Mandarin Guide

Rising Demand

- Middle East: High demand, easy to find buyers but low offer price

- EU: Difficult to find buyers/meet regulations but high offer price

- Demand for soft citruses is increasing

Strength: Competitive prices

Weakness: Lack of cold storage facilities

Opportunity: New markets

Threat: Geographic advantage of competitors

- Farmers-> Wholesalers -> Processor/Exporter

- The major producing region is Sargodha (Punjab) which produced 2 million MT of Mandarins in 2020.

- Farmers do not export directly

- Most exporters have their own packing facilities

- There are around 1-2 middlemen involved in the supply chain but they do not play a big role.

- There are a large number of small and medium-size farmers

- There are around 4-5 big companies but they do not dominate the market

- Nearing the end of the season, the suppliers may source from other suppliers to meet demand

- The suppliers are mainly situated in a city called Bhalwal in the Punjab region. They are mostly aware of each other and it can be said that they have a good relationship with each other as it promotes the interests of everyone.

The main importing markets for Pakistani mandarin include:

1) Russia (USD $40.4M)

2) Afghanistan (USD $37.2M)

3) Philippines (USD $13.5M)

4) Indonesia (USD $12.6M)

5) United Arab Emirates (USD $11.6M)

6) Saudi Arabia (USD $5.6M)

Source: Tridge

Source: Tridge

In 2020, the US was the largest importer of mandarins with an import value of USD 654,833K, followed by Russia at USD 631,274K. Germany placed third at USD 531,032K. 

China dominates production at 19.71M MT (61.3%), followed by Spain at 1.83M MT (5.7%) and Turkey at 1.40M MT (4.4%)

In 2018, China was the top mandarin producer, which held 60.7% of the global production share with 19.04M MT of production volume. This was followed by Spain (6.3%) with 1.98M MT, Turkey (5.3%) with 1.65M MT, Morocco (3.9%) with 1.21M MT, and Egypt (3.4%) with 1.07M MT.

Main Groups of Mandarins produced in Spain

• Satsuma: with origin Japan in Spain is used as early variety. Due to its juicy and not so much sweet fruit it is mainly used for juices. Good quality is that trees are resistant to cold.

• Hybrids contains mixture of variates, with focus on red color of peel, very sweet and juicy.

• Clementine: crossed between common mandarin and orange, it is small in size and sweet but with inconstant production. There are many varieties, some earlier than others.

• Clemenvillas: bigger and with a lot of juice. The harvest season lasts from September to February. Some varieties can be found until March or April.

• Orri: relatively new variety of mandarin grown in Spain, originating from Israel, robust, nicely colored, sweet, and seedless.

• Nadorcott is a high-quality, mid to late-maturing Clementine-type of mandarin. It is a fruit with excellent depth of flavor and sweetness and a pleasing acidity balance. The smooth, deep orange peel is fairly tightly adhering to the segments but is easily removed.

• Tangold (often marketed as Tango) is a late harvested, seedless mandarin. It has an excellent eating quality with great depth of flavor, a good acidity balance, and high levels of sweetness. It is a medium-sized fruit with a very smooth rind, deep orange, and easy peel. The shape is deeply oblate, and the flesh is delicately textured with high juice content.

Source: Plantae

-There is only one major port, namely Qasim, in Pakistan and it is far from the production region. It takes around a day to deliver but because the transportation infrastructure is well established, it’s not that difficult and costly.

-International freight is mostly done by sea since airfreight is expensive. However, due to COVID-19, if the waiting period is too long, airfreight may be used. This depends on the buyer as they will be shouldering the cost.

-Differences between sea freight and air freight:

a. Sea freight: less expensive, bigger quantity can be shipped in one time

b. Air freight: Quicker, less chance of damage

10 KG carton box with inner liner, which allows ventilation of air, is the most widely used packaging in the industry.

According to data from the United States Department of Agriculture global orange production has been relatively flat over the last six years. The three-year average for 2016-2018 is the same as the three-year average for 2019-2021 holding at 49.7 million metric tons (MMT). Supply volume has oscillated between 46 and 54 MMT over the time period. Production in the United States has been declining due to disease while China and Egypt have seen small increases. Other major regions Brazil, Mexico, EU, and South Africa have been relatively flat. Mexico and Brazil had a significant decrease last season due to weather. The following countries have seen increased exports based on the latest three-year averages: South Africa, Australia, Argentina, and Morocco.

Global Mandarin production has trended up over the last six years. The three-year average for 2016-2018 was 29.8 MMT while the average for 2019-2021 is projected at 32.3 MMT. Production for 2020-2021 is projected at 33 MMT with increases in all major regions. The following countries have seen increased exports based on the latest three-year averages: Turkey, China, South Africa, and Australia.

Global lemon and lime production has trended up over the last six years. The three-year average for 2016-2018 was 7.6 MMT while the 2019-2021 average is projected at 8.5 MMT. Increased production has been seen in all major regions except for Argentina which has projected a significant drop this season due to weather. The following countries have seen increased exports based on the latest three-year averages: Mexico, South Africa, EU, and Morocco.

Source: Foreign Agricultural Service/USDA 

- The mandarins are grown by farmers then purchased by the processors/exporters who export them.

- If the order comes in during the harvest season (November - March), the Mandarins are harvested then. If the order is made after the harvest season, it is sourced from supplies in the warehouse.

- The processor processes and packages it as per customer requirement (count, size, etc) then sell them to traders.

- Traders or exporters export directly to other countries

- The deals are mainly conducted in CIF.

Future UK import duties for Spain is unfavorable for the competitive position:

Spain is one of the largest exporters of mandarin. But from January 1, 2021, exports to the UK could be adversely affected by the possible enforcement of 16% tariffs on Spanish clementines and mandarins. If implemented, this is expected to have a strong impact on the second half of the season. These high tariffs would make Spain lose competitiveness against direct competitors from third countries in the Northern Hemisphere, such as Morocco, Egypt, or Turkey, and the United Kingdom has already signed preferential zero-rate agreements for the off-season (when South Africa is on the market). The UK is the third-largest market for Spanish exporters after Germany and France and there is no alternative destination for this market with 66 million consumers with a high purchasing power.

Source: 

Overview global mandarin market

- Stalk attachment

- Insect attack

 -Pressure damage

- Blemishes

- There are machines automatically checking the quality but these are manually checked once more at the final stage.

- Quality checking is done at the production level by the supplier as well as at the processing and packaging level.

- The government, before issuing the certificate of origin and phytosanitary certificate, opens a few boxes and checks the quality.

- A third-party inspection is also an option but it isn’t commonly done. The fee is shouldered by the buyer.

- The supplier asks the buyer to fill the quality feedback form and if there are quality-related problems, suppliers would offer after-sales service most of the time or they may agree to adjust it in the next shipment.

Sizes – 40, 48, 56, 72, 80, 88, 100, 113. All growers have different ways of sorting the grades and there is no national standard.

Average Brix Level: 12.5

As far as the supply is concerned, there are few large sizes from Spain in 2020. The quality of the mandarins from China has been seriously affected by heavy rainfall. In November 2020, the harvest of the Baba mandarins has also started in China, and the Aiyuan already hit the market a month ago (October 2020). At the moment, the supply exceeds the demand and the quality has caused prices to drop in China. This is also having repercussions on the Chinese export of mandarins, which are sometimes not suitable for sale.

In Morocco, despite the difficult weather conditions due to the long drought experienced throughout 2020, The Ministry of Agriculture estimates that citrus production will increase by approximately 29% over the previous season (current season in November 2020). This strong increase is due to the extensive planting of new orange, lemon, or mandarin crops within the Green Morocco Plan. 

Source: 

Overview global mandarin market

A notable increase in this season s citrus production in Morocco

The demand for oranges rose sharply this year due to the coronavirus. One would expect that mandarins would also benefit from this higher demand, but that wasn't the case. In fact, in some countries, such as the US and South Africa, mandarins were somewhat overshadowed by the success of oranges. Still, the demand for mandarins remains stable. Especially in the US and Europe, the prospect is that the demand will increase ahead of the winter.

For Australian mandarin, Thailand and Japan have been important export markets, with Japan importing more than in the previous year. In total, 58,000 tons of mandarins were exported by September 30, which is the same as in 2018. However, the export value of the mandarins was higher than in 2018. The industry had to adapt to operating under different circumstances than in the past - a virtual marketing space - because of the coronavirus. Despite this, Citrus Australia reported that the worldwide demand for citrus was very strong.

Source: 

Overview global mandarin market

Prices in China, Thailand, Russia, and Ukraine have been fluctuating for a year (December 2019-December 2020). Meanwhile, the prices in Mexico, Taiwan, Brazil, and Peru were fluctuating for the past year but show more stability than the first four countries mentioned.

From 14 November 2020 - 14 December 2020, the mandarin prices have increased in Peru (+22.9%), Ukraine (+20.0%), and Brazil (+1.7%). But the prices of mandarin have decreased in Russia (-18.3%) and Thailand (-12.9%). However, prices can show different patterns depending on the variety or condition of mandarin.