Surplus and low consumption affects global citrus market

The citrus market, in particular the orange market, is plagued by several current events this season. Among these are the good harvests, low consumption and political unrest in Russia. The latter especially affected Spanish growers. Improvement is nowhere to be seen.

Spain, Morocco and Egypt all saw good harvests, which directly affected the price. A ten percent increase or decrease in yield can have major implications for the market. Spain experienced a very good season, which puts pressure on prices. In combination with disappointing consumption figures, probably due to the warm winter, the effects are dramatic. In Spanish regions like Seville, bankruptcies are expected among growers and cooperatives. The smaller growers in Valencia get better prices thanks to stronger exporters.

Russia closed for business
On top of this are the practices of Moroccan traders. These are said to flood the markets with Moroccan citrus, which puts further pressure on prices. Political unrest and rising tensions between Russia and the EU also seems beneficent for Egyptian and Moroccan traders. For Spanish exporters, it is difficult to export to Russia, as Russia is increasingly looking for new suppliers outside the EU.

Egypt bigger than South Africa
In Egypt, roughly between Cairo and Alexandria, the climatic conditions are ideal for growing citrus. It’s expected that the North African country will produce more citrus than South Africa in the next five years. US investors, among others, have a lot of money invested in Egyptian citrus cultivation. Political unrest in Egypt has little effect on the crop.

Clementines, on the other hand, are little affected by these developments, and are fetching far better prices. Spain and Morocco don’t provide clementines and mandarins at the moment, and the harvest in Italy and South Africa is particularly good. South Africa has curbed exports of mandarins in connection with the unrest in Russia and the stringent EU regulations. As a result, there is sufficient supply from the African country.

Publication date: Tue 25 Nov 2014