The situation of the new Spanish citrus season that is currently underway, with an overall production that, according to official projections, will be in line with that of last season, although with a sharp drop of Andalusia's orange production, will have a clear impact on the processing and juice industry.
"In general, it is said that the production in the Seville and Cordoba area will drop by 20-30%, although in reality, this decline is greater. In our farms, for example, we will only have 30% of a normal harvest," said Javier Lopez, president of Asociafruit.
"This isn't happening only here, though. This year we are seeing a worldwide shortage of citrus for juice production. Florida and Brazil, which are two other major producers, are having the same issue, and this, in fact, has already been reflected in the orange juice futures market, where the price has skyrocketed."
One of the particularities of the Spanish juice industry is that there are not many plantations specifically devoted to it. The raw material is usually fruit grown for fresh consumption that, for any reason, such as not meeting commercial standards, is discarded, says Javier. "This year, the amount of fruit on the trees has been greatly limited by the shortage of water and the high temperatures in the spring, but the rains in recent weeks have allowed the oranges to thicken, so there are no issues with the sizes and everything points to the fresh industry being able to absorb most of the fruit."
"This year, less fruit will be discarded and the juice industry will not have enough raw materials from that source, so if they want to have oranges to be able to continue serving their customers as usual, they will have to compete in terms of prices with the fresh industry. And although they can choose to import oranges, the price of imports will also increase, given the lack of supply."
"It depends on who you talk to, but oranges for juice production are being sold for up to 35-40 cents per kilo"
It is worth recalling that Spain has a very interesting position in the global orange juice market, in which Brazil is, by far, the largest exporter on the planet (in all formats: fresh, concentrate and even NFC).
"When imports are made from Brazil, which sends ships loaded with orange juice, we growers notice it, because the demand for raw material from our domestic customers goes down, and prices drop, too," says Javier. "But with HLB this year, the forecast is that there will be less juice production and imports."
"As we see almost every year at this point in the season, the feeling in the markets right now is that there isn't a shortage of oranges. Every operator is already working and, even if we are not at 100%, you can get the illusion that there is more volume than there actually is. Generally, at this point each season, prices tend to fall as the supply apparently increases. However, this year we seem to have been able to communicate the situation better, so we have not had that downward pressure, and we have been able to keep prices stable."
"The Navelina campaign will be over for many operators before the end of December, and after that, in just a few weeks, we will get a glimpse of the actual situation this season. We all think that, at that point, prices will go up, because the shortage of fruit will already be evident to the customer. The price paid by the processing industry will also increase when the white varieties arrive, which are more suitable for juice production, but are going to be absorbed by the fresh market."
"As reported by the Lonja de Cordoba, prices at origin currently stand at 36-40 cents for the Navelina, and at 40-43 cents for the Salustiana; while, depending on who you talk to, oranges for juice production, already harvested and dumped, are bought for 35-40 cents per kilo."
"It's a good price, compared to previous years," says Javier López, "and, just as we foresee that there will be a historically low production of oranges for juice production, prices will also be historically high."
For more information:
Asociafruit
Av. Málaga 16,
41004 Seville, Spain
Tel.: +34 954 42 42 98
presidencia@asociafruit.com
www.asociafruit.com
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"The shortage of fruit will become clearer before the end of December, when the Navelinas run out" - FreshPlaza.com
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