Availability has been the number-one concern for the supply chain over the last three months, with growers reaping relatively good returns, while suppliers have had to work out the best ways to meet their commitments.
However, there is a question mark over whether demand is as strong as it once was and retailers are aiming for the winning price tickets to help improve sales this summer.
South African supply has been fairly stable and even though the market has been competitive, growers and exporters made good returns. The country has been the real winner in the southern hemisphere as it has stepped in to fill requirements when rival sources could not satisfy demand or get their fruit to market.
Easy peelers have continued to drive the market and make up the only sub-category to experience sales growth year on year, boosted by promotional activities at strategic times. However, retail sales failed to reach targets in the last quarter, with one UK multiple down by 10 per cent - even though the original aim took the usual summer turn-off into consideration.
The slow start to the southern hemisphere season meant there was not enough fruit early on, when Peruvian shipments were later than anticipated and South African volumes were light. The gap in the market, coupled with the lacklustre quality of available product, meant that southern hemisphere supply did not get off to the best start and overall sales volumes were bound to suffer as a result.
South African easy peelers are now almost completely finished, with just late mandarins to go. Satsuma volumes were in line with last year and failed to reach the estimate of 1.8 million 15kg cartons. More clementines were sent to northern and eastern Europe than usual, following difficult conditions in the US.
But across the easy-peeler category, there has been a shift away from the UK, which was the destination for 51 per cent of South African fruit this time last year, compared to 44 per cent this year to date. More fruit was directed towards northern Europe, where sendings increased to 22 per cent from 17 per cent at this time last year, and Russia, where sendings jumped from six per cent to 10 per cent in the same period.
Tight supply may be meeting the reduced demand at the moment but, going forward, UK importers are concerned that they will be unable to get what they need from the marketplace. It is feared that established suppliers to the UK will continue to explore their options and divert product to other sources, where they can achieve good prices without stringent regulations. This is becoming a more serious concern with every passing quarter, especially as the supply situation is expected to remain fairly tight.
The next three months are set to be more eventful than the same time last year. More soft citrus is expected to hit the market in August and September. The sector is hoping that, even against the background of the economic downturn, prices will remain stable. Availability should not be compromised when supply rolls into the northern hemisphere at the end of September.
South African grapefruit supply is now coming to an end, and the 13m-carton estimate is likely to be met. The last three months have been described as “a tale of two varieties”, with Star Ruby rocketing and values reaching record highs, as South African volumes dropped by 20 per cent on last year. The market for Marsh, on the other hand, has remained weak.
Navel oranges enjoyed a good price at the beginning of the South African season when they arrived onto an empty market, following the swift end to Spanish, Moroccan and Egyptian supply. The shortfalls saw prices reach £11-12 for 15kg. But quality problems and excess fruit towards the end of the season will hit returns and will also have a knock-on effect on the Valencia sector. Total sales will be close to the original estimate of 19.7m 15kg cartons.
Lemons have been the star sub-category of the citrus quarter, with growers and exporters reporting a “fantastic” year, though prices have come down from their earlier highs. Shipments from Argentina were affected by strikes in the South American country and by logistical issues, keeping the market tight. But sales have not been hit by the resulting price increases and, surprisingly, research has shown that the higher the price, the more product is sold. “Volumes and prices have both been up - with some markets paying three times last years prices,” says an insider. “Volumes will exceed the estimate 8.1m 15kg cartons, with 8.5m already packed.”
Traders in the wholesale sector have not reported any major supply issues for the citrus job in the last three months. Class I oranges from South Africa are fetching 850-900p for 15kg, in sizes 40-88. Easy peelers are proving as popular as ever, with Nova satsumas making 750p for 10kg.
Supplies across all citrus lines are expected to pick up over the next six weeks, before volumes tighten again, but insiders are not expecting the market to slip in the foreseeable future. As the sector moves into the next quarter, it will be looking at how best to draw attention to the category.
BRAZILIANS TURN TO TAHITY
The Tahity lime in Brazil has been conquering the international market, especially among European consumers, with more than 90 per cent of the crop selling externally. Brazilian exports of Tahity limes have increased 71 per cent in five years, says Maurício de Sá Ferraz, export manager of the Brazilian Fruit Institute, IBRAF.
Exports rose from 34 million tonnes in 2003 to 58mt in 2007, following a wide range of promotional activities to differentiate the Brazilian lime, which is juicy and seedless, and produced year round.
The Brazilian Association of Producers and Exporters of Tahity Limes (ABPEL), in partnership with IBRAF and Brazilian trade and investment promotion agency Apex-Brasil, are overseeing the campaign.
The UK is the second-biggest direct buyer of the Brazilian Tahity lime, behind the Netherlands, which actually exports to other countries, but mainly Germany, which is the principal consumer of the fruit.
In a bid to consolidate the position of the Brazilian lime in the UK, the sector participated in the World Fruit & Vegetable Show in London last year, giving out samples of lime, with information about its quality and use, as well the traditional Caipirinha cocktail recipe. This was aimed at giving buyers the chance to taste the fruit for themselves and see that, aside from its nutritional value, the seedless Tahity lime does not have such a strong taste as the Sicilian limes, which they are more used to.
ABPEL developed activities in cookery schools to make the most of Limes’ Day, for which schools receive teaching resources and materials that contain information about the fruit, so that students can create new recipes but also bear in mind traditional cookery. This was a success in Germany, Italy and Poland, where we had great feedback from students, who said they loved the taste and would use the fruit in their recipes.
Brazil produces about one million tonnes of Tahity limes, on around 47m hectares. The fruit is available throughout the year, with production peaks between December and June in the south-east, and July to December in the north-east.
The orchards are managed by small producers, but all Tahity crops follow international standards such as GlobalGAP and other certificates required in the EU.
No comments yet