The entry of Argentinian lemons to the United States market, which took effect last Friday, and the opening of Brazil for Argentine oranges, tangerines, grapefruits and lemons, can’t counter a situation that now seems irreversible.
This situation is related to the serious damage caused by the constant rains that fell over the country’s coastal and Northern areas this year and the previous one, which led to a decrease in citrus production.
According to estimates of Argentina’s Citrus Federation (Federcitrus) production will decrease by at least 10% this year, when compared to last year’s production. “This year production will fall by at least 10% over the past year, and it will be strictly due to climatic factors. In addition, the NEA is living with the consequences of three bad years where producers didn’t make investments because of the low prices they achieved in juices and in fresh products,” Jose Carbonell, the President of Federcitrus, told El Cronista. These prices, he said, are another important cause for the gradual loss of competitiveness that has been affecting the sector for many years. “We have problems with the exchange rate and a very high tax pressure. However, we are currently seeing a credit recovery and there is a proposal to improve logistics, which would be very important for the sector, that we must check out,” said the official.
According to the Federation, this year the country will produce 2.6 million tons of citrus fruit. Last year, production stood at nearly 3 million tons. The average production of the past 10 years was about the 3.5 million tons per year, 60% of which was lemons. In 2016, Argentina exported 114.500 tons of sweet citrus (mainly oranges and mandarins) to various destinations and 280,000 tons of lemons, a segment in which the country is positioned as the world’s largest producer.
The Ministry of Agricultural industry confirmed that Argentina would be able to export citrus to Brazil, a market that was closed since 2009 due to health issues, once again this year. This news, and the reopening of the United States for the lemons of North, generated optimism in the sector, even though it won’t have an immediate impact on production. “These processes are gradual and it will take time to increase production. We currently have the capacity to supply those markets, as we can always decrease the volume destined to industrial production,” said Carbonell. In addition, he said, this is a solid sector, with low debt and good financial conditions that allowed it to have an appropriate response to the opening of markets.
Regarding the new markets, he estimated that their presence in the United States would initially be small, but said that Brazil was a market with great potential that they would gradually develop, especially by the sweet citrus sector. “We are also beginning to export oranges to South Korea, and we are going to return to new markets, such as Indonesia and Vietnam for oranges and mandarins,” he added.