Argentina
Lemon Oil Harvest: May - July
Though there have been some hurdles in the smooth harvesting of the lemon crop, the situation is now under control and news is reassuring. The crop is delayed because of heavy rainfall leading to floods in the main production areas. The producers’ woes have been compounded by a labour strike. Despite the accumulation of flood water, the copious rainfall and delay in harvesting have resulted in a longer time for the fruit to mature and, subsequently, produce a larger fruit size. Argentina’s exports to the USA, as well as Europe, have seen a significant rise and this augurs well for the Argentinian industry. Supply has exceeded demand which has exerted a downward pressure on prices. This has enabled prices to be at a reasonable low. Fresh fruit demand is set to increase and prices may move up too.
BRAZIL
Orange Oil CP Harvest: July - December
Brazil reports a period of stress during the initial months. January witnessed extremely dry weather conditions leading to drought-like conditions. Water was scarce in the entire citrus belt except the southwest, leading to a drop in the yield in the groves. This erratic weather has been persisting for some time, in fact as far back as 2017. The spring rains, which were long overdue was one of the reasons behind the late blooming of the orange trees. Growth was hindered, eventually resulting in a sharp plunge in the number of oranges per tree. The rainfall during the fruit development and harvesting period from May 2018 to March 2019 was also deficient, at least 3% below the historical average. Followed by soaring mercury levels after the flowering, the fruit set and size was affected. There is a marked deviation between final average size in April 2019 against what was projected in May 2018. However, the aberration for each orange variety is attributed to irregular rainfall distribution during fruit harvesting season. The largest margin of deviation was observed in early varieties. This was a direct result of the dearth of water at the beginning of the crop season, which coincided with the harvest of these particular orange varieties. In comparison, the size variation was the least in the Pera Rio variety.
Brazil’s orange crop estimates for the year 2018/19 by Fundecitrus are close to 285.98 million boxes of 40.8 kg each. This figure is a drop of almost 28.2% compared to the previous crop of 398.35 million boxes in 2017-2018 – 11.6% below the crop average in the last decade. The Hamlin, Westin, and Rubi varieties are pegged at 50.70 million boxes with the other early season varieties steadying at 14.66 million boxes. The Pera Rio orange saw an upward jump of 0.58% to touch 79.12 million boxes. Valencia and Valencia Folha Murcha oranges were predicted to deliver 107.91 million boxes, an increase of 0.26%; while the Natal variety anticipates a significant drop of 1.08% to deliver 33.59 million boxes.
Italy
Lemon Oil Harvest: November - January, April - July
October 2018 witnessed extreme damage to crops caused by heavy rains. However, it was fortuitous that lemon trees were relatively unaffected compared to other citrus varieties. The blood orange was seriously affected and the market continues to reel under the pressure of excess demand and low supply. The lemon crop achieved a normal 500,000 MT out of which around 100-150,000 MT is supplied for processing into oil. The Italian market is also subject to the dynamics of the fresh fruit sector; and industry fruit prices have risen to very high levels. This continues to pose a major hurdle for the domestic processors. Distillers and processors face stiff global competition from other regions that are offering significantly lower fruit prices. Italy is facing a challenge in terms of the current lemon crop. There is an acute shortage this summer as the farmers grapple with bouts of the black spot disease of citrus crops. Prices for the fresh fruit continue to be exorbitant; and this is one of the reasons that traders are turning to South American and South African supplies. Eastern Sicily farmers too are having a tough time dealing with the Mal Secco fungal disease that is plaguing the lemon harvest. Coupled with unfavourable climate changes in the region with low temperatures and strong winds, the news of lemon production is not too reassuring.
Mexico
Lime Oil Harvest: May - October
Mexico holds second position in lime production after India with annual production slightly more than 2.5 million MT. Exporting its fruit to twenty-eight countries across the world, the USA remains Mexico’s largest buyer of key limes. The district of Buenavista in Mexico leads in lime production with more than 21,000 hectares planted and a harvest of more than 420,000 MT. Citrus production is concentrated in the region of Tierra Caliente and the municipalities of Apatzingan, Aguililla, Tepalcatepec, Paracuaro, La Huacana, Mugica, and Gabriel Zamora. Reports indicate that there are about 6,731 lime orchards registered in the Mexican state of Michoacán. In addition, 5,915 hectares are dedicated to grapefruit plantation, 126 hectares for orange, and 353 hectares for lemon. Each hectare is estimated to produce 19 MT of fruit.
The market is gearing up for a normal crop season in 2019 with approximately 350,000 MT of fruit for processing. The fresh fruit market still commands the lion’s share of fruit, almost 90%, and continues to exert pressure on the industry. This year Michoacán lime production has shot up by an impressive margin of more than 60%; from 711,000 MT to more than 1,300,000 MT obtained from about 64,000 hectares devoted to this crop.
The demand for distilled lime oil has seen a slowdown for the last two years as a result of stock re-adjustment in the market. This year however, the signs are quite positive and seem to be gaining some strength in the first quarter. The price for the oil is more stable than the fluctuations seen last year. Though the supply and demand scenario in the second half of 2019 will influence the price trend, the demand for CP lime oil is looking to be stable. Consequently, prices too are expected to be firm throughout the year. Distilled lime oil with the beautiful green colour is best produced during the early and high season. It is advised that those with a large requirement book their orders since it might be difficult to find this oil later.
South Africa
Lemon Oil Citrus limon (L.) Burm. F. Harvest: July - September
South Africa has seen a rise in lemon cultivation and this has produced the desired result – an encouraging increase in lemon production. Though a large proportion of the country’s newer orchards are still not in production, planting has continued, and total lemon production has soared. Compared to last year, this year South Africa has more than doubled its lemon crop to touch 473,000 MT. The prices for lemon, however, are rather weak.
USA
Grapefruit Oil Harvest: December - April
There is a slack in demand for grapefruit oil. The industry has seen quite a high price range for this oil, especially due to the reformulation work that has been undertaken. The availability of superior quality fruit from Florida has dropped significantly, and naturally this has affected the production of the oil. The USDA’s May production forecast puts the availability of white grapefruit at 780,000 boxes and that of red grapefruit at 3.8 million boxes – rather disheartening figures for the grapefruit market where the supply has been waning over the last twenty years and the fall-off is almost 90%. Grapefruit oil with very low nootkatone is available in other parts of the world. However, even this grade of oil is available in limited quantities and is constrained by lack of fresh fruit supply due to demand from the local markets. It is known that the return on investment on fresh fruit is more than that of essential oil. This, coupled with a robust demand, is the key influencer that dictates the choice of citrus fruit cultivation for growers.
Lemon Oil California Harvest: May - July
Globally lemon stocks are on the upswing across most markets, with demand being quite steady as it has been in the last two years. Naturally, lemon prices have slackened considerably considering the increase in supply and stable demand.
USA grows lemons around the year across the three key varieties, i.e. desert, valley, and coastal. Lemon prices have seen a decline albeit a modest one. The drop in demand holds the potential of further easing out of prices, unless bad weather in the citrus districts of California upsets the applecart. Last year witnessed a substantial fall in crop production by almost 20% due to excessively high July temperatures. Farmers were hoping to avoid this situation this year since weather predictions indicate average normal temperature. Their prayers were answered as this year’s California lemon harvest volume swelled by 10%-20% compared to last year. As a result, the size of the fruit is large and the quality much superior. The USA remains a strong consumer of fresh fruit and this is the segment that is the pivotal driver for the region. The demand for the oil remains resilient and similar to last year since it is a premium quality and coveted globally. This year could prove a great equaliser since supply and demand is set to compensate and etch out price stability in the sector. Predictions for the lemon crop for the USA is said to touch 21.3 million boxes for the period 2018-2019.
Orange Oil Harvest: February - May
Overall the weather in the USA growing belts, especially Florida, has been ideal and conducive to the recovery from last year’s debacle of a diminished crop size. The Florida market has bounced back and consequently the first six months of the current season witnessed a steep fall of almost 30% of the Brazilian import of frozen concentrated orange juice (FCOJ).
The May estimates of the USDA puts the Florida all-orange production forecast at 72.4 million boxes. This represents a 5% decrease from the April forecast of 76.5 million boxes. This figure takes into account 30.5 million boxes of non-Valencia oranges (early, midseason, and Navel varieties), harvesting of which has been completed. With almost 70% of the harvest completed, the Valencia crop forecast is substantially lowered to 42 million boxes, some 9% lower than the April forecast.
