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OVERVIEW GLOBAL ORANGE MARKET

During the lockdown in March, the demand for oranges went through the roof; a market development from which the southern hemisphere benefited the most. Towards the end of the year, the market in Europe and North America has stabilized and the demand is not as high as a few months ago. This slowdown in the demand has been a cause for disappointment in Spain, where they had initially expected the high demand to be maintained. In North America, many wholesalers appear cautious about purchasing due to the uncertainty in the market. The sale of oranges in China is also not going great. The demand has declined, causing prices to fall.

Netherlands: Limited supply of large sizes
According to a Dutch importer, there is currently a good demand for oranges; however, sales of juicing oranges in particular have slowed down due to the closure of the catering sector. Still, the sale of oranges for fresh consumption is booming. There is still some overseas production on the shelves and that is currently hampering the demand for Spanish Salustianas a bit. Probably a price issue, because the Spanish Salustianas easily reach 11, 12 or 13 Euro. Furthermore, there's a limited supply of large sizes.

Belgium: Stable demand for oranges on the market
The citrus season is going smoothly, says a Belgian trader. There's a plentiful supply this year, as the weather during the Spanish growing season was good; therefore, the trader expects there to be enough supply this year to meet the demand. The quality of the Spanish citrus is also good. The first Salustianas have arrived and the quality is satisfactory. Also, the Cara Cara season in Sicily has kicked off again. The demand for oranges is currently at a normal level. It is no longer as high as during the first lockdown, but it is a lot more stable.

Germany: Colder weather favorable for orange sales
In the German market, Spanish Navelinas have a dominant position. Italian Navels are also increasingly present, as are Portuguese Navelinas and Newhall. Greek and Turkish Navelinas are mainly traded to supplement the supply. South African products are also present here and there.

The sudden arrival of winter weather is very favorable for citrus sales. The supply and the demand are in balance across the board. The blood orange season has just started with the first Tarococs from Italy, and the first Cara Caras from Spain are also already available in German wholesalers.

In the long run, Spain's dominance as the largest supplier of oranges only seems to increase. In recent years, the annual export volume to Germany has fluctuated around 370,000 tons, with a peak in 2015 (401,714 tons). South Africa now seems to have outpaced Italy in the battle for second place (33,424 tons, compared to 26,340 tons in 2019). Besides these, only Greece, with a total export volume of 13,701 tons in 2019, still plays a significant role. Other countries with some trade here and there are France, Portugal, Egypt, Turkey, Morocco and Zimbabwe.

France: Lower demand than during first lockdown
Both Spain and Portugal are present on the French market. The season started a few weeks ago. With regard to the Portuguese production, the volumes are reasonably good, but the fruit sizes are smaller than last year. Quality wise, it is very good. Consumption in France is at a fairly normal level, much lower than in the first month of the lockdown in March.

Spain: High prospects for the season not yet fulfilled
The orange production in Spain is expected to remain stable (-1%) in this 2020/2021 season, although this varies by region. In the Valencia region, the production is expected to be 8 to 10% higher than last year, while in Andalusia, in La Vega de Guadalquivir, there's a similar production of early oranges, and that of the late varieties is expected to fall by about 10% compared to last year.

According to various sources in the Spanish sector, the citrus season is not meeting the expectations set after the end of the previous campaign, when there was sky-high demand, a limited supply and high prices. “This summer, many Spanish companies started buying the product at origin earlier than usual, hoping that there would still be a high demand for citrus fruits due to the coronavirus,” said a Valencian marketer. “To avoid running out of produce, many exporters have paid high prices for the fruit in the field, but the truth is that the market has not responded as expected. It has been very difficult to sell the fruit at acceptable prices, given what was paid in the field," he said. It should also be noted that production and processing costs are higher due to the pandemic.

One of the reasons for these not so high prices is the small size of the fruits; however, the recent rains are expected to help in the growth of late orange varieties such as the Lane Late and Valencia Late, which will start to be harvested around February.

The orange market appears to be more stable than the mandarin one, although the growth in both the national and international supply has taken a toll on current prices. "The situation was reasonably good until the end of October/beginning of November, but from mid-November things have become more difficult because there are already too many players on the market. Italy now also has its own production, which means that that market is no longer accessible. Turkey, Egypt and Greece have also launched their campaigns very aggressively," says another exporter.

Orange prices could improve on the European markets by the end of January, as that is when exporters will be able to ship more oranges outside the EU. This season, exporters won't have to deal with the serious difficulties to export they faced last season due to the coronavirus outbreak, so shipments to third countries such as China are expected to recover, helping bring balance to the supply and demand in Europe. However, Spanish exporters are keeping a watchful eye on Egyptian citrus, as sales around the world continue to grow.

Besides all this, there is also the matter of Brexit. From January 1, 2021, the UK will be able to impose tariffs on Spanish oranges, while its competitors in the Northern Hemisphere (Morocco, Egypt and Turkey) and those in the off-season (South Africa) will enjoy zero rates thanks to the signing of preferential agreements with the United Kingdom. The UK is the third largest market for Spanish citrus, after Germany and France.

Italy: Sales are going well; many blood oranges on the market
The Italian orange season kicked off in November with the regular sweet oranges. In most Italian regions, the current season is marked by a predominance of small sizes which has brought prices down.

The supply of Sicilian blood oranges (Tarocco nucellare, Moro, Tarocco Ippolito, Sciara, Meli and TDV varieties) is plentiful. Achieving good sales this season will depend on many factors: the quality of the production (which is good this year), the weather conditions and the market dynamics, with the processing industry there to absorb the surplus of small fruit. Currently, the price at origin of blood oranges, depending on the size, ranges between 0.35 and 0.60 Euro / kg, while the prices for ordinary oranges are stable at between 0.30 and 0.35 Euro / kg.

Small to medium-sized oranges can also be found in Apulia, as reported by a trader from Massafra, Taranto. "Prices are higher than those of clementines, with about 0.20 Euro / kg. Sizes 6 and 4 are among the most demanded. The 2020/21 campaign has not yet fully started, but sales, although limited, are currently going well."

Egypt: Exports important for the Egyptian coronavirus market recovery
Egypt's exports to the European Union are expected to increase, largely due to the projected increase in the demand for citrus. The Egyptian orange export markets will remain the same as in previous years. Exports normally go first to the Arab countries, then to Russia, Ukraine and Belarus, and finally to the European Union and East Asian countries. They are also expanding into new markets, such as Japan, New Zealand and Brazil. The three most popular oranges are the Navels, the Baladi oranges for juicing and the Valencia, the "king of citrus fruits". The Egyptians claim that the Spanish are struggling this year, which means they see many opportunities to become the alternative to Spanish oranges. Prices currently seem reasonable, but are expected to rise as the season develops. Egyptian orange exporters believe that the orange campaign will help in the recovery from the impact of the coronavirus.”

South Africa: A lot more exports to Europe this year
The latest South African orange season has been excellent. Ultimately, 52.4 million boxes (15 kg) of Valencia oranges were packed this year. 42% of these went to Europe (37% in 2019). Southeast Asia and the Middle East both accounted for 16%.

Navel exports are estimated at 26.2 million boxes, compared to 22.76 million in the previous season. 36% of those exports were intended for Europe (28% in 2019), 21% for the Middle East and 14% for the North American market. Exports to Southeast Asia fell from 20% in 2019 to 12% last season.

United States: Reluctant purchasing from food service and wholesalers
The domestic supply of oranges is good at the moment and is improving as the season progresses. Oranges currently come mostly from California, Texas and Florida, with some small import volumes from Mexico. Chilean and South African competitors have now disappeared from the market, although they continued for longer than usual and were still on the market in October.

The demand for oranges is stable and around this time growers in California are also getting ready to start packing for export. Nevertheless, traders feel that wholesalers and the food service sector are reluctant to place orders. Prices are currently slightly higher than last year and stable, although freight costs in the domestic market have also increased. This is affecting FOB values ​​somewhat. Volumes from Florida are currently entering the East Coast market. Just like in the west, prices are stable, but subject to ups and downs. For example, the demand for juicing oranges in the retail sector in particular has fallen due to the measures against the coronavirus implemented by stores. Nevertheless, the demand is expected to increase in the coming weeks as the more popular varieties, such as the Valencia, also hit the market.

China: Lower demand for citrus at the moment
Most oranges imported into the Chinese market come from Australia and South Africa, with the latter dominating. The import volume of Australian oranges is relatively small and the quality and the prices are higher. There's a greater supply of oranges from South Africa at a lower price, but these are also less popular on the market. The demand for these oranges comes mainly from the food and drink industry. There are also some volumes from the US, but these have been reduced due to the US-Chinese trade war.

Due to the coronavirus, the sale of imported fruit is falling and that of domestic fruit is increasing. However, the overall situation of the citrus market in China is not very good, so the price continues to fall. Chilean citrus has recently entered the Chinese market. Imports from Australia have been reduced due to the difficult customs clearance procedure and the high risks for importers. There is also a domestic production of Chinese Navels, but due to abundant rainfall, the harvest is quite poor this year in South China. This also applies to the Gannan Navel from the south of the country.

Australia and New Zealand: Commotion over soft drink rating system in the citrus sector
The Australian citrus industry is concerned about the proposal of a Health Star Rating system that could give diet drinks a higher rating than 100% fresh Australian orange juice, as this would ultimately affect the fruit's sales. The Australia and New Zealand Ministerial Food Regulation Forum will review the issue and make a final decision in February. However, six Australian State and Territory Ministers and the New Zealand government want to introduce this sugar content rating system. Citrus Australia welcomed the forthcoming review, after opposing the opinion of the majority of Ministers.

Hort Innovation statistics show that in the year that ended in June 2019, Australia produced 528,095 tons worth AUD 398.8 million (246.5 million Euro). Exports stood at 188,056 tons worth 308.1 million AUD (190.3 million Euro). 41% of the total fresh orange production went to processing, mainly to the juice industry.

According to the latest edition of Fresh Facts, published annually by Plant & Food Research and Horticulture New Zealand, the country had 183 orange growers in 2019 who produced 13,342 tons on ​​783 hectares. The domestic value in the 2018/19 season was NZD 18 million (€ 10.5 million), with an export value of NZD 1.7 million (€ 1 million) in 2019.

For next week: Overview global grape market


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