Mexican citrus faces dual threat

According to Cesar Cortes Bello, the President of the Persian Lime Product System, the start of 2021 will present difficulties for producers and packers of tropical fruits and avocados.

Cortes stressed that “exports in January and part of February will be very slow, [and] we must prepare for March and April as shortages are expected,” as reported by El Heraldo.

Strong floods in the South-Southeast of the country affected the production in its quality, as well as a small shortage in the center of the country in the aforementioned months, Cortes says.

Volumes (in KG) of limes from Mexico in the US Market

Source: USDA Market News via Agronometrics.
(Agronometrics users can view this chart with live updates here)

Because of this, Cortes called on the states of Veracruz and Oaxaca not to speculate on prices in January.

“It’s better to make moderate cuts to avoid poor quality limes so that when the United States opens its demand to 100 percent, there is the opportunity to sell them, especially to the states of New York and California, which have the biggest demand for lime and Mexican avocado,” Cortes says.

Cortes says demand had fallen by more than 70 percent because of the pandemic and hopes that everything will change and that the winter season doesn’t last too long in the U.S.

He insisted that producers make moderate cuts to maintain supply throughout the year and avoid shortages, at the end of the year the purchase of lime were between four to five pesos per kilo of excellent quality.

“Sadly, this week several exporters had a poor-quality product, and prices decreased by 35 to 40,” he says.

Price (in USD) of limes from Mexico in the US Market

Source: USDA Market News via Agronometrics.
(Agronometrics users can view this chart with live updates here)

He argued that this situation is worrying for the months of greatest demand since some producers are betting on speculations and generating anticipated harvests to sell at high prices in exchange for a shortage in the rest of the year.

Citrus production

Since the middle of last year, producers of citrus fruits such as mandarin, orange, and grapefruit observed that the 2020 harvest could be reduced, due to the severe droughts that hit the country, as reported by El Financiero.

It is projected that citrus production would close 2020 with a fall of up to 50 percent annually. While this is bad news for Mexico, is not for U.S. producers, who consider that the collapse in the citrus production will reduce imports or oranges, mandarins, and grapefruits in the U.S.

This makes them hopeful it will increase the prices of its products and make better use of the domestic market.

The News in Charts is a collection of stories from the industry complemented by charts from Agronometrics to help better tell their story.

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