W40: Weekly Orange Update — Tridge
TA: EU Citrus Production and Imports Decline Amid New Regulations
Spanish Citrus Harvest Expected to Decrease 15.6% YoY to Under 6MMT
The Spanish citrus season is about to start with a projected 15.6% production decline. Similarly, overall EU production is expected to decrease by 5% YoY due to extreme weather conditions. Additionally, citrus imports in the EU have recorded a YoY decline of 7.4% in the first half of 2022 after the new cold treatment regulation is now enforced. With a new campaign expected to be the lowest in the last ten years, the imposition of cold treatment for orange imports from third countries will be a critical factor in the 2022/23 EU citrus campaign development. ( Continue)
South Africa Botswana Citrus Growers Join the Citrus Growers’ Association of Southern Africa
The 2022/23 Spanish citrus harvest is forecast at around 6MMT, which will be 1.1MMT less compared to last season and 878,000 less than the five year average. Oranges are set to experience the greatest drop from 3,7MMT last season to 3MMT this season, which marks a 20% decline. Similarly but to a lesser extent volumes of small citrus will be down by 9.8%, lemons down by 12.4% and grapefruit down by 13.7%. The main reason for the low production volume is excessive rains during flowering and fruit setting, and extremely high temperatures and restrictions on irrigation in the later stages of fruit development.
Increasing Prices of South African Oranges in the Chinese Market in W40
Citrus growers in Botswana have become members of the Citrus Growers’ Association of Southern Africa (CGA), joining over 1400 existing members from South Africa, Eswatini and Zimbabwe. With the addition of Botswana, the CGA now represents just over 1564 citrus growers in Southern Africa. There are currently 164 citrus growers in Botswana, with 94% of these being small-scale farmers that produce citrus on less than 5ha with the remaining 6% falling into the category of medium to large scale farmers.
United States TA: The Cost of Natural Disasters in North America and Consequences for Agri-Producers
Losses of Up to 70% in Florida’s Citrus Sector Due to Hurricane Ian
South African Oranges are selling fast in the Chinese market due to high demand, raising the price to USD 5.58–6.98 (RMB 40–50) per 15kg carton in W40 in the Shanghai market. Before the national holiday, the price of Valencia oranges stood at USD 19.54/15kg (RMB 140), and in W40 the price stood at USD 25.12/15kg (RMB 180). Midnight oranges (size 56 and 64) prices stood at USD 20.93–22.333 (RMB 150–160) per 15kg carton and in W40 at USD 27.91 (RMB 200). The price increase was primarily caused by a lower arrival volume of South African oranges.
Citrus Market in USA Affected by Lack of Water and High Temperatures
According to the National Centers for Environmental Information (NCEI), weather/climate disaster event losses exceeded USD 1B before Hurricane Ian. Orange production in Florida and cereals in Charleston and South Carolina were most affected by severe storms and heavy rainfalls. Also, a recent earthquake in Mexico in the region near Michoacan, prominent with avocado production, experienced significant infrastructure damage. In Michoacán, Colima, and Jalisco, several roads and bridges were damaged which may impact local logistics, increasing transportation costs and causing delays in shipments. ( Continue)
Australia Australia: Loads of oranges dumped as food prices skyrocket
Due to hurricane Ian in the US, losses were estimated to be 40–70% in Polk, DeSoto, and Highlands counties from examining fruit on the ground, damaged trees, and inundated orchards. Up north in Orange County, the damage is minimum since it was not in the path of the hurricane. Currently, there are no Californian or Florida Navel oranges in the marketplace, so the wholesale prices of a 15kg carton of Chilean navel oranges in W40 at the Los Angeles terminal stood at USD 44–46 for sizes 48s and 56s. The price of a 15kg carton of Chilean Cara Cara oranges in the same terminal stood at USD 40–42 for sizes 56s and 72s. The prices of a 15kg carton of Chilean Valencia oranges stood at USD 37–40 for sizes 48s, 56s, and 72s, USD 41–44 for sizes 88s, and USD 43–46 for sizes 113s and 138s.
Chinese Citrus Industry Experiencing Issues Due to Extreme Weather
Citrus supplies in the United States are forecasted to tighten as a lack of water and high temperatures have heavily affected the upcoming season. Smaller fruits are expected to be more available, though the actual supply will be light during the start of the season, causing a price spike.
Italy Italy: The 2022/23 Citrus campaign in Sicily is at risk
Australian inflation figures released last week show that the cost of living rose by 6.8 percent in the 12 months to August. The cost of food and beverages was a major contributor to that figure, with fruit and vegetables in particular driving the increase: from 9.1 percent in June to 18.6 percent in August. That means that the cost of fresh fruit and vegetables is too high for many. And this in turn has resulted in Australian growers dumping lots of oranges that couldn’t be sold on the market. Household budgets have come under increasing pressure in the past year due to rising inflation. Comparison website Finder found last month that groceries are the second largest expense for Australian families. Finder senior money editor Sarah Megginson said rising bills are a “bitter pill to swallow” for those already struggling. In addition, inflation is expected to continue rising in the coming months, largely due to global economic factors.
China has experienced the worst drought and extreme heat since the national record in 1961. The high temperatures lasted for nearly three months. The middle and lower reaches of the Yangtze River and the Sichuan and Chongqing regions have been affected by summer and summer droughts in a wide range and intensity. The citrus industry in Zigui and Hubei has been affected by the continuous drought for nearly 10K hectares, with an economic loss of USD 29.3M (RMB 210M). Guandukou Town, Badong County, and Hubei Province face a risk of losing 40000 mu of citrus. Jingyan County and Sichuan Province have reduced their output of more than 80000 mu of citrus, and Chenggu County and Shaanxi Province are expected to reduce their output of citrus by around 20–30% this year.
The 2022/23 citrus campaign in Sicily is at risk , caught in a perfect storm of double-digit increases in logistics, energy, packaging and raw materials. The president of Fruitimprese Sicilia says that “The operators find themselves in very serious difficulties due to cultivation costs which have almost doubled due to the increases in water, energy, fertilizers, and also due to the increase in the cost of labor which to date has reached 80 euro to euro 100 per day / per worker “.
Manganaro further explains that “The intermediate product processing chain is also in an emergency with many processing industries closing down and thus the possibility of placing the second / third choice product is also lost, which must be destined for pulping with high disposal costs. destined, inevitably, to fall on the producing companies given that discarded oranges are considered special waste “.
Without knowing what the price of energy will be next month and with consumption expected to continue decreasing in Italy and Europe, companies in the sector are wondering if it is worthwhile and under what conditions to start a citrus campaign that, at the moment, does not offer realistic income prospects. 57% of Italian citrus production is concentrated in the Sicilian territory with a turnover of approximately 1 billion euro/year. In 2021, national citrus exports exceeded 234 million euros with the value of Sicilian orange exports reaching over 68 million euros.
Turkey Turkey As Alternative Citrus Import Market for Japan Towards the End of 2022
South African Orange Prices in Italy
Morocco Moroccan Orange Exports increase 42% YoY
For oranges, there is the Valencia Late from South Africa which is trading at EUR 1.30/kg in Rome, 1.50/kg in Cagliari and 1.55/kg in Treviso, 1.35/kg in Turin. Also from the African country, the Navel variety which trades at EUR 1.75/kg in Bolzano, 1.65/kg in Cagliari and 1.55/kg in Genoa.
Argentina’s Orange Supply is Available for the Brazil Market Until December
Lemon warehouse stocks in Japan will be low by November 2022, with arrivals from Chile ending in October along with delayed and limited arrivals from the US. The market for US lemon purchases is also affected by higher import costs caused by a weaker Japanese Yen. As a result, Turkey is becoming the primary target of an alternative source. Japanese importers have been negotiating to secure lemon, navel, and mandarin by bargaining with the charter vessel, dispatching an agronomist for better quality, and installing support for Brix sensors at the packing facility.
Brazil Brazil: With rains, citrus growers pay attention to the opening of flowering
The Moroccan Ministry of Agriculture announced earlier this month that exports this season (1 September 2021 to 31 August 2022) reached a record volume of 766,500 tons. “All citrus varieties are growing. The export of small citrus reached a volume of 629,300 tons. That is 40% more than last season. Orange exports grew by 42%. Growth was achieved in all destinations, but especially in the American market (times 3) and the African market (times 2.2).” The national citrus yield was 2.67 million tons in the last season, 14% more than in 2020–2021. The cultivation is concentrated in four regions: Rabat-Salé-Kenitra with 700,000 tons, Souss-Massa with 672,000 tons, Oriental with 460,000 tons and Béni Mellal-Khenifra with 436,000 tons. Together, these regions account for 85% of Moroccan citrus cultivation.
Argentinian orange supply is expected to be available for the Brazilian market until mid-December, mainly for the Valencia Seedless and Late varieties. In W39, the FCA prices are USD 11 for a 15kg box, and the cost varies based on the sizes offered. Prices may also increase as orange stock finishes.
After the rains in the second half of September, orange growers in the state of São Paulo are getting ready for the opening of flowering in rainfed orchards. According to Cepea researchers, some areas have already flowered, and producers are intensifying preventive care for floral rot (“little star”). As for orange prices, they had a slight increase this week. Employees at Cepea indicate that demand has shown signs of improvement. In the partial of the week (from Monday to Thursday), the pear orange had an average of R$ 41.26/box of 40.8 kg, in the tree, an increase of 2.48% compared to the previous week.
Originally published at https://www.tridge.com on October 12, 2022.
