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Persian lime demand soft as yield remains strong
Persian lime supplies out of Mexico are currently steady but demand has softened, leading to a marginal surplus of fruit. The Mexican growing region has largely escaped any effects of recent natural disasters and yields are looking healthy. At this time of year, supplies are coming out of the Martinez de la Torre region, where the majority of US-bound Persian limes are grown.
Hugo Vargas, of Earth Source Trading, said the season has been good so far. "At the moment, Persian limes are being sourced from the Martinez de la Torre region in Mexico. There are other growing areas in Mexico such as the Tobasco region. But they are typically only for a few months out of the year, whereas the Martinez crop is all year round, and carries the most volume of fruit destined for the US market. This region also produces the Persian lime, which is the greener, better fruit than the lighter colored varieties that you'll generally find out of Tobasco."
"The season is looking good at the moment and the fruit has not really been affected by any of the hurricanes that have hit Mexico this season," Vargas continued. "Volumes are good, but demand is fairly low right now, meaning that it's not currently exceeding supply."
Yields marginally up over last year
Lime yields out of Mexico are close to the long term trend, but slightly up over 2016. The reason for this is due to additional tree planting that has occurred over the last season.
"Yields are close to average, nothing too crazy," said Vargas, "The current report shows a 6% uplift in 2017 over last year which translates to around 90,000lb in the latest figures until September. This has been mainly due to additional plantings over the course of the year. As the trees have aged, many growers have not only replaced them, but also have planted additional new trees, resulting in an increase in volume out of the region.
Price movement will depend on weather
With a moderately excess supply, lime prices have remained soft, but Vargas noted that prices in the medium term will depend on whether any additional rainfall in the Gulf moves into the growing regions.
"Right now, the market price is low on the smaller sizes, which are the 230s, 200s and 250s. For the larger sizes, such as 175s, 150s and 110s, the price is a bit higher compared to the smaller sizes. This is for FOB Texas," he said. "The sweet spot for sizes are the 150s, 175s and 200s, which are the most popular. But sometimes this can change, depending on the numbers of different sizes available. Larger sizes come about when there is a lot of rain and the fruit retains more water. In addition, it's harder to pick in the rain, and if left on the trees, the fruit will get larger."
"Moving forward, price movement will depend on weather in the Gulf. It looks like Martinez is going to get a lot of rainfall in the next week. If growers can't get out in the fields because of this, there will be less fruit crossing the borders which will likely raise prices by a dollar or two," added Vargas.
"Also, the trees are blossoming at present and if more storms come out of the Gulf and hit them, this will affect the winter crop and reduce yield in the New Year. It's something we're monitoring."
For more information:
Earth Source Trading
Tel: +1 717-721-2701
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