Brazil is the main lime supplier to Europe, currently supplying 80-90% of the market. The balance is made up from Peru, Vietnam and sporadic loads from Central America / Colombia.
"Brazil is a very big country and limes are grown in many regions so weather conditions can vary greatly from farm to farm," explains Rob Cullum from Pacific Produce, who is currently attending the Sao Paolo Fruit Attraction with most of the Brazilian lime industry.
"This has been the most challenging period for limes in a long time, the industry is by nature very volatile but the ups and downs tend to be manageable because if one region is having issues then others can 'step up'. What we have seen for the last 4/5 months is a twin problem of low average quality combined with very poor service from shipping lines and ports."
"Quality issues are mainly low colour, which seems to have been caused by the droughts last year and then after the droughts some areas have had excess rain so now we are dealing with higher incidences of progressive defects on arrival. This is an issue for all growers, but we are starting to see improvements as new crops come into play. The biggest problem for everyone in Europe is that this window is normally the "strong" period from Brazil.
There is no doubt though that the big issue has been shipping, the blame is being passed between ports at departure and arrival and the shipping lines themselves."
For the growers and the importers, the losses have been dramatic. "We have started to work on the basis that every boat will be one week late as standard and to hope that they are not delayed more. We have had some containers taking two months and many that are two weeks late – this has a big impact on quality and especially when you are not in a vintage year. London Gateway is consistently getting skipped because it is too busy which damages us in the UK but also Rotterdam is having major problems and on the supply side. It is the same vessels skipping ports constantly.
"In theory we are still in the main season but there is still a phytosanitary "war" taking place which makes life complicated. Citrus canker and Elsinoe are both being challenged constantly in the EU and the protocols set in Brazil are strict which can effect supply suddenly. For the UK this creates an extra dimension where containers at risk of KCB rejection get diverted to us so it just adds another factor to the volatility.
US Tariffs
"Everyone has to plan as if nothing will change between Mexico and USA. I have lost the thread of where we are with which countries and which commodities and which date tariffs will start or be cancelled!
"If Mexico has a high tariff level set which includes produce, then I think that could be a fast inflationary environment for the US consumer, limes are relatively low cost as an item so 25% may convert to an on the shelf increase of 5% which probably would not make a big difference to consumption, maybe for higher value goods like grapes it could be a different story. However, what it will do is encourage more Colombian fruit to go to that market and probably ignore Europe. If Colombia then get targeted then that would be difficult for them. Ultimately, we will have to react back and forth until and if the tariff situation settles down."
Demand in the EU/ UK
January to February is the low consumption window, in March sometimes demand starts to increase. Weather is the key for the next rise in lime consumption, it normally happens at some point in April but occasionally it can take longer.
"I would say the last few weeks have been tough all over Europe because the delayed fruit and low average colour has depressed the market. This week things changed because (again) a big vessel was delayed to both UK and Rotterdam allowing the stock to be cleared and suddenly fresh fruit prices jumped but this is a short-lived situation because next week the boats will all arrive. There is still larger than normal volumes of fruit in the pipeline, so I am not sure the market will change too much, but quality will be the key. Fingers crossed for both sunshine and improvement in fruit colour!
For more information:
Robert Cullum
Pacific Produce
Tel: +44 (0) 1865877801
Email: rob@pacificproduce.co.uk
www.pacificproduce.co.uk