With the media focussed on various points across the globe - political unrest in the Middle East, natural disasters in Japan and New Zealand and even cricket in the Indian subcontinent - it is a simultaneously fascinating and daunting time to be in a business as global as fresh produce.
There are few categories that have as truly global a reach into the UK market as citrus, and the disruption to the Egyptian export industry during the last quarter exemplifies this. “Egypt was less prevalent this season compared to last - obviously, they had some disruption to their infrastructure because of the political situation out there,” says one leading importer. “The Spanish also had a decent crop that was much more competitive compared to last year and of course, they pack so much closer to us than Egypt - three days by road with packing at source compared to 10 days by sea.”
However, transport from Spain has been an issue this year with haulage under considerable pressure from fuel prices and pressure from a Spanish government looking to stabilise its beleaguered economy. It is estimated there are around 30 per cent fewer lorries available to transfer product from Spain this year.
In the supermarkets, some interesting trends are developing. The popularity of leafy clementines continues to grow, with Waitrose and Marks & Spencer seeing strong results, overtrading in sales by 160 and 128 per cent respectively. Meanwhile, easy peelers targeted at kids continue to be popular with Morrisons among the leaders with its Kids Smart range. Citrus popularity is also growing, with penetration in UK households up to 87 per cent despite an increase in prices.
In terms of forthcoming supply, the transition between the northern and southern hemisphere is likely to be a slower, smoother process than last year, when South African suppliers capitalised on a short European market and a slow start from other sources.
Easy-peel varieties are beginning to emerge from the southern African source but lighter crops from there and Argentina are likely to put pressure on supply as hail and rain damage in the east of the Eastern Cape and in the north of South Africa impact on supply.
Late Navel oranges from the source are likely to come on stream in late May and early June, with Cyprus, Morocco and Spain all offering supplies.
The lemon market is likely to continue in a fairly stable vein after a “steady” winter for Spanish product. South African fruit is coming on stream and heading for the Far East and Middle East but remains a few weeks away from the UK market, where consumers prefer yellower fruit. The lime market is reported to be “stable”, with advances made last season attributed to a shortage of lemons.
The South African grapefruit trade will be buoyed by the marketing clout behind the Beautiful Country, Beautiful Fruit campaign after the Citrus Growers’ Association joined the promotional push for the second time last month. Grapefruit sales have been improving at the UK multiples while at wholesale level, fruit from the US, Israel, Turkey and Cyprus have all been making good money, particularly Star Ruby.
In their joint production and export forecast for 2011, the Southern Hemisphere Association of Fresh Fruit Exporters (SHAFFE) and European trade body Freshfel predicted a tricky season for southern hemisphere producers and exporters.
A joint release said: “Southern hemisphere exporting countries [may struggle] compared to the euro and US dollar [nations], the evolution of costs, the ongoing demand development in emerging countries (namely in the Middle East and Asian markets) as well as the possible impact of the demand in Japan for grapefruit. The lower southern hemisphere orange crop might balance out the current poor orange market situation, mainly in Europe.”
It continued: “Other factors such as the ongoing process of market diversification as well as the possible opening of new markets could also play a role as well as the permanent evolution of consumer demand.”
The forecast put southern hemisphere 2011 citrus production at 6.5 million tonnes, a decrease of 0.63 per cent on last year. The figure is also 7.7 per cent below the long-term average from 2003 to 2010.
Export from SHAFFE countries are forecast to decrease by 2.6 per cent in the coming season, however, this is 3.2 per cent up on the long-term average. Oranges and mandarins are expected to see an 8.5 per cent and 6.2 per cent respectively.
Overall, shortages are likely in a market where prospects for grower returns are good.
UK NEWCOMER TO BOOST TURKISH CITRUS OFFER
Turkish exporter Mango Gida has set up a UK office with the aim to reach £10 million in sales. Anna Sbuttoni talks to regional sales chief executive Duygu Kultur, who is based in Luton.
What part will Mango Gida’s citrus offer play in achieving your aim in the UK?
Mango Gida has set up the UK office to be the first contact for customers from UK and Europe and establish professional links in this sector, as we would like to help our customers at every stage of the supply chain from start to end. Citrus is playing an important role in the expected turnover, but we aim to be the main vegetables supplier to the UK and other European countries alongside the high volume of citrus sales.
How was the Turkish citrus season?
Citrus is confined mainly to the south-western region of Turkey, where the climate is most suited to production. This year, the Turkish citrus season had quite a significant demand and most of the time, fruit was programmed before harvesting. It was a good year for us and we have increased sales volumes by around 30 per cent overall in fruit and vegetables.
How is the market for citrus shaping up?
Citrus is cultivated in many countries and it is very much in demand year round. Each season, customers want to see citrus on their shelves and it is one of the most trailblazing sectors in the fresh produce industry. At the same time, it is a category that continues to be developed, with innovations including things like purple grapefruit.
Is the UK as attractive as it used to be?
Although the financial crisis affected the UK market, it is still one of the most important countries in Europe and is still preferred over other countries.
What is your background?
I am an economist. I graduated from City University’s social sciences faculty with a BA and in the third year of my studies, I started a Chartered Financial Analyst programme. I have been accepted on a Masters on supply chain management, which I will study alongside work. I have been a director of sales at a European branch of a company in the textiles sector and also worked as a business development manager in the UK for several years. I will use my experience at Mango, which is a starting point in the fresh produce sector for me.
How is Mango innovating within the citrus category?
Mango is keeping up with innovations in every category of fresh produce, especially in the citrus category, which is more influenced by the new trends and varieties coming out of US laboratories. We have different ranges of citrus fruit and soon we will add Cara Cara oranges to our list alongside varieties including Valencia, Washington and California. Clementines, satsumas, mandarin and Ruby Red grapefruit are just a few examples from the list of citrus we do and we will keep on following the news and trends about what else is available.
How will the Turkish citrus offer develop in the next five years?
Turkish citrus differs in varieties and taste, but at Mango we have realised that every variety is for a different customer base. Turkish fruit tastes and looks good and in the next five years, we believe that Europe will get used to it and there will be lots of demand for Finike oranges and Izmir clementines along with Mersin and Adana oranges. Turkish land is very rich and this will help fresh produce companies to increase supply and demand for products with a point of difference. It may take years, but this would create a great comparative advantage over all other citrus-producing countries. I believe that Turkey can be the leading source of citrus in the next five years.
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