experiencing an earlier end of the citrus season on each commodity on average as well. Therefore, in general we should not expect a market crash between north and south productions offers in Europe, but almost empty markets for the first arrivals.”
“South Africa, as the biggest citrus export country from the southern hemisphere, has mostly recovered from last year's shortage in exported volumes (due drought and hail at the orchards) and the production/export forecast has been raised substantially per commodity, so there are many reasons make us believe that this will be a pretty good season on average”.
South Africa is now not only trying to prevent CBS (Citrus Black Spot) strikes in the EU, but also now the FCM (False Codling Moth) could be a problem to enter in this market. Even if the government has put in place a new protocol for FCM and the growers are working hard to prevent this issue, this will definitely add risk (and costs) for the RSA to export to the EU and will surely slow down some export volumes intentions to this market.
Also last year South Africa undersupplied many “premium selection” markets in Asia, and this year South Africans will definitely have to recover their presence there, thanks to a much cleaner fruit situation at the orchards”, shares Andres.
“Added to that, a big part of the early navels from the South African Eastern Cape (biggest production region for navels of RSA) are facing a very hard time, seeing how a big percentage of their fruits dropped from the trees and many of the remaining fruits have condition and quality issues. This will surely rise the demand and price of the early valencias from this origin and the rest of the south exporter countries in general."
"Together with an earlier than expected end of orange imports from Egypt and Morocco, and thanks to the Ramadan period that starts at the end of week 21, the remaining exportable volumes at those origins will require higher pricing to match export channels to compete with their local markets. On the other hand, Spain and Morocco expect a much smaller sizing this year, which will make it more difficult to market them."
"In contrast, Argentina and Uruguay seem to be experiencing a lower production level this year in oranges, but on average (depending on each sub region), it has been affected by a 15% drop in oranges. Also a bigger demand for Uruguayan oranges from the USA is to be expected."
"To summarize, it seems that Europe promises a high level pricing entry for the southern orange productions and will probably remain at the last 2 years average pricing”, concludes Andres.
“Regarding grapefruit, South Africa is the only significant player that targets Europe during its summer. Our market so far has broken price records and expectations for the first arrivals, thanks to an empty market of grapefruit from Spain, Israel, Turkey, Cyprus and Florida. In the past month, Europe has sold 20% less grapefruit volumes, because of higher prices and very limited availability. Now some more real RSA volumes are shipped to Europe and the prices will definitely drop down a bit to the last 2-year average selling prices and volumes."
"Speaking about soft citrus, thanks to a lower production of RSA, early varieties, and an earlier season end of Morocco and Spain, the European market is performing stronger than average so far. Even after Peru doubled their exports to the EU, these extra volumes have not compensated the shortage of thousands of pallets…”
“Last but not least, the 2017 recovered Verna lemon production from Spain, threated to crash with the first lemon shipments from Argentina. Even RSA is having an earlier production peak this year and has so far avoided the EU for -50% of the volumes until now, compared to their 2016 world export distribution. Added to that, in the last weeks Argentina has experienced many difficulties to get their volumes on the water."
"First focusing on Russia, the eastern EU, the Middle East and some to the Far East, now heading back to EU as well, faces circumstantial problems like rains to harvest, union strikes (on all operational and logistic activities) and a lack of empty containers at the Buenos Aires port. Altogether these have given much more space to Spain to market their remaining (substantial) volumes correctly during May and June. Now we expect a much more normal season than in 2016, which has been surreal regarding prices and starting volumes…”, explains Andres.
“Vientosur is currently importing high quality grapefruits from South African partners (Fruitone). On week 22, the first Argentinian lemon arrivals are expected and around week 24 the first RSA lemons will complete their lemon basket for EU customers. On week 23-24, the first volumes of Peruvian Minneolas will be distributed to their commercial channels via Rotterdam and direct arrivals to other EU ports. Soon after (week 25+/-) the first Tangos will arrive to us. Fruitone’s Valencia oranges will start arriving to EU ports from week 28 and on week 30 Argentinian will follow”.
For more information, please contact:
Andres Ribas van Oosterom
Vientosur BV
Tel: +31 107 630 330
andres@vientosur.nl
www.vientosur.nl