W39: Orange Update

In W39 in the orange landscape, Spain's orange production has decreased by 20.9% year-over-year (YoY) in the 2022/23 campaign, reaching 2.96 million tons. This reduction has affected the volumes exported to international markets, which have declined by 15.4% YoY and 17.7% compared to the average of the last five years. Orange exports to the European Union (EU), which received 86% of all Spanish orange exports, dropped by 15% YoY and declined by 16% compared to the average. All other destinations recorded drops in orange exports, especially Italy and Germany, the main markets for Spanish oranges. This lower production increased Spanish citrus imports, reaching 171.1 thousand tons, driven by a 39% YoY growth in orange imports.

Moreover, the EU's latest Reinforced Monitoring Report reveals that the EU imported 1 million tons of oranges in the 2022/23 campaign, a 39.6% YoY increase and 16.5% more than the average. With an 83.4% increase, Egypt now stands as the EU's primary orange supplier, accounting for 45.1% of the total orange imports. South Africa, which accounted for 42.5% of the total, pushed Egypt to second place. In 2023, the EU imported 658.3 thousand tons of oranges, a 67.8% YoY growth and 23.7% more than the average. Egypt's orange imports increased by 84.2% YoY, accounting for 69.2% of the total supply.

Hurricane Idalia, which hit the United States (US) on August 30, raised concerns in the orange sector in Florida, leading to potential shortages and increased prices. Florida accounts for over 90% of the national orange juice production, and the decline in production has resulted in a 46.5% YoY reduction in 2022/23 juice production. Market experts suggest that this decline may persist into the upcoming 2023/24 season, with Hurricane Idalia expected to exacerbate the situation. High orange juice prices can be attributed to limited supplies from Brazil, further reducing global supply. Global orange juice production for the 2022/23 season has experienced a 9% YoY decrease.

Lastly, Egyptian citrus fruits could enter the US market following an application submitted to the United States Department of Agriculture (USDA). The USDA Animal and Plant Health Inspection Service (APHIS) has written a pest risk assessment for Egyptian citrus fruits. The California Citrus Quality Council (CCQC) President believes that the entry of Egyptian citrus could pose a significant threat to California producers, as the fruit produced by Egypt is produced at a lower price. The domestic market is the most important for California citrus, and the entry of Egyptian citrus could impact the competitiveness of American producers. The CCQC, California Citrus Mutual, and Sunkist have submitted comments to APHIS highlighting the detrimental effects Egyptian citrus would have on US growers. The President of CCQC hopes that APHIS' decision will be delayed as long as possible, as every season or part of the season where California is not directly competing with Egypt would be beneficial for the industry.