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Fresh Citrus Situation
|Total Northern Hemisphere citrus production in 2001/02 is estimated at 47.6 million tons, only slightly ahead of the previous year. Although some key producing countries are reporting gains, weather developments in other countries have offset any increase. U.S. production in 2001/02 is estimated at 15.0 million tons, only 1 percent ahead of last year. Cubas production of citrus has been drastically reduced as a result of Hurricane Michelle. Greeces citrus crops took a severe blow as a result of the snows and freezing temperatures during the first part of January 2002.|
Total citrus production in 2001/02 is estimated at 15.0 million tons, up 1 percent from the previous year. Orange production is forecast to increase to 11.4 million tons, grapefruit production to increase to 2.3 million tons, and tangerine production to increase to 476,000 tons, while lemon production is down nearly 5 percent to 865,000 tons, and lime production continues to decrease, estimated at only 6,000 tons in 2001/02.
Total U.S. exports of citrus are forecast at 1.1 million tons, 1 percent ahead of the 2000/01 level. Oranges are estimated to account for 53 percent of exports, grapefruit 36 percent, and lemons 10 percent. Small amounts of tangerines and limes make up the rest. Although the California navel crop is down 11 percent in 2001/02, the U.S. orange export market situation remains favorable. U.S. exports of oranges in November-October 2000/01 were 566,976 tons, an increase of 9 percent from the previous year. Although Canada remains the largest export destination, seven of the top ten destinations are in Asia, and they collectively accounted for 66 percent of total U.S. exports. U.S. exports of grapefruit are forecast at 395,000 tons in 2001/02, an increase of nearly 2 percent from 2000/01. Japan remains the largest export destination for U.S. grapefruit, accounting for 51 percent of the total in 2000/01.
U.S. imports of citrus are forecast down to 335,000 tons, a drop of 60,000 tons from the 2000/01 level. Although U.S. imports of oranges are forecast to remain stable, several factors will affect the imports of other citrus. U.S. imports of tangerines in 2001/02 are forecast at only 60,000 tons, down from 100,000 tons the previous year. Early in December 2001, USDA banned the imports of clementines from Spain after the discovery of live Mediterranean fruit fly larvae in the Spanish fruit in several U.S. states. This ban occurred during the peak shipping season for Spains exporters. U.S. imports of lemons are forecast at 20,000 tons in 2001/02, a decline of nearly 40 percent from the previous year. U.S. imports of lemons had climbed to 33,000 tons in 2000/01 after Argentina was granted access to the U.S. market. However, a court decision in September 2001 ruled against USDAs import protocol and imports of lemons from Argentina were halted. U.S. imports of limes during 2001/02 are forecast at 180,000 tons, down 8,000 tons from 2000/01.
In fiscal year (FY) 2001 the citrus industry received approximately $5.3 million to conduct promotions overseas under the USDAs Market Access Program (MAP). The MAP has been instrumental in expanding markets for U.S. citrus in Canada, France, Poland, UK, China, Hong Kong, Japan, Korea, Taiwan, Austria/Switzerland, Belgium/Netherlands, Scandinavia, Singapore, and Malaysia. Consumer and trade promotions are developed for fresh oranges, fresh grapefruit, lemons, orange juice, and grapefruit juice.
A new allocation of MAP funds will take place in June 2002. The industry shares the cost of promotions under the program. In addition to MAP funds, the citrus industry received USDA funds for market research under the Emerging Markets Program and for market development under the Section 108 program.
Cubas citrus production for 2001/02 was significantly damaged when Hurricane Michelle ripped through the island in early November, during the peak of the grapefruit harvesting period The storm passed east of Jaguey Grande, Cubas largest citrus production area. Cubas total citrus production during 2001/02 is estimated at 527,000 tons, down 32 percent from a year ago. Cubas production of citrus had been expected to total 900,000 tons, a healthy increase from the 2000/01 level. Orange production is estimated at 340,000 tons, down 24 percent from a year ago. Grapefruit production is estimated at 175,000 tons, a significant drop from the 310,000-ton level a year ago. Prior to the hurricane damage, Cuba had been expected to be the worlds third-largest producer of grapefruit. Citrus production will also be affected in the future, as the hurricane destroyed trees and caused the trees to drop their fruit.
According to reports, Cuba in recent years has diverted a growing percentage of its citrus crop to processed products. According to sources, in 1999/2000, almost half of the orange output and almost all of the grapefruit output, was sent to processing. The hurricane also damaged processing facilities. Cuba is a major player in the grapefruit juice market.
Extreme weather conditions, including snow storms, frost and low temperatures, during the first week of January 2002 have significantly hurt Greeces citrus production. Greeces citrus production for 2001/02 is estimated at 655,000 tons, a drop of nearly half the previous years level. According to sources, the regions which were hit the hardest were Evia, Central Greece, Northern Peloponesse, Central Macedonia, and Crete. The orange crop for 2001/02 is estimated at 500,000 tons, down from 975,000 in 2000/01. Farmers were keeping oranges on the tree rather than harvesting them, in anticipation of higher prices. Lemon production is estimated at 80,000 tons, down 50,000 tons from the previous year. Tangerines and most of the clementines were harvested before the severe weather hit production areas.
As a result of the lower production numbers, Greeces exports of citrus will be significantly reduced as well. Exports are forecast at only 225,000 tons, nearly half the previous years level. During calendar year 2000, only 16 percent of Greeces oranges went to other EU countries; 33 percent went to East European countries.
Spains total 2001/02 citrus crop is forecast to reach 4.8 million tons, about 3 percent lower than last year. Orange production is forecast to remain near last years level of 2.7 million tons. Lemon production is expected to increase about 9 percent, while tangerines will decrease by 10 percent. In Castellon, there has been a decrease in area planted because some former citrus areas are becoming industrialized, and because that region is affected by tristeza, a serious plant disease. High temperatures in May affected the regular setting of the fruit, while hailstorms in early May damaged the trees. High temperatures in October and the beginning of November contributed to an early ripening of fruit. Warm weather also increased the presence of Mediterranean fruit fly. In addition, frost and rains in December affected the some of the citrus crop.
Total area devoted to citrus production remains relatively constant, with some orange area being replaced by tangerine groves. Production in Valencia (about 66 percent of output) continues to account for the majority of Spains citrus crop, followed by Andalucia and Murcia.
Total Spanish citrus exports during calendar year 2000 were 3.3 million tons, almost 18 percent higher than the previous year. About 80 percent is exported to other EU countries. Total citrus exports during 2001/02 are forecast to decline about 5 percent to 2.5 million tons. Most of the reduction is forecast to occur in the export of clementines. The ban recently imposed by the United States on the import of clementines from Spain due to medfly-related problems is expected to result in a drop in Spains exports of about 14 percent.
Italys citrus production for the 2001/02 marketing year is forecast at 3.3 million tons. This is an 8-percent increase from the 2000/01 level. The increased production is due to more favorable weather conditions, which helped yields to recover. In fact, while overall citrus planted area remained stable, orange orchards declined slightly and mandarin orchards dropped, but clementine and grapefruit crops increased.
The increase in grapefruit output is due to increased planted area as orange and lemon producers,especially in the Calabria region in southern Italy, replaced some of their "blonde" oranges with grapefruit, which has better market potential. Producers are planting more pink grapefruit varieties to meet consumer demand for sweeter grapefruit. The market prospects for Italian oranges have declined over the last several years, due mainly to strong competition in the European market from Spain and marketing inefficiencies. Italys citrus producers have been unable to set up a marketing organization that is efficient enough to satisfy the needs of the large distribution companies both in Italy and in Northern and Eastern Europe. Italy has had some success marketing its Tarocco variety, a blood orange with red pulp that is unique to southern Italy and Sicily, as a specialty item. However, the Tarocco is only harvested from December to March so the Italian traders are unable to supply their customers during the full marketing season and they have not been able to capitalize on its uniqueness to build a strong seasonal demand.
In Italy, citrus fruit consumption is very dependent on availability and price, with consumers willing to substitute other fruits based on price and a wish for variety. Consumption for 2001/02 is forecast to grow because of a large supply, especially for oranges. Grapefruit consumption has risen in Italy in recent years and is forecast to rise in 2001/02, too. The consumption increase is mainly due to a larger supply of pink grapefruit that is strongly preferred by consumers. For 2001/02, Italys citrus exports are expected to increase further except for lemons, which have remained stable since 1999. The major markets for orange exports continue to be mainly EU countries and Switzerland.
Italys citrus imports in 2001/02 are forecast to decline about 4 percent to 179,000 tons. Italys importers of oranges have started to shift their source to countries outside the EU. Imports from South Africa, Cyprus, and Argentina increased strongly, whereas imports from Spain declined. Italys grapefruit imports in 2001/02 are forecast at 30,000 tons, unchanged from the preliminary 2000/02 level. Israel remains the major supplier of grapefruit to Italy, while imports from the United States dropped due to the high value of the dollar. However, it is believed that small quantities of U.S. grapefruit are transhipped through other EU ports and thus do not show up on trade statistics.
Total citrus production in Mexico during 2001/02 is estimated at 5.0 million tons, down nearly 8 percent from the previous year. Orange production for 2001/02 is forecast at 3.1 million tons, a decrease of 11 percent compared to 2000/01, due to the alternate bearing nature of the crop. Also, Veracruz had weather-related problems that will hurt production. The third and fourth blooms were affected by untimely rainfall and warm weather, which reduced flowering and fruit set for the last part of the season. However, orange trees had good first and second blooms in Veracruz, due to timely rainfall. It is expected that the Valencia harvest will be good, although not as large as the 2000/01 crop. Production in San Luis Potosí was also affected by untimely rainfall. Production will also be affected because some areas in Veracruz have been abandoned due to low market prices and high input costs. The 2001/02 forecast for oranges destined for processing is 370,000 tons, a 12-percent increase compared to 2000/01, due to industry expectations of higher international frozen concentrate orange juice prices (FCOJ).
Japans economic recession will affect the sales of citrus products in 2001/02. Japans imports of oranges during 2001/02 are forecast at 130,000 tons, down from 132,000 tons imported in 2000/01. Grapefruit imports are forecast to increase marginally to 275,000 tons with approximately 187,000 tons coming from Florida. The Japanese lemon market is fairly stable, with imports of approximately 90,000 tons forecast for 2001/02.
With the economic downturn, Japans consumers began belt-tightening their family food spending, carefully selecting products and looking for the best value for the price. Consumption of citrus products has been declining marginally. This trend is likely to continue in the 2001/02 season, assuming the current market situation continues. Without continued high-quality products and price reductions, increased sales of citrus are unlikely.
Through November 2001, fresh orange imports totaled 91,192 tons, of which 88,975 tons came from the United States. An estimated 32,041 tons of the total entered under the reduced tariff Minimum Market Access (MMA) quota. The MMA quota for 2001 was 40,046 tons. The Cheju Citrus Growers Agricultural Cooperative (CCGAC), administrators of Koreas MMA citrus quota, started auctioning off MMA quota shares in June this year. Four such quota auctions netted awards of 4,140 tons. Though CCGAC had stated earlier in the year that the 2001 MMA quota would be filled, that did not happen. For the second consecutive year, out-of-quota imports exceeded the in-quota amount.
Several events in 2002 may help U.S. orange sales to Korea. The FIFA World Cup games and a Presidential election, coupled with a stable foreign currency should provide strong stimuli for greater citrus demand. The United States ability to provide quality fruit at a reasonable price should enable it to continue to attract the Korean consumer and to maintain a favored supplier position.
Chinas citrus production for 2001/02 is expected to increase by 10 percent to 8.8 million tons due to good weather conditions and the alternating production year cycle. Tangerine production accounts for about 67 percent of total citrus production, or 5.9 million tons. Orange production accounts for 33 percent of total citrus production, or 2.9 million tons. China can produce good quality citrus, but the quality quickly declines after harvesting due to excessive handling during distribution and sales. Post-harvest practices of washing, waxing, and packing tend to be rare. Approximately 80 percent of Chinas citrus is harvested during November and December. Chinas processing industry uses between 5 and 10 percent of the citrus crop each year. The amount of citrus used for canning this year should increase compared to last year, because of the larger crop. Canned fruit is the main processed citrus product and mandarin oranges are the variety of choice for most canners.
While Chinas citrus exports exceed its imports, exports are mostly comprised of fresh tangerines and canned citrus. When these two products are not considered, Chinas imports are greater. The United States still is Chinas main source of imported oranges. During the year 2001, most tariffs on imported fresh citrus and processed citrus products decreased, but most cuts were small. By the year 2004, fresh citrus tariffs are scheduled to fall to 12 percent.
Forecasts for the Southern Hemisphere are unavailable at this time.
(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 Attaché Report search engine contains reports on the Fresh Citrus industries for more than 10 countries, including Argentina, Brazil, China, Greece, Italy, and Spain. For information on production and trade, contact Debra A. Pumphrey at 202-720-8899.)