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Turkey benefited by lower exchange rate

Spain: Larger lemon production volumes and lower prices

The rains in late August and early September had promised a two week advance in the start of the lemon season, although the unusual heat and lack of rain that followed have pushed it back to the normal period, allowing for the produce from the Southern Hemisphere to be sold out. Consequently, the Fino lemon harvest started two weeks ago and will last until March, when it will be replaced by the Verna from early April to late June.

Production volumes for this season are estimated to reach 910,000 tonnes; an 11% increase compared to last season, when 820,000 tonnes were harvested. "This could still change depending on the weather and pace of the harvest, as calibres may change and consequently also the volumes. It is not a great increase in production, but it will allow us to ensure the fruit's availability for the entire campaign," explains José Antonio García, director of AILIMPO.

The bad news for Spain is that Turkey already started with sales on 20 September with a 20% increase in production and much lower prices. "Their production costs are obviously much lower, but it should also be considered that the Turkish government provides financial aid to exports of around 60€ per tonne, and that the exchange rate between the Turkish Lira and the Euro, marked by the 19% devaluation of the former, allows Turkey to reduce prices without it having an impact on profitability."

"This makes it difficult for Spanish exporters at the beginning of the campaign, especially in Eastern Europe, where the Spanish and Turkish produce collide. Last year, Turkey had very little presence in those countries, but things have changed this season."

In any case, these markets are generally the recipients of second class produce; and thus, if things got difficult in the fresh fruit market, "Spain has the advantage of a really advanced processing industry with a very large capacity."

Prices are slightly lower than in the same period of 2012, and according to José Antonio García, this trend is expected to continue during the entire campaign. Despite this, "we are moderately optimistic about the campaign, during which we should be able to commercialise the entire production while obtaining profitable prices, both for producers as well as exporters."

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