Even though the European Union treaty with the Mercosur countries (Argentina, Brazil, Uruguay, and Paraguay) was announced on June 28, the Commission and the Spanish Government still haven't clarified its conditions to the citrus sector. However, according to the Citrus Management Committee (CGC), the Brazilian Ministry of Agriculture has reported that tariffs on Brazilian concentrated orange juice will gradually disappear in 10 years and that tariffs on 100 % squeezed juice will disappear in 7 years. They also announced that customs duties would orange and mandarin imports would also be eliminated, but the deadlines are still unknown.
Given this scenario, the CGC has warned of the impact that these measures will have on the Spanish citrus sector, whose fresh marketing is led by the Valencian Community with a 70% share.
"We are especially concerned about the ratification of the treaty with Mercosur because it will impact the European fresh market in two ways: it will improve the competitive position of South American oranges and mandarins in Europe, which is our first and main market, and, what's more serious, the massive shipments of Brazilian juices at zero tariff will question the viability of our processing industry," stated the president of the Citrus Management Committee, Inmaculada Sanfeliu.
The entry of South American oranges and mandarins into the European market would affect the European market for a few weeks, perhaps months, and -since it's production takes place in the off-season- mainly at the beginning and end of each season, Sanfeliu said.
"However, the massive entry of Brazilian juices with zero tariffs would affect the market throughout almost the entire season because the much cheaper competition from the juices produced by only three large multinationals –Cutrale, Citrosuco and Louis Dreyfus Company (LDC) - will complicate or even prevent us from giving value to 650,000 to 900,000 tons of oranges and 250,000 to 300,000 tons of clementines and mandarins that are currently being used to make juices," she added.
The president of the CGC recalled the citrus sector's need to withdraw that volume of fruit from the fresh market in the campaigns in which there are imbalances between supply and demand (due to abundant harvests, lack of demand, weather issues that alter the fruit's exterior appearance, etc.) and because there is fruit that, due to skin defects, small sizes, etc., must be processed by the industry. "The role of the processing industry should not be belittled. In fact, the processing industry is the Spanish citrus sector's first customer in volume," Sanfeliu emphasized.