Demand could strengthen on increasing lime supplies

Supplies of limes are beginning to increase which may make for some pricing adjustments.

“The supplies of limes have been pretty high this year and we’re starting to see a slightly higher increase in fruit--it’s about 25-30 percent more,” says Steven Leal with S&J Distributing in Edinburg, TX. He notes that supply increases such as these are fairly standard at this time of year.

The fruit is also maintaining its quality. But generally in the industry, at the end of June and into July, some quality issues can emerge such as seeing more lighter colored fruit and burn marks on the tips. “When it does rain, the elevated temperatures and the heat can potentially cause exaggerated burn marks on the fruit,” says Leal.

Ample smaller fruit
Sizing is still dominated by small fruit. “The number one size coming in right now is the 230 count,” says Leal. “Then there are even amounts of 200 and 250 counts coming in and every size that gets larger, you’re going to see less and less of it.”

While Mexico is the dominating country supplying limes, Leal notes that offshore supplies are still coming in from countries such as Guatemala, the Dominican Republic and Colombia. Generally though this fruit heads to Eastern parts of the U.S. and Canada.

That said, offshore fruit is likely to wind down soon in supplies. “The prices of Mexican fruit get so far down that the offshore fruit can’t compete,” says Leal. “When Mexican fruit is $20-$30 and up, they can compete, even with elevated freight rates. But if the market continues to come down like it normally does to summer pricing of high single digits to low teens, offshore fruit will fade away.

Higher prices
Currently, Leal says pricing doesn’t reflect the high supplies. “Pricing has been at a higher level than normal considering the supply in hand. The only thing that’s changed is the market reacted in an aggressive way to where we’re basically at a summer price point,” he says, noting pricing is in the teens currently.

Demand is also slightly weaker compared to how it’s been recently. The market had seen elevated demand lasting months recently, which could be what kept that pricing higher than what an increased supply market would normally dictate.

That said, foodservice continuing to reopen across the country is helping demand. “I think that’s why we’re going to be in a better position overall once the next few months get going,” says Leal. “I’m not sure if it will help price points. But it’s another avenue for movement.”

For more information:
Steve Leal
S&J Distributing
Tel: +1-956-383-5325 

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