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Spain: The citrus crisis is not only due to South African imports

In recent months, there has been a big crisis in the citrus production sector, especially in the case of oranges and mandarins, with prices falling below the production costs and plantations left unharvested. It was not the first time that the price paid for citrus fruits has oscillated between 5 and 10 cents per kilo, or when the production costs have been over 15 cents, or when growers have left part of their production in the trees.

In previous crises, the causes were a combination of increases in the production, a lower demand in the rest of the European Union due to weather issues, pressure from large retailers and also imports from third countries. In this year's crisis, the main argument, and almost the only target of the complaints, has been the importation of oranges and small citrus fruits from South Africa. The reality is that, regardless of the entry of citrus fruits from third countries into the European Union, the crisis is also due to other reasons.

According to data handled by Eurostat, the European Union annually imports an average of about 7 million tons. Some 4 million of these correspond to Spain and 2 million to third countries, with South Africa at the head. This country exported 658,000 tons, including lemons and grapefruits, between the years 2013 and 2017. Next in the ranking are Turkey, Egypt and Argentina, with about 220,000 tons each.

In the case of South Africa, the added problem against the interests of EU producers was the signing of the agreement with the European Union, which came into force in October 2016, and which involves a progressive reduction of tariffs for sweet oranges. These stood at 11.68% in 2018 and at 10.24% in 2019, and will eventually disappear in the year 2026, when a minimum entry price will be in place between 1 December and 31 May, to which a specific tariff will be added if it falls under. According to official EU data on the import of oranges and small citrus fruits, the total volume entering the EU between January and November before the signing of the agreement was 523,000 tons in 2013, 519,000 tons in 2016, 566,000 in 2017 and 593,464 in the same period of 2018; some 27,000 tons more than in the previous year.

Harvest
Objectively, in a market that absorbs 7 million tons of citrus fruits per year (with about 4 million being Spanish), focusing on South Africa as the main cause of the sector's ills, despite it only recording an increase of 27,000 tons, is like closing our eyes, refusing to admit that there is a problem which has already affected other products in the same fruit sector.

Also, the agreements with less developed third countries have been and continue to be perceived as an open door for the entry of their raw materials, without them having to meet every health requirement. This would be done in exchange for them opening their borders to EU industry exports, from which agricultural producers don't benefit directly.

But in this year's citrus crisis, other factors should also be taken into account. For instance, in spite of the reduction of the acreage due to its lack of profitability, especially in the Region of Valencia, the production has registered an important increase, reaching up to about 7.4 million tons, compared to an average of about 6.7 million. This situation has also been aggravated by delays and overlaps in the harvest, with the product harvested not being properly ripe in many cases. Moreover, there has been a lower demand due to the good weather in the rest of the European Union.

The sector's protests and the complaints from political parties in the opposition pushed the Administration to withdraw 50,000 tons, with a cost of about 12 million Euro, although to date, only one quarter of that volume has been covered.

Source: qcom.es

 


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