Cyprus’ membership of the European Union is expected to favour its citrus fruit sector. Joining the EU has provided the republic with a large free market for citrus growers to trade with, and they are making the most of it.
Even though the UK is the major export market for Cyprus, typically importing 28 per cent of it citrus volumes, other EU markets, such as Italy, the Czech Republic and Sweden, have gained in importance of late.
Additionally non-EU markets are showing an interest in Cypriot fruit and Russia, Croatia and Hong Kong are proving to be good markets for early exports of fruit, especially lemons.
Prior to the EU enlargement, citrus exports, and other agricultural products, were state-controlled and restricted by heavy taxes. This has all changed with Cyprus joining the EU, and these restrictions have disappeared, allowing growers to promote their produce to a wide European audience. In return, however, joining the EU has meant that the citrus industry has had to unite and several producer and export groups formed during 2004, changing the mechanics of the industry.
This evolution in the market has occurred quickly as many major exporter groups in the Cypriot citrus industry were granted producer organisation status just five months after ascension. These included Sedigep, the Fassouri growers’ group Lionhart, Golden Tree Growers, Etairia Esperidocalliergiton Genesis and Persefoni. An additional three groups were formed later in 2004 - Greenfields, Horizon and Sedigep Argaka.
Antonis Constantinou, director of the agricultural department of the Ministry of Agriculture, Natural Resources and the Environment, says the move was significant because of the benefits which could be collectively gained through promotion and marketing and improvements to produce quality, environmental protection along with entitlements to financial assistance in the local processing (juicing) industry.
However, this has also meant that local growers have needed to change their marketing strategies and abide by the new rules regarding financial aid when it comes to promoting citrus. Ioannis Shekeris, commercial counsellor at the Cyprus High Commission Trade Centre in London, says the major difference now is that all promotions must be co-financed by the sector, and not solely by the government. “This change is both good and bad,” says Shekeris. “Producers need to get involved with advertising and promotions but at the same time it has made the process more complicated.
“Producers are familiar with marketing their own brands, but collectively they need to establish how they will go forward. The grower/exporter groups have been invited to submit promotional proposals to the Ministry of Commerce and Industry for approval, but they can no longer solely rely on the government’s help. Growers need to change their strategy and work with the recognised producer groups for their generic sector advertising,” explains Shekeris.
However these changes to the industry’s mechanics have not affected production and Shekeris says volumes have improved over the last few seasons. He says: “The 2003-04 season was fantastic for Cypriot growers with over 73,000 tonnes of citrus exported, and having had a long and dry summer last year and high reservoir levels, we expected similar volumes.” Citrus production takes place on 54,000 hectares in the south west of the island near Limassol and Paphos, and in the west towards Nicosia - orange orchards cover 1,830ha, mandarins 2,000ha, grapefruit 720ha and lemon groves 850ha.
Mandora is now the single largest citrus crop in Cyprus and the UK is the main importer of the variety. The mandarins come on stream in January, and are exported almost in their entirety, with average sendings at 27,000t. In the UK, there are usually smaller quantities of minneolas available that arrive around Christmas, as well as Nova and Ellendale.
Lemons grown in Cyprus are harvested and exported normally starting in mid-September, with a typical crop size of 13,000t, of which 10,000t are shipped to both EU and non-EU countries.
In grapefruit, Cyprus primarily produces pigmented grapefruit varieties such as Ruby Red, and grapefruit exports stand to benefit from the severely reduced Florida crop. Grapefruit exports average 18,000-20,000t, which equates to almost 80 per cent of total production, and have remained steady over the last few years.
Amagio Enterprises in Limassol produces 12,000t of grapefruit, 5,000t of mandora and 1,000t of lemons. Managing director George Ioannides says: “Overall production has been good with more varieties planted in the last few years. The orange variety Nucellar is promising and every year an additional 50ha have been planted as we replace older trees with Nucellar, because it is a better size and colour.”
Fesa imports a range of Cypriot citrus fruit, working closely with one grower to fulfil its citrus programme says Colin Blake, industry import sales manager: “Over the last few seasons we have had very good programmes for mandora, lemons and grapefruit. We deal with one grower/exporter that has its own production and supplements volumes from other growers when needed.”
Over the last five years, Fesa’s Cypriot citrus imports have increased on average by 10 per cent each year. Blake says: “In general, Cypriot growers have managed to maintain their quality standards for fruit and we have not noticed any major changes since Cyprus joined the EU. The fruit goes predominantly to the retailers and steadily the category has increased its market share. This season grapefruit quality has been good and we have seen good returns, but lemons have been difficult to trade.
“However we were surprised this year by the lack of industrial citrus fruit available. This is the major change we’ve noticed since Cyprus joined the EU - growers now receive the same subsidies as the Spanish for processing fruit locally. We didn’t fully take this into account and the usual volumes that serviced the UK processing sector haven’t been there - it’s lost out to the local market and we have had to look elsewhere for industrial fruit.”
However Shekeris says the introduction of subsidies is not the only reason for the shortage of Cypriot citrus in the UK lately. He explains: “The subsidies were already available to growers before May 2004, where normally only a small percentage of fruit not suitable for export was naturally channelled to the local processing industry. The increased subsidies are not a big incentive for the sector not to export, however they can sway exporters when prices for fruit in export markets are not favourable. This is what has happened this season; the fruit quality has suffered, prices offered by the UK for easy peelers have been low so exporters have gone elsewhere.
“In this instance, growers have the option to sell their fruit to the local processor a few miles down the road from the main growing regions, in Limassol, rather than pay to send their fruit to a low-paying UK industry.”
There are four citrus processing industries in Cyprus, mainly involved in juice production, which have been recognised by the department of agriculture as approved citrus processing plants under the financial aid scheme. However it is a small industry and production and transportation costs are high, and competition for the finished produce strong.
Being part of the EU will bring benefits to Cyprus’ processing sector from direct EU funds, producer groups stand to gain and additional revenue will be generated from export refunds to third world countries. Shekeris says: “The formation of producer groups strengthens growers’ positions in the marketplace and stabilises production. Of late, growers have learnt to adopt best practice and become more patient, such as was the case with grapefruit this past year. They are now giving priority to early pigmented varieties and wait a little longer for seedless, rather than rushing to market to fill a gap, and sending grapefruit when it is not at its best. Growers have realised in the last two to three years that it is not beneficial for them to send sour fruit to the UK. This is better for everybody.”
