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Turkey threatens Spanish lemon sector's hegemony in Europe

The Spanish lemon sector is undergoing a true price crisis that, in the case of the top lemons, dropped up to 25% at origin compared to the previous campaign, having as a main threat the competition of Turkish production. According to some Spanish growers this produce gets into Europe without adequate food safety control measures.

Since the beginning of the year, weekly quotas of lemon bring losses between 8% and 11%, according to numbers from the Ministry of Agriculture, Food and Environment (Magrama).

In this case the on-going campaign presents itself as more difficult than the previous one, when a production of 930,000 tones - a reasonable number from the 41,000 hectares of lemon trees in Spain - had a "harmful" profitability for the farmers as prices collapsed, according to numbers from the Interprofessional of Lemon and Pomegranate (Ailimpo).

High production costs come with the demand to comply to the demanding quality and food security controls established by the European Union (EU) to communitarian production, but that doesn't happen in the case of third party countries, meaning that they can compete by presenting lower prices.

80% of the Spanish lemon production is exported, mainly to Germany, France, Italy, the Netherlands and Poland, places that when freely reached by the Turkish product put in danger the market quota for the Spanish product, the price of which dropped, during to the present campaign, 18% and 20% to compete with the Turkish prices.

In just ten years time, Turkey went from an unknown and harmless competitor to be among the main world producers of lemon and pomegranate, next to Spain, Italy, Argentina, South Africa and the United States.

In the last decade, Turkey doubled its production and exportation levels, until reaching, in the last campaign, 860,000 tons of lemon - exporting 465,000 of those - an amount that steps on the toes of Spain data.

According to Ailimpo's predictions for the 2011/2012 campaign, Turkey can increase their production by up to 10%, which would diminish the distance between Turkish produce and the Spanish leading lemon in the European market - the main destination for both countries product.

By now, Spain has already lost to Turkey the leading position in the Russian market, going from 59,000 tons in 2003/2004 to 13,4000 in the last campaign, a small number that was mainly made in the whole between the end of the campaign for the Turkish Lamas lemon and the beginning of the campaign in Argentina.

Ailimpo considers that, despite inferior quality, the Turkish lemon counts on its lower price, which is thanks to cheap labor, lower production costs and support from its Government through "hidden subsidies" to export - worth more than 100 dollars (around 80 Euro) per ton.

Ailimpo also regrets the effects of the Association agreement between the European Commission and Turkey, allowing free circulation to Turkish lemons in the European area with tariff exemption, while, according to its information, the European product gets an aggravation of 54.6% when entering Turkey.

Producers consider that the dominant position of distribution in the value chain and the proliferation of a black economy are other factors to account for when talking about the sector's instability.

Source: ABC

Publication date: 2/29/2012


 


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