"Grapefruit has always been a volatile product on the European market, with sales trending gradually downward, at a two to three percent annual rate. And in the last two years, consumption has plummeted by ten percent," Oron Ziv of the Israeli fruit and vegetable exporter BeFresh Europe begins during an interview with FreshPlaza about this citrus cousin's not-so-rosy picture. "It's a bit of a riddle why, and add the stiff Turkish and Spanish competition, and things are becoming genuinely tough for us."
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A lot of grapefruit also goes toward the juice industry, where growers usually get good prices. The global market situation determines those prices. "So, it's the minimum price we have to put on the table, something we failed to do last year," explains Oron. Yet Israeli grapefruit growers' profitability is not always guaranteed either, and some are wondering whether it might not be better to uproot their trees and replace them with more profitable crops.
Easy to cultivate, but acreage is shrinking
"Those who keep at it fear a continuation of the downward trend in demand. And those who decide to plant another fruit variety often have to wait years for the new crop to come into full production. Still, for the next few years, I think some growers, especially those with plots in less-good growing areas, for example, because of a lack of water, will keep grubbing up their trees."
Still, grapefruit is easy to cultivate and gets good per-hectare yields, especially compared to easy peelers. According to Oron, growers in Israel can harvest 70-80 tons per hectare; with the easy peelers, getting 30 is considered successful. "We try to get as much of our grapefruit that goes to Europe into retail programs, but some eventually reach the spot market. After all, we have obligations to our growers. Our job is to always find a market for the available fruit," he says.
Export figures
"Florida sends hardly any grapefruit to Europe anymore, and Mexico would rather concentrate on the dollar markets. In early October, we fared well on the European market for a few weeks. But then South Africa, which had found some stock, and Spain, very early in its season, sent some shipments, attracted by the nice prices. So that resurgence was short-lived, with demand falling again since then. December usually isn’t a good month for grapefruit. It's not a typical Christmas product."
FAOSTAT figures show that for 2020, with 244,334 tons, South Africa exported the most grapefruit in the world, followed by China (203,882 tons) and Turkey (184,393 tons). With exports of 73,138 tons, 65,097 tons, and 55,453 tons, respectively, Israel, Spain, and the US occupy spots 4, 5, and 6. Four more countries of some importance - that export between 10,000 and 25,000 tons - can be mentioned: Egypt, Thailand, Vietnam, and Mexico. Of course, compared to oranges or lemons, grapefruit is not such an important export product. In 2020, 7,715,527 tons of oranges and 4,024,561 tons of lemons were traded on the international market, while that was only 1,189,238 tons for grapefruit.
Strong Shekel
Oron is not entirely dissatisfied with Grapefruit prices. "They're not bad, but neither are they great. And although logistics costs have fallen slightly, they remain substantially above those of two to three years ago.
Add Israel's strong currency to that, and it becomes evident that exporting is no easy venture. It comes down to finding retailers willing to pay a little more for our quality. That's why we're trying to broaden our horizons somewhat and are looking for opportunities in the Far East.”
"South Korea's a good market, China slightly less so. That's due to fruit arrival delays and difficulties getting it to market because of pandemic issues. If grapefruit only arrives after 70-75 days instead of 40, its quality is no longer optimal. Last year, we lost a lot of money there. Colleagues have had the same problem, as have South African exporters who entered the Chinese market after us," he knows.
BeFresh also sends some produce to Singapore and Hong Kong, but in small volumes, because, says Ziv, everyone is trying to penetrate those markets. "After all, they don't demand cold treatment. Exports are easy, but prices aren't great. It's also theoretically possible to send a conventional refrigerated ship with a capacity of 5,000 pallets chartered by another company to Japan every year. Usually, it's half filled with Sweeties and half with grapefruit. This year, that ship didn't set sail; the $2 million-plus charter price prevented that. Many Sweeties just stay on the trees now. Fortunately, yields are a little lower, and we hope the market improves by January."
The rise of Turkey
According to Oron, Turkish grapefruit cannot compete, flavor-wise, with the Israeli product. Even so, you have to wonder how long European retailers will still choose the more flavorful but pricier fruit. "Ten years ago, those stores carried mostly Florida grapefruit, and the product from Israel could only benefit from a gap at the beginning and end of the Northern Hemisphere season. Then a box of Florida grapefruit suddenly started costing €30-35, and we gained access to the middle section too. Nevertheless, in Europe, Spanish grapefruit still has the advantage of being considered a local product."
Turkey's weak lira means there are, in theory, plenty of opportunities for that country in Europe, he says. Even though, at present, it too, has limited availability and is sending far less to Russia and the Far East. Yet things are noticeably turning around. "We've already had to cede the Italian market, where we used to be strong, to Turkey and Spain," says Oron.
Minneola also struggling
BeFresh Europe's affiliated growers already harvested the first Minneolas - a grapefruit/mandarin hybrid - around November 20. But, finding enough hands was tough. "That's on top of the labor cost problem, of course. And recently, for security reasons, a border crossing to an area where many harvest workers live was closed for a few days, bringing the picking to a halt."
Minneola, a niche product, is also losing some ground, even at Dutch and Belgian retailers, where it used to be hugely popular. "After all, there aren't that many of these, and there's no way it can be supplied year-round. After our season, there are some from USA and later on from Peru, but that's about it. There are too many supply gaps. There are no longer any promotions when they suddenly order 10 truckloads a week instead of the usual one or two,” the Israeli exporter explains.
“Here in Israel, the Minneola acreage is also shrinking, with cultivation concentrated around one valley. In central Israel, most plots have been uprooted, as growing conditions there aren't ideal, requiring too much spraying. It’s a delicate fruit too. Too much rain and the harvest fails. Israeli exports don't exceed 2,500-3,000 tons, whereas until ten, 15 years ago, it was ten times that."
Russian market remains important
With BeFresh Russia, the group has a company specializing in the Russian market. "BeFresh Russia and BeFresh Europe operate independently, but when we go to the Russian market, we obviously do so through BeFresh Russia and vice versa. We're doing less in Russia, but it's an important destination for some products, like Sweetie, which doesn't sell on the European market but does in Russia. And in pomelos, some sizes don't get sold in other markets but are welcome in Russia," adds Oron, who explains that Russia was inaccessible in the month after the war broke out. "Vessels stopped sailing there, and there were payment difficulties. But solutions were found, and now there are regular maritime services to Russia again. The war in Ukraine's biggest impact on Israeli exports is general: higher energy, raw materials, and logistics costs."
"Though, of course, there are some 'issues'. For example, a month before war broke out, Turkish grapefruit was denied the Russian market because of some problem. We jumped in, but just after the war started, when several countries imposed sanctions against Russia, the country suspended many of its restrictions to ensure product supply. Turkish fruit flooded the Russian market again. Our grapefruit, which arrived by boat around the same time, suddenly couldn't get sold once docked," Ziv claims. There was a similar story with pomelos. "In recent years, Chinese pomelos were banned from the Russian market for phytosanitary reasons. That benefited us, but not anymore - that market is once again flooded with cheap Chinese product."
Broad range of export products
Besides Citrus, BeFresh also exports Avocado, Mango, Carrots, Celery, Potatoes, Radish, much of which, by the way, go directly to the Russian market. "Last year, we couldn't send a single container of carrots to Europe. That went to the US and Russia. The latter also takes 90% of our bell peppers and as much as 100% of our Radishes. And take away the Russian market, and we no longer have any reason to grow Celery. But, when it comes to Citrus, we can't compete with Turkey in that market," Oron says, adding, however, that Europe generally remains the largest market for Israeli agricultural and horticultural exports. "And we may even benefit now from the current geopolitical situation, including the high grain and cotton prices," he concludes.
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For more information:
Oron Ziv
BeFresh
Tel: +972 (0) 722 555 135 (Israel)
Email: oron@befreshcorp.net
www.befreshcorp.net