Taiwan's pomelo season harvest is estimated to start around August 10. China announced the ban of citrus products from Taiwan on August 3, right before the start of the season. Taiwanese producers are worried since, in 2021, China received 70% of the total pomelo exports from Taiwan. Producers are searching for buyers in alternative destinations like Canada, Singapore, and Japan to prevent a price drop during the season.
In July, China faced an oversupply of South African Oranges. Due to the high supply, the price of oranges dropped from USD 32.57-37.01 per carton to USD 7.40-14.80.
Chinese importers expect that the peak sales for South African oranges will occur ten days before the Mid-Autumn festival in September, so imports will increase in that time to cover demand. The current orange situation and the overall economic situation in China do not allow clear price forecasts for the second half of 2022.
According to Australian growers and trading companies, the overall quality of Australian oranges this season decreased. The rainy weather caused quality defects in the fruit as puffy skin, softness, and sour taste. At the Guangzhou Wholesale Market, 90% of the oranges are reported to have quality defects. There is a difference in selling prices of Australian oranges in China due to the disparity between orange qualities, ranging from USD 14.82 to USD 59.27 per 18kg carton.
According to an experienced Dutch citrus importer, the impact of the new cold treatment protocol implemented by the EU in July 2022 can be felt in many aspects. Firstly, the total costs related to the import of oranges from South Africa have increased. Citrus needs to be cooled at the port if the length of cold treatment was not carried during the sea voyage leading to extra storage expenses. Furthermore, additional paperwork, more inspections, and control from the Phytosanitary authority (KCB in The Netherlands), which is entitled to secure the fruit in cooling chambers for 16 days, resulting in a longer lead time and shorter shelf life.
The new protocol impacts also impact fruit quality because the cold treatment exposes the fruit to too low temperatures (-0.5 to +0.5), resulting in skin damage (pitting, especially Navel varieties) and softness (Valencia type oranges). Ultimately, the biggest impact will be the lack of availability of citrus from South Africa, as many exporters are already deciding to go to markets with easier protocols than the European ones such as the Middle East. This will result in higher orange prices on the shelves of European supermarkets.
South African citrus producers and suppliers are facing a trucking logistics crisis. Due to the increased production and demand for mandarins and Valencia oranges, packhouses have a backup of packed fruit as there aren't enough trucks to move the fruit to harbors. The crisis is particularly acute for producers and suppliers in Limpopo and Mpumalanga due to the long distances to the Durban harbor. Producers must find alternative solutions to resolving the challenge, including possibly utilizing rail to move the fruit from the growing regions to Durban harbor.
High Orange Prices in Netherlands Due to Lower Volumes
The demand for oranges in the Netherlands is constant and steady, allowing good rotation of existing stocks and high prices in week 31 of 2022 compared to previous weeks. Especially for the so-called "juice sizes" ideal for juice machines in terms of the diameter of the fruit (equivalence to 6/7/8 or 64/72/88). According to the exporter/importer, week 31 prices range between EUR 16-17 per 15kg box, representing an increase of 15% compared to week 29 prices.
The high prices are the result of less availability in the market caused by fruit held by phytosanitary authorities due to non-compliance of cold treatment during the sea voyage, which means that this fruit will be kept on stock for at least 16 days; lower arrivals from Egypt and Morocco; as well as less volumes shipped from South Africa due to the new cold treatment regulation imposed by the EU.
Combined with huge numbers of Argentinian lemons allocated to European markets this summer, creates a “perfect storm” condition for prices to collapse. The worst-case scenario is before the mid of August the price in Europe to drop to 0,70USD/kg for imported Argentinian lemons, which will create big losses for all Argentinian suppliers.
This season, some lemon and orange suppliers in Argentina decided to end the export season a month earlier due to the drop in the exchange rate of the Argentinian Peso vs. the U.S Dollar. Due to the low exchange rate, many producers are losing money when exporting their products, so selling them in the local industry has become more profitable.