The lime market is never stable and at the moment the European market is reliant on Brazil for supply as Central American countries have been supplying very little this season.
“The reason that there is very little coming from other countries is higher prices in the US – with very little risk and a 3 day transit it just does not make sense to ship to Europe. This leaves Brazil as the dominant player in Europe at the moment,” said Rob Cullum from Pacific Produce.
European fruit has moved through already with Spain pushing the major volume, Vietnam arrivals are steady but expensive and Peru’s season has been delayed by El Nino and has only just started which is 8 weeks later than normal.
The market is finely balanced – as volumes decline from Brazil consumption also declines as we move to Autumn weather. Prices are peaking at the moment due to low volumes of large sizes and a slight under-supply caused by a couple of low export weeks in combination with logistical blips.
"Personally I see this as something that can change fast – it only takes a 10% oversupply to send things in the wrong direction as consumption continues its natural decline through November, December will then see a seasonal uplift in consumption. The problem that both sides (exporter and importer) face is that there are too many players and speculation is dangerous."
On the export side the growers have been hit with rain and also have a decent local market and then combine that with high traded prices in Europe and their understandable reaction is to expect high prices. On the import side consumption is declining and the risk to fix high MG prices increases along with probable quality issues on arrival.
"The danger is that we can face a repeat scenario of last year where the growers held prices too high for too long and then the market completely collapsed as a result and this created a lot of tension and significant losses (who took that loss was the battle).
"This estimate of when prices should decline at source and when the market will have a problem is the big gamble in the lime industry."
For more information:
Robert Cullum
Pacific Produce
Tel: +44 (0) 1865877801
Email: [email protected]
www.pacificproduce.co.uk