Spanish citrus imports began making their way to UK shores in week 38 and the sector was already making headlines when fruit was still growing on the trees.
There is nothing particularly unusual about that but speculation over this season’s volumes peaked when grower union La Unio de Llauradors-Coag warned that the crop would be 30 per cent higher than last season and announced that it was concerned prices would drop as a result.
“After the decline in production last year and therefore ideal commercial conditions, returns were so low, and growers are asking themselves what will happen this year when everyone knows that increased volume leads to a drop in value at the farm gate,” a spokesman for the union said.
With Spanish production set to reach 6.5 million tonnes, there is no denying that the country’s citrus is big business. According to Intercitrus, Valencia, Castellón, Alicante and Andalusia account for 85 per cent of the country’s total crop and production in these regions is forecast at 5.5 mt, says Anabel Siguan, the company’s technical director.
Last season’s crop was hit by frosts in the first quarter of 2006 and therefore, insiders believe it is pointless to compare this season’s crop to the one in 2005/06.
Instead, Siguan says a comparison between the expected output for 2006/07 and that of 2004/05 is more meaningful. “Overall, the provinces of Valencia, Castellón, Alicante and Andalusia anticipate that the coming season will produce a crop 5.5 per cent bigger than two seasons ago,” says Siguan. “Easy-peeler production is expected to be similar to two years ago and the orange crop - particularly late varieties such as Navel Late and Lane Late - is forecast to be 10 per cent bigger than in 2004/5.”
Breaking down the figures further, Valencian association Citricos Valencianos agrees that there will be a production rise for mandarins and oranges. “Valencian production is nearing 3.7mt and will probably approach 4mt,” says general manager Juan Bautista Juan. “The growth seems to be especially in mandarins, above all clementines, and this could affect the whole model of marketing in the future,” he predicts.
Judging by recent reports, Bautista anticipates high-quality Valencian citrus this season, with the warm summer months producing better levels of ripeness and higher percentages of juice.
Exports of Spanish citrus from Valencia rose 8.8 per cent during January to June 2006, compared with the same period last year. With a value of E854m, citrus is responsible for 9.2 per cent of total Valencian exports.
As of April, exports to the UK reached 232,466t, according to Citricos Valencianos. This is a slight reduction on the same period in the 2004/05 campaign, when 234,505t were shipped. Easy peelers made up the majority of exports, with 127,587t, followed by 70,447t of oranges, 34,116t of lemons and 316t of grapefruit.
The UK is the third-largest importer of Valencian citrus in Europe after Germany and France. The Netherlands and Poland are also significant importers.
Mack Multiples has been the sole agent in the UK for Spanish citrus producer Martinavarro for more than 50 years and Guy Dixon, commercial director of Martinavarro, claims that early indications point to an excellent Spanish quality season.
“The tree blossom has set on the early second and third flowers which, as a guide, results in medium sizes, excellent quality eating fruit and smooth skins,” he says. “High yields per hectare are being achieved across all products.”
Chris Rowe of Redbridge Worldfresh also reports favourable weather during most of the growing season, adding that even though there was a lot of rain in mid-September, it did not do any damage.
Quite the opposite in fact. According to recent accounts, citrus crops in Andalusia and Valencia have benefited from the increased rainfall in terms of sizing and quality.
Redbridge Worldfresh imports from all of Spain’s main citrus growing regions and has offices in Valencia and Huelva, which Rowe says increases its direct offering from source. “We have commercial and technical people on the ground in Spain, dealing directly with growers and packers,” he adds.
When asked whether there will be a glut of citrus this season, Rowe responded: “There will be enough for the business but no glut. It will be a normal year, with oversupply at times and shortages at others. This will be easily managed by the trade.”
Size could be a bigger issue than normal this season, however, as greater quantities of smaller-sized oranges and easy peelers have been reported. However, Rowe believes that there will be enough fruit of the right size.
Steve Roberts, managing director of Westminster Produce, agrees. “In my opinion, the general orange market will be OK, particularly for smaller sizes,” he says. “The first production from Spain is based on Navel varieties which inherently produce larger calibres and cannot be juiced. Therefore, until mid-November there could well be a split market with high demand for smaller fruit and the expected glut of large Navels being left on the shelves.”
Westminster Produce sources oranges, satsumas, clementines and lemons from three suppliers in Valencia and one in Seville. “The new Spanish citrus season is due to kick off in week 38 with easy peelers,” says Roberts. “First volumes may not be the best-tasting fruit but they are likely to attract high wholesale prices which will then fall much lower as the season progresses.”
While some suppliers are keen to start the deal as soon as they can, Pouparts, which supplies Waitrose, is in no hurry. “Some importers begin handling Spanish citrus in late-September but we wait for a couple of weeks later until sugar levels rise,” Poupart’s Paul Olins tells FPJ. “We’ll be starting around October 15-17.”
The Spanish citrus sector has undergone a number of changes in recent years and key trends have emerged - particularly in terms of the country’s varietal mix.
“The UK market continues to want more easy peelers, to the detriment of oranges,” says Janine Gilson of Foods from Spain.
Siguan believes that mandarin varieties are better suited to our current lifestyles because of their size and the fact that they are easy to peel. “As a result there is an increasing demand for easy peelers over longer periods during the season,” she says.
Siguan adds that work needs to be focused on producing mandarins that have excellent eating quality, especially during the second half of the season. However, she acknowledges the industry is making a “tremendous effort” in this direction.
The UK imports massive volumes of Spanish easy peelers and you would be hard pressed not to find most British families savouring their satsumas during the chilly months. However, Spanish satsuma production has fallen in recent years as growers have concentrated on other easy-peeler varieties, such as clementines and marisoles.
Some UK sources believes this is a shame. “Spanish satsumas are unique for their flavour and colour and demand in the UK, especially in England, outstrips the rest of Europe, which generally prefers clementines,” Roberts says.
Regarding other developments, Valencia and Murcia are by far Spain’s main citrus producers but they could see stronger competition in the future. According to several sources, Andalusia is diversifying its production as some growers are looking to avoid reliance on strawberries and have been ploughing their efforts into citrus.
“Andalusia is gradually increasing its orange, and to a lesser extent, clementine production,” confirms Bautista.
Dixon believes that Huelva and Seville have grown in importance within the Spanish citrus sector. He points out that this has allowed growers to gravitate towards larger plantations on improved rootstocks and varieties.
Olins says that Andalusia is becoming a force to be reckoned with. “There’s plenty of opportunities for oranges and soft citrus,” he predicts. “The area has ample land and water.”
However, Bautista is confident that Valencia is in a secure enough position to counter competition. He says: “We are a dynamic and innovative community that perfectly meets market demands and that’s why we are leaders. We produce high-quality citrus fruits and were very happy with our functioning in the market.”
Meanwhile, the acquisition of Medicitrus by Fyffes Citrus has also whipped up a frenzy of interest. Fyffes Citrus secured the 40-year old company in order to build on its brand and plans to increase sales of Spanish citrus to the European market, with a focus on finding new customers, said managing director Ruth Castilla. The new venture will control fruit from the field to the supermarket shelf.
A number of suppliers believe that further consolidation of the citrus sector is inevitable. “Similarly to the consolidation of supermarkets globally, it is likely that the supply structures that support them will also consolidate and align to focus on delivering points of difference and exclusivity where appropriate,” Dixon argues.
Other areas of change include rising demand for organics. Poupart has witnessed steady growth across the board, while Dixon says that organics is a niche market that is “growing proportionately ahead of the category average in the UK due to a greater store presence.”
In terms of core product, Redbridge Worldfresh claims that consumption can be increased further by making citrus more readily available. Rowe says: “Our 5 A Day brand is one way that we are achieving this, by making fruit more accessible as a healthy snack on the high street. Through innovative packaging and making more variety available, we can make citrus more appealing to consumers.”
“Customers buy with their eyes and repeat with their tongues,” says Dixon. “If the product has high visibility in the shop with attractive displays, offers good value for money and something for all tastes, then maximum penetration can be achieved, creating habits in consumer citrus consumption.”
While suppliers are reasonably confident about the 2006 season, there is never a time for complacency. “Weather and currency are direct challenges that a UK citrus category manager has to face,” says Garry Cirillo of Mack Multiples. “New restrictive measures on EU road transport could further impact on the operation so we constantly have to find new ways to overcome these challenges and offer seamless availability of top-quality citrus.”
In addition, from January onwards, Spain sees more competition from Cyprus, Turkey, Egypt and Morocco. Lower costs in these countries, Egypt in particular, and good-quality production methods are boosting volumes and exports.
Nevertheless, insiders insist Spain is still the leading supplier of citrus to the UK despite the competition.
“Spain’s unique breadth of growing regions, coupled with its proximity to the UK market and its ambition to constantly improve its position as a world leader in citrus production, gives it a clear head start above other potential sources,” Cirillo says.
So long as it continues developing to meet the ever-changing needs of its customers, the sector is expected to remain a front runner.
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