Three oligopolies in Brazil could control the citrus industry in Europe after the approval of the EU-Mercosur agreement

The Spanish citrus sector is monitoring the final approval of the EU-Mercosur agreement, which is still pending its final ratification for environmental reasons. Companies, cooperatives, and agricultural organizations are worried about this change in the rules of the game between the European bloc and the bloc formed by Argentina, Brazil, Paraguay, Uruguay, Venezuela, and Bolivia (the latter country is in the process of joining), as they fear the South American citrus will invade the European continent; especially the citrus from Brazil, the world's leading orange producer –a fruit that accounts for 90% of Brazil's citrus cultivation– and a very powerful country in the orange juice industry.

"The agreement would liberalize citrus juice imports into the EU, particularly of 100% squeezed juice, which could lead to the disappearance of the European juice industry, consequently unbalancing the fresh market and strangling the European citrus-producing sector," stated the president of the Citrus Management Committee (CGC), Inmaculada Sanfeliu.

It's worth noting that Spain transforms around 1.3 million tons of citrus fruits into juice each year. Brazil is the second-biggest producer of oranges in the world, with a production of up to 20 million tons. It exports over 1 billion euro in orange juice to the EU a year.

In addition, the Minister of Foreign Affairs, Arancha Gonzalez Laya, recently recognized that if this pact is approved, an oligopoly of three Brazilian multinationals (Citrosuco, Cutrale, and Dreyfuss) will set the minimum prices of the orange for the industry sold in the EU - the destination of 90% of Spanish citrus- in accordance with their commercial interests.

Sanfeliu has warned that the EU-Mercosur agreement threatens the value chain of the orange sector. He also said that these minimum prices will constitute an attack against the profitability of the Spanish sector. She also said that, once again, the Spanish citrus industry -a sector that has been affected for years by the EU trade agreements with South Africa, Egypt, Morocco, and Turkey- has not been taken into account in the negotiations.

The Valencian Community has large juice industry firms, such as Zuvamesa and Agriconsa, that could be affected by the liberalization of juice imports from Brazil, as the production, collection, transport, and transformation costs in Brazil are much lower than in Spain. In fact, transporting the juice with the large ships owned by the Brazilian processors to Europe (Rotterdam and Ghent) has a cost that is very similar to what Spanish processors pay for transporting the juice from Spain to France by tanker.



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