“The prices were already agreed on with distribution in September
The first part of the campaign was very complicated due to the apathy of the markets, problems concerned with quality, an excess of supply and especially the pressure exercised by the distribution.
The second part started off even worse than the first because there was absolutely no price recovery. Different sources revealed to this publication that “the prices that are paid are less than the outlay involved when producing.” In the same way, an operator stressed that “there is no doubt that the sector is self-destructive as there are operators who are selling in order to close the warehouse and get out quickly whilst salvaging as much as possible.”
Some declarations went even further stating that “this season’s prices were imposed in September, before starting off the season and they come to 20% less than the price paid last year.”
A sector that is losing its dominance
Spain contributes 22% of the oranges cultivated in Mediterranean countries, although Egypt and Italy jointly account for 21% and Morocco controls the exportations to Holland and the United Kingdom. Turkey is becoming better and better at maintaining its commercial fence as regards eastern European countries which are nearby. Judging by these figures along with the recognised fact that several farming exploitations, due to their lack of profitability, are tending to disappear, the Spanish sector could lose part of its dominance.
The Moroccan threat
Moroccan production in the 2010-2011 campaign grew by 10% with respect to the previous year and its volume came to 1.7 million tonnes.
Moroccan citric fruits are focussed on the traditional European community market, as it has preferential access, although it also looks towards the large Russian market, given the exportation incentives that the government of Rabat offers. The estimations of the sector indicate that, in less than a decade, Morocco will be able to attain a production of 3.2 million tonnes, a figure that is very near to the average Spanish total.
Spain reached a record exportation figure during last year of 3,644,000 tonnes. Germany is the top receiver of Spanish mandarins, with a total figure of 368,050 tonnes, but the competition between the large chains and the special discount offers mean that this country is becoming less and less attractive. It is becoming almost commonplace to find that a kilo of citric fruits is cheaper in Germany than in the producing country, Spain.
Russia, the biggest market in the world
Russia needs to go to external markets in order to cover its strong internal demand. Citric fruits have become the second most popular fruit category, after the apple. The growth of its population, which is enjoying greater spending power, and the adoption of healthier habits are the causes of this important growth in demand. The Autonomous Region of Valencia alone exported products to the value of 300 million euros and has become the Spanish region with the second largest distribution in Russia, which is the fourth world destination outside the European community for Valencian production.