The mood on the global market for lemons is generally optimistic, with the exception of those countries suffering from increasingly volatile weather conditions.
In the Netherlands, the lemon market remains stable, exhibiting positive growth after a temporary lull in demand linked to moderate weather conditions. Belgium, on the other hand, witnesses a slight recovery in lemon prices driven by diminished volumes and improved weather. In Germany, concerns about blackspot affect the Eureka lemon variety sourced primarily from South Africa.
France, while experiencing adequate weather for lemon consumption, anticipates challenges from extreme heat affecting upcoming northern hemisphere campaigns. In Italy, distinct weather conditions have taken a toll on lemon production, leading to reduced yields and sporadic supplies, particularly impacting regions like Sicily, Calabria, and Campania. Spain, however, expects a significant surge in lemon volume due to favorable weather conditions, expanded plantation areas, and sustainable agricultural practices.
South Africa, a key player in the global lemon trade, has maintained stability, partly attributed to a reduced harvest from Spain that bolstered demand. Nonetheless, the industry faces challenges like oversupply in the Middle East market and the need to manage export volumes effectively.
In North America, the US lemon industry is preparing for a more optimistic season with elevated prices providing relief to growers after a period of low prices and increased import competition.
The Netherlands: Stable lemon market, positive development
"The lemon market has been quite stable this summer, both in prices and quality. A few weeks ago there was a bit less demand, but I think the market was also subject to the moderate weather in Western Europe, with people putting fewer lemons in their cocktails anyway," said a Dutch importer. "Fortunately, we are now noticing that the lemon market is developing in a positive way again. The past 10 days have seen good sales. Moreover, it is positive for us that Argentina and South Africa are declining in numbers and Turkey and Spain will start a bit later due to the hot weather."
Belgium: Slight recovery for lemon prices
In Belgium, lemon prices are going back up a bit in the last week. "Demand has been moderate due to the lots of rain and cold and in addition we had more than enough volumes from South Africa in particular," explains a Belgian trader. "In contrast, volumes are now falling a bit more, which is good for prices. Moreover, consumers seem to be picking up the lemons a bit again with the better late summer weather."
Germany: Issues with blackspot on lemon market
Lemons of the Eureka variety currently come mainly from South Africa. There are many problems with blackspot this year, which is mainly due to excessive rainfall during the flowering period. Price levels are generally high. In addition, large calibres dominate the current supply. Apart from South African lemons, Argentine, Spanish, Italian and Zimbabwean products are also offered in German trade.
France: Adequate weather for lemon consumption
As the stone fruit season draws to a close, operators have already switched to citrus fruits from the southern hemisphere. Lemons from Argentina and South Africa are on the market. The market is quite good, as it is very clear due to the lack of products from the northern hemisphere. Consumption is also good, thanks to the cooler weather of recent days.
The northern hemisphere campaign is due to start in October, and some people are worried about the extreme heat which could affect the fruit on the trees.
Italy: Production affected by challenging weather
Whether in Sicily, Calabria or Campania, this year's weather conditions have affected lemon production.
In Sicily, the production of Bianchetto lemons has fallen short this year. "There has been a drop in fruit due to unfavourable weather conditions. Given the lack of product, prices were quite high, averaging €0.80/kg. Spain has been able to meet the demands of the Italian and foreign markets as far as possible," says one grower. "We are now in the middle of the Verdello lemon campaign, which runs roughly from July to September. The product is even more scarce than in previous months, this time because of the July heat wave, with temperatures over 40°C, peaking at 48°C. Trade is at a standstill, or almost at a standstill. The producer price for the organic product is around 1.00 €/kg. Supplies in Italy currently come mainly from the southern hemisphere (Argentina and South Africa)."
An industry body also estimates that the 2023/24 harvest will be lower, with a 25-30% reduction compared to last season. The reason for the reduction in yield is not only the abnormal weather in May/June, with heavy rainfall and high humidity, which affected flowering and fruit set, but also the high temperatures in July and August, which significantly increased the physiological drop of the fruit, the percentage of sunburn and slowed down the swelling of the product. However, it is feared that the autumn weather will be similar to that of 2022, when temperatures were mild in September, October and November, leading to an unfavourable development and ripening of the lemons and a subsequent overlap between Italian and foreign supply.
Despite the unfavourable weather conditions, production of lemons protected by the Costa d'Amalfi PGI was at the same level as last year. From a commercial point of view, prices were not very satisfactory from April to June. From July onwards, however, prices began to rise, both because there were fewer lemons available on the market and because the quantity of PGI lemons from the Amalfi Coast fell in the face of strong demand. Since August, exports of this denomination have also ceased. The campaign is now drawing to a close and will end in mid-September.
Spain: Significant increase in volume expected
Last July, a Spanish industry body confirmed in its first estimate of the Fino lemon harvest for the next 2023/2024 campaign that the production of this variety will record a significant increase of up to 30% compared to production in the 2022/2023 campaign. And although the harvest is subject to the weather, the availability of water and the impact on the harvest volume of the entry into production of the new plantations - the Fino lemon surface has increased by 5,671 hectares in recent years - it is expected that the national harvest, which will begin next October 1, could amount to 990,000 tons.
“This increase that will occur in the national harvest will allow us to provide a spectacular 12-month service to the entire market in which Spanish lemons are made,” says the manager of a Murcian company that produces organic lemons.
Thanks to the efforts of a leading export sector worldwide, in the last 30 years the water footprint of lemons in Spain has been reduced by 38.96%, to be 57.8% lower than the world average.
“Spanish agriculture, and more specifically, lemon cultivation, is one of the most sustainable in the world,” highlights the Murcian operator, whose fruit, taking another step in the sustainability of this crop , has the biodynamic agriculture certification. “The Demeter seal right now is above any agricultural standard worldwide.”
South Africa: Stable market, challenges with oversupply
It was a stable year for South African lemon producers and the main reason was the short crop from Spain which stimulated the demand from Europe, not only on lemons. (Although exporters note that their European clients have shared a drop in consumption of 20% to 30% on fruit).
The 2023 season is an almost complete carbon copy of the 2022 season, with a million more cartons to be exported than last year’s 34.7 million cartons. Europe took close to half of that.
The Middle East received 10 million cartons of South Africa’s lemons, more than it can absorb. It typically gets overloaded during weeks 15 and 16 when it gets double the weekly 400,000 cartons of lemons they can absorb. Much of the class 2 lemons are earmarked for the Middle East. As over the past three years, the lemon market gave in and took a long time to recover. The industry is looking at ways to get exporters to voluntarily send fewer lemons to the Middle East during the early part of the season.
“We can’t go on like this in the Middle East, and with lemon volumes still growing, - we have 10 to 15 million cartons still to come before we plateau. If we continue in this way we’ll turn the Middle East into a consignment market and then we’ll be very sorry.”
Russia remains stable, taking 2.8 million cartons this year, they don’t want class 2 lemon anymore, exporters say. At the moment is a $2 to $3 difference between class 1 and class 2 lemons. Money flow is complicated and exporters remark that they’re worried about the situation ahead as it’s clear that the Russian economy is weakening.
The lemon trade with China is still well below a million cartons per year, despite a more favourable cold protocol.
South African producers are being encouraged not to plant any more lemons. “The days of making big money on lemons are definitely past,” says an experienced exporter. “And the juice price is close to zero. That’s the first indication that global lemon volumes are too high. There’s a year’s worth of lemon juice available and markets aren’t working its way through it quickly enough.”
Reefer tariffs have come down by 25%, but it’s not enough – it’s still very expensive to ship fruit, especially fruit with low margins like lemons. The industry says it needs reefer tariffs at pre-2020 levels.
On the bright side, because of the good rains in the Eastern Cape, where volumes were significantly lower this year, a larger crop could be on the cards for next year, perhaps even reaching 38 million cartons.
“Growers have had some room to breathe this year, which they really needed.”
North America: More positive outlook for upcoming US lemon season
Although harvest is delayed, California’s desert region (District 3) is expected to start with limited picking between now and mid-September. “Climate change has led to more extreme environmental conditions with increased temperatures, intense, inconsistent precipitation, and amplified insect pressure on crops. All these natural effects are creating challenging growing and crop conditions,” says a California grower-shipper. These changes have resulted in a delayed start to the season in District 3 and a projected 15% or larger decline in lemon production compared to last year.
Market forces and lower supply have led to elevated lemon prices, which is beneficial for growers who have struggled with low prices in recent years. “It is a blessing that the market supply conditions are helping prices move closer to normal levels after three seasons of depressed prices,” he commented. Between fancy, choice, and standard grade, the seasonal average price of lemons was down about $5 - $7 per box in the past three years. “Reduced prices are predominantly caused by perfect competition exacerbated by the accumulation of large volumes of imported lemons to the U.S. market.
Adding the rising costs of growing, packing, and distributing lemons, it becomes increasingly challenging for lemon growers to sustain. The economics of growing lemons have not been profitable in recent seasons.”
Retailers and the food service community are considered vital partners in sustaining the lemon industry. This is especially important as the price elasticity of demand for lemons is highly inelastic, meaning consumers will continue to buy lemons in significant volume even when prices rise. The consumption of lemons has been showing steady increasing trends over the past 15 years due to their versatility of uses and healthy attributes driving demand growth.
Argentina: Near ‘nightmare’ season for Argentinian lemons
The traditional South American leaders in lemon production and exports in Tucuman, the main lemon production area, have had a near ‘nightmare’ season. This is due to a very late start caused by a drought. Internal challenges in Argentina, like runaway 100% plus inflation and foreign currency supply challenges and limits made it very challenging for producers and exporters. The Argentinian government declared an emergency which brought some tax relief for Tucuman’s lemon growers.
However, good news was received during the season when the US market opened for organic lemons. One producer and exporter noted: “Here was a season with less volumes of exportation. The very good news is that the organic lemons can go to US market. We are starting to export more and more with excellent results and quality in lemon arrivals. The governments emergency declaration helps of course.”
Volumes for Argentina’s lemons up to week 30 of 2023 was the third lowest for this period in 10 years at 145,160 pallets.
Next week: Global Market Overview Avocados!