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GLOBAL OVERVIEW ORANGES

This year's orange season has seen different producing countries vying for spots on export markets, as the seasons have had significant overlaps, particularly between the Spanish and South African seasons on the European markets. In China, Australian oranges seem to be losing out in favour of South African produce, due to trade relation issues holding up the fruits in ports.

The Netherlands: Overlap Spanish and overseas oranges
This week, the first Spanish Navelina oranges will arrive in the Netherlands. "There are currently still plenty of oranges from South Africa, but also from Argentina and Peru on the market," indicates a Dutch importer. "Those prices are between 11-13 euros."

Germany: South African season dominates the market
On the German market blood oranges from Australia were sold at 3,50 Euros per kg this season. Italian oranges of the Navelina variety were only available in very small quantities. Otherwise, South African batches dominated the market, with prices mostly below the previous year's level. Two wholesalers from different regions in Northern Germany have said that they mainly sold oranges from South Africa for juice production. The quality, however, is rather low compared to the Spanish products. 

Another wholesaler from Northern Germany also sells oranges from Colombia and Peru. Prices had to be adjusted accordingly, given the high freight and delivery costs. The latter also said that the demand for oranges was slowly declining. The start of the Spanish season in calendar week 44 will then replace the currently dominant South African season.

Italy: Citrus campaign with smaller volumes and larger sizes of fruit forecast
The 2021/22 Italian citrus season has not yet started. In Sicily, there has been damage due to bad weather in the Plain of Catania. A decrease in production of at least 30% is expected. Elsewhere, in Puglia, for certain varieties of citrus fruit there could be losses up to 60% due to frosts during the spring. The plants have fewer fruits and therefore they are generally larger. Among the challenges for the Italian citrus campaign there are: the shortage of manpower, the increase in plastics and packaging costs, and the rise in energy costs. The Sicilian campaign will begin with blond oranges in November. At the start of December the blood oranges harvest will start, the season of which will continue, thanks to the late varieties, until summer 2022.

According to figures, in the year ending on September 2021, 76.2% of Italian families bought oranges at least once, with a decrease of 2.7 points compared to the 2020 record which had recorded 78,9%. The frequency with which Italian families buy oranges is fairly regular and stable over time and equal to an average of 10.2 acts in the last year. The average expenditure per purchase of oranges is € 2.95 (only a slight decrease compared to last year), for a rather high quantity per purchase on average and equal to 2.24 kg. In Italy, 4.7 million families (equal to 23.5% of the total orange buyers) have purchased organic oranges in the last 12 months ending in September 2021.

Spain: Low prices due to overlap with South African season
The Spanish orange season is currently starting with the first Navelinas. Oranges will be the citrus fruits with the highest production, representing 52% of the total citrus production this season. Volumes will be 0,4% higher this season, with a forecast of 3.511.099 tones.

Although there are already Spanish oranges being harvested, operations are still very quiet in the European markets where retailers are currently buying much smaller volumes of Navelina oranges than last year and also at a much lower price than usual due to the high stocks still remaining from the Southern Hemisphere, mainly from South Africa. European retailers and importers have stockpiled oranges from South Africa and have them stored. Due to the big delays in South African arrivals, there is a big overlap with the Spanish oranges that could take up to 3 weeks longer than usual. At this moment, orange prices on the field amount to an average of 0.15 €/kg; when last year at this time they were approximately double. At the same time, production costs like electricity, fertilizers, packaging materials and fuel have risen significantly.

The current EU trade agreement with South Africa -in force since June 2016-, and to be reviewed this year, allows South African oranges to enter European markets from June 1 to November 30 (previously it was until October 15), with a progressive reduction of entry tariffs that, in 2025, will disappear definitively. Growers’ organizations state that the impact on the Spanish -and European- citrus sector of the application of this specific point of the agreement is bringing very negative consequences, both from an economic point of view and a phytosanitary one. They ask to reduce the period of imports again and for tariffs on imports to be reinstated from October 15.

South Africa: Vaccine rollout reduces demand for vitamin C-rich oranges
Orange orchards are in the fruit setting stage at the moment in the northern growing regions. It’s been a good blossom, which could mean heavy settings, but it’s very early into the next season. The final Valencias of this season are being packed in the Western Cape.

The orange season was very different to last year’s excellent campaign. The shorter marketing window due to Egypt’s prolonged presence on the market and a world economy under pressure meant it was a very difficult season for SA. For Valencias there was an estimated 55.1 million cartons exported, by the end of week 41, 54.7 million cartons were packed. For Navels an estimated 27.2 million 15kg cartons were shipped this season

Last year the Northern Hemisphere orange season ended early and the market was really short on oranges, which was the main driver behind 2020’s stellar orange campaign. This year, those markets were full and South African growers were taken by surprise by the length of Egypt’s Valencia campaign. Egypt remained in the market well into July and August, marketers say, shortening South Africa’s marketing window by up to six weeks.

Logistics were a major constraint and the supply chain was delayed by two to four weeks.

Consumption and sales of oranges weren’t quite as strong last year; the vitamin C-citrus wave is over, marketers say, and the vaccine rollout makes consumers feel safer.

China: Decline in import of Australian oranges to China
Although China does have its own domestic production of oranges, the harvest of China Gannan orange has not yet started. 

For the import orange market this year, South Africa and Peru produced high yields and increased their volume. The overall arrival volume was higher than the same period last year. This has also had some impact on the import of Australian oranges. Some businesses that used to import Australian oranges switched to South African oranges. "In addition to port congestion caused by the tight global capacity, China Customs implements 100% inspection of Australian fruits. It takes about ten days for the inspection and quarantine process such as disinfection and sterilization. Therefore, the time for containers from Australia to enter the market has a serious lag. Two months ago we ordered a batch of Australian oranges from the place of origin, but this batch is still in the port. But on the other hand, the slow arrival of containers has also brought about the fruit circulation and prices on the market. It has a certain stabilizing effect. Overall, the sales of Australian oranges in the Chinese market this season are not very good.

North America: Production down and prices up for North American oranges
While supplies of oranges are generally strong, overall the volumes look to be shorter this year in the U.S.

“We’re working on our early season oranges right now--we have three varieties in the early season, which is October-December. We have Hamlin, Early Gold and Parson Brown,” says one Florida-based grower. “We’ve had great weather so I don’t see anything hindering us from having a good season out of Florida.”

The grower is currently running primarily oranges for juice machine customers and some bagging product for in-store juicing. Given the Brix level requirements for juicing are a 10+, the grower is using an Early Gold orange right now for that demand.

Domestically, Florida has a shorter crop this season. “There’s also currently the Valencia season finishing up out of California that’s still in some of the markets. But they’re finishing up a little earlier than they have in the past,” he says. On top of that, following the Texas freeze seen in the early part of 2021, it’s anticipated that there won’t be as much volume coming out of that state either. On imports, there are Midnight oranges also coming in from South Africa and South American imports which are reportedly higher this year.

Demand-wise, it does feel stronger this season which in part he points to the Texas freeze as a likely reason why. “We’re seeing more strength in the Midwest--it’s come on a bit earlier this year than last year. The Northeast and Southeast are coming in with about the same amount as last year,” he says.

However generally there’s global strength in demand as well. “There’s higher demand for oranges worldwide right now,” he says. “Brazil, California and Mexico are all down and then Florida has this shorter crop and Texas had the freeze.”

All of this is leaving pricing slightly up over last year. 

The initial 2021-22 California navel orange forecast is 70.0 million cartons, down 14 percent from the previous year according to the results of the 2021-22 Navel Orange Objective Measurement (O.M.) Survey conducted June 15-September 1, 2021. 

One California-based grower shipper says factors contributing to the smaller crop outlook include excessive summer heat and drought. “The way that the navel crop packed out last year, we had quite a bit of fruit on the tree during the bloom time. When you have a fruit load on the tree and the tree is trying to bloom, you don’t tend to have success retaining the new bloom.”  

Growers do anticipate quite a bit of fruit growth--the report notes that the tree count is off by 25 percent and expectations are that the fruit will grow with rain and irrigation.

At the same time, the crop should meet strong demand, though holdover imported crop and the disrupted supply chain and port delays could factor into that demand.   

Domestically, other citrus fruit such as California mandarins, also look to be seeing a lighter crop this season meaning it won’t be making up for the drop in navels. Pricing will also likely be up.  

Australia: New opportunities for Australian orange exporters
More orange growers from Australia could have the opportunity to export to the USA, following the recent announcement that the United States Department of Agriculture will revise the requirements for the importation of fresh citrus from Queensland, inland New South Wales and Western Australia. Until now, citrus could only be exported to the US from NSW’s Riverina, SA’s Riverland and the Sunraysia region of Victoria/NSW. Citrus Australia CEO Nathan Hancock says: “Growers are looking to diversify their export markets as new plantings enter full production so this is welcome news. The USA has historically been a very strong market for exports from our southeast regions and we feel that there are some good opportunities for fruit from other regions.” He cautioned that while the decision was first announced in August, the commencement of trade is contingent upon agreement between governments on an operational work plan, which is still a live conversation.

Meanwhile, a Chinese importer noted that Australian oranges are not doing as well as in previous years in the Chinese market: "The product quality of Australian oranges is not great this year. And on top of that, there are problems in the trade relations between China and Australia. Many Chinese importers are hesitant about importing oranges from Australia this season. The import volume is much lower than in previous years."

Next week: Global Overview Grapefruit!


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