The major citrus players have had a fair few ups and downs over Christmas and into the New Year, with a number of factors from both within and outside the industry coming together to make the category one of the most difficult to navigate.
The last three months have seen natural and economic forces conspire against the citrus sector, leaving both growers and exporters struggling to tough it out.
Spain had expected a bumper crop this season, but a series of bad weather conditions, including frost and strong winds, have whittled their figure down from the 23 per cent jump to 6.5 million tonnes expected. Some of the worst weather hit the heavyweight producer at the end of January, knocking citrus off the trees and damaging fruit.
The main production areas in Valencia were blasted by wind speeds of up to 160km/h (100mph), blowing mid-season orange varieties, especially Navel, Navelina and Lane, from the trees. Some growers lost all their remaining production of these varieties, as well as sustaining longer-term damage to the trees themselves.
Fears that the damage will not be covered by insurance or that the level of insurance is well below that of the actual production in the field took hold and were singled out by growers’ association Ava-Asaja as a cause for concern.
“Between low prices, rainfall, snow and frost, and now these winds, it is proving a very challenging season,” says one insider, and no doubt many others would back his claim.
But the Spanish sector is planning to tackle some of its problems head on by continuing to invest in production. The region of Valencia launched its citrus conversion project last month, with the aim to diversify and reorganise the varieties produced in the area, to stabilise the market and bring prosperity to what has become a troubled sector. The plan will subsidise growers up to 60 per cent of the cost of grubbing up their old trees and planting new ones, grafting new varieties onto existing rootstock and improving irrigation. The subsidies will be met equally by the Valencia regional executive and the national government.
The move, over four years, is set to shift production away from its peak in December and January towards the end of the season, in order to fill gaps in the market.
The Spanish sector is not the only one braced to overcome the difficulties it has faced. Israeli growers and exporters have picked themselves up after two cold snaps last year, with good growing and harvesting conditions allowing them to make the most of their offer this year. The country has enjoyed good planned volumes, strong demand and regular shipping. “The market has been stable and we are exceeding our expectations at the moment,” says one exporter. “This is because there has been a lot of promotional activity at the multiples, while consumers have felt the general need to go back to basic products, which citrus comes under.
“With the initial indications of the strong Israeli shekel and huge Spanish crop, I think the market under-programmed Israel slightly, but there has been a huge turnaround in the last six weeks,” he continues. “We are now supplying Or clementines, Shamouti oranges and grapefruit. We expect this to continue in fair volumes through the rest of the season.”
Across to the US, and Florida grapefruit shipments to the UK are gaining on last year, but overall sendings are expected to be lower than in 2008. Major players are still confident that this season will be a good one, following adequate rainfall throughout the early development of the crop and cool temperatures in November, which helped give the fruit colour and improved brix levels. All this, even though much of the fruit narrowly escaped a damaging freeze last month.
The US department of agriculture released its latest citrus figures last month, which revised the total orange production from the original projection of 165 million boxes to 162m boxes, while the grapefruit crop was unchanged from the original forecast of 23m boxes, down from last year’s total crop of 26.6m boxes.
“Supply and demand appear to be in balance, currency exchange rates are still favourable for our export business and, despite escalating production costs, we are seeing some relief in energy prices,” says one insider. “All in all, I anticipate a good season.”
The southern hemisphere is gearing up to come into its own. South Africa is preparing for what could be a promising season, with some of the main production areas enjoying good growing conditions, high volumes and top quality.
The Northern Province is expected to see a strong season in terms of fruit quantity and quality, with the weather conditions in the Limpopo favourable so far, and the early part of the growing season enjoying a hot and dry spring.
“The crop on the trees looks good and clean, with a few area differences,” says one insider, based in South Africa. “Volumes and sizing for Delta, Midnight, Navel and Valencia oranges look similar to last season. The grapefruit crop could be slightly higher than last year, with smaller sized fruits. The easy-peeler crop from this region could be higher than last year.
“Generally, we expect a good season, with fewer problems than last year,” he added.
Down to the Western Cape, the size and quantity of satsumas look to be in line with last year, but the clementine crop could be down by 15 per cent.
In KwaZulu-Natal, the southern and interior areas had good rainfall last month. The Navel and Valencia crops look similar in volume to 2008, but fruit size could be larger.
The general feeling is that the lemon crop has a good second set, which means the volume will be up slightly on last season. The predominantly grapefruit-producing central and northern regions of KwaZulu-Natal will produce more Star Ruby volumes as young trees begin to bear fruit, while the Marsh crop continues to face decline.
Only someone with a crystal ball would be able to predict what will happen in the next quarter, but with growers and exporters across the key sources pulling out all the stops to keep their businesses profitable, this should stand them in good stead.
AKSUN EYES UP NEW HORIZONS
Aksun has established itself by exporting 47 different kinds of fresh and dried fruits and vegetables for more than 15 years and is looking to gain in strength, says Esra Söyleyen, co-ordinator for international trade.
The Turkish firm, which is a member of Akincigil Group, has always seen Europe as its major market, but recent shipments to the UK and the Far East have been very promising and these areas are set to become increasingly popular.
Our first aim is to secure successful shipments of citrus to newer markets such as the UK, but we will not disregard the possible shipment of other products. We started the season with Interdonato lemons back in October and have continued with grapefruit, satsumas and oranges. We are still very much in the citrus season and currently have high-quality Lamas lemons and minneolas on offer.
At the same time, we are also looking forward to the summer season with products such as apricots, grapes, watermelons and figs.
Aksun is determined to establish itself in new markets and always deliver quality on time, 12 months a year. We are aware of the challenges that can come up when delivering to the UK, such as quality, punctuality and presentation, but everyone on the team here is confident that we can overcome these challenges. We will also be resolute throughout these tough financial times that the world is going through.
Turkey enjoys a climate that is well suited to production. We have been exporting high-quality citrus fruit since the start of our operation and, on average, we have recorded around 20 per cent growth every year. At the moment, we are dealing with 300 tonnes of citrus every day and we like to give our customers a choice of different pack and size formats, from 500g nets to one-tonne jumbo bags.
Apart from citrus, Aksun has been supplying tomatoes, potatoes, onions and peppers year round. We have the capacity to load four to five trucks of tomatoes and 16 trucks of potatoes each day. And we are equipped with a special sizing machine to grade the vegetables according to customer requirements.
Our direct business with major supermarkets across Europe is continuing with great success and every year sees the growth of deliveries to these markets. A considerable growth of 1,800 trucks a year, from only 14 trucks a year at the start of operations, has been met with pride and joy from the founders and workers of the company. We have set our sights on 2,000 trucks a year in the new season.
The other companies within Akincigil Group - Petronak and Akın Transport - are continuing the policy of reaching consumers with high-quality fresh produce.
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