The lemon and lime sectors normally enjoy strong sales during the winter festivities, when consumers go for a gin and tonic with a twist of lemon or plump for a refreshing cranberry juice with a slice of lime. This year is unlikely to prove any different and many northern hemisphere producers are reporting good supplies and strong demand.
According to Freshfel Europe, Morocco, Turkey, Greece and Israel are all forecasting significant increases in production. Spain is the only Mediterranean country anticipating a decrease in lemon production of 20-25 per cent this year. Overall production in the Mediterranean Basin is set to rise by 1.6 per cent.
Turkish citrus growers and exporters have reported strong demand for early-season lemons, with the deal beginning in early October.
“It’s fair to say that we have been very pleased with the start of the season,” says Evren Hüner, of exporter Aksun. “Demand for Turkish lemons, which began with the Mayer variety and was followed by Interdonato, has been very high.”
Hüner attributes the high quality of fruit to favourable weather conditions and plenty of sunshine. “Our aim is, of course, to increase our exports to the UK and with the current volumes this is very likely to happen in future seasons,” he adds.
Beste Yildiz, export manager at Mersin-based firm Eren Tarim, agrees that this season’s quality has been very good and hopes to begin supplying the UK in 2010.
A marked reduction in Spanish lemon volumes this season could prove beneficial to other Mediterranean producers seeking to make gains in the UK.
However, Hüner points out that it is just as important to focus on the improvement in quality of Turkish citrus. “Turkish produce is getting more recognition and this will surely increase exports to the UK and hopefully most of Europe,” says Hüner. “Maintaining the quality of current products is the key aim here. We are always looking to improve what we have on hand and offer the highest-quality fruit.”
Hüner has high hopes for the later lemon variety, Lamas. “This is the last variety of the season, but probably of the highest quality,” he tells FPJ. “Lamas exports should hit their peak in December or January and the main characteristics of this variety is the shiny, clean texture and durability.”
Aksun now operates three coldstorage facilities, having recently built a brand-new room, as well as extending its packhouse capacity. “With the current capacity, Aksun is able to load up to 11 trucks a day,” Hüner says.
The exchange rate issue remains a challenge, but some exporters say that the situation is becoming less of a concern. “The exchange rate has been around for a while now and although it did have a huge effect at first, growers, exporters and importers have learnt to live with it,” says Hüner. “The players in the business have adapted themselves to the situation and it does not seem to be a setback anymore.”
Other suppliers continue to view the fluctuations in currency exchange rates as challenging. “This is a variable that is difficult to predict and will always impact on the cost to market,” says Nick Bainbridge, a senior product manager within Redbridge Worldfresh. “The effect on the business cost drivers, including cost of freight and cost of goods has been marked this season, but we believe we do as good a job as any to mitigate this effect.”
As part of Total Produce, Redbridge Worldfresh has an extensive supply base that includes Turkey, Spain, South Africa and South America.
Redbridge Worldfresh says it is well placed to address an anticipated increase in demand. “Our contingencies cover the risks of poor quality and we can respond by increasing the quantities available from other sources, therefore ensuing our customers receive the products they require to satisfy the demands of their consumers,” says Bainbridge.
Redbridge Worldfresh’s exclusive deal with South Africa’s Sundays River Citrus Company (SRCC) means that it markets Eureka SL-branded seedless lemons from mid-June to November. According to Morgan Barrett, a senior product manager at Redbridge Worldfresh, these lemons have been a huge success and have been well received by customers.
“Sales exceeded our expectations and growers were very happy with their returns,” Barrett says. “We were also very pleased that our supplier received a merit award from the Eastern Cape exporters’ club for its successful efforts in marketing seedless lemons.”
Lemons have enjoyed higher prices over the last couple of years but it has been a rollercoaster ride. Martin Dunnett, trading director at Capespan, says the volatility began around two years ago when a large proportion of the Turkish crop was wiped out and producers only had 20 per cent of volumes to market. “Once the cycle starts, it takes a while for the market to stabilise and correct itself,” he tells FPJ.
Strong demand from the Middle and Far East has also affected UK and European supplies. Argentina is a major lemon supplier and in recent years, exporters have been targeting Russia, where there is strong demand and high prices.
This season, Argentina endured weather-related problems, including frosts, drought and heavy rain, which affected exports. In addition, producers have also seen lower, albeit still firm prices from Russia as the global recession has taken hold.
It has certainly been an eventful time for southern hemisphere lemons and South Africa is another market that has seen its fair share of ups and downs. Lemon exports to Europe fell 15 per cent compared to 2008, according to recent reports. However, Justin Chadwick, chief executive officer of South Africa’s Citrus Growers’ Association, says that as 2008 was a record year for lemon exports, the 2009 deal has been more in line with 2006 and 2007 levels.
“Last year was a lemon bonanza, with high volumes out of South Africa and high prices in the markets,” Chadwick tells FPJ. “Although 2009 was expected to be disappointing, it in fact turned out okay, with prices rising towards the end of the season as Argentina suffered from frost and pushed more into processing.”
However, although the rand has strengthened steadily this year, returns to South African growers have been reduced by some 10 per cent.
Dunnett agrees that the South African lemon market faced unusual times this season. “It was a funny summer - although a good one in terms of prices - but there was the expectation that the market would come under pressure,” he explains. “Some importers sold at too low a value.”
According to Chadwick, future pricing will depend on keeping the balance of supply and demand in place. In addition, when supplying the UK, Chadwick says that there is pressure on growers to comply with ever-increasing requirements, but with no addition to returns.
Meanwhile, bridging the gap between the end of southern hemisphere supply and the first Turkish crop was challenging, says Barrett. However, he maintains that Redbridge Worldfresh’s exclusive arrangement with SRCC meant that it was one of the few holders of lemons in the UK during a very difficult September.
Although there are adequate lemon supplies at the moment, Dunnett expects that supplies will become tighter early next year. “The normal end for the northern hemisphere is usually around March or April, but Spain could bow out early as its volumes are down,” says Dunnett.
Israeli lemons are available from mid-January to early April and according to Agrexco, the 2010 deal will be the first year that the country has any significant volume for export following a severe frost in January 2008. “Our main export market traditionally has been the Far East; customers know and appreciate the quality and, in doing so, pay the price - but as customers elsewhere are becoming more aware of the quality, we are increasing sales accordingly,” says Rob Cullum, sales manager at Agrexco UK.
Looking ahead, lemon demand should remain strong given the “intrinsically healthy” demand, Dunnett says. “There is a lot of demand from the catering sector and, even if the volumes are not there, the high prices do not choke off demand,” he explains.
The processed sector is also a major customer with drinks companies such as Coca-Cola willing to pay considerable sums as they add lemons into their range of products.
In previous years, lemons have sold for 19p each and Dunnett says that even when there is a shortage and lemon prices have risen to as much as 29p, there has been little change in the volumes sold.
“The Primafiori variety is currently selling for around £11 for 15kg and although this is a drop compared to when the variety was selling at more than £20 for 15kg a couple of years ago when there was a real shortage, it is still a lot higher than the average price of £7-8 for 15kg,” Dunnett says. “Lemons have not been devalued and it seems to be a non-price sensitive product.”
In the current climate, Fairtrade has not been at the forefront in some consumer shopping baskets but Dunnett is confident that once the economy picks up, Fairtrade lemons will enjoy a resurgence. “Fairtrade lemons are here to stay,” he tells FPJ.
Regarding varieties, Dunnett is complimentary about the Eureka lemon. “This is one of the best varieties around with a high juice content,” he says.
Dunnett is also confident that seedless Eureka will secure a strong following. “The seedless Eureka is a new concept in development that will undoubtedly grow in volume in future seasons,” he tells FPJ.
On the lime front, Capespan sources limes from Brazil for most of the year and also imports smaller volumes from Spain. Dunnett says the lime market has become more interesting over the last two to three years and demand is rising steadily.
According to TNS data, lime expenditure for the last 12 months up to November 1 has risen by 21 per cent. Volumes have also climbed seven per cent in the same period.
“Limes are a trendy fruit - you see them served with Corona beers and the fruit is underexploited,” says Dunnett. “Limes are also benefiting from a tight lemon situation - it’s a slipstream effect, as limes are probably used as an alternative when lemon volumes are short.”
Dunnett points out that retailers often intersperse limes with lemons on their shelves and this has proven to be an effective sales technique.
According to Bainbridge, limes from Mexico tend to be the best looking, athough it is recognised that Brazilian limes contain more juice.
Agrexco enjoys a regular season for limes from Israel during August and September. The majority of the crop is sold domestically, with a small percentage available for export. “The total volume is quite small but important nevertheless as it enables us to bring fruit to Europe in the event of shortages from Brazil and Mexico - a situation that can happen once every two years due to excessive rain,” explains Smadar Cheifetz, who handles international trade at Agrexco.
As well as limes from Israel, Agrexco also sources from Brazil, Mexico and the Dominican Republic. Under the international Alesia brand, Agrexco handles Brazilian limes year round from the Andrade Farms and Citrus Tree, which run as a joint operation.
“Export volumes totalled 13,000 tonnes last year and the combination of the two packhouses, with production of 600 hectares, makes the partnership one of the biggest lime producers in the world,” says Cullum.“In addition, they have contracted grower partners that supply extra volume.”
The Israeli producer also works closely with San Gabriel, supplying Europe with Mexican limes from May until December. Tahiti and Persian are the two main varieties shipped.
Although limes are generally on an upward trend, a couple of producers reported lower prices and lacklustre prices for Brazilian limes earlier this year. “Sales were down for the first four months of this year - total volumes were low and price levels were not really good enough for Brazil,” explains Cullum. “The Brazilian economy is rising fast so for us to give them the same returns, prices in dollars or euros have to rise proportionately.”
At the start of the Mexican season, which ran alongside Brazilian supply, there remained a slight concern that supply could outstrip demand.
However, Cullum is optimistic about future opportunities for limes. “In the UK, we have a steady business that I believe is growing due to increased culinary use and limes becoming an essential component for soft drinks and cocktails,” he tells FPJ. “Mojito and Caipirinha are two cocktails gaining in popularity and they need limes, not lemons, so the bar industry is increasing orders - a situation that hopefully the recession will not damage.
“I am sure that there is a potential for increased consumption both within established markets and the new markets being opened up.”
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