OVERVIEW GLOBAL MARKET ORANGES

The Mediterranean citrus campaign has already started. Extreme weather is playing tricks on growers in several countries. In Egypt, the volume is slightly smaller. On the Italian island of Sicily, the production volume will be lower than expected. At one point, there was drought; at another point, an abundance of rainfall. In Spain, after a good start to the season, prices have fallen quickly. This has had an impact on the market in Northern Europe, where a warm Indian summer resulted in low demand. Latin America is preparing for the next season. Although it is difficult to give estimates, growers are hopeful.

Israel is targeting exports again
The market for oranges has changed considerably since the success of the Jaffa label about 30 years ago. Israeli oranges were known for their high quality. When other exporting countries increased their production, the Israeli exporters could no longer compete in terms of price. Today exports are a niche market for exporters. However, there are signs that the market will pick up in the coming years. In recent decades, the majority of Israeli oranges have been sold in the domestic market. Although consumption in Israel is higher than average, this hasn't entailed higher profits for producers. As a result, growers switched to other crops. In the 70's, the acreage stood at ​​about 42,000 hectares; that figure has now dropped to 17,500 hectares. The most cultivated varieties are the Valencia, Shamouti and Tabouri. Only the Tabouri is exported.

This year, there has been a rebound of exports. After several campaigns with the export volume standing at around 60 tonnes, this year's shipments abroad will amount to approximately 200 tonnes. This increase is partly the result of the opening up of markets in the Far East.



Egypt exports large sizes to Scandinavia
The first of December has marked the official start of the season for Egyptian citrus. The Government had set that date to make sure that the fruit acquired the right colour. For oranges, a slightly smaller volume is expected due to the weather conditions. The sizes are large. These calibres are doing well in Scandinavia, where Egyptian exporters are gaining a firmer foothold. Exporters hope to get their share of the high demand around Christmas. Moreover, Eastern Europe is a good market. The oranges reach Poland or the Czech Republic within six days. Also in the Far East there are attractive markets for orange exporters. India, Indonesia and Singapore are mentioned as destinations for the smaller calibres.

Spanish campaign moderately positive
The season started early with the Navelinas. The campaign kicked off in October and will go in the record books as one of the earliest seasons. Spanish exporters benefitted from this, given the high prices that were being paid for the last oranges from the southern hemisphere. The first three weeks were good in terms of sales volume and price. As more volume becomes available, the price is more under pressure. The weather, both in Spain and in the export markets, has had a big impact on the market. The Brix level is high this year, which is positive for trade. The disadvantage is that prices have fallen even before the peak of the season. Last week it rained in the main growing areas, especially in Valencia. As a result, the harvest was delayed.

Italy: Changing prospects in Sicily
The market for oranges has been difficult, so the prices have been low. In Bologna, however, prices are higher, between 0.50 and 1 Euro per kilo, depending on size. Although prices at origin have reportedly been better than last year, demand for Italian oranges is slow. Besides domestic fruit, there are also imports from Spain on the market at a price which is 20 cents lower than that of Italian oranges. The larger calibres are sold for 70 to 80 cents per kilo.

The general impression is that there is a lower availability of Navels from Calabria and Sicily, but that is actually true of other varieties, as well. A trader says that they estimate the volume to be about 30 percent lower than last year, which was already a year with a lower supply.

In Catania, Sicily, the Tarocco harvest is expected to be good, despite a 30 percent decline in the volume. A larger volume of medium-small sizes is expected as a result of the limited rainfall and the impact of the sirocco wind. The season should also be shorter and last until April.

Also in Sicily, in Syracuse, the season has only just started. Early Navelinas matured quickly, so the harvest could kick off in early November. Although there is a smaller volume than expected, the market also counts on bigger sizes. Unlike in other regions, there has been a normal amount of rainfall after a period of drought. The lower temperatures of recent days have had a positive impact on the colouring of the (blood) oranges.

Growers in Ribera, Sicily, were faced with heavy rainfall. As a result, the crop has been damaged. The overall damage is not too severe, but for some growers, it has been huge, with the loss of the entire harvest. The rain has also caused damage to some roads, which can complicate the transport of the oranges. Some producers may have become unreachable, which would delay the supply of Navelina oranges, whose harvest started in November. Before the period of heavy rainfall there was a drought which lasted from April to November. That forced growers to irrigate the crops and start the harvest earlier.

Belgium expects calibres to remain small
The Spanish citrus season has not been easy so far. In the beginning, they had to deal with unabated hot weather. Because of this, there was a predominance of small calibres and little colour on the good fruit. According to citrus importers, the situation for oranges at this time is still not easy. At the beginning of the season, everyone was very vocal about their good prospects. The prices then were very high. Now they vary greatly per importer, ranging from 8.5 to 12 Euro. With the South African season the prices were lower, but more stable. There have also been big differences in terms of quality. Some are afraid of the coming period, as the weather in Spain has been disappointing, with heavy rainfall and forecasts predicting more rain.

The calibres are disappointing. Oranges have been small from the beginning and they are expected to remain smaller than usual. The frost-like weather this week is certainly not detrimental to sales, but has unfortunately not given a big boost either.

Netherlands: Rough orange market, except for Salustiana
The orange market in the Netherlands is greatly strained. A lot of product is now arriving from Spain, and soon there will also be fresh supply from Greece and Turkey on the market, giving a push to the available supply.

For Navelinas, market prices stand between 55 and 75 cents per kilo, but importers point out that they can actually get them for any price. The only variety that is still somewhat able to escape this is the Salustiana. For this, the price per kilo stands between 70 and 85 cents.

US: New push for oranges to compete with mandarins
The advance of mandarins since the introduction of this citrus fruit has led to a shrinking market for Navels. Oranges are often sold in bulk on the supermarket shelves, while more attention is paid to the presentation of mandarins. New varieties, such as the Vintage Sweet, should take the Navel segment to the next level. It seems to be working. A grower says that supermarkets are doing more to showcase these extra sweet oranges. Moreover, these oranges can be sold for a good price.

In California and Florida there are also some producers who are growing the fruit organically. Organic cultivation of citrus is harder than with other fruits, and most competition takes place at local level. Prospects point to the supply of organic oranges this year remaining at a similar level to that of 2015. The harvest kicked off in November and will last until May for the Navels. In January, the Cara Navels will hit the market and their season will last until March. The blood oranges will follow in February (until April) and the Valencia will be on the market from May to October.

Mexico hopes campaign results will improve
The season runs from November to April. To date, traders have been satisfied with the campaign, despite the fact that the results have not been as good as they had expected. Since the harvest is still underway, the situation may still change for the better. The quality of the oranges is good, but the calibres are smaller.

Colombia expects better season
Due to the impact of drought, the harvest has been disappointing this year. There have also been smaller calibres and Colombians have had a difficult year. Now, since the weather forecast has predicted rain, the mood for the upcoming season is more positive. The new season will start in May.
 
Peru records high production
Looking back, last year's production was good in terms of volume for Peruvian growers. Because of the favourable weather conditions, the country's production increased significantly. For the upcoming season, prospects are also good, as the weather conditions are suitable for the crop.
 
Good season in Argentina
Orange growers have not been severely hampered by the rain and floods. In general, it has been a pretty good season. For the upcoming campaign, it is still too early to make forecasts, but the recent frost may have an impact.

China expects smaller production
This season, the Chinese production has fallen by about 15 to 20 percent. As a result, prices have increased. One of the reasons for this decrease in the supply is the increased labour and production costs. Besides its own production, China imports citrus from the US, Spain, Egypt, Peru, Israel, Morocco, South Africa and Australia. Prices for oranges from South Africa and Australia have fallen under pressure from the larger import volumes.


Every week, FreshPlaza and AGF.nl publish an overview of the market situation of a product in a global context. With these articles we aim to provide a view of a global market shrinking due to globalisation. Next week, mangoes will be on the spotlight.


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