Citrus Fruit Outlook

An Expert's View about Citrus Fruits in Italy

Posted on: 30 Dec 2011

Italian citrus fruit production is forecast to reach 3.6 MMT, up 11 percent from the previous year.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Voluntary Public - Date: 12/6/2011 GAIN Report Number: IT1157 Italy Post: Rome Italian Citrus Fruit Outlook Report Categories: Citrus Approved By: Jim Dever Prepared By: Stefano Baldi Report Highlights: MY 2011/2012 Italian citrus fruit production is forecast to reach 3.6 MMT, up 11 percent from the previous year. This forecast anticipates a 16-percent increase in orange production to 2.3 MMT, a 7-percent increase in lemons, and little increase (3 percent) in the production of easy peelers. 250 Others Grapefruit 225 Lemons Clementines 200 Mandarins Oranges General Information: Ci 175trus is largely cultivated in southern Italy (Sicily, Calabria, Apulia, Basilicata, Sardinia, Campania) and to a minor extent in some areas of few central (Tuscany and Latium) and northern (Liguria) Italy. During the last 10 years, total citrus area has slightly declined mainly due to farmers abandoning the orchards or replacing citrus with more profitable crops, particularly in Sicily. Even so, the1re ha5s bee0n an increase in clementines area, little change in grapefruit area, and a decrease in other species. In the last decades, Italian citrus producers have been losing competitiveness on both the foreign and domestic markets. Lack of organization, small farm size, increasing input costs, and strong compe1tition2 from5 other Mediterranean countries, such as Spain, Egypt, and Turkey, have gradually eroded the Italian share of the world, EU, and domestic markets. Moreover, the Citrus Tristeza Virus (CTV) has increasingly spread over the south of Italy forcing many farmers to replace their orchards with new resistant varieties. MY 2011/12 Italian citrus fruit production is forecast to reach 3.6 MMT, up 11 percent from p 00revious year. The forecast anticipates a 16-percent increase in orange production to 2.3 MMT, a 7-percent increase in lemons, and little increase (3 percent) in the production of easy peelers. Italian citr7us fr5uit total area 10-years trend ('000 hectares) 50 25 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Istat. I. ORANGES Italian Orange Production, Supply and Demand (ha, ‘000 MT) 2009/2010 2010/2011 2011/2012 Oranges, fresh MY begin 11/2009 MY begin 11/2010 MY begin 11/2011 Current post data Current post data Current post data Area Planted 102,033 101,475 101,000 Area Harvested 100,212 99,947 99,500 Production 2,350 1,950 2,260 Intra EU27 Imports 44 100 45 Extra EU27 imports 51 40 50 Total imports 95 140 95 TOTAL SUPPLY 2,445 2,090 2,355 Intra EU27 exports 143 110 135 Extra EU27 exports 31 28 35 Total exports 174 138 170 Fresh domestic consumption 1,841 1,652 1,785 For processing 430 300 400 TOTAL DISTRIBUTION 2,445 2,090 2,355 Italy produces around 4 percent of the world’s orange crop and 37 percent of EU-27’s production. A large part of Italian orange production consists of the “blood” varieties, planted chiefly in Sicily and Calabria and used mainly for fresh consumption. The main orange varieties cultivated in Italy: Pigmented (red) oranges: Tarocco (T.comune, T.galici, T.gallo, T.scirè, T.nucellare etc.), Moro (M.comune or M.nucellare), Sanguinello (S. moscato cuscunà and S. moscato nucellare), Sanguigno; Blond oranges: Ovale or Calabrese and Biondo comune; and Navel oranges: Navelina, Washington navel. Moreover, two specific varieties are traded as EU recognized Geographical Indications: the Ribera Orange variety (blond) is a PDO (Protected Designation of Origin) while the blood orange is a PGI (Protected Geographical Indication). PRODUCTION MY 2011/12 Italian orange production is expected to be at about 2.3 MMT, close to the 2009 harvest and significantly higher (+16 percent) than the previous year. According to industry estimates, the crop in Sicily and Calabria (the two main Italian producing regions) will be abundant due to rotational bearing, which creates wide cyclical swings in yields. In fact, MY 2011/12 is a higher quantity year in this cycle. Moreover, experts report the quality to be good due to high brix degree levels and to lack of disease and insect damage. Fruit size is significantly lower for oranges harvested from November to January due to higher yields and to the drought that hit Italy over the summer. However, abundant rains occurred in late October and November will likely positively affect the fruit size of varieties harvested from February on. As for the beginning of MY 2011/12, the size of almost 80 percent of the production is below the 76 mm size and farm gate price fluctuates around 0.2 €/kg (larger sizes are sold at 0.30-0.35 €/kg). Farmers will likely try to sell part of this small-size production through targeted campaigns in foreign markets. However, a large portion of this crop will be destined to the processing industry. According to estimates, around 400,000 MT of oranges will be processed in MY 2011/12. The cultivated area is not expected to decrease substantially. Despite every year around 5 percent of Moro Tarocco comune 0 0.4.3 0.35 0.25 0.3 0.2 0.25 0.2 2009/10 2009/10 0.15 2010/11 0.15 2010/11 2011/12 2011/12 0.1 0.1 NOV DEC JAN FEB MAR NOV DEC JAN FEB MAR APR Navel 0.35 0.3 0.25 the farms cultiva0ting ora.nges 2shift to other crops or abandon the fields, other farms are trying to invest their private capital in new innovative and advanced orchards – by planting fruit root stocks tolerant of tristeza, increasing in the mechanization, adopting micro-irrigation, sub-irrigation and fertigation, and so on) to compete with international competitors. Average Farm Gate Prices for Oranges in Italy (Euro/kg) 2009/10 0.15 2010/11 2011/12 0.1 OTT NOV DEC JAN FEB MAR APR Source: ISMEA. CONSUMPTION Domestic demand has been decreasing for the last few years due to the economic crisis, which cut household purchasing power. In MY 2011/12, orange consumption will likely stagnate accordingly. However, the Italian Ministry of Agriculture has recently announced a marketing campaign attempting to promote fresh oranges consumption by distributing fresh oranges at national B League soccer matches. This campaign follows a similar initiative carried out over the summer to promote peaches and nectarines consumption at beaches. TRADE Italy likely will increase orange exports in MY 2011/12 both to the northern EU markets (UK, Germany, France) and to Eastern European countries and Russia. Italy exports only 7 to 8 percent of domestic production, compared to Spain, which exports more than 50 percent. Good export performances are also backed by increasing support from the main producing regions in Italy (mainly Sicily), which are financing export and foreign promotion programs especially to China and to the United States. Moreover, red varieties producers from Sicily have successfully promoted these varieties in the Spanish market, Italy’s main competitor, finding consumers’ appreciation. After a long negotiation of about two years, Brazil has finally recognized the phitosanitary conformity of Italy’s citrus fruit necessary to give the green light to imports. The legislation refers specifically to oranges and citrons. Therefore, Brazil could represent a new market opportunity for Italian producers growing high quality, blood varieties (Moro and Tarocco) oranges. Italian Main Orange Export Markets 2008/09 2009/10 Nov-Aug 2009/2010 Nov-Aug 2010/2011 000 MT 000 MT 000 MT 000 MT EU-27 54 143 138 105 Germany 17 50 49 38 Austria 12 20 20 16 Poland 1 13 12 6 France 4 12 11 10 Slovenia 4 7 7 5 Hungary 3 7 6 4 Sweden 3 6 6 5 Czech Republic 1 5 5 2 Extra EU-27 21 31 30 27 Albania 4 4 4 2 Switzerland 15 21 21 19 World 76 174 168 132 Source: GTA. II. LEMONS Italian Lemon Production, Supply and Demand (ha, ‘000 MT) 2009/2010 2010/2011 2011/2012 Lemons, fresh MY begin 11/2009 MY begin 11/2010 MY begin 11/2011 Current post data Current post data Current post data Area Planted 30,080 28,906 28,700 Area Harvested 25,832 25,780 25,100 Production 545 488 520 Intra EU27 Imports 36 55 35 Extra EU27 imports 55 53 50 Total imports 91 108 85 TOTAL SUPPLY 635 596 605 Intra EU27 exports 45 40 40 Extra EU27 exports 3 2 2 Total exports 47 42 42 Fresh domestic consumption 508 444 463 For processing 80 110 100 TOTAL DISTRIBUTION 635 596 605 Italy produces around 4 percent of the world lemon crop and around 39 percent of EU-27 production. Sicily is responsible for about 90 percent of the domestic crop. The main lemon varieties cultivated in Italy: Femminello comune (F.zagara bianca, F.siracusano, F. S.Teresa, etc.), Monachello, and Interdonato. Industry experts forecast that MY 2011/12 lemon production will increase 7 percent to more than 520,000 MT. Prices have been declining since the beginning of MY 2011/12 because of increasing competition from other countries and weak domestic demand. Farmers will deliver around 100,000 0.7 2009/10 2010/11 0.6 2011/12 0.5 0.4 MT of lemons to the industry for processing. Average Farm Gate Prices for Lemons in Italy (Euro/kg) 0.3 0.2 NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT Source: ISMEA. III. TANGERINES/MANDARINS/CLEMENTINES Italian Tangerines Production, Supply and Demand (ha, ‘000 MT) 2009/2010 2010/2011 2011/2012 Tangerines/Manda MY begin MY begin MY begin rins/Clementines, 11/2009 11/2010 11/2011 fresh Current post Current post Current post data data data Area Planted 38,640 38,553 38,650 Area Harvested 37,407 37,699 37,800 Production 827 758 781 Intra EU27 Imports 65 70 68 Extra EU27 imports 6 5 5 Total imports 70 75 73 TOTAL SUPPLY 897 833 854 Intra EU27 exports 99 92 90 Extra EU27 exports 17 13 14 Total exports 116 105 104 Fresh domestic consumption 711 679 725 For processing 70 49 25 TOTAL DISTRIBUTION 897 833 854 Italy produces around 3 percent of the world easy peelers crop and around 24 percent of EU-27 production. Traditional mandarins (with seeds) are responsible for about 17 percent of the total crop while clementines (hybrid seedless easy peelers mainly cultivated in Calabria and Apulia) cover the remainder 83 percent. The harvesting season goes from September to April, but the bulk of the production hits the market between December and January. Clementines Mandarins 0.6 0.4 PRODUCTION 0.5 MY 2011/12 Italian easy peelers production is expected to be at about 780,000 MT, 3 percent up from the previous year. However, while clementines production will significantly increase, mandarins production will drop by about 30 percent due to a bad fruit set. Despite a relatively 0.3 abundant crop, the prolonged drought occurred over the summer along with dry and warm weather over the ripening0 period .in the4 fall, delayed the harvest by 10-15 days, and negatively affected the fruit size of early (Caffin) and regular (Comuni) clementines varieties. As in MY 2010/11, experts expect prices to decline significantly in December and January due to the bulk of the production hitting the market, to growing competition from other Mediterranean countries and to the lack of early and late varieties. Early and late varieties currently grown in the south of Italy are generally less productive a0nd more. capi3tal-labor intensive than regular varieties indeed. Average Farm Gate Prices for Clementines and Mandarins in Italy (Euro/kg) 0.2 2009/10 2009/10 0.2 2010/11 2010/11 2011/12 2011/12 0.1 0.1 OTT NOV DEC JAN FEB NOV DEC JAN FEB MAR APR Source: ISMEA. CONSUMPTION MY 2011/12 consumption of mandarins and clementines is forecast to remain stable, around 700,000 MT. Italians generally consume large quantities of clementines and mandarins during the winter holidays when the bulk of the production hits the market. Therefore, consumption tends to be quite steady over the years. TRADE Italy exports nearly 14 percent of its mandarins and clementines production, mainly to other EU-27 countries and to Eastern European markets. Despite strong competition from other easy peeler producing countries, MY 2009/10 exports more than doubled and MY 2010/11 and 2011/12 exports are expected to remain stable. Italian Main Clementines/Mandarins Export Markets 2008/09 2009/10 Nov-Aug 2009/2010 Nov-Aug 2010/2011 000 MT 000 MT 000 MT 000 MT EU-27 41 99 97 89 Poland 6 24 24 21 Germany 5 14 14 9 Slovenia 8 12 12 11 Romania 5 9 8 8 Hungary 6 8 8 10 Lithuania 1 7 7 6 Austria 3 5 5 3 Czech Republic 1 5 4 3 France 2 3 3 3 Extra EU-27 10 17 16 13 Albania 6 8 7 5 Russia 2 3 3 2 World 51 116 113 102 Source: GTA. IV. ORANGE JUICE Italian Orange Juice Production, Supply and Demand (MT) 2009/2010 2010/2011 2011/2012 Orange Juice MY begin 11/2009 MY begin 11/2010 MY begin 11/2011 Current post data Current post data Current post data Deliv. To processors 430,000 300,000 400,000 Beginning Stocks 0 0 0 Production 30,000 22,000 29,800 Intra EU-27 Imports 16,952 14,000 15,000 Extra EU-27 Imports 2,794 2,300 2,500 Total imports 19,745 16,300 17,500 TOTAL SUPPLY 49,745 38,300 47,300 Intra EU-27 Exports 37,877 32,000 35,000 Extra EU-27 Exports 4,812 5,000 7,000 Total exports 42,690 37,000 42,000 Domestic consumption 7,055 1,300 5,300 Ending Stocks 0 0 0 TOTAL DISTRIBUTION 49,745 38,300 47,300 According to preliminary estimates, MY 2011/12 Italian Frozen Concentrated Orange Juice (FCOJ) production is forecast to increase to almost 30,000 MT following the increase in the quantity of oranges destined to the processing industry – due to the fruit size reduction that makes a large amount of production not suitable for fresh consumption. Experts report the brix level to be quite good (11 brix). Consumption has been declining for the last few years and is expected to stagnate in MY 2011/12. Nevertheless, Sicilian orange and orange juice producers are trying to promote and foster the orange juice consumption by educating young people to replace less healthy beverages with orange juice. In fact, the region has recently installed a large amount of orange juice vending machines in schools. V. GRAPEFRUIT Italian Grapefruit Production, Supply and Demand (ha, ‘000 MT) 2009/2010 2010/2011 2011/2012 Grapefruit, fresh MY begin 11/2009 MY begin 11/2010 MY begin 11/2011 Current post data Current post data Current post data Area Planted 303 300 300 Area Harvested 253 250 250 Production 7 8 8 Intra EU27 Imports 7 8 9 Extra EU27 imports 26 28 27 Total imports 33 36 36 TOTAL SUPPLY 40 44 44 Intra EU27 exports 9 8 3 Extra EU27 exports 0 0 0 Total exports 9 8 3 Fresh domestic consumption 31 36 41 For processing 0 0 0 TOTAL DISTRIBUTION 40 44 44 ASSOCIATIONS Ass.I.Tra.P.A. (Association of citrus fruit processing companies) Contact info: Corso Trieste, 184 00155 Roma (RM) Tel (0039) 06.45422897 Fax (0039) 06.45422918 www.assitrapa.com Abbreviations and definitions used in this report CMO Common Market Organization EU-27 European Union FCOJ Frozen Concentrated Orange Juice Ha hectare; 1 ha = 2.471 acres MT Metric ton = 1000 kg MS EU-27 Member State MMT Million metric tons MY Marketing year Oranges, Tangerines/Mandarins, Lemons, Grapefruit, Orange Juice: November/October Tariff codes employed in this report for trade data: Oranges: 080510 Tangerines/mandarins: 080520 Lemons: 080550 Grapefruit: 080540 Orange juice: 200911-200912-200919
Posted: 30 December 2011

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