From the pages of TopInfo.
The lemon trade comes from years of “fat cows”, which led to a strong global expansion of the harvest. The risk is that before the increase in productivity begins a cycle of “lean cows”. Tucumán, who has already gone through several complicated situations, is ready for this challenge.
Lemon marketing is characterized by its extremes. From a favorable period with more than attractive prices, it can fall in a few weeks to a totally saturated market with prices at rock bottom. The reason is its inelastic demand. Thus, a small oversupply causes prices to crash, while a lack of lemon pushes prices to very high levels. Over the past 20 years, the average prices paid in Rotterdam ($FOT) have fluctuated between €8 and €30/box. The prices paid in Tucumán for the industrial lemon fluctuated between 80 and 350 U$/tonne.
In the last 10 years, there has been a real lemon boom in the world. The growing demand for fresh products and derivatives; as well as occasional drops in production, resulted in a strong demand for lemons worldwide and some truly attractive prices were paid.
This has excited growers, who have expanded their planted acreage. Countries like South Africa, Turkey and Spain have increased their production by 20-40% in just a few years. But it’s a risky business. It is feared that when the new areas come into production, there will be a global oversupply, quickly turning the lemon trade into unprofitable. This is what the Spaniards have suffered in the current campaign. The abundant harvest of 2021/22 has not found enough outlets, for which prices have fallen to minimal levels and have so far failed to recover. Tucumán has also had several ups and downs in its history. But the lemon is also surprising; a drop in production, unexpected growth in demand or another factor can quickly distort the outlook.
The past few years have not been easy for the lemon industry in Tucumán. The province has exceptional conditions for its cultivation, but it is not exempt from climatic adversities. Frosts and droughts have affected production in 2020 and 2021. The next campaign will again be marked by water scarcity and high temperatures in spring and early summer. But in recent weeks it has started to rain, which may partially reverse the decline.
But weather adversities were not the only problem facing the industry. In 2020 the phytosanitary situation was complicated. Tucumán’s humid conditions and high temperatures favor many pests and diseases, which have been controlled for many years through a strict care plan and phytosanitary applications. But, in 2020, extreme weather conditions determined that the Black Spot spun out of control. It is a difficult quarantine pest to control and detect, which is why it has caused many headaches in countries like South Africa and Argentina. The European Union temporarily closed the Argentinian citrus market in 2020, to reopen it after signing very demanding phytosanitary protocols in May 2021.
Europe has always been the main destination for Argentine lemons. But in recent years, the volumes shipped have been reduced due to better quality control and increasing competition from Spain and South Africa. Mainly, the latter country recorded a lemon boom, strongly developing its production and exports. Today, it is South Africa that floods the European market in summer. Argentina moved up to second place, even more in the last campaign, in which the demanding phytosanitary protocol complicated shipments.
As an alternative to the European market, North America has emerged. Argentina was able to send lemons to the United States for 4 years. During the first three campaigns, progress was slow in the effort to gain experience and strengthen trade links. But in 2021, the conditions in the United States were very favorable, to which were added the complications in Europe. This has led to a strong shift towards this market. A total of 73,000 tons were exported. In this way, the United States became the second largest buyer of Argentine lemons, acquiring a third of the total exported.
Another destination that has grown is China, a market that opened up two years ago. Also in this case, the volumes could be greatly increased, but despite this, it remains a secondary destination.
It should be noted that the export of fresh lemon is only part of Tucumán’s business. The industrialization of lemon continues to be the main destination and the great engine that drives the sector. Between 0.9 and 1.4 million tonnes are processed annually, representing 70% of Tucuman’s production. In the lemon industry, Argentina continues to be the absolute leader. This huge production is what sustains the sector and explains its strength.