OVERVIEW GLOBAL MANDARIN MARKET

The demand for oranges rose sharply this year due to the coronavirus. One would expect that mandarins would also benefit from this higher demand, but that wasn't the case. In fact, in some countries, such as the US and South Africa, mandarins were somewhat overshadowed by the success of oranges. Still, the demand for mandarins remains stable. Especially in the US and Europe, the prospect is that the demand will increase ahead of the winter. As far as the supply is concerned, there are few large sizes from Spain. The quality of the mandarins from China has been seriously affected by heavy rainfall.

Netherlands: No corona effect on mandarin sales. Will Sinterklaas be a solution?
The Spanish mandarin campaign started this year with sky-high expectations. The coronavirus pandemic gave a boost to the demand for citrus fruits during the overseas season, but this corona effect has not yet materialized in the Spanish season. The sizes are very small this year. As a result, the sale of the large sizes continues smoothly, but that of the small sizes is a bit more challenging. All in all, the season is still failing to meet the initial prospects, but importers remain optimistic. In terms of quality, the season is going well, and with Sinterklaas approaching, the demand will again arise."

Belgium: Supply and demand in balance
The citrus season has had a good start in Belgium. Despite the fact that there are still some overseas volumes on the market, the supply and demand are in good balance. The demand for mandarins and clementines is good for this time of the year. The quality is also good and the prices are at an excellent level. This year, 20 to 25 percent more Spanish citrus is expected compared to last year. A Belgian trader expects a good citrus season, as the coronavirus is stimulating the demand for citrus.

Germany: Supply and demand in balance
In the German wholesale market, Spain currently has a monopoly as far as clementines are concerned. Italian goods are only sporadically available. Turkish satsumas, however, have a good market position. The later areas in the Izmir region have been on the market since last week and enjoy great popularity on the German wholesale markets. Several Turkish exporters have now expressed their wish to supply more retail customers in the near future.

In general, the demand could be met without any problems. Here and there orders had to be reduced somewhat, partly due to the closing of the catering industry. Prices have also been fluctuating strongly as a result of the coronavirus crisis. Besides, the German consumer still appears to be highly brand aware when it comes to citrus. “Nowadays people tend to pay a lot of attention to the price-quality ratio with many products. This is less the case with citrus and old quality brands, such as Der Flieger and Götterfrucht, remain very popular."

The organic season has also got off to a good start. Almost a month ago, the first Spanish organic clementines hit the market, and now the Clemenules and Basol in particular are abundantly available. “We see a slightly higher demand than usual, as people are looking for vitamin-rich products due to the corona virus. However, the supply and demand are in good balance,” said an organic importer.

France: Switch in varieties
In France, the market is currently in the middle of a switch between two mandarin varieties. Although the supply is good, the quality is not on par. This is partly due to the weather conditions in Portugal and Spain. However, the demand is not as high due to the lockdown and the still warm temperatures, which means that consumers are more likely to choose other fruits.

Spain: A lot of small sizes, future UK import duties unfavorable for competitive position
According to the Spanish Ministry of Agriculture, Fisheries and Food (MAPA), the harvest of Spanish clementines and mandarins in the 2020/2021 season will be 12% higher than in 2019/2020. The free variety Clemenules is currently the most commonly harvested and traded. Although the production appears to be recovering this year, it should be taken into account that, due to the greater number of fruits in the trees and this year's weather conditions, sizes are generally very small and there are therefore fewer kilos than originally expected.

Just as the spread of the first wave of the coronavirus pandemic brought the end of the 2019/2020 citrus season, the second European wave, which arrived at the start of the new mandarin and clementine campaign, has again been taking a toll on the market and generating uncertainty. In the beginning, the demand was low, but now seems to be recovering somewhat; however, prices are very low in Europe, especially for the small sizes, for which the supply is greater than the demand.

From January 1, 2021, exports to the UK could be adversely affected by the possible enforcement of 16% tariffs on Spanish clementines and mandarins. If implemented, this is expected to have a strong impact in the second half of the season. These high tariffs would make Spain lose competitiveness against direct competitors from third countries in the Northern Hemisphere, such as Morocco, Egypt or Turkey, and the United Kingdom has already signed preferential zero-rate agreements for the off-season (when South Africa is on the market). The UK is the third largest market for Spanish exporters after Germany and France and there is no alternative destination for this market with 66 million consumers with a high purchasing power.

Italy: Much fluctuation in the market in recent days
The Italian mandarin and clementine market has been subject to fluctuations in recent days and has been demanding medium to medium-large citrus fruits. A wholesaler in the north of Italy is currently selling mandarins from Spain and clementines from Italy. Prices range from 0.60 € / kg for the smallest product to almost 2.00 € / kg for the fruit of the highest quality.

As far as the production is concerned, in Calabria, the harvest started in the first days of October and will continue until the end of February. With the end of the harvest of the early varieties, we are now moving on to the regular clementines. The dry weather and high temperatures have resulted in a predominance of small-sized clementines and a faster ripening of the fruits. The market is currently not taking those. The high temperatures in Italy and abroad, as well as the uncertainty caused by the coronavirus, have prevented consumption from increasing. The prices paid to producers are mostly falling.

The production of Sicilian clementines will only reach its peak in the coming weeks. Prices are quite high due to the low production. Prices at origin on the markets of Eastern Sicily amount to around 0.50 € / kg.

South Africa: Mandarin market this time overshadowed by oranges
The soft citrus yield of the past season in South Africa has been estimated at 24.3 million cartons (15 kg); higher than the previous forecast. In this category, the export this season has also been higher than in the previous campaign (+36%). Mandarins are the largest group in this category, but in this unusual citrus season, mandarins have been outperformed by oranges. There were also some reports about the market being tough this year for some new late mandarin varieties.

Now it is still too early to say anything about the upcoming season. In the early northern regions of South Africa, the “November drop” will soon follow, in which growers decide whether to have fruit abscised or not. A first early prognosis about this can already be made. In the Western Cape, the season has now come to an end and the first trees are already blooming again.

Egypt: Saudi boycott on Turkish citrus having an impact on the Russian market
The situation in the global market and the uncertainty linked to the second wave of the coronavirus in Europe are currently the main concerns ahead of the Egyptian mandarin season. After all, they can cause quick changes in the market and Egyptian traders must be able to respond to them. One of the challenges traders must face is the Saudi ban on Turkish citrus. After all, much Egyptian fruit goes to Saudi Arabia and Russia, and so does the Turkish; however, a lot more of the latter will now have to be shipped to Russia, which means that prices in Russia have become very unstable. Apart from this development, the Egyptians also see high demand for citrus fruits in Europe, as well as East Asia and Arabia. For the first time this year, Egypt will also export citrus to Japan.

United States: Demand and competition are getting stronger
It looks like the upcoming mandarin season in North America is going to be competitive. Domestically, California has started with the early clementine harvest. There is a lot of fruit set this year, so the harvest promises to be good. However, warm days earlier in the year have caused some difficulties in the irrigation of the fields.

A 15% price increase is expected for the mandarins. This is due to the more expensive freight rates to transport the mandarins from the West to the East coast. The FOB for mandarins on the West Coast is likely to decline. For the next two weeks, Chilean mandarins will also be available, as well as the first batches from Morocco and Spain, although the Americans don't expect the sales of the latter two to increase until around January. "The quality is not yet what it should be," says a New Jersey trader. Imports are expected to compete heavily with California's domestic product.

Although the demand for oranges has risen sharply due to the coronavirus because of the fruit's vitamin C content, this trend does not seem to be spilling over to mandarins in the US. The demand for the latter remains stable, and is even slightly lower than in previous years. The demand is picking up and reaching normal levels for the time of year. The price for the consumer can now also be considered reasonable.

Last of Chile’s mandarins for this season now on the market
The last of the Chilean mandarins are now entering the market, but the season has mostly ended and any fruit that is on the US market is competing with the domestic production. The majority of the Chilean volumes go into the US market and this has been a good season for volumes though pricing has been average to low. Chile exported 9.8 million boxes to the US this year, which is up from 8.5 million boxes in 2019. Overall, mandarins didn’t see the growth that oranges did for Chile.

Peru sees growth in volumes
Peru’s mandarin season has now ended but they saw good growth in volumes this year. The country exported 7.2 million boxes to the US, which is their largest market, which is up from 4.7 million boxes last year. Because of the high demand for citrus in general due to the pandemic, growers were expecting to see better demand than they did. The season started in the spring with high prices but by July the prices started to decrease and stayed at the lower level until the end of the season in October.

China: Heavy rainfall reduces quality of mandarins
One of China's main mandarin producing regions is Sichuan, where the acreage and production volume have not changed much compared to last year. However, the quality is lower this year due to the heavy rainfall in the region. This will result, for example, in a lower Brix in the mandarins and more spots on the skin. The amount of top quality mandarins is therefore limited this year.

At the moment, the harvest of the Baba mandarins has also started in China, and the Aiyuan already hit the market a month ago. At the moment, the supply exceeds the demand and the quality has caused prices to drop. This is also having repercussions on the Chinese export of mandarins, which are sometimes not suitable for sale.

Australia: More exports to Japan
Last year's record year for citrus was marked by an 'on crop'. Mandarin exports increased due to the number of new plantings in Australia over the past decade. This year, the harvest volume has fallen, but the sizes have been good. Citrus Australia had predicted that the volume in the 2020 citrus season would be smaller than in the previous year, but the volumes of certain varieties, including the Murcotts, were even smaller than the industry initially expected.

By September 30, China had imported most of Australia's mandarins (13,488 tons). Due to the crop's sizes, there is generally less fruit available that meets the Chinese market's specifications. Thailand and Japan have also been important export markets, with Japan importing more than in the previous year. In total, 58,000 tons of mandarins were exported by September 30, which is the same as in 2018. However, the export value of the mandarins was higher than in 2018. The industry had to adapt to operating under different circumstances than in the past - a virtual marketing space - because of the coronavirus. Despite this, Citrus Australia reported that the worldwide demand for citrus was very strong.

For next week: Kaki / Persimmon / Sharon


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