EU Citrus Production Set to be 10% YoY Lower with Trade Implications

Published Jun 23, 2023

For the 2022/23 current season, European Union (EU) citrus production is expected to decrease by 10%, reaching 10.4 million mt. The decline will predominantly affect oranges and lemons, with production estimates slightly lower than previously anticipated. The main drivers behind the reduced production in Spain are unfavorable weather conditions–a combination of 2022 spring rains that negatively impacted flowering and fruit setting, and a severe drought in 2023 that further compounded the situation. As citrus prices rise and domestic consumption decreases, the EU citrus supply is not expected to be supplemented by higher imports, except for oranges.

The EU's citrus production is primarily concentrated in the Mediterranean region, with Spain and Italy leading as citrus producers, followed by Greece, Portugal, and Cyprus. Spain's citrus accounts for approximately 65% of the EU's total production. Spain is projected to experience an almost 18% decrease in citrus production, the lowest level seen in the last decade. Italy and Portugal are also expected to see reductions in citrus production, while Greece anticipates a rebound compared to the previous season. Unfavorable weather conditions in Spain, such as spring rains and a warm summer followed by continued drought, have significantly impacted citrus production, particularly oranges, and lemons.

Furthermore, Russia's invasion of Ukraine in February led to increased input costs for citrus producers, including energy sources such as fuel, electricity, and fertilizers. Lack of economic productivity and an agricultural labor deficit further compounded the challenges faced by EU citrus producers.

As a net importer of citrus fruits, in the past 2021/22 season, the EU citrus imports from non-EU countries were 5% lower compared to the previous season. However, from Oct-22 to Mar-23, EU citrus imports increased by 6% compared to the same period in 2022, primarily driven by shortages in orange production. South Africa, Turkey, Egypt, Morocco, Argentina, and Brazil are the leading citrus suppliers to the EU, with Northern and Eastern EU countries being the primary destinations. Although EU citrus imports from Turkey and Morocco declined in the first half of the 2022/23 season, imports from South Africa and Egypt grew.

With the significant reduction in EU orange production, orange imports are anticipated to increase by 13% YoY in the 2022/23 season, from 740 thousand mt to 835 thousand mt. Although Spain remains the major supplier of oranges to the EU, South Africa, Egypt, and Morocco, have become the main non-EU import origins. Zimbabwe and Argentina have also rapidly increased their exports. For the 2022/23 season, Egypt and Morocco are expected to increase their orange export volumes to the EU.

For the 2022/23 season, mandarins are expected to see a decline of 5% YoY in imports, aligned with the anticipated reduction in domestic demand. Fresh mandarins for consumption and processing are forecast to decrease in the 2022/23 season in the EU due to the expected drop in supply and the rise in mandarin prices. The shorter Spanish mandarin production is projected to limit EU mandarin exports due to reduced domestic supply. However, Morocco, South Africa, and Egypt could see a slight increase in their export mandarin volume. Israel, Peru, and Turkey are the other suppliers of mandarins to the EU market that could benefit from the Spanish shortage.

In terms of lemons, EU lemon imports increased significantly in the 2021/22 season to meet domestic demand and compensate for a reduced crop. However, for the 2022/23 campaign, EU lemon imports are expected to decline by 11% YoY, in response to the anticipated decrease in internal demand. Similar to mandarins, the reduced domestic production and the increase in lemon prices are expected to strongly reduce EU fresh lemon consumption and use in processing due to rising farmgate lemon prices.

Regarding grapefruits, the EU relies on imports to satisfy domestic demand. Despite a shorter domestic crop, EU imports of grapefruits are projected to decline by 4%YoY due to decreasing demand as prices increase. In the 2021/22 season, grapefruit imports declined by 25%, primarily driven by reduced exports from South Africa to the EU. United States (US) grapefruit exports to the EU also contracted, primarily due to reduced production in the US.