Citrus

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Russian veto could see withdrawal of 62,000 ton total of Spanish citrus

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The Russian embargo has already seen about 46,000 tons of Spanish-grown citrus fruit taken off the market and provision has been made for another 15,775 tons, according to EU Agriculture Commissioner Phil Hogan.

He was responding to a written question from Spanish MEP Clara Eugenia Aguilera García (S&D) about EU compensation for farmers affected by the veto.

Aguilera García had asked to what extent, from January 2015 on, the Commission expected the ban to affect the export of citrus fruit during its peak season and whether support measures would be extended or other forms of compensation provided.

“The exceptional measures that were brought in to offset the effects of the Russian embargo on agricultural producers (expired) on 31 December 2014 for fruit and vegetable farmers. However, January marks the start of the high season for citrus fruit and certain vegetables, with exports to Russian peaking in the first few months of the year,” she said.

“The Russian embargo has not just resulted in the loss of an important market for our producers; it has caused the price level in the EU for agricultural produce to drop too.

“Relations between the EU and Russia remain difficult, and farmers in the EU — especially those in Andalusia (Spain), where a significant proportion of the winter crop is produced — continue to suffer the consequences of this geopolitical conflict,” she said.

New envelopes for Spain: 26,650 tons vegetables & 15,775 tons citrus fruit

Hogan said the initial compensation provided – under Commission Delegated Regulation (EU) No 1031/2014 ( 1 ) – covered citrus.

“The quantities allocated for citrus fruit were calculated on the basis of exports to Russia during the period from August to March in order to prepare for the peak in exports during the first months of the year. Interim data on the use of the measure for citrus in Spain until 31 December 2014 show that around 46,000 tons have been withdrawn from the market.

“An extension of the abovementioned Regulation to counter pressure on prices for some products and regions was adopted on 19 December 2014. It applies until 30 June 2015.

“New envelopes for the same group of products have been calculated taking into account exports to Russia during the period concerned. The quantities allocated to Spain for the group of vegetables including tomatoes, carrots, sweet peppers, cucumbers and gherkins amount to 26,650 tons; for citrus fruit the allocated quantity is 15,775 tons including lemon,” he said.

 

http://www.europarl.europa.eu/RegData/questions/reponses_qe/2014/010605/P8_RE(2014)010605_EN.pdf

 

 

 

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Increased citrus imports and online sales in China

The majority of China’s imported citrus is sold through major retailers, convenience stores, fruit stalls, high-end hotels, restaurants and e-commerce.

 

Ongoing growth in China’s citrus imports is fuelled by strong thirst for fresh – and thus counter-seasonal – fruit, reports the Global Agricultural Information Network (GAIN). And the main suppliers – South Africa, Australia and the US – are also benefiting from the increasing cost of locally-grown fruit, GAIN said in its 2014 citrus annual for China.

Among its forecasts for the 2014/15 marketing year:

Orange imports: to rise 13% on previous year to 100,000 tons (South Africa then the US the main suppliers);

Mandarin imports: to rise more than 30% to 24,000 tons (South Africa & Australia the main suppliers);

Grapefruit imports: to rise 23% to 32,000 tons (imports from South Africa have grown to meet higher demand as more consumers become aware of grapefruit’s nutritional benefits).



Online fresh produce sales up 41% to more than $930 million

GAIN also said the majority of China’s imported citrus is sold through major retailers, convenience stores, fruit stalls, high-end hotels, restaurants and e-commerce.

It noted e-trade platforms developed fast in 2014 and though the market share is still small, using they are increasingly popular in China, where revenue from online fresh product sales rose nearly 41% in 2013 to more than $930 million.

“Selling fresh fruit online has continued to expand rapidly over the past 4 years. For example, Fruit Day was the first company to develop an online website to sell fresh fruit products in 2009 followed by Guo Ku Wang (www.guocool.com) and Tou Tou Gong She (www.tootoo.com). Guocool.com also provides fresh-cut products online,” GAIN said.



Shanghai the preferred entry port

Guangzhou is China’s biggest fruit import distribution hub but importers increasingly prefer the next biggest, Shanghai, because of domestic transportation costs and other cost concerns.



 

Read the report

Image by NuclearVacuum via Wikimedia Commons

 

 

 

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US to spend $173.2 million promoting exports of its farm products

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The US Government has announced funds of more than $173 million to be used next year to increase exports of American agricultural products.

Washington apple growers, Florida citrus producers, California’s table grape sector and the Northwest pear industry are among those set to benefit from multi-million dollar allocations.

 

Cranberry, cling peach, cherry, sweet potato, tomato, and organic produce organisations are also among the recipients.

 

Through the US Department of Agriculture (USDA) Market Access Program (MAP), the Foreign Agricultural Service (FAS) will provide $173.2 million (up from nearly $172 million last year) to 62 nonprofit organisations and cooperatives. Participants contribute an average 214% match for generic marketing and promotion activities and a dollar-for-dollar match for promotion of branded products by small businesses and cooperatives.

 

MAP focuses on consumer promotion, including brand promotion for small companies and cooperatives, and is used extensively by organisations promoting fruits, vegetables, nuts, processed products, and bulk and intermediate commodities.

 

Meanwhile, under the Foreign Market Development (FMD) Program (also known as the Cooperator Program), FAS will allocate $26.7 million (up from $24.6 million last year) to 22 trade organizations that represent U.S. agricultural producers.

 

The FMD program focuses on trade servicing and capacity building by helping to create, expand and maintain long-term export markets for US agricultural products.

 

An independent study released in 2010 found that trade promotion programs like MAP and FMD provide $35 in economic benefits for every dollar spent by government and industry on market development, the USDA said in a press release.

 

“The past six years represent the strongest period for U.S. agricultural exports in the history of the United States. Farm exports in fiscal year 2014 reached a record $152.5 billion and supported 1 million jobs in the United States,” it also said.

Here is our summary of this year and last year’s funding most relevant to the fresh fruit and vegetable sector:

 

USDA Market Access Program (MAP) funding: Participant FY 2015 Allocation FY 2014 Allocation
Food Export Association of Midwest $10,272,114 $9,637,643
Food Export USA Northeast $8,896,086 $8,138,985
Western US Agricultural Trade Association $7,705,129 $8,097,508
Southern United States Trade Association $7,152,346 $5,874,329
Washington Apple Commission $5,179,019 $4,930,752
National Potato Promotion Board $4,998,822 $3,647,427
Florida Department of Citrus $4,383,830 $3,885,364
California Table Grape Commission $3,424,871 $3,093,070
Pear Bureau Northwest $3,069,707 $2,926,873
California Prune Board $3,023,063 $2,668,406
Raisin Administrative Committee $3,018,117 $827,922
Sunkist Growers, Inc. $2,660,274 $2,372,577
National Association of State Departments of Agriculture $2,329,520 $3,533,072
Cranberry Marketing Committee* $1,791,836 $1,561,170
Washington State Fruit Commission $1,685,709 $1,361,810
U.S. Apple Export Council $998,650 $712,727
Welch Foods, Inc. $932,734 $834,411
California Agricultural Export Council $861,378 $1,228,525
Organic Trade Association $784,902 $746,912
Intertribal Agriculture Council $728,492 $642,528
California Cling Peach Growers Advisory Board $500,182 $444,892
California Pear Advisory Board $468,842 $442,081
California Cherry Marketing and Research Board $443,722 $519,189
New York Wine and Grape Foundation $422,674 $484,886
California Grape and Tree Fruit League $413,125 $420,800
Synergistic Hawaii Agriculture Council $379,415 $388,412
Cherry Marketing Institute $290,042 $204,115
American Sweet Potato Marketing Institute $200,000 $200,000
Florida Tomato Committee $3,578  
National Watermelon Promotion Board   $290,367
*Cranberry Marketing Committee also received the following in Foreign Market Development Funds (FMD) $182,665 $153,754

 

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The TPP and Fresh Produce Imports in Japan

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What the Trans-Pacific Partnership could mean for fruit and vegetable exporters

Oranges are one of the possible opportunities for imports in Japan, a country where the population is steadily shrinking and consumption of agricultural products likely to decline, says the US Department of Agriculture (USDA).

That’s because oranges are sensitive to price drops – lower prices bring higher consumption – and thus among the opportunities for growth that could be filled by imports, the USDA’s Economic Research Service said in its new report “Japan’s Agri-Food Sector and the Trans-Pacific Partnership (TPP)“.

It’s hoped a TPP agreement will see the reduction or even elimination of Japanese import tariffs, which could significantly lower the prices of imported products including oranges.



Demand strong in Japan for organic and local food

Organic food is another area where demand for agricultural products is increasing in Japan – against a backdrop of otherwise “sluggish growth in the volume of consumption” – because consumers worry about “food safety, quality, healthfulness, and production methods.”

There is significant concern about metabolic syndrome (including about excessive weight), another reason “foods and beverages perceived as heart-healthy – including fruits, vegetables, seafood, wine, and tea – are likely to be more popular as a result.”

Meanwhile, the “recent popularity of local food does not appear to be waning.” the USDA said, which is a growing opportunity for Japanese farmers.



Japanese farmers focus on ‘taste and appearance’

Among other insights into the Japanese market:

– vegetable production has been one of the strongest segments of Japan’s agriculture,

– Japanese farmers focus on taste and appearance and one of their strengths is the ability to differentiate from imports based on quality and providing very fresh products,

– Japan’s web of protection for agriculture includes tariff quotas and protection against price declines for Japanese vegetable and fruit growers,

– as well as open-field production, Japan grows vegetables in plastic-covered hoop houses and glass houses,

– Japan is self-sufficient in most temperate fruits,

– China poses a challenge to Japan in products including fresh and processed vegetables, and fruit, which generally arrive at a lower price than Japanese farmers can match.

 

Access the USDA report here.

To learn more about the Japanese fruit and vegetable market read our report here.

 

Photo by Evan-Amos via Wikimedia Commons

 
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COUNTRY PROFILE: Japan

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Bananas, citrus and pineapples lead Japan’s fruit imports

Japan has always been very dependent on imports, especially for food and even more so for fresh produce. The total value of its fresh produce imports in 2012 was $2.5 billion, which included about 1.86 million tons of fruit and 862,082 tons of vegetables.

 

The leading imported fruits in Japan are bananas (59%), citrus (20%) and pineapples (9%). Most of the bananas are from the Philippines. Among citrus varieties, the leading import is the grapefruit, though Japanese people are increasingly preferring oranges. In 2013, 67% of imported citrus in Japan came from the US, 30% from Australia and 2.4% from South Africa, for a total volume of 30,745 tons.

 

The fastest growth in fresh produce imports in Japan is in avocados, which rose by 25% in 2012. Because it favours domestic produce, Japan imports only small amounts of products that it grows itself – such as stone fruit, apples and cherries.

 

Fruit imports in Japan, 2012 (tons)

Bananas 1,096,538, Pineapples 174,041, Grapefruit 151,413, Oranges 130,422, Kiwifruit 63,970, Avocados 58,555, Lemons & limes 55,895

 

 

Vegetables imports in Japan, 2012 (tons)

Onions 342,710, Pumpkin & squash  125,024, Cabbage 84,110, Carrots 82,051, Leeks 56,400

 

Exports

Due to its small land mass and high population density, Japan lacks an agricultural sector strong enough to export significant volumes. But of the fresh produce it does export, fruit is the leading type, especially apples, mandarins and pears. In 2012, it exported about 14,015 tons of fruit and just 956 tons of vegetables.
 

Japanese retailers undergoing concentration

Japan’s retail sector has been quite stable in the past few years, even if regional retailers, such as Universe and Hokkaido’s ARCS, have tended to merge to compete with national players such as AEON and Ito-Yokado, which both represent 40% of total Japanese retail. The top 5 national companies – AEON, Ito-Yokado, Uny, Daiei and Life Corp. – together woo 62% of food sales.

Nationwide retailers, including AEON and Ito-Yokado, generally source their foods through importers and wholesalers.

 

Consumption in Japan – elders are big spenders

 

Japanese Ministry of Internal Affairs figures show nearly a quarter of household spending in Japan is on food. Japanese people value local products and in particular high quality and premium produce. The recent ecological disasters there have also increased awareness of environmental issues and safe production standards.

Japanese consumers can be split into two main groups: young active people and elders. In the last few years, a big range of healthy and ready-to-eat fresh produce has been developed to cater for each of these segments.

AEON is particularly targeting elders by opening its stores two hours earlier and with special deals attracting more of them onsite.
 

This is an abbreviated version of an article that appeared on page 26 of our latest issue, available online here. Each edition of Eurofresh Distribution magazine features a country profile providing insights into the opportunities and trends in different world markets.

 

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USDA tips small increase in Italian orange production

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Italy’s orange crop should be up 4% on last season but there’ll be a lack of big size fruit, says the USDA’s Global Agriculture Information Network (GAIN) in a new report. Fruit quality is expected to be good, despite unfavorable weather, though there’ll be more small size oranges in the 2013/14 (November-October) marketing year, it said.
 

Orange consumption is likely to remain flat in Italy, where most oranges are consumed fresh, principally the blood varieties (Tarocco, Moro, and Sanguinello), GAIN said. In 2012/13, Italy imported 223,566 tons of oranges (mainly from Spain) and exported 126,083 tons (mainly to Germany).
 

Little change is expected in Italy’s tangerine, lemon, and grapefruit crops. Its tangerine production is more than 80% seedless clementines (mainly Comune or Oroval and Monreal) and the rest mandarins (mainly Avana and Tardivo di Ciaculli varieties), with very slight reductions in production but satisfactory quality forecast for both.


GAIN said Italy’s lemon-producing area (concentrated in Sicily) is gradually shrinking due to reduced profitability and consumption will probably slip 6% on last season.

 

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Russian embargo hitting Croatian mandarin growers hard

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European Commission says additional targeted support measures cover mandarins

 

About half of all mandarin exports from Croatia’s Neretva Valley ended up in Russia, last year. This year a record harvest of 80,000 tons is expected but many growers risk going bust due to the combined effects of the Russian embargo and an already difficult economic context, according to Croatian member of the European Parliament Davor Ivo Stier (PPE).

Stier said it will be hard for them to find alternative markets in a short period. The total value of the mandarin market in Croatia is roughly €50 million and an estimated 10,000 people there depend on mandarins as a main or additional source of income.

“A large amount of money has been invested up to this point in production materials,” Stier said. “As a result of these investments and of people’s hard work, this year it was anticipated that revenues for the sector would amount to €30‐40 million. However, Russia’s embargo, coupled with an already‐difficult economic situation, could result in many mandarin producers collapsing.”

In answer to Stier’s questions about the mandarin growers’ eligibility for exceptional support from the EU agricultural crisis fund for the effects of the Russian sanctions, Agriculture Commissioner Dacian Cioloş said on behalf of the Commission that there is now support for mandarin growers.

Support for citrus producers was not included in its initial exceptional market support measures. “However, the Commission has prepared additional targeted support measures for fruit and vegetables hit by the Russian ban taking into account new harvest and export seasons. The new measures include mandarins and (were) published on 30 September,” Cioloş said.

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Citrusvil, significant investments to streamline all processes

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Among the strategies to deal with this bumpy year, Citrusvil is proposing to carry out a series of manoeuvres, both in-house and externally. First, internally, they will be working harder and better on the issue of lemon quality, incorporating cutting-edge technology to boost performance and cut production costs. An example of this is the significant increase in mechanical harvesting, especially for industrial lemon, as its handling will soon be totally automatic.  In the case of fresh lemon, although the contribution from growers is indispensable, Citrusvil’s aim is to triple workforce productivity by means of enabling machines. Producing sustainably and in harmony with the environment is a priority for the Tucumán leader, and to this end they are pioneering the use of a closed water saving and recycling system.  Along with this, Citrusvil is renewing its commitment to meet the All Lemon requirements to deliver a fresh lemon of the highest quality. Also, in the broader scope, the firm will continue to support government negotiations towards opening up the market in the United States, Japan and China.  Citrusvil accounts for 30 % of Argentina’s supply, which makes it one of the country’s top citrus companies. Production operations in the Tucumán region cover a net average of 6,000 ha in lemon production, the vast majority located in the Tucumán foothills, generating almost a million tons annually. Whereas last year they allocated 40 thousand tons of fresh lemon and 310 thousand t for industry, in 2014 they are also feeling the negative effects of the frosts, shipping only 24 thousand t of fresh lemon and 160 thousand t to the industry, i.e. in both cases they will have almost half as much fruit as last year. “This is a critical year – we haven’t seen anything like it in Argentina since 1989. The final balance will not be good even if there is a steep rise in prices, because the level of scarcity makes it impossible to compensate the loss. The groves will be producing half the amount, but still under the same fixed production costs.” explains the CEO Pablo Lucci, with concern. He also stated that it will be a time to strengthen relationships and try to supply all customers, even if it has to be in smaller quantities, but with the same quality and regularity as always. 

 

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FGF Trapani and export outlook for 2014

FGF Trapani executives foresee losses of 50 to 60% of total production from Tucumán for this campaign. Commercial Manager Fabricio Trapani warns that “there will be 30% less fresh lemon for export, while the industry will also suffer important shortages (roughly 60%), which are bound to lead to very high prices. Last year, FGF Trapani sent 50,000 tons of crushed lemons to the industry and 19,000 tons to fresh fruit exports. Forecasts for this year 2014 see the industry taking up between 25 and 30 thousand tons, while only approximately 12,000 tons of lemon will be set aside for fresh exports, maintaining their strict high quality parameters.  But they remain unfazed, as this time there will be no oversupply of fruit or price slump, as happened in previous years. In terms of developments in international markets, Trapani highlighted the presence of their own brand in the Russian market, where it has achieved good positioning and large volumes, assuring that: “Despite the international political situation they are currently going through, for FGF Trapani Russia is and will continue to be a very important market worth investing in.” The Middle East was also mentioned, as the export share to this destination is steadily increasing year after year. 
FGF Trapani is a prime example of a young Tucuman company, which in just 12 years has managed to position itself among the country’s leaders. Their fresh lemon supply is shipped overseas to countries like Russia, Ukraine, Eastern European countries, the European Union, Canada and Asia. The fruit channelled to the industrial sector is used to obtain derivatives such as dehydrated peel, essential oils and juice concentrates.  They begin production earlier, with 450 hectares in Jujuy and 240 h in Salta, where they have a modern packing facility. They also purchase lemons from Tucumán farmers who rely on FGF Trapani’s impeccable management.  
 

 

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Acheral projects more future sustainability

Acheral S.A.is a family company founded in the year 2003 by the Martinez Zuccardi brothers, a second generation of citrus growers and exporters. This entrepreneurship is the fruit of more than 30 years of experience of their associates in the industry, and is oriented towards total integration of all their citrus business activities, from the development of nurseries and plantations to the export of fresh fruit and industrial by-products. 
The Martinez Zuccardi family manages 1400 hectares of certified citrus plantations, 1000 in full production and 400 under development, a packing house with an hourly processing capacity of 15 tons in line with Global GAP standards and an industrial plant certified under BRC, HACCP, Kosher, SGP and GFSI (TCCC), SGF and ISO 14000 – in process – which is capable of processing 25 tons per hour.

Acheral SA exports fresh fruit to Russia and the EU, as well as industrial lemon and its derivatives to the USA and the EU. Chairman Jorge Martinez Zuccardi forecasts very short volumes for the fresh fruit campaign in 2014. «We are focused on keeping our skills and our human resources oriented to invest in new projects for the medium and long term. Although we know that this year the work will bring very little profit, we are confident that we can ride out the storm while preparing ourselves for the future sustainability of the company, incorporating new technology in the fields and also in the packing facility, improving process efficiencies in both areas.” The CEO also confirmed that Acheral will soon inaugurate two new warehouses with a total area of 3000m2, while developing 400 hectares of new plantations.