2012 Citrus Annual

An Expert's View about Citrus Fruits in Spain

Posted on: 27 Dec 2012

This report presents the situation for citrus (orange juice, oranges, grapefruits, lemons, tangerines, mandarins and other citrus) in the EU-27.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 12/12/2012 GAIN Report Number: SP1242 EU-27 Citrus Annual 2012 Annual Approved By: Robert Hanson, Agricultural Counselor Prepared By: Diogo Machado Mendes, Agricultural Specialist Report Highlights: With the exception of grapefruit, the production of all citrus crops is expected to be lower in the EU in MY2012/13, a consequence of Italy’s lower orange crop and Spain’s lower mandarin and lemon crops. The Autumn rains had a positive influence in the size and quality of fruits and the farmers are seeing this season as an opportunity to increase revenue and compensate for previous years when prices were lower. EU exports proceed at a good pace as production in some of the main competing countries is also lower. Disclaimer: This report presents the situation for citrus (orange juice, oranges, grapefruits, lemons, tangerines, mandarins and other citrus) in the EU-27. This report contains the views of the authors and does not reflect the official views of the U.S. Department of Agriculture (USDA). The data are not official USDA data. This report was written with the contributions of the following Foreign Agricultural Service analysts: Ornella Bettini FAS/Rome covering Italy, Greece and Cyprus Tania De Belder FAS/USEU Brussels Diogo Machado FAS/Madrid covering Spain and Portugal Abbreviations used in this report: CMO Common Market Organization EC European Commission EU European Union FAS Foreign Agricultural Service FCOJ Frozen Concentrated Orange Juice GTA Global Trade Atlas HS Codes: Harmonized System codes for commodity classification used to calculate trade data Oranges 080510 Tangerines/Mandarins 080520 Lemons 080550 Grapefruit 080540 Orange Juice 200911, 200912, 200919 MS EU Member State(s) MT Metric ton (1,000 kg) MY Marketing year Orange November/October Tangerine November/October Lemon November/October Grapefruit November/October Other Citrus November/October Orange Juice November/October PO Production Organization PS&D Production, Supply and Demand TMT Thousand Metric Tons USD U.S. Dollar EU-27 Citrus Annual Report 2 Commodities: Oranges, Fresh Production: EU orange production is concentrated in the Mediterranean region. Oranges are the second largest EU fruit crop after apples, with more than 80 percent of the EU’s total production of oranges sourced from Spain and Italy. The remaining 20 percent is distributed among other Member States (MS), mainly Cyprus, Greece and Portugal. For MY2012/13, an EU-wide orange crop of 5.6 MMT is forecast. Spain Spain is the largest orange producer within the EU, representing about 50 percent of total orange production within the Union. The orange production for MY 2012/13 in Spain is projected at around 2,900 MMT, almost 5 percent above last year’s in what is considered a promising season for the sector. A long, hot, and dry summer caused the season to start with a 10 days delay in Andalucía and a week in Murcia and Valencia. This interval allowed for the fruit to reach the market with better color and sugar levels. The arrival of the first autumn rains was very beneficial to fruit calibers. This increase in calibers is reported by the industry to have motivated an interest from the retail chains which is reflected on producer prices (Annex A). More and more producers try to cover the whole marketing year by growing very early and very late varieties. Navelate/Lanelate and Valencia Late varieties are used to boost supply in the late part of the season. Valencia late varieties have brighter color, and are more adequate for juice. In particular the industry has good hopes for the pigmented varieties and the new lines of Valencia oranges with bigger calibers and wider distribution around the calendar year. However, oranges are grown with the objective of being consumed fresh and oranges of the Navel group are the most appreciated. In Valencia, the area planted to citrus has been diminishing due to urban pressure. Many roads were built that were preceded by expropriation of the lands and some small fields were abandoned. There is also some switch from citrus to other fruit crops such as kiwi, nectarines, and peaches. On the other hand in Andalucía the area has been increasing and groves with less than 10 years are now reaching their full production potential. Italy EU-27 Citrus Annual Report 3 MY 2012/13 Italian orange production is forecast to decrease by 23 percent due to bad weather conditions in early spring. Quality and fruit size is good, but the early varieties will probably show a delay in ripening, while late varieties will be ready in advance. Sicily (59 percent) and Calabria (22 percent) are the main producing areas. Tarocco, Moro, Sanguinello, Sanguigno, Ovale or Calabrese, Biondo Commune, Navelina, and Washington Navel are the main orange varieties grown in Italy. Greece MY 2012/13 Greek orange production is forecast to stay flat. Peloponnese and Aitoloakarnaia (western Greece) are the main orange-producing areas. Washington Navel, Commons, Valencia, Navelina, and Newhall are the major orange varieties grown in Greece. Portugal In Portugal the MY2012/13 season has developed within the normal parameters, with some registered occurrences of mildew that followed the October and November rains. The sanitary state of crops is considered normal. Production will be similar to last year’s although it is possible that late varieties like Encore and Valencia Late that were hit by frost last season in February have better yields this year. Calibers are considered within the normal range. A 10 year census released in 2011 by the National Institute of Statistics revealed a 22 percent reduction in the orange commercial production area from 1999 to 2009. Orange trees account for 83 percent of the country’s 17,000 ha of commercial citrus groves. Restructuring of farms has been occurring to try to gain competitiveness through economies of scale. This is seen by a 46 percent reduction in the number of commercial citrus farms and an increase in the average area from 0.5 to 0.7 ha in the last 10 years. However total commercial citrus area also decreased by 28 percent in the same time period reflecting remaining competitiveness problems in the sector. Cyprus MY 2012/13 Cypriot orange production is expected to be constant from the previous year. The size of fruits is expected to be normal. Famagusta, Limassol, Larnaca, and Paphos districts are the major orange-producing areas. Navels, Ovals (Shamoutis), and Valencia are the main orange varieties grown in Cyprus. Table 1. Major EU Fresh Orange Producers by Volume in MT Country MY 2010/11 MY 2011/12 MY 2012/13 Spain 3,114,808 2,770,000 2,900,000 EU-27 Citrus Annual Report 4 Italy 1,950,000 2,020,000 1,550,000 Greece 901,212 910,000 914,000 Portugal 208,000 205,000 206,300 Cyprus 24,000 24,000 24,000 Source: FAS offices Consumption: Consumption of oranges in the EU is expected to remain above 5,000 MMT for MY 2012/13, a level below last season’s that reflects lower availability in the market. The per capita annual apparent human consumption of oranges in the EU is estimated at 10 kg but this varies by Member States with countries like Spain showing a level of per capita consumption that is double the EU average. Oranges are sold all year round due to its high demand by consumers, but in Spain around 80 percent of sales are concentrated in the months of November to May. Trade: The EU is a net importer of oranges, with imports largely exceeding exports. Imports into the EU were valued at about US $611 million in MY 2011/12 whereas the value of exports in MY 2011/12 was close to US $230 million. Intra-EU trade is very important, considering the volume of oranges produced within the EU. The main customers of the major EU producing countries are other EU Member States. The major supplier of oranges to the European market is South Africa, which supplies the market from June until October, when the Northern hemisphere harvest starts, followed by Egypt, Morocco, and Tunisia. The major EU export destinations are Switzerland, Serbia, and Russia. Exporters are aiming at increasing their presence in the strategic emerging markets of Saudi Arabia, United Arab Emirates, and Brazil. Table 2. EU-27 Imports of Oranges by Origin in MT Country of Origin MY 2009/10 MY 2010/11 MY 2011/12 South Africa 413,915 333,558 441,577 EU-27 Citrus Annual Report 5 Egypt 132,927 101,261 139,740 Morocco 94,011 99,376 82,974 Tunisia 22,330 20,319 16,768 Israel 17,862 11,077 11,601 Turkey 17,387 10,923 10,576 Others 260,153 222,941 147,435 Total Imports 958,585 799,455 850,670 Source: Global Trade Atlas (GTA) and FAS estimates. Table 3. EU-27 Exports of Oranges by Destination in MT Country of Destination MY 2009/10 MY 2010/11 MY 2011/12 Switzerland 58,342 55,469 57,034 Serbia 36,010 43,230 34,645 Russia 21,625 28,308 32,194 Norway 29,290 28,110 29,163 Croatia 22,423 26,887 22,704 Algeria 11,326 6,746 19,553 Others 93,092 128,375 106,307 Total Exports 272,108 317,125 301,600 Source: GTA and FAS estimates. Production, Supply and Demand Data Statistics: Table 4. Oranges, Fresh Production, Supply and Demand Oranges, Fresh EU-27 2010/2011 2011/2012 2012/2013 Market Year Begin: Nov 2010 Market Year Begin: Nov 2011 Market Year Begin: Nov 2012 USDA Official New Post USDA Official New Post USDA Official New Post Area Planted 320,613 316,158 320,813 317,082 313,819 Area Harvested 296,018 293,489 296,307 295,110 293,414 Bearing Trees 0 0 0 0 0 Non-Bearing Trees 0 0 0 0 0 Total No. Of Trees 0 0 0 0 0 Production 6,264 6,204 5,521 5,935 5,600 Imports 788 799 900 851 850 Total Supply 7,052 7,003 6,421 6,786 6,450 Exports 317 317 280 302 300 Fresh Dom. Consumption 5,520 5,322 4,873 5,298 5,009 For Processing 1,215 1,364 1,268 1,186 1,141 Total Distribution 7,052 7,003 6,421 6,786 6,450 HECTARES, 1000 TREES, 1000 MT Source: FAS offices Commodities: Tangerines/Mandarins, Fresh Production: EU-27 Citrus Annual Report 6 Total European tangerine production is expected to be close to 2,910 MMT in MY2012/13, some 8 percent below last season’s level. Spain Spain’s total tangerine/mandarin production is projected to decrease by 10 percent to 1,900 MMT in MY 2012/13. This is mostly due to the fall in production of clementines whereas the production of satsumas is expected to rise. Andalucía is the only region of Spain reporting an increase in the production of mandarins as groves that were planted 5 to 10 years ago come into full production. Growers tried hard to keep costly irrigation working during the very hot and dry 2012 summer until the first autumn rains fell in October. The rain and the cold weather felt allowed for good calibers and color. Farmers are hopeful that the good quality and the slight fall in supply will allow prices to remain at good levels and profits to be better than last season’s. The industry continues to expand the range of varieties used to cover more of the calendar spectrum. Clemensoon is an early variety that has shown to produce clementines with good calibers, taste parameters, sugar and acidity and without many of the common skin problems. On the late varieties the industry is betting on the Safor and Garbí. However the Clemenules is still the most widespread clementine variety and it hits the market in the months of November and December. The great concentration of supply in just a few months is still a problem for producers. Among the solutions proposed by industry are a new plan for the withdrawal from the market in coordination with processors, the strengthening of research into new varieties, the opening up and consolidation of export markets, and the move to alternative fruit crops. Italy MY 2012/13 Italian easy peelers production (83 percent seedless clementines, 17 percent mandarins) is forecast to be 3 percent down from previous year. Sizes of the Avana variety are good, but the planted area of this variety is decreasing every year. Higher input costs and lower prices have negatively affected crop profitability. Calabria (50 percent), Sicily (23 percent), and Apulia (14 percent) are the main easy peelers-producing areas. Avana and Tardivo di Ciaculli are the major mandarin varieties grown in Italy. Comune or Oroval, and Monreal are the main Clementine varieties. Greece MY 2012/13 Greek tangerine production is forecast to remain steady. The main producing areas include the prefectures of Igoumenitsa, Arta, Mosologgi, and Thesprotia, located in northern Greece. “Clementine” is the major tangerine variety grown in Greece. EU-27 Citrus Annual Report 7 Cyprus MY 2012/13 Cypriot tangerine production is expected to be similar to the previous year with low volumes but with higher calibers. Famagusta, Limassol, Larnaca, and Paphos districts are the major tangerine-producing areas. Mandoras, Tangelo, Minneolas, Nova, and Clementines are the main tangerine varieties grown in Cyprus. Portugal Tangerines are the second most important citrus product in Portugal, after oranges. The Algarve is the most representative region with 80 percent of the total producing area. The production of tangerines is projected at the same levels of last year with normal calibers and quality. Table 5. Major EU Fresh Tangerine Producers by Volume in MT Country MY 2010/11 MY 2011/12 MY 2012/13 Spain 2,196,890 2,115,900 1,900,000 Italy 758,000 817,000 790,000 Greece 120,000 120,000 120,000 Cyprus 55,000 51,000 43,000 Portugal 34,185 34,200 34,800 Source: FAS Offices Consumption: Total EU-27 consumption in MY2012/13 is forecast to be close to 2,530 MMT, an 8 percent fall from the previous year reflecting lower availability and a falling purchasing power. The per capita consumption in the EU for 2012/13 is calculated at 5.0 kilos. Trade: The major suppliers of tangerines to the European market are Morocco, South Africa and Turkey. European exporters have been asking authorities to monitor the implementation of the commercial agreement between the EU and Morocco that since 1 October 2012 allowed this country a higher export quota of agricultural products to the EU. EU imports of tangerine were valued at US $394 million and EU exports at US $352 million in MY 2011/12. Exports continued to increase to Russia in MY2011/12 and this country is seen as the only growing market that is effectively able to absorb large quantities. The EU turned from being a net importer to being a net exporter of tangerines in volume terms in 2010/11. Table 6. EU-27 Imports of Tangerines by Origin in MT Country of Origin MY 2009/10 MY 2010/11 MY 2011/12 EU-27 Citrus Annual Report 8 Morocco 115,546 87,576 80,253 South Africa 65,064 57,756 67,191 Peru 33,217 41,925 49,253 Turkey 64,894 49,562 45,186 Israel 36,165 29,086 42,615 Argentina 40,157 32,142 24,424 Others 62,139 46,239 38,656 Total Imports 417,182 344,286 347,579 Source: GTA and FAS estimates. Table 7. EU-27 Exports of Tangerines by Destination in MT Country of Destination MY 2009/10 MY 2010/11 MY 2011/12 Russia 59,351 91,131 98,258 Ukraine 27,293 54,631 55,569 United States 46,090 62,247 45,433 Switzerland 38,965 37,661 40,010 Belarus 19,073 30,384 25,013 Norway 24,544 23,356 23,360 Others 52,154 65,222 83,203 Total Exports 267,470 364,632 370,847 Source: GTA and FAS estimates. Production, Supply and Demand Data Statistics: Table 8. Tangerines/Mandarins, Fresh Production, Supply and Demand Tangerines/Mandarins, Fresh EU-27 2010/2011 2011/2012 2012/2013 Market Year Begin: Nov 2010 Market Year Begin: Nov 2011 Market Year Begin: Nov 2012 USDA Official New Post USDA Official New Post USDA Official New Post Area Planted 167,835 174,122 165,161 171,303 168,989 Area Harvested 152,492 160,291 149,890 157,224 155,194 EU-27 Citrus Annual Report 9 Bearing Trees 0 0 0 0 0 Non-Bearing Trees 0 0 0 0 0 Total No. Of Trees 0 0 0 0 0 Production 3,194 3,187 3,127 3,161 2,911 Imports 337 344 330 348 350 Total Supply 3,531 3,531 3,457 3,509 3,261 Exports 365 365 380 371 370 Fresh Dom. Consumption 2,828 2,674 2,757 2,770 2,530 For Processing 338 492 320 368 361 Total Distribution 3,531 3,531 3,457 3,509 3,261 HECTARES, 1000 TREES, 1000 MT Source: FAS offices Commodities: Lemons, Fresh Production: At EU-level, the production of lemon is expected to reach 1,150 MMT in MY 2012/13, a 9 percent fall from the previous year. Spain In Spain, the lemon crop production for MY 2012/13 is projected close to 630,000 MT, a 12 percent decrease from the previous year. The season started with 10 days delay when compared to previous years. The summer was very dry and hot and the calibers were small but the October and November rains improved crop prospects. Lemon production in Spain is concentrated in three regions located in the southern Mediterranean area: Murcia, Valencia and the Provinces of Malaga and Almeria in Andalusia. The dominant varieties in Spain are Verna - a tender and juicy variety with few seeds, representing 30 percent of total production; and Fino which represents 70 percent of total production and is favored by the processing sector. The season starts with the harvest of the Fino variety and then proceeds with the remaining varieties such as the Verna in spring and summer. The introduction of new cultivars is a relatively slow process and these are mostly planted when small and old orchards are grubbed up to give way to new and larger fields. MY2012/13 harvest forecasts from the main lemon and grapefruit inter-professional association (AILIMPO) are higher than official numbers at 850,000 MT in Spain. As can be seen there continues to be an important disparity between official numbers - published by the Ministry of Agriculture - and the EU-27 Citrus Annual Report 10 numbers from the main industry body. AILIMPO also refer to the lower stocks of lemon resulting from imports from Argentina and South Africa in the off season and the lower crop in Turkey as factors affecting the Spanish market positively. Spain has even started exporting to Eastern Europe ahead of what is normal because of the lower supply pressure from Turkey. Producer prices have been at higher levels than the in last two seasons (see Annex C). Because the volumes are considered sufficient to supply all clients but without excess production the industry is hoping that prices will not plummet when the bulk of the crop arrives to the market in November and December. This will be achieved with careful phasing in of harvest, as far as the technical requirements of each variety allow. The good volumes being exported make for an optimist scenario for this year’s lemon crop in Spain from the point of view of profitability for farmers and industry. Italy MY 2012/13 Italian lemon production is forecast to decrease by 4.3 percent. Quality is forecast to be good. Sicily produces more than 86 percent of Italy’s lemons. The lemon-producing area is progressively decreasing: higher input costs and lower prices have negatively affected crop profitability. Femminello Commune, Monachello, and Interdonato are the main lemon varieties grown in Italy. Farmers are forecast to deliver 80,000 MT of lemons to the processing industry. Greece MY 2012/13 Greek lemon production is forecast to increase by 11 percent due to favorable weather. The main producing areas include the prefectures of Korinthos, Achaia, Piraeus, and Ilias, located in northern Greece. The major lemon variety grown in Greece is “Maglini,” whose fruit is strongly aromatic, with a quite sour juice. Cyprus MY 2012/13 Cypriot lemon production is expected at the same levels than the previous year. The harvesting was delayed by approximately a week due to the warm weather. The size of fruit is expected normal. Lapithos village is the main lemon-producing area. “Lapithiotiki” (a local variety), “Eureka,” and “Lisbon” are the major lemon varieties grown in Cyprus. EU-27 Citrus Annual Report 11 Portugal Lemons represent 5 percent of Portugal’s citrus crop. Production in MY 2012/13 is projected at slightly last season’s but with normal calibers and quality. Table 9. Major EU Fresh Lemons/Limes Producers by Volume in MT Country MY 2010/11 MY 2011/12 MY 2012/13 Spain 717,906 730,000 629,800 Italy 488,000 460,000 440,000 Greece 33,000 45,000 50,000 Cyprus 16,000 18,000 18,000 Portugal 13,132 13,000 12,600 Source: FAS Offices Consumption: EU-27 consumption is forecast to be around 1,250 MMT in MY2012/13. This is a 3 percent fall from the previous year due to a combination of lower domestic availability and higher demand for exports as competitors like Turkey are expected to have a lower production this year. The industry is also projected to process fewer lemons as a consequence of these two factors. The per capita consumption of lemons in the EU for 2012/13 is calculated at 2.5 kilos. Trade: The EU is a net importer of lemons, with imports largely exceeding exports. Imports into the EU reached US $462 million in MY 2011/12, while the value of exports in MY 2010/11 was US $103 million. Intra-EU trade is critical to the sector, taking into account the volume of lemons produced in the Mediterranean Member States and the demand in non producer Member States. The main intra-EU importers are Germany, the Netherlands, France, and the United Kingdom. The major supplier to the European market is Argentina, followed by Turkey, Brazil, and South Africa. The major EU importers of non-EU lemons are the Netherlands, Germany, France and Italy. The main extra-EU destination for European lemons is Russia. Table 10. EU-27 Imports of Lemons/Limes by Origin in MT Country of Origin MY 2009/10 MY 2010/11 MY 2011/12 Argentina 182,160 159,650 179,892 Turkey 128,376 113,545 94,192 EU-27 Citrus Annual Report 12 Brazil 56,773 56,536 58,432 South Africa 45,794 45,062 40,502 Mexico 24,914 27,289 35,834 Uruguay 10,832 8,280 9,949 Others 22,014 10,293 16,943 Total Imports 470,863 420,655 435,745 Source: GTA and FAS estimates Table 11. EU-27 Exports of Lemons/Limes by Destination in MT Country of Destination MY 2009/10 MY 2010/11 MY 2011/12 Russia 24,526 21,475 32,469 Switzerland 13,448 14,274 14,929 Ukraine 6,211 4,646 11,374 Croatia 5,444 7,636 7,562 Norway 3,340 3,839 4,344 Canada 226 962 3,586 Others 13,450 15,279 25,124 Total Exports 66,645 68,111 99,388 Source: GTA and FAS estimates Production, Supply and Demand Data Statistics: Table 12. Lemons, Fresh Production, Supply and Demand Lemons/Limes, Fresh EU-27 2010/2011 2011/2012 2012/2013 Market Year Begin: Nov 2010 Market Year Begin: Nov 2011 Market Year Begin: Nov 2012 USDA Official New Post USDA Official New Post USDA Official New Post Area Planted 81,838 84,865 79,166 81,812 78,937 Area Harvested 79,157 76,844 77,145 74,853 73,520 Bearing Trees 0 0 0 0 0 Non-Bearing Trees 0 0 0 0 0 Total No. Of Trees 0 0 0 0 0 EU-27 Citrus Annual Report 13 Production 1,183 1,272 1,316 1,270 1,154 Imports 418 421 410 436 440 Total Supply 1,601 1,693 1,726 1,706 1,594 Exports 68 68 80 99 95 Fresh Dom. Consumption 1,357 1,296 1,407 1,293 1,250 For Processing 176 329 239 314 249 Total Distribution 1,601 1,693 1,726 1,706 1,594 HECTARES, 1000 TREES, 1000 MT Source: FAS Offices Commodities: Grapefruit, Fresh Production: Overall EU grapefruit production is projected to reach 91,000 MT in MY 2012/13. The market is considered stable by the industry. Spain Grapefruit production is projected to grow by 3 percent in Spain in MY 2012/13. Half of Spain’s grapefruit production is found in the region of Murcia. The main variety planted is Ruby Red. This is a very small market for Spain and indeed for the EU, as most of consumption is supplied by imports. Cyprus MY 2012/13 Cypriot grapefruit production is projected at levels similar to the previous campaigns but there was a downward revision of historic production levels. Prices are expected to be better as initial stocks were low. White Marsh Seedless, mostly grown in the Limassol area, is the major grapefruit variety grown in Cyprus. New plantations have been established in the district of Paphos where the Red varieties (Star Ruby, Red Blush, and Rio Red) were introduced to meet the increased market demand. Greece MY 2012/13 Greek grapefruit production is forecast to grow by 5.4 percent. The prefectures of Corinth and Kavala, the region of Thessaly, and the island of Crete are the major grapefruit-producing areas. Table 13. Major EU Fresh Grapefruit Producers by Volume in MT EU-27 Citrus Annual Report 14 Country MY 2010/11 MY 2011/12 MY 2012/13 Spain 46,824 51,000 55,000 Cyprus 23,000 20,000 18,000 Italy 7,500 7,000 7,000 Greece 5,800 5,500 5,800 Portugal 208 200 210 Source: FAS Offices Consumption: EU-27 consumption of fresh grapefruit is forecast to remain stable at around 370,000 MT in 2012/13. The Spanish industry believes there is the potential for growth in the consumption of grapefruit as the majority of people still do not consume grapefruit. However recent news about possible side effects of medicines if taken with grapefruit may have a negative effect on the market. Trade: The EU imports grapefruit from third countries, as domestic supply is currently enough to supply a quarter of internal demand. Imports for MY 2011/12 were valued at US$ 282 million while exports were slightly below US$ 20 million. The largest importers within the EU are France, the Netherlands, Germany and Belgium. The major sources for imported grapefruit in MY 2011/12 were Turkey, South Africa, China, United States, and Israel. Regarding exports, the main destinations for EU-27 grapefruit are Russia, Belarus, and Switzerland. Table 14. EU-27 Imports of Grapefruit by Origin in MT Country of Origin MY 2009/10 MY 2010/11 MY 2011/12 Turkey 75,622 64,258 83,437 South Africa 79,071 93,865 74,817 China 73,102 50,325 63,169 United States 57,889 54,233 45,578 Israel 61,276 39,727 45,106 Mexico 12,787 15,482 10,257 Others 28,853 30,399 15,161 Total Imports 388,600 348,289 337,525 Source: GTA and FAS estimates EU-27 Citrus Annual Report 15 Table 15. EU-27 Exports of Grapefruit by Destination in MT Country of Destination MY 2009/10 MY 2010/11 MY 2011/12 Russia 8,387 6,361 7,639 Belarus 2,090 1,996 2,108 Switzerland 2,393 2,318 1,851 Ukraine 1,606 2,463 1,736 Croatia 1,273 1,663 1,158 Norway 708 635 860 Others 5,119 4,987 3,834 Total Exports 21,576 20,423 19,185 Source: GTA and FAS estimates Production, Supply and Demand Data Statistics: Table 16. Grapefruit, Fresh Production, Supply and Demand Grapefruit, Fresh EU-27 2010/2011 2011/2012 2012/2013 Market Year Begin: Nov 2010 Market Year Begin: Nov 2011 Market Year Begin: Nov 2012 USDA Official New Post USDA Official New Post USDA Official New Post Area Planted 2,120 2,773 1,902 2,506 2,548 Area Harvested 2,096 2,346 1,871 2,119 2,155 Bearing Trees 0 0 0 0 0 Non-Bearing Trees 0 0 0 0 0 Total No. Of Trees 0 0 0 0 0 Production 107 88 104 88 90 Imports 344 348 365 338 330 Total Supply 451 436 469 426 420 Exports 20 20 18 19 20 Fresh Dom. Consumption 411 385 431 376 370 For Processing 20 31 20 31 30 Total Distribution 451 436 469 426 420 HECTARES, 1000 TREES, 1000 MT Source: FAS Offices Commodities: Orange Juice Production: EU-27 production of orange juice is expected to decrease by 4 percent in MY 2012/13 to 88.4 MMT (Brix 65), in line with lower expected deliveries of orange to be processed by the industry. The European citrus sector is strongly orientated towards the fresh produce market. Margins are better for fresh fruit intended for fresh consumption for both domestic and export demand. Processing is a buffer for production surpluses and fruit that does not meet commercial standards. Consumption: EU-27 Citrus Annual Report 16 Consumption of orange juice is expected to continue the falling trend reflecting decreasing buying power in the majority of the EU countries. While orange juice is the most popular juice within the EU- 27, it competes with other non-alcoholic drinks and juices made from other fruits. The preferred packaging type by European consumers is the carton. The convenience of orange juice is reflected in its better adaptation to modern consumption habits than whole fresh oranges. Another factor affecting consumption is the current economic situation that has led to higher demand for private label juice at the expense of brand labels. Trade: In MY 2011/12, total EU imports of orange juice were valued at US$ 1.594 billion with exports worth US$ 145 Million. Imports were stable from the previous market year. Brazil continues to be the main supplier of orange juice to the EU with around 85 percent of total imports of orange juice to the EU market. EU-27 exports have increased in MY 2011/12 with main export destinations to be Switzerland, Saudi Arabia and Algeria. Table 17. EU-27 Imports of Orange Juice by Origin in MT (Brix 65) Country of Origin MY 2009/10 MY 2010/11 MY 2011/12 Brazil 682,952 549,614 593,027 United States 27,798 57,068 21,028 Israel 10,391 12,170 9,145 Argentina 5,841 6,409 5,769 Cuba 12,836 7,087 4,195 Switzerland 7,113 546 818 Others 49,236 55,039 49,620 Total Imports 796,166 687,934 683,602 Source: GTA and FAS estimates Table 18. EU-27 Exports of Orange Juice by Destination in MT (Brix 65) Country of Destination MY 2009/10 MY 2010/11 MY 2011/12 Switzerland 5,877 5,846 5,545 Saudi Arabia 5,365 7,857 7,567 Algeria 4,355 3,192 5,888 Japan 2,021 2,051 2,801 Norway 3,089 2,696 2,381 Russia 1,435 1,496 1,779 Others 23,355 26,244 28,784 Total Exports 45,498 49,382 54,745 Source: GTA and FAS estimates EU-27 Citrus Annual Report 17 Production, Supply and Demand Data Statistics: Table 19. Orange Juice Production, Supply and Demand (Brix 65) Orange Juice EU-27 2010/2011 2011/2012 2012/2013 Market Year Begin: Nov 2010 Market Year Begin: Nov 2011 Market Year Begin: Nov 2012 USDA Official New Post USDA Official New Post USDA Official New Post Deliv. To Processors 1,215,453 1,363,883 1,268,000 1,186,500 1,141,078 Beginning Stocks 15,000 15,000 15,000 15,000 15,000 Production 94,224 105,731 98,298 91,980 88,459 Imports 693,541 687,934 680,000 683,602 690,000 Total Supply 802,765 808,665 793,298 790,582 793,459 Exports 49,279 49,382 50,000 54,745 55,000 Domestic Consumption 738,486 744,283 728,298 720,837 723,459 Ending Stocks 15,000 15,000 15,000 15,000 15,000 Total Distribution 802,765 808,665 793,298 790,582 793,459 MT Source: FAS Offices EU-27 Citrus Annual Report 18 EU Policy Section A new Common Market Organization (CMO) for fruit and vegetables was reformed in 2007. The policy changes agreed in the context of the CMO reforms for fruit and vegetables were incorporated in the single CMO by Council Regulation 361/2008. The shift from production support to direct aid to producers was designed to improve the competitiveness, market orientation and sustainability of the sector. The European Commission asserts that the aim of the reformed CMO is to improve the competitiveness and market orientation of the fruit and vegetable sector, reduce income fluctuations resulting from crises, promote consumption – so contributing to improved public health – and enhance environmental safeguards. Producer Organizations (PO's) are the key elements in the EU's CMO for fruit and vegetables. PO's are legal entities established by producers to market commodities, including citrus fruit. EU subsidies are not paid to individual producers but are channeled through PO's. In order to qualify for EU subsidies, PO's must submit an operational program financed through an operational fund. The EU's financial contribution is paid directly into the PO's operational fund. The calculation of the estimated amount of operational fund is based on the operational program and the value of marketed production. All the implementing rules of Council Regulation 1234/2007 have been incorporated in Commission Implementing Regulation 543/2011 . The Commission Implementing Regulation 701/2012 amended the crisis adaptation measures in Commission Implementing Regulation 543/2011 since August 2012 and was introduced as part of the ongoing CAP reform. The Commission improved the functioning of the crisis management system in the fruit and vegetable sector in the run-up to the entry into force of the CAP reform expected in 2014. The regulation also aims to make rules more flexible on green harvesting and non-harvesting. For information on the CAP starting on January 1, 2014, please see: http://ec.europa.eu/agriculture/cap-post- 2013/index_en.htm The Commission has agreed to add compensation payments for withdrawing certain products. The amounts of aid per kilo paid to POs for products withdrawn from the market have been increased for certain products, among others for clementines (22.16 €/100 kg) and lemons (23.99 €/100 kg). EU Marketing Standards for Fruits and Vegetables The Commission implementing Regulation (EU) No 543/2011 provides for a general marketing standard for all fresh fruits and vegetables, repealing Commission Regulation 1221/2008. Specific marketing standards are still in place for ten products, including citrus fruit. The specific marketing standards are EU-27 Citrus Annual Report 19 set out in Part B of Annex I to this Regulation. The specific marketing standards for citrus fruit can be found in Part 2 of that same section (p.111). Fresh fruit and vegetable imports into the EU are checked for compliance with EU-harmonized marketing standards. These standards apply at all marketing stages and include criteria such as quality, size, labeling, packaging, and presentation. Certification of Fruit Shipments Plant products need a phytosanitary certificate to be exported to the EU. Phytosanitary certificates issued by an APHIS inspector are required to accompany fruit, vegetable, and nut shipments. APHIS issues phytosanitary certificates in accordance with international regulations established by the International Plant Protection Convention of the Food and Agriculture Organization of the United Nations. This standard-setting body coordinates cooperation between nations to control plant and plant product pests and to prevent their spread. Council Directive 2000/29/EC contains provisions concerning compulsory plant health checks. This includes documentary, identity, and physical plant health checks to verify compliance with EU import requirements. More information can be accessed on DG Health and Consumer Protection's website http://ec.europa.eu/food/plant/organisms/imports/inspection_en.htm. Commission Regulation 1756/2004 provides for plant health checks to be carried out at reduced frequency when justified. The list of products recommended for plant health checks at reduced levels was updated June 29, 2011 . School Fruit Scheme A key objective of the changes made to the Fruit and Vegetable regime was to reverse the declining consumption of fruit and vegetables. Commission Regulation 288/2009, last amended by Commission Implementing Regulation 1208/2011, lays down the rules for applying the European School Fruit Scheme (SFS) as a measure to combat child obesity. These SFSs include three elements: free distribution of fruit and vegetables in schools, a series of accompanying measures, such as information campaigns on healthy eating habits, and monitoring and evaluation. The SFS aims to provide fruit and vegetables to school children from the start of the school year. The SFS makes €90 million of EU funds available to provide fruit and vegetables to school children to be matched by national and private funds. The 2012/2013 school year is the fourth year of the program and the Commission implementing decision of March 2012, allocates the €90 million of EU funds to the 24 participating Member States (Sweden, Finland and UK have opted not to participate). The main beneficiaries of the scheme in 2012/2013 are Italy, who is set to receive over € 20.5 million, followed by EU-27 Citrus Annual Report 20 Germany (€ 11.6 million), Romania (€ 9.8 million), Poland (€ 9.2 million), France (€ 5.6 million) and Spain (€ 4.8 million). Information and documents on the SFS are available on internet at: http://ec.europa.eu/agriculture/fruit- and-vegetables/school-fruit-scheme/index_en.htm Maximum Residue Level for Fruit Maximum Residue Levels (MRLs) for pesticides, including import tolerances, have been harmonized throughout the EU since September 2008. As a marketing tool, some retail chains in the EU adopt private standards that exceed EU regulations by requiring their suppliers to adhere to stricter company policies that limit the maximum residues to 30, 50, or 70 percent of the respective EU MRL. Please find the link to the EU MRL database, as well as to the International MRL database developed by USDA for MRLs worldwide. Tariffs Imports of fresh fruit and vegetables are subject to the Entry Price System (EPS) which has been in place in its current form since the Uruguay Round. It is a complex tariff system that provides a high level of protection to EU producers. In this system fruits and vegetables imported at or above an established entry price are charged an ad valorem duty only. Produce valued below the entry price are charged a tariff equivalent in addition to the ad valorem duty. The tariff equivalent is graduated for products valued between 92 and 100 percent of the entry price. The ad valorem duty and the full tariff equivalent are levied on imports valued at less than 92 percent of the entry price. Whether or not the EU will maintain the EPS will be discussed in the context of the Doha Round trade talks. The U.S. tends to sell high quality products, which are usually relatively higher priced and typically do not face any additional duty. Replacing the EPS with fixed tariffs could result in higher ad valorem duties. Tariff levels for 2013 are published in EU Regulation 927/2012. The tariffs for citrus fruit remain unchanged compared to the levels of 2012 and can be found at page 96 for oranges, tangerines, lemons, grapefruit and other citrus fruit, while the tariff for orange juice can be found at page 165. EU-27 Citrus Annual Report 21 Annex A. Navel Orange Nominal Prices in Spain at different levels of the supply chain a. Producer prices (Euro/kg) b. Wholesale prices (Euro/kg) c. Retail prices (Euro/kg) Source: Spanish Ministry of Environment, Rural and Marine Affairs (MAGRAMA) Annex B. Clementine Nominal Prices in Spain at different levels of the supply chain a) Producer prices (Euro/kg) b) Wholesale prices (Euro/kg) c) Retail prices (Euro/kg) Source: MAGRAMA EU-27 Citrus Annual Report 23 Annex C. Lemon Nominal Prices in Spain at different levels of the supply chain a) Producer prices (Euro/kg) b) Wholesale prices (Euro/kg) c) Retail prices (Euro/kg) Source: MAGRAMA EU-27 Citrus Annual Report 24
Posted: 27 December 2012

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