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OVERVIEW GLOBAL LIME MARKET
After a period with a lower supply of Mexican and Brazilian limes in Europe, which was accompanied by high prices, the situation has now returned to normal, with sharp price declines recorded in recent weeks in the wake of the increasing volume. For example, in the United Kingdom, prices have been halved in a month. Other producing countries, such as Israel, Spain, Colombia and Guatemala, have tried to take advantage of the high prices in the European market. In Russia, the price is still high and this is pushing the demand down. In recent years, China has invested heavily in lime production, even though their season is rather short.
Mexican volumes on the rise
In Michoacan, the average price at origin in July stood at $ 4.90 per kilo. In other provinces, prices were a bit lower, with the lowest one paid in Guerrero, with $ 3.16 per kilo. Compared to the situation early this year, the price is significantly lower. According to SIPROLIMEX, Colima started the year with an average price of $ 8.50 per kilo. That price rose to a peak of $ 17.48 per kilo in March, followed by a rapid decline.
According to official figures, 31,860 tonnes of limes were harvested in July. Producers in Colima harvested 14,700 tonnes, or 46% of the total. Michoacan followed with 11,400 tonnes (36%). Other production regions are Oaxaca, with 4,450 tonnes (14%) and Guerrero, with 1,310 tonnes (4%). The total volume was almost 10% greater than in June.
Besides the banned export routes, Mexico is also working on new markets. The United Arab Emirates is one of them, but also Moscow was added to the list. "We also sell the limes in Moscow, where they are sold for 7 dollars per kilo," said a trader.
Peru: Expensive limes until start of new season
The harvest will not start until October, so until that time, the price of limes at supermarkets will remain high. Between June and July, the price rose by 105.3%. In June, limes cost 3.04 Peruvian soles (0.80 Euro) per kilo. One month later, the price jumped to 6.24 soles (1.64 Euro). The higher prices are due to the traditionally lower production in these months, with the impact of El Nino (Coastal Nino), which hit the coastal regions. The region of Piura, the largest production region for limes, was the most affected by the Coastal Nino. The region accounts for 57% of the country's production. Other major production areas include Lambayeque (19%) and Tumbes (5.8%). The remaining regions have a smaller share of 13.7%.
The price is expected to rise to 9 or 10 soles (between 2.30 and 2.69 Euro) this month. According to estimates, supply in September will be even lower than this month. The volumes will only rise when the new harvest hits the market in October.
Brazil: Good quality, but low price
The quality is better than normal during this period of the year, and since the season is over, prices are on the rise. In the European market, Brazilians compete against the Mexican limes, although the latter benefit from a 0% import tariff, which gives them an advantage. As a result, the Brazilian volumes shipped to this market are limited. That situation will not change until December. Brazil has a good market position from December to July, after which Mexico takes over the dominant role until November. It was a good season considering the quality; however, prices in Europe were lower than expected. There was a lot of Mexican product available that reached the market earlier than usual.
Israel: Exports back down after short peak period
After a short peak in early August, export volumes went back down. Exporters benefited from the lower supply from South America, which left a gap on the European market; however, due to bad weather conditions, the sizes in Israel were generally small, which is unfavourable for exports. Prices have stabilised after that period and the market is again as it usually is in the summer months, which means lower prices and less profit for exporters.
Almost all of Israel's lime exports go to Europe and the United Kingdom in the short season between July and September. Israeli exporters have lost market share to the major lime producers. Israeli limes are described as inferior to the Latin American and Spanish limes. The main reason for this is the lighter colour of their skin, caused by the warm and sunny weather. While in the past Israel managed to take advantage of any gaps in the Mexican and Brazilian seasons, competition in those periods has become tougher, as Spain, Colombia and Guatemala are following the same strategy.
Russia: Small demand for expensive limes
It is high summer in Russia, which means that the domestic production dominates the market. In addition to the fact that the summer has an impact on the demand, the price also plays a role. The price for limes is still high, especially when compared to lemons. While limes yield 1 dollar per piece, Russians pay 0.10 to 0.20 dollars for the lemons. As a result, the demand for lemons is higher. Although limes are sometimes used with drinks in the summer months, the relatively cool summer has taken a negative toll on their demand for this purpose.
China: Low price for domestic crops
Limes are grown on the tropical island of Hainan and in Anyue, in the province of Sichuan. What is marketed as limes in China includes some lemon varieties that are harvested early in the season, before they turn yellow. Both cultivation and trade remain local.
Anyue is a great lime production region. The harvest begins in August and lasts until late September, when the lemons arrive. The lime production is small compared to that of lemons.
The local government of Hainan has invested heavily in the cultivation of limes. The sector has become more professional and revenue has increased. Also, more and more growers are switching to the cultivation of lemons and limes. The harvest starts earlier than in Anyue. Prices in the summer months have so far been considerably lower than in 2015 for the second consecutive year. In addition to domestic crops, there are also imports from Australia and Peru. Taiwanese limes are also currently on the market.
The Netherlands: Good market for limes after long difficult period
Last week, the conditions were good in the lime market. On average, prices were higher than normal and the supply was slightly lower, with shortages as a result. This recovery was welcomed by lime importers and suppliers, who have endured a long period of very low prices and difficult market conditions. When there are shortages, there is also a place for the limes from countries other than Brazil and Mexico, which are the largest exporters. Israel, for instance, is also on the market, even though it has a short season, lasting from August to September. The price has now fallen slightly and Brazilian limes cost between 6.50 and 7.50 Euro, while Mexican limes cost around 7.50 Euro. According to importers, the summer holiday (cocktails) hasn't really affected lime imports too much. "In the Netherlands, the impact is not as great as in southern European countries, but the cocktail culture is still on the rise. People are inspired by local cuisines and drink cocktails more often, so the sale of limes is expected to rise in the coming years."
UK: Price halved in a few weeks
In early July, the price for a box of limes stood at 10 pounds. A trader describing the situation said that "peaks in demand help no one." Given that retail prices hardly change, someone in the chain will lose money. A month later, the prices have been halved and a box of limes costs 5 pounds. The retailer's forecast that the high prices were not sustainable was thus confirmed.
There are several reasons for the decline in the price. The volumes from Brazil and Mexico, the two main suppliers, have increased. Furthermore, the high price attracted the supply from other countries. Exporters from, among others, Colombia and Guatemala, relatively small players, wanted to benefit from the high prices and made shipments to Europe and the United Kingdom.
The demand also fell. "If prices are too high, consumers stop buying. Pubs and restaurants use less limes or switch to lemons," explains a trader. Lastly, the weather also plays a part. The weather was hot in July and since then the temperature has fallen.
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