With the Spanish mandarin harvest already underway, the campaign ahead appears to be different compared to the previous one in terms of production, with challenges such as the increasingly tougher competition from Egypt, but also with opportunities in markets like the Chinese. FreshPlaza learned this during a visit to the facilities of Frutas Tono, in Benifairó de la Valldigna (Valencia). The Valencian company marketed a total of 140,000 tons of citrus fruits in the previous campaign. 60% of that volume corresponded to oranges and the other 40% to clementines.
"While the sector expects the production this campaign to be between 15% and 20% greater than last year's, we can also already report smaller calibres than in the previous campaign for the earliest varieties, such as the Clemenrubí, Esbal, Marisol, Oronules, etc. It is also true that the latest rains will have a favorable impact on the size of the fruits, but we'll see that in later harvests, in the second season," explains Juan Bautista Juan, Export Manager of Frutas Tono.
The domestic market is the most important one for this Valencian company. It works with several distribution chains all year round. Meanwhile, at European level, France and Germany are the countries receiving the largest volumes. The countries of Eastern Europe, the Baltic and Italy are also important, each with their own demands when it comes to varieties, confections and calibers.
To be able to supply citrus fruits to its customers all year round, Frutas Tono mainly imports oranges from South Africa. These accounts for 6% of the total citrus volume they handle. Some imports also arrive from Argentina.
"Regardless of how much we try to extend the domestic campaign, it is clear that we'll need to resort to importing for 6 to 8 weeks, until the arrival of our Navelinas. Imports are necessary in order to work with retail chains that sell oranges all year round. If we don't do it, other importers will offer them to our customers. What matters most is that imported fruit undergoes all necessary phytosanitary controls at origin and destination, and that all EU ports enforce the same standards," says Juan Bautista.
“Going for China without good planning just because it pays well is very risky”
"We believe in sustainable growth and the delivery of a high quality product to the Chinese market. We do not believe in growth without good planning, motivated solely by good prices, because that leads to uncontrolled exports not adjusted to the demand," says the producer and exporter.
"The 2017/2018 campaign started with shipments of Navelina oranges in December and of Lane Late in early January at exorbitant prices. These were not absorbed by the Chinese market because it already had a large and good enough domestic production that was more interesting than imports; hence the need for good planning. We believe that there is a market gap for us between March and June, when we can supply orange varieties such as the Midknight and the Navel Powel. Also, depending on what South Africa does, Valencias could also be shipped."
"Not everyone is ready to enter that market, and in many cases, the Chinese intermediary is the one who is unfamiliar with the product and who cares more for making a profit in the mediation than for ensuring a satisfactory operation for all parties. It is necessary to have good professionals who are familiar with the market and customers with whom to grow and who accept advice."
"We know the product and they know what the market needs; the problem is that it takes 5 weeks for any reactions to market swings to be noticeable, hence the importance of anticipating the market's needs early enough. Letting yourself be carried away only because China is a good paying market is a very risky bet. We saw that last season, when a number of different problems pushed sales down until very late in the campaign."
Egypt is gaining ground on the desert and becoming a tougher competitor
It is a fact that citrus production in Egypt is growing every year and that the country is becoming an increasingly fierce competitor for Spanish exporters in more and more markets. "In Egypt, large farms are being planted because they have the necessary land and water to do so. And most importantly, they also have cheap labor, and the technology in the warehouses is imported from Europe. Therefore, it is no longer a threat, but a reality. The Egyptian government is committed to gaining ground on the desert with the Toshka project, which will involve creating some 630 hectares of irrigated land for fruit and citrus. These new crops are going to grow at the edge of the Nile," says the exporter.
According to Juan Bautista, it is important to be careful to prevent the spread of pests existing in Egypt that do not yet exist in Spain. "We must also keep the devaluation of the Egyptian currency in mind, as this has stimulated the country's exports even more. We are mostly at a disadvantage when it comes to labor costs, which make us less competitive compared to Egyptian producers. We have to enforce strict controls on Egyptian imports to detect the presence of residues. The standards should be the same as those in place for EU products."
For more information:
Juan Bautista Juan Gimeno
Frutas Tono S.L.
C/ Camí Pinar s/n.
46791 .Benifairó de la Valldigna, Valencia. SPAIN
T:+ 34 96 281 03 26
jbjuan@frutastono.com
www.frutastono.com