Murcia's lemon sector is facing trouble this campaign after a few golden years in which the 'boom' in the production and profitability seemed to have no end. The significant increase in the production, which has reached around 1.3 million tons in Spain, together with other factors, such as greater competition from other countries, mainly Turkey, has caused prices to sink. As a result, a significant part of the production of the Fino variety; that is, between 10% and 12%, will be left unharvested. The fact is that the crop is close to becoming unprofitable, with the price coming close to 18 cents per kilo, which is the estimated production cost.
Thus, more than 97,500 tons of lemons from the region will not reach the market, either for fresh marketing or for processing, while nationwide, 150,000 tons of Fino lemons will be left unharvested. Moreover, of the 920,000 tons of this variety expected to be harvested across the country in the 2018-2019 campaign, 625,000 were still unharvested by the end of December, according to data from the Lemon and Grapefruit Interprofessional Organization (Ailimpo). This is a huge volume. It is worth keeping in mind that the region's lemon production accounts for 65% of the total Spanish volume.
This is a new situation after six exceptional seasons, in which many new plantations had been set up, motivated by the fruit's high profitability. That is why the production capacity has gone from 1 or 1.1 million tons to 1.3 million, including the 380,000 tons of the Verna variety, which will be harvested from April to June. In this specific case, the volume more than doubles that of the previous year, which was especially bad.
Growers, marketers, exporters and processors assume that the time has come for the sector to enter a new stage of stabilization, seeking "a soft landing," in the words of the director of Ailimpo, José Antonio García, although "always making sure that a profit can be made."
Given the current situation, many producers decided not to sell at a loss and tried to endure until prices recovered; however, time is running out and there is little room for maneuver, with a fruit that is about to become too ripe in the tree. In fact, it has become clear that there is no time left to harvest and find a market for those tens of thousands of kilos.
The prominence that Turkish lemons are having this campaign explains, to a large extent, the deterioration of the market conditions for the Murcian product. This year, Turkey has again set its sights on Europe, since it has recovered its normal production levels, with around 800,000 tons. Besides, the country has also benefited from the strong devaluation of its currency, which led to oversupply and much cheaper prices.
Therefore, it is a priority to move forward towards stabilization, taking into account that in the next two years, the total production is expected to grow by another 200,000 tons, causing it to exceed the 1.5 million tons.
"Handling such volumes between fresh (70%) and industry (30%) will not be easy," acknowledges the top executive of Ailimpo. "Especially if the countries competing with us, such as South Africa, Argentina, Turkey and even Egypt, are also planting more." In the opinion of José Antonio García, "although the lemon consumption in Europe has grown by 30% in the last decade, which has allowed prices to rise, that growth cannot continue to happen indefinitely."
Source: laverdad.es