Smooth seasonal change European lemon market

Worldwide, demand for lemons is on the rise, partly because of a focus on positive health effects. Importers in Europe look back on the overseas season with satisfaction. The harvest around the Mediterranean has started with the Turkish lemons entering the market first, followed by the harvest in Spain and Italy. The prospects are reasonably positive. Although the estimated volume for Spain turns out lower than last year, it's around the multi-annual average. Shortages later in the season are being reckoned with though. The lemon cultivation on Cyprus is decreasing, the export has virtually stopped. In the United States, the harvest has started, and there are rumours of demand surpassing supply. China can rely largely on domestic cultivation for year-round supplies.

The Argentine citrus sector is going through a tough time. Last year, production decreased by 8.2 percent, with the main cause being a decrease in the volume of lemons. Although some recovery is expected this year, the volumes are still below the historic levels. The lemon cultivation represents thousands of jobs, and 660 million dollars in income from export. As with the entire Argentine economy, the costs for labour and logistics are only increasing. In comparison, the lemon sector appears to dodge the bullet, partly thanks the the high volume and good promotion.

At the end of September, the Turkish citrus season began with the harvest of lemons. Exporters looked forward to the start, and saw high demand for the Interdonato lemon. A good calibre is expected for the Interdonato, but some problems with the peel are expected. That's why more class 2 produce is expected for this variety. In addition, the latest estimates reckon on a harvest that's about twenty percent lower.

Due to unfavourable weather conditions, the Meyer lemons turned out smaller this year. One exporter who trades a lot in this variety, says that around twenty percent of the harvest will have to be offered as class 2 product. The domestic market is the biggest buyer of the lemons, followed by nearby countries like Romania, Bulgaria and Greece.

The Israeli lemon production is often insufficient to meet domestic demand. So it's no surprise that the entire production is sold domestically. Once in a while, there is enough to fill gaps in the global market.

The lemon harvest in Arizona and California has begun, according to estimates harvest yields turn out lower this year. A decrease in volume between 15 and 20 percent is expected. Later, the harvest shifts to San Joaquin Valley, and finally to the coastal regions of California. Finally, there are rumours of demand currently being higher than supply, but there are no traders who are willing to confirm these reports.

On average, prices in Europe are higher than last year. With the start of the Spanish season, the market was relatively empty. South Africa, Uruguay and Argentina had a good season, which changed smoothly into the start of the season in the northern hemisphere.

The warm and dry summer leaves its mark on the lemon harvest. In Germany, they're already anticipating shortages due to part of the blossom being burned in the sun. Lower volumes are expected to be available in Primofiori and Verna, for instance. The latest estimates also reckon with a 23 percent decrease in volume. This confirms the estimates from July, which reckon with a production of around 850,000 tonnes. Last year's harvest was also exceptionally good, however, with 1,100,000 tonnes. Compared to the multi-annual average though, the harvest is virtually the same this year. With 90 percent of the export, Europe is the biggest buyer of Spanish lemons. This year, the export to outside the EU could fall due to the lower volume.

While sales of lemons in general display a decreasing trend, lemons appear to dodge this bullet. Research shows demand remains stable. The country has roughly 15,000 hectares of lemon orchards, with Sicily, Campania and Calabria being major cultivation region in particular. Over half of the market is taken up by Femminello (53.6%), followed by Zagara Bianca (23.5%) and Monachello (10.2%). The harvest of Femminello Siracusano has begun, the season lasts until June. The harvest has a 20-day head start, and grower prices are about 20 percent higher than last year. From Arab and Asian countries, there is a lot of demand for the Italian lemons, but within the EU the citrus is also popular. Spain is the biggest competitor in markets like France and Germany, in Eastern Europe Turkey is a competitor.

The first Spanish lemons entered Belgian wholesalers last week. The start of the Spanish season came a bit later than usual, and sales of the Argentine lemons went smoothly. The importer is not happy about the quality of the Argentine lemons, which he says has decreased noticeably in recent years. Although the Argentines point to the weather as a cause, this importer has his doubts about this argument. Nevertheless, sales of the Argentine lemons went well. "People didn't have a lot of choice this season. It was either that (Argentine) or nothing."

The Dutch importers look back on the overseas season with satisfaction. Although prices did not reach the same level as last year, when a record price was achieved in the summer months, that also has advantages. Sales went smoothly, supply and demand were balanced. The quality from Argentina was considered to be good. Turkish suppliers were early this year looking into the state of the market. On September 28, the border was opened, and Turkey could export. The quality of these lemons is also satisfactory. One trader reports wanting to extend the Turkish season for as long as possible, but seeing how prices for the Turkish citrus are on the rise, the question is whether that's feasible.

German trade reckons with shortages in the winter months due to the dry and warm summer in Spain. How much lower the harvest will turn out on the Iberian peninsula, can be said with certainty at the beginning of the year, according to one importer. The importer prefers higher prices, which is better for the growers. Due to the low prices, many growers have a hard time keeping their heads above water, the German importer says. Prices on the wholesale markets turned out higher than last year for the Spanish lemons in week 40. The lemons yielded, depending on size, 197 to 213 Euro per 100 kilos. The prices for Argentine ones turn out lower, with 178 Euro per 100 kilos.

The Mediterranean island is seeing its export of lemons decrease. The production volumes turn out lower, and the majority of the harvest is sold on the domestic market. Last year, the total export of the Mediterranean island amounted to 2000 tonnes, negligible compared to other products. In the past 15 years, a large part of the acreage was removed. The current economic situation doesn't encourage growers to invest in lemon production either, they don't have a long-term perspective. In the summer months, the island depends on import, particularly from Argentina, the rest of the year Cypriot production is able to meet domestic demand.

Prices in France are high at the moment. Although the country imports lemons from all corners of the world, supplies are disappointing at the moment. Due to the low availability, prices have gone up. In the coming days, the price is expected to go down, seeing how Spanish supplies will be available then.

The Asian market is increasingly interested in lemons, encouraging various countries to increase production. Egypt is one of the countries that sees possibilities.

Production is disappointing this year, especially in the largest production area, Gujarat in the wet of India. Combined with high demand, caused by the higher temperature, this results in higher prices than last year. On average, lemons yield a dollar per kilo. The export from India is mainly focused on the Arab countries, like Oman and the United Arab Emirates. The export to these countries has logistical advantages, and the import rules are also favourable.

Over the past few years, production in the northern region of Kashmir has also grown. Although growers are optimistic about the quality, the cultivation does cause raised eyebrows among scientists. Several professors say the region is absolutely not suitable for the cultivation of lemons.

The Chinese market is able to rely on domestic production virtually year-round. By far the biggest part of the production, about 90 percent, can be found in Anyue, in the province of Sichuan. The season lasts from September until July. Last year, the harvested volume amounted to 450,000 tonnes, a five percent increase. The government of Anyue has invested in lemon production in recent years, including through a constructing distribution centre, setting standards and establishing public-private investments. The lemons from this region are popular in China. About 60 percent of the harvest is exported, with major buyers being the Middle East, Southeast Asia and Russia. The import from South America and South Africa is still limited, but it is growing. Other countries to which the Chinese borders are open are Israel, Taiwan, Spain, Cyprus, Australia and New Zealand.

The harvest in Australia has stopped in the past three weeks, the season is over. The available volumes are limited. The seedless varieties in particularly have high availability in the next two months, after which the available volumes will once again increase towards the holidays. The situation on the market was satisfactory, although compared to record year 2014 the prices turn out lower. The export of lemons has increased, a trend that's been noticeable in the past two years.

Every week, FreshPlaza publishes an overview of the market situation of a product in a worldwide context. With these articles, we're aiming to give an idea of a global market that's becoming ever smaller as a result of globalization. Next week, the spotlight is on tomatoes.