Mexico is the world’s second leading lime exporter, accounting for 17.5% of the global export value in 2020 - only behind Spain who accounts for 29.69% of the global market share. Despite droughts that have been affecting their citrus production, Mexican lime production has only been growing year after year. Production is forecasted to reach 2.87 million metric tons this year - a 6% increase from the 2.7 million metric tons produced last year. Principal lime producing regions include Michoacán, Veracruz, Oaxaca, and Tamaulipas.
While Mexico expects to increase their lime production once again this year, the global market is seeing an overall decrease. According to the USDA, lime harvest in the US and Argentina are expected to significantly decrease - up to a 30% decrease in Argentina alone - which may greatly affect the market, considering that the US are the world 5th and 6th leading lime exporters respectively. Seeing as the US is Mexico’s top export destination, making up 84.4% of their export value in 2020, this decrease in US lime production may allow Mexico to further increase their export sales to the country which has only been growing year after year - from $330.10M in 2015 to $513.08M in 2020.
Market Outlook
Although the Persian Lime has year round seasonality, it does experience a low season from February to April. With this in mind, many Mexican growers decided to wait to increase the volume and quality of their harvest resulting in lower quantity and quality of persian limes and thus an increase on its global price. Production volume during the past few months was down by 80-85% of normal availability but with the low season coming to an end, the volume and quality of the limes are improving, and growers have resumed production and export.
About a third of Persian lime production goes to the export market that doesn’t meet export quality requirements and are used for domestic consumption. The majority of Key limes on the other hand stay in the domestic market. However, according to the USDA, Key lime exports have been increasing.
Despite the positive trend in lime production, demand for limes fell in 2020. According to the USDA demand fell in the hotel and restaurant sector due to COVID-19 sanitary measures but have been back on the rise as restrictions have been lifting.
Despite the spike in lime prices at the beginning of the year, as we approach Persian lime peak season and production increases, prices may start to fall. The price trends for the past few years indicate a potential price drop as well.
Sources:
- Tridge Local Insights
- Agrimaroc.ma - Declining Global Production of Lemons and Limes
- ThePacker - USDA predicts better year for Mexican citrus
- USDA - Citrus Annual