Easy does it for Spain

Heavy rain in Spain has been a cause for concern in recent years, and that was certainly the case when the country experienced its wettest May on record this year. Downpours drenched citrus orchards throughout the month and, inevitably, some trees suffered more than others. Mild hailstorms hit from late August to mid-September, but these are quite common at this time of year and did not cause much damage.

But despite the unsettled weather, which has resulted in lower volumes on key lines, observers are optimistic about the new season.

Guy Dixon, from MMG, says the first flower sets were good but, depending on location, the second, third and fourth flower sets were greatly affected by the rain. “When the rains eventually finished, the trees were somewhat confused,” he says.

Matt North, Sainsbury’s fruit category manager, confirms that this year’s rainfall has taken yield expectations from a bumper harvest to a standard year.

The UK’s total citrus market is worth an impressive £553 million and easy-peel consumption has soared, with varietal development reflecting this trend. Spain’s most popular citrus exports to the UK are clementines and satsumas, says Antonio Muñoz, president of Intercitrus. Indeed, consumers expect year-round availability of easy peelers, and Spanish growers are capitalising on this trend by increasing their production.

“The easy peeler is a key part of the retail offer now,” says MMG’s Garry Cirillo. “We have seen good progress on easy peelers for our market in that the Spanish producers are now largely growing the varieties we really seek, which is improving our offer overall. We offer Spanish easy peelers from September right through until June.”

Muñoz agrees. “It is true that the consumer wishes the citrus campaign to go on all year round,” he says. “In Spain, we are taking advantage of this trend by producing easy peelers in February and March, but we will also produce good quantities, in the future, for April and May. Late Navel type oranges will be available in March, April and May.”

However, consumers may see fewer early volume clementines this season. Availability across Spain is expected to be 30-50 per cent lower and sizes are reduced. Forecasts for later season clementine volumes report a 15 per cent drop in volume against last year.

“There is still a lot of fruit available, but it is looking a little smaller,” says Dixon, from MMG. “It is good quality too - a good, fine skin which makes for lovely fruit.”

Sainsbury’s has worked with the majority of its growers for a number of years. The retailer handles a range of easy peelers, including Clemenules in December and January. This variety serves the clementine offer over Christmas, when consumer demand is at its highest.

Clemenules are followed by mandarin variety Nadorcott, which is in season from mid-January to May. “Over the past few years, the production of this premium variety has increased significantly,” North says. “Until recently, we have only had enough for our Taste the Difference range, but last year we introduced the seeded fruit to the standard lines.”

Oranges are an important export line for Spain and the fruit makes its mark later in the year. This season, producers have breathed a sigh of relief as Navels and juicing varieties are expected to be much less affected by the rain.

The Navelina variety is available from November through to January. According to North, these are oranges at their best and, over the past few seasons, the retailer has ruled out or restricted certain varieties such as Hernandina, Marisol and Fortuna.

Sainsbury’s has not taken on any new citrus producers for the Spanish season, but it did launch the easy-peel Taste the Difference Navel from Australia in the summer to try to boost lagging orange demand.

Meanwhile, conflicting reports surround the lemon deal. According to regional fresh produce association Asaja Murcia, harsh drought conditions this summer have been a major worry.

Alfonso Gálvez Caravaca, general secretary of the association, said in August that he had some concerns. “We fear that the lack of rain this summer so far in Murcia means that the crop for the autumn will be seriously affected both in terms of size and production volume,” he says.

However, Spain’s national grapefruit and lemon promotional body, Ailimpo, says the outlook is much less grave. According to spokesman José Antonio García, the harvest looks as though it will be up on 2007’s very light crop. “What we can see this year from our inspections so far is that production definitely looks greater than in 2007,” he says. “Everything is pointing to a normal size crop for grapefruit too, and enough fruit to supply our markets.”

Despite the uncertainty, Asaja Murcia is forecasting a strong start to this year’s citrus campaign for quality and quantity. Gálvez says this season’s campaign is likely to be “very positive”, though more action is needed to galvanise the sector to forge ahead with joint promotions, communications and marketing.

Gálvez also insists that recent investments in R&D should ensure “better possibilities for expansion”.

Elsewhere, production is rising in key areas, includingAndalusia. However, Muñoz points out that in the area of Castellón, some orchards are being abandoned.

Bristol Fruit Sales (BFS) is on course to increase the amount of Spanish citrus it handles this season. The company sources citrus from around a dozen co-operatives and began handling the Ukitsu clementine in mid-September.

“Fingers crossed this year’s quality will be better than last season,” says BFS’s Julian Scott. “Not only did poor weather in 2007 affect the quality, but there were also fewer lemons available.”

BFS will once again be offering pre-packed clementines and oranges, which achieved a favourable response last year.

But while the sector is optimistic about this season’s prospects, it is not all plain sailing.

One of the biggest issues is pressure on land, in terms of availability and the cost of production. Growers have also endured large hikes in fertiliser and pesticide costs, while the “enormous” rise in electricity and gas costs are affecting packing operations. Adverse weather, pests - in particular medfly - and diseases are also challenges confronting the citrus deal.

“The consumer perception of pesticide residues and Sainsbury’s policy on their reduction is a huge challenge, which in turn creates huge challenges for the supply base to maintain fruit quality, availability and shelf life,” North says.

Then there is the water issue. Water supply is certainly a big problem for citrus-growing areas such as Alicante, Valencia and Murcia, says Muñoz.

Packaging also needs to be on the agenda, critics say. “It is important that more producers move away from wooden cartons into flatpacks that can be put straight on to retailers’ shelves,” Scott says.

Moreover, Muñoz says the gap between the salaries of Spanish workers and those of its closest direct competitors such as Morocco, as well as other rivals such as Egypt and Turkey, is getting bigger and bigger. “This is quite a challenge for us,” he adds.

To significantly increase consumption of Spanish citrus would be a challenge, says North. “With a large amount of advertising this could be achieved, but thin margins do not make this viable. Pricing is keen,” he says.

Observers also predict that rationalisation is on the cards. “In all industries, consolidation, alliances and streamlining are key to survival - and the Spanish citrus industry is no different to any other,” says North. “These factors will occur and this should lead to better standards of production, improved quality and varietal development.”

Dixon predicts that the economic environment will also hit the sector. “The economic pressures will cause many to fall by the wayside and the professional, larger enterprises, which are able to sell the whole of their crop across a number of markets, will become stronger and more successful,” he predicts.

He says that the European grant system for fruit that is not good enough to export has been stopped for the Spanish market this year, and this will affect costs for those who do not have access to the Brussels subsidy. “This is likely to exacerbate the problems for smaller growers and threaten their businesses and viability further,” Dixon says.

Nevertheless, many producers remain optimistic about the future for Spanish citrus, as the country’s growers hold a number of aces up their sleeves.

“Spain offers fruit from peninsulas over 800km wide and this includes some of the best growing areas in the world,” says Dixon. “Fruit can be sent directly and quickly within 48 hours and on customer shelves within three days. When the quality is right, it is a phenomenal combination. The proximity to the UK means prices are still competitive against other developing countries.”

THUMBS-UP FOR EASY-PEEL ORANGE

MMG’s easy-peel orange is finding favour since it hit the UK for the first time this summer.

Garry Cirillo from MMG says supply got off to a promising start. “Early indications are that consumers welcome the new variety and our immediate focus is to get the Australian fruit crop increased for next year,” he says.

The fruit is marketed under Sainsbury’s Taste the Difference premium brand and was available for the first time this summer. It is not strictly speaking a new variety, but the growing technique and conditions are crucial.

“In its home market in Australia, this orange is big news and has a strong following,” says Cirillo. “The proof of the orange is definitely going to be in the eating.”

The fruit has a high brix level that gives it a super-sweet taste, as well as being easy to peel. It also has the added bonus of being light on pith.