Lemon OilCitrus limon (L.) Burm. F.Harvest: May - July
Argentina, like some of its other citrus counterparts, is reeling under erratic weather patterns and climate change and this has affected the lemon trees. Furthermore, there is increased channelling of supply into the fresh fruit market, which actually brings good returns in the USA market. This is because the crop from coastal California has gone down and Argentine lemon exports to USA fetch good prices. Mexico, Brazil, Vietnam and Indonesia are the new entrants to the Argentine lemon export market and are expected to offer substantial orders.
The season began well with ideal weather and rising hopes. The current 2019 crop was expected to be higher than last year. However, April brought prolonged showers, in fact copious rainfall for 50 days thereby impeding harvesting. The extensive delay in harvesting impacted the fruit in terms of colour and size. The quality of fruit did not meet export parameters and was thus rejected. This substandard fruit was channelled into the processing industry; distilleries were unable to cope with such large volumes in the time available. Much of the fruit was discarded. Argentine farmers continue to harvest and distill their crop but have overshot timelines. Spain, Turkey and some of the newer players have completed big harvests so now the markets are depressed. Lemon essential oil has seen some spot sales but now slowly the markets seem to be rallying with some requests for bulk orders.
BRAZIL
Orange Oil CPCitrus sinensisHarvest: July - December
There is good news from Brazil. Total orange crop production estimates are 26% higher than the previous crop and set to touch 494 million boxes. The São Paulo region, Brazil’s star performer in this category, is set to deliver 389 million boxes as against last year’s 286 million. It may be safe to deduce, then, that the rise in crop production is from São Paulo and that the rest of the orange growing areas have recorded negligible or no change in the figures.
With the weather as an ally for excellent blooming, fruit setting as well as fruit development, Brazil has recorded a higher number of fruits per tree. Another factor that has contributed to this tremendous harvest is the vegetative regeneration of trees due to lower production from last year. The processing industry is looking forward to an impressive rise of 93.0 million boxes of fruit for processing. There is more than sufficient supply because of the increase in crop size and prices have plummeted by a whopping 60% compared to early 2018.
Out of the 494 million boxes, around 362 million are earmarked for processing. The mood is optimistic regarding the total crop that is around 30% higher than last season. The demand for orange oil has been declining in the domestic, as well as global arenas. Some manufacturers of d’limonene are looking at creating new formulations by using dipentene as a solvent in industrial applications. Brazilian manufacturers are currently wooing the industrial sectors like the resin industry, and other institutional buyers of orange oil. Material is being offered at cheaper rates. Other traders and smaller processors have also joined the low-price bandwagon in an effort to expend old stock before the new batches hit the shelves. An uncertain market fraught with instability and volatility has prevailed over the orange oil market. Demand has weakened and this has been further fuelled by the reformulations of the oil by many producers. Clients are hoping for prices to slide further before booking their requirements; but the time has come for the top-notch players to book material. In this context, prices are expected to firm up and the market is hoping for stability.
ITALY
Bergamot OilCitrus bergamia Harvest: November - March
It is a catastrophic year for Italian bergamot farmers. More than 70% of the bergamot flowers in one of the most important growing areas, Reggio Calabria, have been wiped out by a heat wave. With no more flowers left and little chance of the plants flowering again, farmers have reconciled themselves to this drastically reduced crop. Prices are expected to rise.
Lemon OilCitrus limon (L.) Burm. F.Harvest: November - January, April - July
This year’s lemon production remained the same as that of 2018. Last year, the crop was at around 500,000 MT. Going by past trends, usually 20 to 30% of the total crop is earmarked for the processing industry. This time, demand for the fresh market has dropped significantly. The Italian oil industry, which is largely influenced by the dynamics of the fresh fruit sector, saw a corresponding rise in availability of processed lemons. Lemon oil prices last year fetched much better prices compared to this year.
MEXICO
Key Lime OilCitrus aurantifoliaHarvest: May - October
Key lime oil distilled has been in a downturn for the past couple of years. After a long period of slowdown, the demand for key lime oil has revived. This has come as an impetus for the main growing regions Colima and Michoacan to expand their cultivating area, which has gone up to cover approximately 6,000 hectares of land. Naturally production too is set to go up by an estimated 10% in around three to four years. The cold pressed key lime oil market is largely influenced by the fresh fruit industry; and currently is balanced with steady supply and strong prices that are expected to remain firm.
The first half of the year from January to June was quite a heartening time, with a significantly healthy crop of 130,000 MT. Producers are expecting to sign off 2019 with a bang and touch a crop level of 250,000 MT shared between all processing plants. The market hopes for a normal crop on a par with last year’s figures. The fresh fruit market is quite strong and this has put an upward thrust on price levels. Raw material prices are scaling up and will soon touch USD 0.51/kg. In turn this has impacted the prices of industrial lime, which has escalated. The robust key lime demand has led to large scale booking of orders; and currently stocks are somewhat restricted. This is bound to push up prices.
SOUTH AFRICA
Grapefruit OilCitrus paradisiHarvest: December - April
Fresh fruit market
Leading the pack among the grapefruit producing states is Limpopo. The province contributes around 59% of total production. Mpumalanga follows with 22% and KwaZulu-Natal with 10%. A mere 6% comes from the Northern Cape with the Western Cape contributing less than 1% of grapefruit. The Star Ruby variety, commanding the highest demand on a global scale, forms the bulk of the produce with 84% of production. The Marsh variety makes up 13%; with negligible amounts of the Rose, Redheart, Pomelit, Ja Shaddock, Flame, and Fe 1(Jackson) varieties.
Global demand for grapefruit, especially in Asia and the Middle East, is on the rise. The South African farmers have increased their cultivation of this rather profitable crop from 7,950 hectares in 2017/18 and covered almost 8,200 hectares in 2018/2019, an increase of 3%. In the face of higher than normal temperatures and severe aridity, the size of the fruit is smaller than average. Furthermore, since grapefruit follows a cyclical production pattern and 2018/19 corresponds with a lean period, the total production has fallen by a marginal 1% at 415,000 MT. The 2017/18 production was 419,000 MT. The decline in production has been somewhat mitigated by the increase in cultivation. However, the water levels in the dams, and prevailing drought conditions in some growing regions such as Letsitele in Limpopo, will severely impact the 2019/20 crop if there is inadequate rainfall by November 2019.
Processing
The EU is a major importer of grapefruit juice and concentrate. A favourite in the food industry for jams, fruit preserves, and marmalades, the inner peel is a source of pectin and citric acid. Many a beverage and soft drink use leftover pulp following commercial juice extraction as a preferred flavouring ingredient. Tonic water gets its signature flavour from naringin obtained from grapefruit peel, while the essential oil from the peel is used in scented fragrances. This year’s market forecasts a 26% jump to 160,000 MT of fruit delivered for processing as opposed to last year’s figure of 127,000 MT. The main reason behind this increased volume is the smaller fruit size and, with the increased production, a significant quantity of fruit that has not met the export criteria has been channelled into processing.
Orange Oil CPCitrus sinensisHarvest: June - September
Fresh Fruit Market
Once again Limpopo takes first place in orange production, accounting for 49% of the total area planted. The Eastern Cape follows a close second with 25%. The Western Cape and Mpumalanga fill in with 15% and 8% percent respectively. KwaZulu-Natal, Northern Cape and the North West Province contribute 1% each. Out of the total area dedicated to orange, 61% is the famed Valencia variety, while navel oranges cover 39% of the area.
Production
Overall there has been a rise in the area of orange cultivation. With a perceived shift towards late blooming, high yielding orange crops and improved water management techniques, the crop size is predicted to be on the higher side. In fact, industry predictions peg the orange crop at 1.60 million MT in 2019, a 3% jump from 1.55 million MT in the last year. This however, will be evened out by the crop damage due to hail, dry weather and small fruit sizes. It is estimated that the area under orange plantation will expand by around 2% to reach 45,000 hectares in 2019 due to an increase in planting of the seedless orange variety. Parity, however, is on the cards as the Western Cape and Limpopo gradually turn their attention away from oranges to soft citrus farming.
SPAIN
Grapefruit Oil PinkCitrus paradisiHarvest: December - April
The season for grapefruit commenced in October. Market predictions for 2018/2019 peg the production figure at 76,000 MT, hardly any change from the last crop. Even for processing there is no change expected in the quantity or volumes of fruit. Last year around 10,000 MT of fruit was received for processing.
Lemon OilCitrus limon (L.) Burm. F.Harvest: November - July
With an estimated lemon production of 1.1 million MT Spain is set to once again win the crown of being the world’s numero uno producer of lemons for fresh consumption. This figure released by AILIMPO is an upsurge of 19.0% from last year’s crop, though of late Turkey has emerged as a stiff competitor with viable price points. Producers have undertaken efforts to expand the areas under lemon cultivation and, backed by exemplar weather, literally, their efforts have borne fruit. Excellent flowering and very good fruit setting have produced good quality fruit. However, the challenge from Turkey has cast a shadow over Spanish farmers. Driven by the apprehension of losing out market share to their Turkish counterparts and be left at a price disadvantage, many growers have decided to slow down the harvest by leaving much of the fruit on the trees. Another factor that has led to this decision is the drop in processing of lemon by the industry.
USA
Grapefruit OilCitrus paradisiHarvest: December - April
The July forecast has come with good news for Florida farmers. Compared to last year’s crop of 3.88 million boxes, this year’s crop is set to touch 4.51 million boxes, according to the USDA. White grapefruit seems to be a little tight on the supply front with a prediction of a crop size of 0.770 million boxes only. The coloured grapefruit variety is set at 3.74 million boxes.
Lemon Oil CaliforniaCitrus limon (L.) Burm. F.Harvest: May - July
Arizona reported a good crop and increase in production from last year. Combining this with the output from California, the USDA forecasts the combined volumes at 22.390 million boxes. This is a slight increase from last year’s 22,200,000 boxes. Currently, the quality of oil is good and this is bringing in reasonable prices.
Lime OilCitrus aurantifoliaHarvest: March - October
This oil is seeing some difficulties due to overproduction and a surplus supply. An increase in the plantation area has resulted in a surfeit of limes, which, released into the market, has led to saturation. However, this augurs well for the processing industry since a larger volume of fruit is now earmarked for distilling into oil. In the face of weak demand, supply is adequate but prices have plunged to their nadir in the last five years.
Orange OilCitrus sinensisHarvest: February - May
Orange production in 2018/19 is set to outshine the previous crop with an increased output of 4.2 million MT leading to an estimated global production of 51.8 million MT. As a result, fruit for processing will go up to an estimated 21.2 million MT this year. USA’s combined orange production from Florida, California and Texas is estimated at 124.09 million boxes.
Florida, the USA’s biggest orange-producing state and third largest orange producer in the world has been plagued by the dreaded citrus greening disease and hurricanes. The state, which once boasted a peak production of 244 million boxes in 1998, has dwindled by a mammoth 70% over the last decade. Citrus greening is fatal for the trees. The bacteria impact the vascular systems of citrus trees, hinder nutrient uptake and naturally, adversely affects yield, fruit size and quality. The cost of production also goes up. After concerted steps were taken to battle this disease, the industry has slowly limped back to normal. Despite weather setbacks, crop production this year looks promising with an estimated increase from last year.
The USDA pegs the total Florida orange crop for 2018/2019 to be 71.6 million boxes, a sharp upsurge of 26.55 million boxes from last year’s crop. Hurricane Irma coupled with citrus greening had brought down the last crop (which ended in July 2018) to 45.05 million boxes. This year, out of the predicted 71.6 million boxes, 30.4 million boxes are expected to be the early, midseason and navel oranges while the remaining 41.2 million boxes will be the Valencia variety.
Approximately 95% of Florida’s orange bounty is sent for processing. The 2018/2019 Florida total orange crop is somewhat reduced from the initial 76.5 million boxes forecast in April; it is still a significant improvement. This year will bring relief to several farmers who were struggling to come to terms with the massive, 75-year-low precipitated by Hurricane Irma.
