Oranges from South Africa are still to be found in many markets, however the mixed winter weather across the country, as well as high local juice prices, caused lower export volumes. The shortage of oranges for juice seen in Brazil, due to their own challenges of bad weather, is expected to continue. The high orange juice price in South Africa is expected to continue for a few more seasons, giving growers the option to send the fruit for a good income without shipping and packaging costs. The Red Sea crisis will likely persist as Egypt is to start their new season in December. Growers and exporters expect that the next season will also be shaped by the crisis. A reduction in volumes is essential to the success of the next season, from a pricing point of view for Egyptian exporters.
In North America the domestic orange crop is getting underway. The early harvest has begun on some Florida oranges though the main crop won't be ready until about mid-October. The crop is down somewhat though plenty of fruit is anticipated for the fresh market. Texas will be ready with its production in another three to four weeks and Mexico as well. The China market needs a reasonable price range to drive volumes of South African oranges with the the arrival volume currently only 60% of the same period last year. Orange growers and exporters in Argentina have had a generally good year this season, unlike last year when prices were not suitable.
Due to a lack of rainfall the supply of citrus this season in Italy cannot be guaranteed. In general, this year promises to be a very difficult production campaign. Only oranges of South African origin are currently present in the main Italian wholesale markets. In Germany the demand for overseas citrus, especially oranges, has been surprisingly low so far. The market in France is undersupplied with oranges. This situation is set to continue until the start of the Spanish season in mid-October. Orange production is expected to recover somewhat in Spain this 2024/25 season. Mandarin production will be lower than the previous year. Lower supply from the Southern Hemisphere points to an interesting start for the Spanish orange campaign. The Spanish citrus sector has already pushed purchases on the fields starting at the end of August and beginning of September for the first Navelina oranges with higher prices. Lower orange imports, mainly from South Africa into the Netherlands did not lead to a significant price spike.
South Africa: Weather impact and high local juice prices led to lower orange exports
The last of South Africa's Valencia's are being shipped. Weather played a substantial role: unseasonal rain and flooding in the Cape, coupled with a warm winter and incidences of creasing in the Eastern Cape, as well as the devastating cold in the north led to a reduction in export volumes.
These factors led to a constant downward adjustment of the export estimates: on Valencia's, the original estimate of 58.3 million 15kg cartons are now 49.1 million cartons, while the latest navel estimate is 24.4 million cartons.
The high orange juice price came as a surprise. "If you'd told me a year ago the orange juice price would be this high, I would never have believed it," says a grower, noting that the delay in colouring up as a result of weather complicated the harvest. "The internals were two weeks early and the external quality two weeks late, so that by the time we could harvest, fruit was already overripe, and many green oranges were simply sent for juicing."
The unusually high price for orange juice provided orange exports with a welcome floor price for oranges which overseas buyers had to meet, lifting orange prices, because many farmers decided to rather send oranges to local juice factories and thereby avoid packaging and shipping costs. Consequently, some exporters reported difficulties in obtaining sufficient oranges for export this season.
It is expected that this dynamic will continue for at least the next few years as the global industry adjusts to Brazil's lower orange supply.
Many cold rooms have been erected to cope with the requirements of the European cold protocols: in the past oranges would spend two or three days in cold rooms. That has now gone up to at least five days, increasing landside dwell time and slowing down the flow of fruit.
Egypt: Red Sea crisis to persist into new season starting in December
Egyptian oranges are expected in December. The Red Sea crisis, which changed the course of the previous season, persists. Growers and exporters expect that the next season will also be shaped by the crisis. One exporter says: "the crisis will not be resolved either politically or peacefully."
A reduction in volumes is essential to the success of the next season, from a pricing point of view for Egyptian exporters. To recall, prices fell sharply last season due to excessive production and oversupply in Europe, as oranges failed to reach Asia as a result of the Red Sea crisis. However, while growers realize that volume control is essential, individual and decentralized planting decisions don't necessarily follow suit.
Exporters are also concerned about the disadvantageous payment terms resulting from oversupply in Europe. One exporter says: "In the Netherlands, for example, I estimate that commission payments have increased by at least 40%. Our payment terms have gone from 80%-20% to 50%-50%. Prices have fallen by 25% on average.
Egyptian exporters face an acute increase in packaging costs, resulting from a monetary reform implemented by the government this year. Another exporter states: "Packaging costs have reached their record last season due to global material shortages, exacerbated by exchange rate fluctuations."
On the production front, conditions are rather favourable for the upcoming season. An exporter reports: "Weather conditions have been relatively favourable, contributing to a particularly high quality of citrus this year."
Demand prospects augur well, despite all these problems. The crisis has prompted Egyptian players to diversify their markets, resulting in increased volumes for North America, Latin America and Africa. An exporters shares, "Egyptian citrus continues to benefit from strong global demand, and the positive results of our market diversification efforts last season reinforce our confidence in strong demand for the upcoming season. This optimism is further reinforced by current market prices, as early contracts for Egyptian citrus are comparable to price levels prior to the Red Sea crisis."
North America: Domestic orange crop getting underway
Early harvest has begun on some Florida oranges though the main crop won't be ready until about mid-October. The crop is down somewhat though plenty of fruit is anticipated for the fresh market. (The overall crop for juice will be down a bit.) Brix levels and juice content are up. Pricing will be slightly higher than last year.
In California, there is exceptional quality on navel oranges–a significant improvement from last year when the industry suffered from record levels of thrip damage. Higher than normal Brix levels should result in an earlier start to the season. Recently, the USDA released its California navel crop estimate for 2024-25 which is estimating a two percent increase from the 2023-24 treecrop.
Texas will be ready with its production in another three to four weeks and Mexico as well.
On imports, supply has been tight on oranges from Chile and South Africa. Navel oranges are still coming in and the transition has begun to Midknight Valencias. Pricing is good on the fruit that is available outside the program business. Imports will likely finish by the end of October.
China: The market needs a reasonable price range to drive volumes of South African oranges
Cambria oranges from South Africa began arriving in the Chinese market in week 28, 2-3 weeks later than anticipated. So far, arriving volumes remain small, and prices are higher than before. Overall, South African oranges have been priced high since the start of the season due to limited arrivals. As of now, the arrival volume was only 60% of the same period last year.
The reduced arrivals are due to both weather conditions and market dynamics. Two major growing regions in northern South Africa experienced low temperatures, leading to frost damage and a 10%-20% reduction in orange production compared to last year. Most of the oranges destined for the Chinese market, including Cambria oranges, originate from these northern regions.
Additionally, the global shortage of orange juice has led to higher prices from local juice factories in South Africa, attracting many growers. Strong demand from Europe, which offers better prices, has also shifted export priorities. In contrast, returns from the Chinese market have declined in recent years, making suppliers more inclined to export to Europe, the Middle East, Russia, and Canada, while enthusiasm for shipping to China and the Far East has reduced.
However, the Chinese market remains a priority for premium varieties like Cambria, Witkrans, Rustenburg, and Midknight, which are in high demand due to the market's preference for high-quality South African oranges.
Regarding Cambria oranges, the quality and peel of the Cambrias that have arrived on the market so far are below expectations. Issues like green tops, low sugar content, and poor taste compared to previous years have impacted sales.
Argentina: Generally better prices and good market demand seen
Orange growers and exporters in Argentina have had a generally good year this season, unlike last year when prices were not suitable. Last year they also had a lot of domestic issues to contend with that impacted their currency with 100% inflation too. A grower and exporter noted, "Prices in general are good and demand is high for both types of confections that we do: 15kg boxes and 550kg cardboard bins and markets accept all qualities and almost all sizes, which is very efficient for growers as almost all fruit gets accepted and exported."
The mandarin season has only a few more weeks left. An exporter noted the season was a bit shorter than usual due to the climate. "We have long-lasting programs until the end of the calendar year when Egypt and the Northern Hemisphere will start with good volumes and competitive prices."
Italy: Citrus season supply cannot be guaranteed due to lack of rainfall
The situation for citrus fruit production is not the easiest and this year the supply cannot be guaranteed as usual. In Sicily, and particularly in the Catania area, it has not rained for many months (with due distinction). There was hardly any snow last year, which meant that the aquifers in the area were not able to replenish their water reserves.
In general, this year promises to be a very difficult production campaign. The almost total lack of rainfall for many producers in the Catania plain threatens not only production but even the survival of the citrus groves. Only structured farms, i.e. those able to provide regular irrigation, will be able to produce fruit of a quality suitable for marketing sweet and blood oranges. Not all Sicilian production is at risk, of course, as rain has fallen in other parts of the island, but the reduction in production will be felt on the markets. What will be practically the same for all Sicilian oranges is the predominance of small sizes. The campaign with the first Navel oranges will start in mid-October, if the weather permits, otherwise at the beginning of November,' reports a producer organisation.
Only oranges of South African origin are currently present in the main Italian wholesale markets: Navelina at a prevailing price of €1.35/kg, Navel Late and Valencia Late at €1.45-1.55-1.65/kg, with a downward trend.
According to GfK Consumer Panel Services, around 70% of Italian households bought oranges. This figure has remained virtually stable over the last two years. Although oranges can be found on shelves throughout the year, more than 10 million people buy them in the winter months (December to March). The organic factor could be a growth driver to be evaluated in order to develop this market, considering that the diffusion has not yet reached 20% and that Italian buyers are always interested in wellness and sustainability.
Germany: Demand for overseas citrus, especially oranges, surprisingly low so far
The Navel varieties and Valencia Late from South Africa are currently dominating the scene. With the exception of Valencia Late in the 7/8 calibration, prices for all varieties and grades are below the previous year's level. During the summer months, German wholesalers mainly offered oranges from the Southern Hemisphere. Products were mainly offered from South Africa, Zimbabwe and Argentina. "The demand for overseas citrus, especially oranges, has been surprisingly low so far. In this respect, it was rather an arduous campaign," a wholesaler concludes.
France: Undersuppplied market with oranges
At a time when very few origins are available, the market for table oranges is currently under-supplied. This situation is set to continue until the start of the Spanish season in mid-October. South African origin is now virtually the only orange on the market. It's a very difficult campaign due to a number of factors. There has been a slight drop in volume compared with the previous year, and many delays caused by disrupted logistics and shipping.
Supply is all the more limited because of the fierce competition from Asian markets. Producers prefer to send their goods to Asian markets, which are buoyant and easier to export to. Europe is not their priority. As a result, there are very few products available on the French market.
Spain: Orange production is expected to recover somewhat
For the 2024/2025 campaign, Spanish orange production is expected to recover somewhat, especially in Andalusia, the main producing area of this citrus fruit in Spain and which in previous campaigns plummeted by more than 50% due to the effects of the drought, continued in the Guadalquivir Valley. On the other hand, mandarin production will be lower than the previous year, as in the case of lemon, while grapefruit production will remain the same.
Specifically, 2.975 million tons of oranges are expected, 8.8% (242,500 tons) more than last season, but 8.2% (-266,000 tons) below the average. As usual, this citrus would be the one with the highest production, with 51% of the total volume. 72% of the oranges produced in Spain are varieties of the Navel group.
It is from the end of September when the demand for citrus fruits begins to awaken more after the start of the school period, a time in which a noticeably lower supply of overseas products is expected. But, the availability and quality of citrus fruits from the southern hemisphere, especially from South Africa, have been notably affected by climatic adversities this year. In addition, local citrus processing industries have paid very good prices for the fruit, which has led to less exportation.
This situation forecasts an interesting start for the orange campaign. In fact, the knowledge of this situation in the Spanish citrus sector already pushed purchases on the fields starting at the end of August and beginning of September for the first Navelina oranges, which were already priced higher than at the beginning of the previous campaign in the field and for which a premature harvest is expected. And situations like this lead to a more speculative citrus buying and selling market in the field, as happened in the 2023-2024 campaign. The first Spanish oranges will arrive in October.
Netherlands: Lower orange imports do not lead to significant price spike
With the duty deadline of October 15 approaching, South African orange exports to Europe are entering their final phase. "The market is currently quite calm, but it is progressing steadily. We are dealing with a very flat price level. Prices between €15.50 and €18 are historically very good, but given the tighter supply, we expected the levels to rise further. Apparently, high prices are resulting in lower consumption," notes a Dutch importer.
He attributes the 25% decrease in supply to several factors. "First of all, we are facing high prices in the juice market. This allows growers to sell their citrus at a good price—without too many risks—to the processing plants. Consequently, all category II and off-size fruit go directly to the processing industry. Additionally, many orchards have been placed on the blacklist this or last year due to Citrus Black Spot, which disqualifies them from exporting to Europe. Furthermore, Black Spot is still being intercepted in the fields and packing stations. This results in relatively few interceptions, but it is one of the reasons for the reduced fruit exports to Europe.
Moreover, there has been heavy rainfall in Citrusdal, a late-production area, both a few months ago and recently. This has led to fruit that is no longer suitable for export or that cannot even be harvested. Normally, we see a spike in smaller sizes at the end of the season, but I do not anticipate that last-minute surge this time."
Next week's topic: Sweet Potatoes