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Citrus

World production declines in 1993/94, after a record year in 1992/93

World citrus production in 1993/94 was expected to be 4 percent below the record level of the previous season. It would appear that even after this prospective reduction, and barring adverse weather conditions, there may still be too much fruit available to reverse the slump in prices in both the fresh and processed citrus market precipitated by the bountiful supplies of 1992/93. Total citrus production in 1993/94 was estimated at 72 million tonnes, with output in major producing countries expected to decline, in Spain by 13 percent, in Brazil and in the United States by 10 percent, in Italy by 6 percent and in Greece by 5 percent.

Orange production world wide was expected to fall by 6 percent in 1993/94. However, at 52 million tonnes it would still be larger than the crop harvested in 1991/92. Although there was a downward revision in the orange production forecast for the United States, due to an estimated shortfall in California, the expected crop would still be equivalent to that of 1992/93, as the increased harvest in Florida would offset the shortfall in California. New plantings and replanting in Florida during the late eighties continued to reach commercial bearing stage and contributed to this expansion. The forecast for Florida was 25 percent more than the 1992/93 harvest. In the Mediterranean region, the 23 percent increase in Morocco and Israel would not be sufficient to offset declines in Spain (20 percent), Italy (8 percent). and Greece (6 percent).

World output of tangerines was expected to continue to expand in 1993/94, reflecting the increasing demand for easy peelers. Expansion was evident in the forecasts of leading supplying countries such as Spain, up 4 percent, and Israel and Morocco with estimated increases equivalent to 3 percent, offsetting the 11 percent decline anticipated in Italy. In the United States, production response to growing domestic demand for tangerines would result in an estimated 17 percent expansion.

Lemon production in 1993/94 was expected to increase slightly to reach almost 7 million tonnes, due mainly to the 3 percent expansion in Italy. Output in the United States expanded slightly, while in Spain output shrank 23 percent. World grapefruit production was estimated to be reduced by 8 percent, reflecting the 15 percent fall in the United States and a maintained level in Israel.

Trade in juice to expand: fresh fruit to stabilize

The volume of world trade in processed citrus. primarily as frozen concentrated orange juice (FCOJ), was forecast to rise 15 percent, with expansion of demand in new markets. The recovery of processed product prices would amplify the expansion in the value of these exports. By contrast, the level of trade in fresh citrus fruit was expected to be maintained in 1993/94.

World exports of fresh oranges were expected to fall slightly in 1993/94 to 4 million tonnes. In the Mediterranean, the rise in exports in most countries would not be sufficient to offset the decline in shipments expected from Spain. The percentage increases in exports were high, notably in Italy, 68 percent, Israel, 33 percent, Morocco, 15 percent, and Greece, 9 percent. However, these increases were quantitatively on a smaller scale than the decline in Spain.

Global tangerine exports, in 1993/94, would be close to the level in the previous season. Shipments from Israel would expand by 21 percent, while shipments from Spain, although estimated to decline by 7 percent to 940 000 tonnes, would still be larger than the combined exports from all the other countries. Another expected decline was in shipments from Morocco, down 13 percent.

World lemon exports were estimated to decline 4 percent in 1993/94, as marketing difficulties experienced in 1992/93 would discourage larger shipments. The decline expected in Spain and Turkey would not be offset by rises in Italy and Greece. Global grapefruit exports, however, were expected to rise mainly as a result of larger shipments from Israel.

1992/93: a record year for world citrus production

World citrus production in 1992/93 reached more than 75 million tonnes, or more than 7 percent greater than the record of the previous season. However, demand had not kept pace with this expansion and exports of processed citrus products increased by only 2 percent, in contrast those for fresh citrus fruit declined by 2 percent. Fresh fruit prices remained relatively depressed throughout most of the season. In contrast, those of Frozen Concentrated Orange Juice (FCOJ) fell to their lowest point in early 1993, before recovering somewhat towards the end of the season. The availability of alternative fruits and juices, in particular the record apple harvest in Europe, together with the continued recession in many leading importing countries, exacerbated the market situation.

Measure to redress the balance of demand and supplies were implemented in a number of countries. These measures included the continued grubbing out of areas of marginal production, and the aggressive development of new markets, in particular expansion of the market in Japan. After the lifting of Japan's orange juice import quotas in 1992, retailers there were able to expand the market share of' orange juice using a more competitive supply of consumer packs based on imported FCOJ. Europe's imports of FCOJ also expanded, spurred by price reductions. On the other hand, greatly increased output in the United States did not provoke the expected large reduction in imports.

Abundant citrus crops were harvested in the world's two largest producing countries. In Brazil a bumper orange crop contributed to a 17 percent rise in total citrus output. In the United States, the 32 percent increase in orange production resulted in an estimated 29 percent increase in citrus output. In the Mediterranean region, the overall growth in citrus production was 3 percent. Major increases occurred in Greece, where production recovered from a disastrous season in 1991/92 and output was up by 37 percent, in Morocco by 4 percent, in Spain by 12 percent, and in Italy by 8 percent. Nonetheless, these increases were barely sufficient to offset declines in Egypt by 30 percent, Israel by 12 percent, and Turkey by one percent.

In other major producing countries, a decline in output of oranges, tangerines and lemons in Argentina contributed to an almost 13 percent decline in total production. A similar proportionate decline occurred in the Islamic Republic of Iran, where oranges constitute the bulk of the production. In China, the rapid growth since the late eighties was reversed in 1992/93, when production declined by 16 percent, as unfavourable growing conditions depressed yields. Among the minor producing countries, output in Tunisia expanded by more than 50 percent to reach 281 000 tonnes and in Portugal by 3 percent to 148 000 tonnes while production in Uruguay declined by 12 percent to 245 000 tonnes.

Oranges had the largest share of citrus production reflecting its dominance in fresh as well as processed consumption and trade. World production of oranges increased 9 percent to a record 55 million tonnes in 1992/93. Brazil, with almost 15 million tonnes, and the United States with 9 million tonnes, will process most of the fruit. The expansion in the United States was mainly from trees coming into bearing from replanting and new plantings in the late eighties. In the Mediterranean, Spain and Italy continued to dominate, as large increases resulted in their output totalling 3 million tonnes and 2.2 million tonnes, respectively, in 1992/93. These countries were followed by Greece with an output of 1.1 million tonnes, and Morocco with 831 000 tonnes. Mediterranean countries are the major suppliers of fresh citrus fruit to the European market and offered ample supplies in 1992/93. This, coupled with sluggish demand reflecting economic recession, and a bigger harvest of summer fruit especially apples, resulted in prices declining throughout the season.

World tangerine output continued its upward trend with the almost 2 million tonnes produced in Japan being by far the largest contribution. Japan was closely followed by Spain with 1.5 million tonnes, with the Republic of Korea (645 000 tonnes), and Italy (515 000 tonnes) further behind. World lemon production, by contrast, declined slightly. to less than 6.9 million tonnes in 1992/93. with increases in the developed countries insufficient to offset declines in the developing countries. Finally, world grapefruit production increased by 15 percent, largely due to the 26 percent rise in the United States to 2.5 million tonnes. Other notable increases were in Israel, up 14 percent to 383 000 tonnes. and in Cyprus, up 18 percent to 120 000 tonnes.

Fresh citrus trade stagnated in 1992/93 and prices tumbled

Global trade in fresh citrus fruit contracted by 2 percent in 1992/93. Germany continued to be the largest importing country mainly for oranges and "easy-peelers" such as mandarins, followed by France. Other major importing countries included the United Kingdom, Netherlands, Japan and Canada.

Spain continued to dominate exports of fresh citrus, followed by the United States. Spain capitalized on the growing demand for "easypeelers" in major European markets as it increased exports of these varieties by 2 1 percent, contributing to an overall 10 percent increase in its citrus exports. Shipments from the United States were larger by 2 percent, as it recovered market share lost after the 1990/91 freeze in California. In the Mediterranean region Greece as well as Spain expanded exports, with a rise of 30 percent to almost 390 000 tonnes. In contrast, shipments from Morocco declined by 10 percent, as demand for third country imports into the EC, its main market, remained flat. Similarly, exports from Israel and Turkey declined by about 25 percent. Turkey was hit by decreased EC demand for imports from third countries, and by a severe contraction of markets in eastern Europe and countries of the former USSR. Economic reforms in these countries have reduced the foreign exchange available for importation of commodities such as citrus. In Israel, the fall in exportable quantities was mainly due to the restructuring of both its production and export marketing systems.

Other notable exporting countries mostly increased shipments. Exports from Uruguay increased by 81 percent, South Africa by 13 percent, and Mexico by 6 percent. By contrast, shipments from Cuba were smaller by 74 percent, mainly due to depressed demand in its usual markets. Exports from Argentina declined by 30 percent, mainly due to marketing difficulties in Europe.

Oranges and tangerines accounted for most of the increase in total fresh citrus exports of the developed countries. as output from California recovered from the damage caused by the 1990/91 freeze and Spain increased its exports of "easy-peelers". World lemon exports continued to decline in 1992/93, by 3 percent. Similarly, global grapefruit exports declined by almost 10 percent in 1992/93.

Continued growth in the processing sector but prices collapsed

The global quantity of citrus processed in 1992/93 increased by 23 percent. Supplies of oranges for processing had continued to expand as a result of replanting and new plantings in the United States and the maturity and favourable yields of trees in Brazil. However, demand had not kept pace with this expansion.

Supplies of juice for export in 1992/93 appear to have increased by at least 20 percent, bringing about the near collapse of FCOJ prices in early 1993. These prices recovered a little towards the end of May. This recovery accelerated when it became apparent that the lower prices in the European markets had stimulated sales beyond expectations. An additional impetus to the recovery in FCOJ prices was fear of a complete draw-down of available stocks in Brazil through larger than expected shipments to the United States.

The Brazilian export reference price fell from $1 300 per ton in the second quarter of 1992 to a low of $368 per ton in the first quarter of 1993. The calamitous fall in prices forced structural readjustments in the production sector and, as a result, prices rose noticeably in May 1993 and reached $920 by July. However, prices of fresh citrus fruit remained depressed in all major markets as supplies of other fresh fruit were also abundant.

Production: total and oranges¹

¹ Data refer to crop year October/September. For the southern hemisphere production data refer to crops harvested in second year shown.
² Marketing year July/June beginning in first year shown. For the purpose of facilitating demand/supply analysis, data shown correspond to the processing season since the bulk of the fruit is processed into FCOJ.
³ Data for southern hemisphere production include the harvest of Valencia late oranges in California.

Production: tangerines, lemons and grapefruit¹

¹ Data refer to crop year October/September. For the southern hemisphere, production data refer to crops harvested in second year shown.

Exports: total and oranges¹

¹ Data refer to crop year October/September.

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