Grapefruit may not normally be associated with the chilly winter months, but importers are reporting strong demand for the fruit with a very loyal following. However, the weak sterling, which reached a record low in mid-December, has led some growers and exporters to question just how profitable the deal will be this season.
Israel is enjoying an encouraging grapefruit campaign, with an early start to the season and good prices as demand outstripped supply. Sales to date have been above expectations and, according to Marius du Plessis, general manager of MTEX UK, there are good indications of solid demand for the coming months. Volumes of white and pigmented grapefruit destined for the UK are expected to be on a par with 2007 and a range of varieties, including Sunrise, enjoy a loyal customer base.
Israel’s stable grapefruit supplies over the last few years are now beginning to pay off. “We have demand from retailers that normally stock Florida grapefruit and have been supplying these lines for some weeks now,” du Plessis said in early December. “MTEX has invested in the product and the marketing of all our citrus products, and we are reaping the benefits of our activities in these tough times.”
Rob Cullum, sales manager at Agrexco UK, says most of Israel’s new orchards grow red varieties. “The volume of white will remain stable, but growers do not see it as a variety to plant for the future as demand is only from a few countries, whereas red is wanted throughout the world,” he explains. “Israel has already proven itself with grapefruit - the length of the season far outstrips others and the quality of the fruit is the best in the Mediterranean - and we keep looking to improve every year.”
But there are challenging times ahead. “We do not want to give up on our customers here, but it will be a tough season,” says Cullum. “On the one hand, the growers need to achieve the returns, but the price in the UK cannot reach the necessary figures due to the poor exchange rate.”
Factor in the UK’s stringent demands on quality, sizing, packaging, labelling and technical requirements, coupled with a logistical disadvantage compared to its competitors and higher transportation costs, and it is fair to say that Israel faces significant hurdles.
However, Cullum emphasises that Agrexco’s growers understand the challenges and want to keep providing good-quality fruit to the UK. “We are proud to have gained a foothold in the market in the UK and hope that our customers feel that we do a good job - it is not easy to provide the standards and sizing that are required for grapefruit for the length of season that we do,” he says. “We aim to give a service of continual supply throughout and do our best never to let customers down.”
MTEX says it will continue to invest and promote its fruit in the UK market to grow its share of sales, in spite of the weak sterling, which makes alternative markets attractive. But it is business as usual for grapefruit, and du Plessis tells FPJ that there will be a rise in other citrus types, such as late clementine varieties Or and Mor. This year will also see the first volumes of Flamingo Pomelo and taste samples from Agrexco will arrive in mid-December.
Florida began shipping grapefruit to the UK at the end of September and the US department of agriculture (USDA) has put this year’s crop at 26.6 million cartons, a 13.5 per cent fall compared to last season.
Weather conditions during the growing season have been “quite favourable”, according to Mike Yetter of the Florida Department of Citrus. “We have had adequate rainfall, which has helped the sizing of the fruit and the juice content,” he says. “Compared to last season, we have seen substantially more rainfall and that will certainly help the quality of our crop.”
Florida growers did have a brief scare in August when Hurricane Fay brought significant rain to the sunshine state. “We did see some standing water in groves - and standing water for more than a week can kill a tree because of oxygen depravation - but the long-term effect appears to be negligible,” Yetter says. “Fortunately, the winds from the hurricane did not pass directly through the growing area. All in all, it is shaping up to be a good season.”
Packers of Indian River has supplied the UK market for a number of years and the company’s Paul Genke says this season’s larger sizes are one result of the extra rainfall. “External quality is not the best because of the rains, so more will have to be graded out, further reducing volume,” he says.
Demand is expected to be in line with last year. “Prices may go up a little due to thelower volume in the smaller sizes,” Genke tells FPJ.
The Florida Department of Citrus anticipates good volumes for the UK market this year. “The crop is 13.5 per cent smaller than last year and, despite the economy, we believe that consumers still appreciate the nutritional value and benefit of Florida grapefruit,” Yetter explains. “We expect somewhat firm pricing for this year.”
Canker and greening are, and will be, major issues facing Florida’s industry for several years to come. However, according to Yetter, the Florida sector is optimistic that it will overcome these problems. This year, the Florida citrus industry has budgeted $20m (£13.4m) in product research to combat these diseases.
Most producers are holding off on new plantings and grove expansion, but Packers of Indian River is re-planting 100 acres of groves a year.“It is a gamble, but we cannot wait until there is a control or cure for canker,” Genke says. “Like many other fresh grapefruit growers, we are trying to keep our groves canker-free so we can continue to pack and ship.”
Production costs are also a significant challenge. While high energy costs are abating, Genke points out that transport costs are rising, as is the value of the dollar, causing price rises.“We cannot absorb the extra costs because our costs to grow the grapefruit and battle canker have gone up tremendously,” he says.“Four years ago, production costs were about $800-$1,000 an acre.Now they are $1,800-$2,000 an acre.”
And while there is some concern among the trade that consumers will cut back on fresh produce purchases, Yetter says the fact that the UK places a high priority on nutrition should help the sector weather the storm. “There are a number of factors that favour us this year,” he says. “These include a good crop reflected by the juice content, solid PR programmes and marketing support, educated consumers who appreciate the nutritional value of fruit and favourable exchange rates that allow us to price our products at attractive price points.”
Elsewhere, Cypriot grapefruit is available from October through to June. Orchards have endured adverse weather conditions this season and the prevailing drought has affected fruit sizes and increased irrigation costs. However, the UK is traditionally one of the main destinations for Cypriot products, accounting for a quarter of total citrus exports. “Grapefruit is a very important product within citrus, as it represents around 25 per cent of total exports,” says a spokesman from the Cyprus High Commission.
But demand has plateaued and with the ongoing economic instability, prices are unlikely to rise as consumers tighten their purse strings. “The main challenge grapefruit shippers face when supplying the UK market is the production of fruit by suppliers outside the EC, where cheap labour results in lower costs,” says the spokesman. However, sources say that as long as high quality is maintained, there will always be a market for Cyprus.
In order to offset rising transportation costs, a number of Cypriot producers have joined forces this season to negotiate costs as a unit, rather than as individual exporters.
Meanwhile, the USDA has pegged this year’s Turkish grapefruit crop at 126,000 tonnes, a steep 20 per cent drop on 2007-08. But the Turkish sector is buoyant about this season’s grapefruit campaign. “We are experiencing strong demand for Turkish grapefruit and the quality of our produce has been recognised early in the season, which has resulted in continued demand,” says Evren Huner, from Aksun.
The exporter is hoping to make further gains in the UK and the grapefruit supplied this season has far exceeded early expectations. “The fact that the UK market demands high-quality product and an impressive presentation could have been a challenge, but we are providing the highest quality produce,” Huner says.
When it comes to rising logistics costs, Huner says that although it does its best to absorb these increases, a time comes where it has no option but to implement these charges. “However, Aksun always keeps these charges at a minimum, as we have our own ample fleet of refrigerated trucks,” he says. “As well as this service, we can arrange for produce to be delivered by different means, which in some cases can prove to be more profitable to our customers.”
The South African grapefruit season is over now, but the country enjoyed a successful deal, says Martin Dunnett, trading director at Capespan. “Growers achieved good prices and demand held its own, especially as the white grapefruit market is contracting year on year,” he tells FPJ.
The South African offer ended ended in mid-October and while it was a shorter season compared to 2007 and the crop was smaller in size, high-quality fruit prevailed.
South Africa produces around 10-12m cartons of grapefruit a year, with the UK market importing some 700,000 cartons. Of this volume, Capespan accounts for some 25 per cent of the market.
But supplying grapefruit to the UK is not for the faint-hearted. “It can be a crazy rollercoaster ride in late July-early August when more producers come on line, and this puts pressure on prices,” Dunnett says.
In addition, with the Star Ruby variety dominating production, supplying white varieties such as Marsh is becoming increasingly difficult and there are concerns about supplies of rosé varieties, also known as Ruby Red.
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