Harvest of lemons in Argentina this year will be reduced by 30%


Harvest of lemons in Argentina this year will be reduced by 30%

07/06/2020

The main reason for the reduction in the yield of citrus producers is called adverse weather conditions.

Argentinean lemon production will drop by 30% in 2020 due to weather conditions – drought at the end of last winter and spring, as well as too hot summers, reduced the citrus crop. In addition, the high demand for lemons during the COVID-19 period and the uncertainty in the world market forced some producers to start harvesting fruits earlier than usual, when the fruits were still small in caliber.

Harvesting began aggressively, said Daniel Calvo, head of Salix Foods (a new division of Salix Fruits), writes FreshPlaza.

It is reported that Salix Fruits has launched a new line of “Processed Products”, and managers are analyzing the current marketing situation for sales of lemon juice concentrate (LJC) and essential oil (ELO). The data will help build plans for the rest of the year.

According to marketers, a drop in yield will reduce the total processing volume to 1-1.1 million tons. In fact, at the end of May, 400 thousand tons of lemons were processed, which is significantly lower than the volume for the same period last year, which amounted to 500 thousand tons.

A drop in production is already affecting the market. About 50% of ELO is supplied to leading manufacturers of soft drinks under long-term price agreements that are independent of supply and demand. Surpluses are in the spot market, where demand is always stable, so volumes ultimately affect prices.

“This year, with the normal or almost normal season in the Northern Hemisphere and the mentioned drop in production in Argentina, the situation is expected to be the reverse of the situation in recent years. Given the fixed prices and quality requirements of regular customers, volumes will decrease only in the spot market and prices will rise there, ”said Esteban Lazzo, ELO market specialist.

For lemon juice concentrate (LJC), it is fair to note demand and supply decline that has not fully recovered from COVID-19. According to data posted last year, prices ranged from $ 2.2 thousand to $ 2.4 thousand per ton, and the minimum threshold was $ 1.7 thousand per ton.

“Buyers evaluate the market’s response to the consequences of COVID-19, as consumption in the HoReCa segment has changed a lot: the industry has suffered from the closure of public catering and the end of the flow of tourists. Sales remain in retail, where demand is not high enough, ”explained Esteban Galliardi, commercial manager of the juice company.

Daniel Calvo emphasized that the economic crisis in Argentina, the lack of credit and the consequences of COVID-19 are making supply processes more expensive to maintain reserves. Those who have taken a wait and see attitude can benefit from a stronger market.

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