One of the biggest challenges for Argentine citrus exports is the strengthening of the peso, which has increased export costs by 20-30%. "We've lost competitiveness so we have to see if we can transfer these higher costs to the sale price," stated Gonzalo Piñeiro, Ledesma's head of logistics.
"In addition, the global logistics crisis has impacted operations, especially in the US market, where port issues have generated delays and additional costs. Strikes have led to missed departures and higher freight rates," Piñeiro stated.
Ledesma has been active in the sector for more than 116 years and specializes in the cultivation and export of citrus, with a focus on lemons and oranges. Its main export destinations are the United States, Spain, and the Netherlands, where the company competes with growers from South Africa and Egypt.
Last year, Ledesma exported around 12,000 pallets of oranges and 6,000 pallets of lemons, i.e. 18,000 to 20,000 tons of citrus. The company mainly exported Valencia oranges and Eureka lemons.
"In the last two years, we adjusted our business strategy, focusing on industrial products (juice concentrates and essential oils), reducing and streamlining the fresh fruit operation. The fresh fruit market is volatile and dominated by large players such as Egypt and South Africa, who put pressure on prices with low production and production costs and large volumes," stated Walter Scotton, Ledesma's commercial and logistics manager. This made us rethink our fresh fruit strategy. We adjusted field and packing costs, reduced our packaging and brands range, and prioritized customers in strategic markets to optimize the operation," stated Walter Scotton, Ledesma's commercial and logistics manager.
"We went from focusing evenly (50/50) on industrial processing and the fresh business to 80/20 respectively, which has allowed us to greatly improve the working capital used and the margins of the operation. Today, 80% of the production is used to make juice concentrates and essential oils," Scotton added.
This change responds to the need to optimize resources and minimize the impact of fluctuations in fresh fruit exports. "15 containers of fresh fruit are equivalent to one container of juice. Thus, if we change strategy, we'll reduce fresh orange exports to increase juice production," Piñeiro said.
The outlook for this year remains uncertain. In addition, potential trade barriers in markets such as the US add an element of volatility to the season. "This makes it even more important to work efficiently and maintain volumes," Piñeiro concluded.
For more information:
Gonzalo Piñeiro
Ledesma
Buenos Aires, Argentina
Tel: +54 11 4378 1627 / +54 11 6890 6408
Email: [email protected]
www.ledesma.com.ar