The very mixed weather patterns across Brazil, impacting the growing and harvesting of limes, has caused lower volumes to be exported to European markets. Some parts of the South American country have seen drought and other parts a lot of rain, leading to variable lime quality being reported in receiving markets. Many European markets report these lower volumes caused much higher prices. Other South American lime suppliers like Colombia, Peru, Mexico, Guatemala and Honduras have too little volume to fill the supply gaps left by Brazil in key weeks. In North America, even with a drought in Mexico, they are able to send enough limes to their primary markets. However, the extreme heat will impact sizing and quality, the Mexican industry warns.
In the United Kingdom, lime demand increases a lot with good weather. Due to increased European phytosanitary checks, with the first on citrus canker over the past few years, the spotlight is now on Elsinoe. The UK is exempt from this issue, with importers noting that this causes periodic waves of containers that are rejected or diverted to the UK from the EU, causing big price rises on European markets. Lime exports from Asia come mainly from Vietnam, with low volumes due to high logistics costs.
The demand for limes also increases with good summer weather in Europe. In the Netherlands, there is an excellent market for Brazilian limes due to relatively low volumes from this country. The market in Italy is seeing fluctuating prices, while the quality of imported limes vary, an importer notes. In Spain, a shortage from Brazil led to a significant increase in prices. The French market has a similar situation with lower volumes from Brazil leading to higher prices. In South Africa despite the low supplies of limes the market was stable.
South America - Brazil sends fewer goods to Europe due to troubling weather
Brazil is the dominant player at the moment in the lime supply to Europe, this is the case on a year-round basis. Colombia, Peru, Mexico, Guatemala, Honduras all with supply Europe with small volumes.
A Brazilian lime grower and exporter notes, "In the state of São Paulo, due to the lack of rain, we have few limes and they need rain to grow. In the northeast it's the opposite: it rained a lot and limes are already past the point of being harvested. Furthermore, in the northeast, ships have been skipping the Port, passing through every 15 days. So volumes fell and consumption in Europe has only increased with the summer. There are high prices in Europe in July and I believe they will stay high into September."
Peru is now in the low season, which will last until October. The country is just coming out of El Niño, which will cause a slightly delayed start to the new season and Mexico is suffering from droughts in some areas. That said, Brazil has multiple growing regions, so weather conditions can be very variable.
Mexico is nearly 100% focussed on the North American market, although small volumes will reach Europe. "We don't expect a big change as per the last three years due to lower volumes available and large consumption on their doorstep. The same goes for Guatemala, Honduras and Colombia," said a lime importer.
North America: Lime pricing to strengthen this month
The supply of limes is steady. Even with drought in Mexico as well as Tropical Storm Alberto which could have prolonged some things, the supply has been good to North America. While Colombia is also shipping limes right now, limes in North America are primarily sourced from Mexico.
However, in mid-June, the Persian Lime Growers and Packers Association (COPELP) released a statement about the extreme heat and drought conditions in all crops in Persian lime-growing regions in Mexico noting that it would impact quality and sizing. It's anticipated that supply will be challenging in June and August supply remains unknown.
Markets are expected to increase this month and it's also expected that in July and August, larger sizes will be particularly tight in supply. Meanwhile, the demand for limes is relatively strong, particularly with the warm summer temperatures.
UK market
Demand for lime in the UK increases a lot with good weather, but the baseline volume even in winter is reasonably steady. It is still a niche item, but it seems to have a loyal following. The recent sunshine and the European Championships are a welcome boost.
EU phytosanitary decisions
"The main talking point for limes is what will happen with the EU phytosanitary decisions. There has been a lot of focus on citrus canker for the past 3-4 years but now the spotlight is on Elsinoe. This is not a new issue; it is just that the checks are very determined and "suspected" cases take a long time to be verified and with lime time is critical," explained an importer.
"This is really causing a problem in both the EU and UK. The UK is exempt from this issue, so periodically there are waves of containers that are rejected or diverted to the UK from the EU. This causes big price rises in Europe and then creates a mess of arrivals into the UK without a home."
"For anyone trying to run supermarket programs with technically approved fruit, this extra level of volatility in a notoriously difficult product is not appreciated. Hopefully the EU and Brazil can find a solution soon."
A Brazilian exporter noted, "The biggest obstacle are the trade barriers, that unfortunately in Europe become a phytosanitary issue, which is in the interests of a few."
Asia: Vietnam supply to Europe low due to high logistics costs
Vietnam is the only real supplier to Europe from this region and volumes are low due mainly to high logistics costs which is affecting all trade to and from Asia. The Red Sea problems, adding to an already long journey for limes, do not help.
Netherlands: Excellent market for Brazilian limes
"The volumes of Brazilian limes are relatively low. We mostly see smaller sizes and few larger sizes (36/42/48). The warm weather and holiday season are boosting demand, leading to above-average market prices. Additionally, the quality is at a good level," says a Dutch importer. "Peru is currently off-season and production there won't return to normal levels until the end of September. Due to the 'hot' market in the United States, there is no need for Mexico to ship to the EU, unless importers pay a significant premium upfront. This results in low volumes from Mexico. Overall, strong demand and low supply create an excellent market for Brazilian limes."
Belgium: Market disrupted by lower supply
The limes market in Belgium has been disrupted in recent weeks. "There are fewer volumes coming in from Brazil and, in addition, many containers are stopped at the port with phyto-problems," explains a Belgian trader. "As a result, prices have gone up by about 3 euros in the last 3 weeks and I suspect that this upward trend will continue for some time. Nevertheless, sales continue to be fine. In fact, we are experiencing bad weather here, but in countries like Spain or France they don't suffer much from it, so the demand for limes, which is after all a summer product, is not bad at the moment."
Italy: Fluctuating prices, quality of importer limes vary
With exotic products such as limes, the climate is always the deciding factor. "Until two weeks ago, everything pointed to a price increase. In reality, this has not happened. Due to the weather conditions, the summer lime season has never really started," explains a wholesaler from northern Italy. "There were fewer quality limes from Brazil, Mexico and Colombia. However, we have been experiencing low incoming volumes for some time. At the beginning of June there was an overlap of product from different origins, such as Colombia, Peru and Honduras, which made up for the lack of Brazilian product. Now these sources have dropped off. Prices have risen again: at the moment, the Brazilian product has an average purchase price of around €10 per 4.5 kg box, while the Mexican product goes up to €11. Until last week, we were talking about purchase prices between €8 and €9. However, consumption is generally slow."
A company based in the Marche region, specialising in international import and distribution, reports: "The arrival of limes in Europe has not been regular, which has led to abnormal dynamics with sudden high demand, accompanied by product shortages and subsequent sudden drops in demand. Not infrequently, there has been a lot of medium to low quality product on the market, often with mould or rot problems. As a result, we have had irrational commercial moments, with prices fluctuating uncontrollably from €4 to €10 per 4.5 kg box. Italian and Spanish production has not yet started, with a few exceptions in Spain. We will have to wait until August and, above all, September to see the first marketable fruit".
Spain: Shortage from Brazil led to a significant price increases
At the end of March, a shortage of limes from Brazil caused a significant price increases. After a period of relative calm and a slight decrease in prices, the last two weeks have seen a revival in demand coinciding with the arrival of summer. This has led to a further increase in prices. Currently, there is a situation of high demand throughout Europe due to seasonality, while supply remains limited at origin.
"Forecasts for the summer indicate high demand across Europe and limited supply of limes, mainly due to several challenges in Brazil. Among these challenges are health restrictions that have significantly reduced the number of exportable limes. Extremely dry weather conditions have also affected both the quantity and quality of fruit available. We expect to find a greater proportion of small-caliber limes and less fruit from the larger sizes available on the market", a Spanish importer says. "Demand is expected to continue to rise in the coming weeks as the heat increases and we enter the height of the holiday season in Spain."
France: Brazilian volumes low, prices higher
There is mainly fruit from Mexico and Brazili available now. Regarding Brazil, the quality depends. There is less production from Brazil at this time, so the prices are going up.
South Africa: Low supplies of limes on the market
"When limes are scarce, prices are very good. But there are lots; prices are very low," says a market agent, adding that there are little on the market at the moment.
The season was stable, says a lime grower, and in May and June the wholesale lime market was good, selling at R30 (1.5 euro) per kilogram. At the Johannesburg market, the current price is R22 (1.12 euro). Prices will be high until December when the volumes start coming in during high summer.
During January, February and March when limes are plentiful, prices in the Cape exceed those of the inland markets where the price can drop as low as R7 (0.36 euro)/kg. Limes for the South African market are also grown in Mozambique.
Next week's topic: Ginger