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Fresh Citrus Situation
|Total citrus production in 2000/01 in selected major-producing countries is estimated at 64.1 million tons, down 10 percent from the 1999/2000 level. Almost all of the major-producing countries are reporting some level of decline in production, except for Cuba, Mexico, South Africa, and Argentina. Brazil is reporting a drop of 1.7 million tons in orange production, the forecast overall decline. The total output for the Northern Hemisphere is estimated at 45.0 million tons, down 11 percent. The Southern Hemispheres production level is estimated at 19.1 million tons, down 8 percent. As a result of the lower supplies, major-producing countries exports in 2000/01 are forecast at 7.3 million tons, down nearly 13 percent and processed citrus is forecast down nearly 11 percent.|
Total citrus production in the United States in 2000/01 is forecast at 14.8 million tons, down nearly 6 percent from the previous years harvest. Total orange production in 2000/01 is forecast at 11.2 million tons, down about 6 percent from last years output. As of July 11, Californias Valencia orange harvest was in full swing. Harvest of the Navel orange crop is virtually complete. Grapefruit production in 2000/01 is forecast at 2.2 million tons, down 10 percent from last years output. Floridas grapefruit production is estimated at 1.77 million tons, the smallest grapefruit production level in Florida since 1991/92.
Total U.S. citrus exports in 2000/01 are forecast at 1.2 million tons, 12 percent higher than the previous years shipments, despite the lower production. Orange exports in 2000/01 are forecast at 625,000 tons, up 21 percent from the 1999/2000 level and up 155 percent over the freeze-damaged level of 1998/99. U.S. grapefruit exports in 2000/01 are forecast to increase to 410,000 tons. Despite the lower levels of production, exports have remained strong. U.S. exports to Japan during 2000/01 are running 2 percent ahead of last years levels.
This year (September 2000August 2001) is being considered Israels worst citrus season since World War II. A combination of deteriorating citrus prices in new sheqel terms, internal political unrest, the continuation of a debilitating drought, and rising water prices all contributed to a catastrophic year for producers. Total citrus production in 2000/01 is forecast to reach approximately 658,000 tons, 18 percent lower than in 1999/2000. Although the market price for Israeli citrus was 810 percent higher in local European currencies than in the previous season, the weakening of the European currencies relative to the dollar and the Israeli sheqel, mainly during the second half of the export season, caused exporters c.i.f. revenues to drop by 20 percent. Continuing low profitability, combined with aging orchards and increasing water shortages are expected to lead to the uprooting of some 6,000 hectares of citrus orchards at the end of 2000/01.
The industry appears headed for a production volume below that which is needed to support the necessary export and processing services. The winter of 2000/01 was the third successive winter with lower-than-average rainfall. The government cut irrigation quotas in half and raised water prices. Retention of the current planted area is possible only by the substitution of recycled water for the very scarce fresh water presently in use. But because of the uncertainty as to the future of the citrus industry, growers hesitate to invest in replanting, regrafting or installing new irrigation systems.
Greeces citrus production for 2000/01 is estimated at 1.1 million tons. The tangerine and lemon production estimates were revised downwards to 80,000 and 136,000 tons, respectively, while the orange production estimate remained unchanged. The weather this season has been favorable, with somewhat higher temperatures recorded and the crop maturing a little faster than normal. Exports for oranges, tangerines and lemons this season, through mid March, were about 250,000 tons, 33,000 tons, and 22,000 tons, respectively, compared with 200,000 tons, 29,000 tons, and 14,000 tons, respectively, through the same period last year. One fourth of the orange and tangerine exports went to EU destinations and the balance to Eastern European countries. Only 10 percent of the lemon exports, however, go to the EU.
Total citrus production in Mexico during 2000/01 is estimated at 4.9 million tons, up nearly 3 percent over last year. The fresh orange production forecast for marketing year 2000/01 has been revised upward to 3.5 million tons. Producers indicate that weather was good in most of the producing states, with timely rainfall, so the main harvest (October to April) was larger than expected. Orange trees had good first and second blooms, resulting in a larger volume of oranges. However, the large crop depressed prices. In fact, producers from Nuevo Leon left part of their harvested crop on the trees because of the low prices, and producers from Veracruz complained of the low prices by attempting to block roads. According to sources, such actions were viewed as an attempt by the orange producers to get support funds from the government. Oranges destined for processing for 1999/2000 and 2000/01 were revised downward due to the lower demand from the processing industry. The industry indicates that the low international price for juice concentrate will reduce the volume of oranges for processing.
The fresh orange consumption forecast for 2000/01 has been revised upward to 3.1 million tons, reflecting good consumer purchasing power due to lower prices.
On May 30, 2001, key members of the Agricultural Committee of Mexicos House of Representatives met with a variety of leaders of the Mexican citrus industry to discuss the overall conditions for citrus production, marketing, NAFTA, and the status of Citrus Tristeza Virus (CTV) in Mexico. The President of the Agricultural Committee presided over the meeting along with other officials from the Secretariat of Agriculture, Livestock, Rural Development,Fisheries and Food (SAGARPA), Secretariat of Economy (SE) and the University of Chapingo. Citrus producers, representatives of citrus organizations, and state government officials were present at the meeting. According to reports, a series of question and answer periods produced some lively discussions. In general, producers main concerns are access to domestic and international markets and the availability of credit to purchase the new disease-tolerant planting stock. Also, they asked for more government information on the status of all programs, including the CTV control program.
SAGARPA has indicated that about 90,000 families depend upon the citrus industry. To assist citrus producers in Mexico, several months ago SAGARPA announced a Citrus Support Program. Both the federal and state governments are involved in and support this program. The objective of the program is to assist farmers with planting stock by providing different supports to renovate groves with vegetative material that is certified free of CTV and resistant to CTV. SAGARPA funds are budgeted for the replacement or renovation of citrus groves with virus-free material and certified plants, to have specialized technical assistance, to establish producer lots of virus-free seeds and propagative material, and to have marketing assistance. This program is an important effort to reduce the possible spreading of CTV through the brown citrus aphid vector. SAGARPA also stated that CTV has already been reported in the country in different citrus- producing areas. Reportedly, the highly infested zones are within the states of Yucatan and Quintana Roo in southeast Mexico. Several phytosanitary norms and regulations have been published to prevent the spreading of CTV in Mexico. According to SAGARPA, several actions have been taken to eliminate CTV and the brown citrus aphid, including monitoring CTV outbreaks, using genetic and biological controls, training and providing information to farmers. The detection and eradication of plants has been carried out in different entities. It is prohibited to continue the use of CTV non-resistant material, and the gradual replacement of old trees with new resistant root stock is being enforced. So far, the state of Tamaulipas is the leader in producing CTV-resistant material and citrus grove renovation.
Japans production of total citrus is estimated at 1.5 million tons, down 18 percent from last year. Most of the reduction is the result of reduced tangerine production.
Japans imports of grapefruit are projected to reach 265,000 tons, with the United States accounting for about 80 percent of the total. This seasons U.S. grapefruit made a strong impression with Japanese traders, due largely to high quality and reasonable pricing, and is currently trading at prices 15-20 percent higher than last year at Japans major wholesale market. The 2000/01 crop of Florida grapefruit had an excellent taste, well-balanced Brix levels and acidity. However, this season Japanese importers have been cautious on their purchasing volume in order to avoid excessive inventory, a problem last season.
Japans imports of oranges during 2000/01 are estimated at 140,000 tons. The good taste of U.S. fresh oranges has supported good sales this season. The movement of U.S. fresh oranges is fairly stable in Japans distribution channels due to the stable supply from the United States. Sales of California Navels, which had a good quality with high Brix levels, were good this season. Japanese sales of fresh oranges have been fairly strong since early April, as Japanese temperatures started to climb. Strong sales are expected to continue with Valencias, although traders are cautious about the import volume in order to avoid excessive stocks.
In an effort to prop-up producer prices and the market image of Cheju oranges, the Cheju Citrus Growers Agricultural Cooperative (CCGAC) and provincial government are engaged in measures to reduce the volume and improve the market quality of fruit moving into domestic channels. Measures include encouraging farmers to remove orchards from production (permanently or during alternate years), to thin and prune more frequently, to plant improved citrus varietals, to encourage processors and retailers to sort fruits, to better coordinate marketing efforts, to introduce attractive smaller packages, and to increase export promotion activities. The governments biannual harvest measures are intended to flatten the cyclical production to provide a more stable supply of domestic oranges leading to stable producer prices. The calendar year (CY) 2001 program participation target is to set aside or "rest" 3,000-hectares. However, because of the inflexible nature of orchard-based agriculture--few alternative uses are available for such land during a "resting" year--larger producer incentives may be required to attract greater farmer participation. Through the above-referenced measures, Cheju officials aim to reduce future domestic orange production to 600,000 tons, the calculated optimum for producer prices when holding all supplies constant. On April 1, 2001, the Cheju Provincial Government announced a 995.5 billion won, 10-year citrus industry development plan. The plan calls for reducing Unshu orange planted area to 22,000 hectares that would yield annually 550,000 tons. The plan focuses on the development of alternative crops (i.e., green tea and flowers), the citrus processing industry, the encouragement of environmentally-friendly cultivation practices, and introduction of improved outdoor varietals (i.e., late season varieties), on expansion of marketing channels, and export promotion programs.
In CY 2000, fresh orange imports totaled 99,139 tons, of which 31,183 tons entered under Koreas Minimum Market Access (MMA) quota. Fresh orange non-quota imports exceeded quota imports for the first time, and by a large margin. Three variables underpinned the markets demand for imported oranges: consumers positive perception of California oranges, ample supplies of reasonably-priced quality U.S. oranges, and higher-cost domestic produce. As of April 16, 2001, CY 2001 orange imports totaled 57,387 tons (15,312 tons under MMA quota, 42,075 MT out-of-quota). Recently, Cheju officials auctioned off the remaining MMA quota. Korea is now the United States third-largest market for oranges. However, industry expectations of steep price increases for California citrus, specifically for oranges, are expected to dampen import demand the latter half of this year.
Australia, New Zealand, and South Africa offer only limited competition to the United States in the fresh orange import market, accounting for only 4 percent of the trade in 2000. Spain, Israel and Italy are negotiating phytosanitary protocols for orange trade with Korea. Argentina and Egypt are involved in preliminary discussions with the Korean quarantine authority for phytosanitary protocols for a broader range of citrus products. South African oranges face stringent phytosanitary requirements that require both pre- and post-shipment fumigation. Korea-Chile and Korea-China free-trade agreement discussions are creating consternation among Koreas producers over additional competition. However, even if such agreements are reached, separate phytosanitary protocols would need to be negotiated.
Production of fresh citrus in 2000/01 is forecast at 2.63 million tons, up nearly 2 percent from the 2.58 million tons produced in 1999/2000. With the exception of grapefruit, production of all other citrus fruits is expected to increase slightly. Grapefruit production is estimated down only 1 percent.
Total lemon production for 2000/01 (harvested year around with the bulk of the harvest in May and August 2001) is forecast at 1.17 million tons, or 5,000 tons more than in 2000. In Tucuman, the drought during the winter and spring adversely affected the first blossom, but later on climatic conditions improved. However, recent rains have delayed the harvest and resulted in a delay in shipments.
Argentinas orange production for 2000/01 (harvested April-December 2001) is forecast at 830,000 tons, 5 percent higher than last year, due to improved weather conditions in Entre Rios and Buenos Aires provinces. In Entre Rios, last spring was very rainy and windy, and even though an increase in production is expected, it is estimated that the quality of fruit could be below normal levels due to some diseases. In Buenos Aires, the weather conditions during the growing period were good, leading to a higher production forecast for this province.
Tangerine production for 2000/01 (harvested April-November), is estimated at 445,000 tons, compared with 438,000 tons produced the previous year. This slight increase is due to greater tangerine production in the provinces of Buenos Aires, Misiones and Jujuy, which could offset the reduced production in Salta Province. The production of tangerines in the other producing provinces is expected to be similar to last year.
Total exports of fresh citrus fruit in 2000/01 are forecast to reach 283,000 tons, down only about 6,000 tons from the 1999/2000 level. Lemons are forecast to account for about 73 percent of that total.
Total orange production for 2000/01 (local marketing year April 2001-March 2002) is forecast at 428,000 tons, down 31 percent from the previous year. This is due to a return to normal weather conditions and will result in a more manageable level of production. However, industry sources anticipate dramatically-improved quality with the smaller crop expected to produce larger fruit suitable for export to the United States. A lack of wind and drier conditions have prevented rind damage through abrasion or insect pressure, generally improving the appearance of the fruit. Furthermore, quality assurance measures enforced by packing sheds have led to the adoption of cultural practices aimed at preventing rind breakdown in exported fruit.
Orange exports increased from 45,000 tons during 1990/91 to 111,235 tons during local marketing year 1999/2000. According to official figures, four out of Australias top five export markets are in Asia and accounted for 66 percent of total exports during this period. Exports for the first 11 months of 1999/2000 (local marketing year 2000/01) are already 25 percent higher than the previous year. The United States was the third largest export destination in local marketing year 2000/01. The lower value of the Australian dollar is expected to improve returns for exports to the United States in April 2001 to March 2002. Industry sources anticipate excellent export prospects in 2001/02 due to the improved quality of the crop and the low value of the Australian dollar.
Industry sources anticipate higher prices for this year as the crop quality improves for both Valencias and Navels. Prices are expected to be further boosted by a smaller crop effectively restricting supply on the domestic fresh market. A dramatic reduction in deliveries to processors for juice production is expected in April 2001-March 2002, as both a smaller crop and increased quality restrict the supply of oranges suitable for juicing.
Prior to 2001, the two major horticultural organizations in Australia were the Horticultural Research and Development Corporation (HRDC) and the Australian Horticultural Corporation (AHC). The HRDC was responsible for research and development and the AHC was responsible for promotional activities. Both organizations were funded by levies paid by growers and received pro-rata government funding for specific purposes such as research and development to a maximum of 0.5 percent of the gross value of industry production. In 1998/99, the total amount of government funding was A$15.2 million.
In CY 2000, the government of Australia reviewed the legislation pertaining to these bodies and merged both organizations into one, with industry support. Horticulture Australia Ltd. (HAL) is the new organization that replaced the AHC and HRDC on January 1, 2001. This was established under corporations law as a not-for-personal-profit company in accordance with the Memorandum of Understanding (MOU) signed by 26 industry organizations. The focus of the new company is the continued marketing and promotion of horticultural products in both domestic and export markets, as well as the exploitation of the opportunities for uptake and commercialization of new technology.
Brazils orange production in 2000/01 (local marketing year July 2001-June 2002) is estimated at 14.5 million tons, down 10 percent from the previous year. The commercial area of the state of São Paulo, plus the western part of Minas Gerais is expected to produce 12.9 million tons, an 11- percent decrease compared to the previous crop. The remainder should be provided by other producing regions.
One major large blossoming occurred in the states of São Paulo and Minas Gerais during September 2000. Fruit set, however, was damaged by the drought that prevailed in the producing regions during October and November, resulting in an expected production decrease. The second and third flowerings were sporadic and non-uniform, as opposed to the previous crop, and should not result in a significant volume of oranges. In addition, depressed orange prices in the domestic market led to below-average crop management, further contributing to expected lower production. The steady rainfall that occurred during the past couple of months is also likely to result in fruit splitting.
In the past two years, about 71 percent of the orange crop in Brazil has been processed for the juice sector. In 2000/01 (local marketing year 2001/02), it is estimated that approximately 74 percent of the orange production will be processed.
South Africas citrus production in 2000/01 is forecast at 1.5 million tons, an increase of 13 percent from the previous year. Total orange production is estimated to account for about 76 percent of the total citrus production. South Africas citrus industry is primarily dominated by the Valencia orange varieties, which include the Deltas Midknights, and Navels. The delivered-in-port prices of Valencias and Navels have reflected good producer prices and real price increases.
Total citrus exports are expected to rise to 850,000 tons from 707,000 tons. South Africas citrus exports should continue to expand as a result of the Rands devaluation, which is expected to boost export earnings and depress agricultural imports. The rapid devaluation of the Rand compared to the U.S. dollar should also favor South Africas exports to the United States, if exporters continue to meet U.S. phytosanitary requirements. South Africas biggest export market is still Europe, with an estimated volume of about 612,000 tons per year, followed by the Middle East, Japan, the United Kingdom, the Far East and the United States.
(This article was prepared or estimated on the basis of official statistics of foreign governments, other foreign source material, and, in particular, reports of Agricultural Attachés and Foreign Service Officers, results of office research, and related information. The FAS Attache Report search engine contains reports on the Fresh Citrus industries for more than 10 countries, including Argentina, Brazil, China, Italy, and Spain. For information on production and trade, contact Debra A. Pumphrey at 202-720-8899.)