Demand for lemons currently exceeds supply and as a result, the market is facing a shortage. Although Mexico's lemon deal started about a month ago, the country is off to a slow start because of weather. "Due to rain and moisture, harvesting has been limited," says Ronnie Cohen with Vision Global Group. In addition, the U.S. domestic lemon season hasn't really started yet, so the country is fully dependent on imports currently. "While California stored fruit from this past season's harvest, supply wasn't enough to bridge the gap to the new season."
Imports from Argentina
To fill the gap in supply, Vision imported lemons from Argentina, but that deal is now over. "We will receive a few more containers in the next two weeks, but those will be the last arrivals for the season," commented Cohen. Argentina could have shipped a larger volume to the U.S., but the country decided to adjust and strategically ship less. "They were looking to receive a high price to compensate for uncertainty and tariffs." When growers and shippers couldn't get the price, they hoped for, Argentina shifted gears and focused on other markets. In addition to Argentina, lemons were also imported from Chile, but the country didn't send their usual export volume to USA.
According to Cohen, the shortage may last another 30 days, but before the end of October, the market will correct itself. By that time, Mexico's production will have increased and domestic supply from California will start up.
© Vision Global Group
Price disparity in limes
The landscape in the lime market looks different as there is no supply shortage. "Lime production areas are spread through various regions, so rain didn't impact the lime production zones as much as the lemon region. As a result, harvest continued without interruption," mentioned Cohen.
However, small fruit is more abundant than large size fruit and as a result, there is a price disparity. Larger fruit – size 110 and 150 – peaks at $24 - $26. Smaller fruit – size 230 and 250 – on the other hand, is priced between $14 and $16. "There is about a $10 spread between large and small sizes."
Lime consumption has witnessed organic growth in recent years. As a result, there is a need for the category to become more organized. Currently, the formation of a lime committee is in progress, but it may take two years to be up and running. The early organization is evolving under the Texas International Produce Association (TIPA) c/o Lime Committee and Cohen is associated.
For more information:
Ronnie Cohen
Vision Global Group, LLC
Tel: (+1) 917-930-7178
[email protected]
www.visionglobalgroup.com