U.S. situation prompts more Mexican lime exports to EU, says Don Limón

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U.S. situation prompts more Mexican lime exports to EU, says Don Limón

Don Limón CEO Andreas Schindler discusses lime markets and better access to Mexican small growers, as well as budding sweet potato projects in Central America and West Africa.

A "lack of demand" in the U.S. is pushing more Mexican lime exporters to ship to Europe this year despite the effects of a weaker euro, according to Andreas Schindler of Germany-headquartered fruit trader Don Limón.

Don Limón invests in and collaborates with small-to-medium growers on 800 hectares of farms in Martínez de la Torre, Veracruz, and like most in the area it has a key focus on the U.S. market because of its geographical advantage, good returns and less sensitivity about quality compared to Europe.

"As far as I know the market in the U.S. per week is 500 to 600 loads, and Europe is maybe 100. Now it’s growing, sometimes you have 150 loads coming to Europe every week," he told www.freshfruitportal.com last week.

"Production was affected last month [June] by heavy rain but big volumes have been coming to Europe and the U.S. market is much more difficult at the moment with low prices that are just coming back.

"The price situation in Mexico is difficult because of a lack of demand in the U.S., and here in Europe I would say there is even an oversupply these last two weeks because there are huge volumes coming. It’s very complex," he said, adding at the moment the main European markets for the fruit were Spain and the Mediterranean.

But regardless of the ups and downs of markets, which is all part of the trade, Don Limón has made inroads in its Mexican partnerships in 2016 with added support from Germany's Federal Ministry for Economic Cooperation and Development (BMZ).

"We have a development project in Mexico supported by the German development organization and there we really increased quality at the origin," he said.

"The big part of the lime production is produced by small growers in Mexico and it’s very difficult to control this supply. We invested a lot to reach the production of small producers and get influence in the moment of growing, before harvesting.

"This is something revolutionary that we get access to these volumes of small producers that are normally out of control until they supply to our warehouse there."

He said BMZ came on board after Don Limón had demonstrated the success of previous ventures.

"We’ve been working with the small lime growers in Mexico for 10 years," he said

"We’d done trials already before, financing them by ourselves, but then we presented the project and we showed its impact, and that gives us access to donors to really help the small producers to supply good product to the Northern Hemisphere and fulfill the needs of supermarkets surrounding residues and GlobalG.A.P, etcetera.

"What we did to handle this changing market is to work very hard on quality and to gain markets in the channels we are already in and which we were able to stabilize, and establish new customers especially in the retail business where we offer new kinds of packages."

He emphasized Mexico could produce the fruit year-round but usually the bulk of lime exports went to Europe from May to September, given growers could fetch such good prices in the U.S. from December to May.

He said Brazilian supply was not so important at the moment but would come on stronger in September. In recent years exports have not been such a large focus for the Brazilian industry, but Schindler said the country's domestic crisis could lead to a new outward-looking approach.

"For the Mexicans the American market makes the music, as we say in Germany, and for Brazil that’s the internal market. They are the strongest economy in South America," he said.

"We have not seen the Brazilian limes in this strong need of exports in the last five or six years - they were not really pushing, but we can recognize in the last year there’s a strong interest from Brazilians to get back into Europe. There is a changing of export because of Brazilian national problems.

"Export is mostly driven by a lack of alternative – on the export market you need to be careful not to oversupply the market. In marketing they talk to us, they want to know what we are loading. We feel this interest and we are back on the stage with them because internally they have problems to sell these volumes."

Sweet potatoes on the rise

In terms of other socially-focused projects with small farmers, Don Limón has now been growing sweet potatoes on 200 hectares of farmland in Honduras and production is "strongly increasing".

Sweet potatoes in Honduras

Sweet potatoes in Honduras

"It is a high-value consumer product in the markets of the Northern Hemisphere like Europe, the U.S. and Canada, but in Central America and African countries it’s a product for the nutrition of a mass of people. That's why this product is so interesting for us.

"The [Bill and Melinda] Gates Foundation is financing a research program in Africa to grow sweet potatoes for local and national consumption, and there is increasing demand from the markets of the Northern Hemisphere

"We have this mix of economic development and feeding poor people while exporting to northern markets - it gives people income and the rest of the sweet potatoes stay there for nutrition."

He said the company was working on its first trials in Ghana and the Ivory Coast now although there is no production as yet, while there are also plans to grow the crop for export from the Democratic Republic of Congo and Nicaragua.

"Normally the big supplier of sweet potato was always Israel, but then they totally disappeared after the crash of Agrexco, and then they switched to a U.S. company Scott Farms which was very successful, which established their markets, especially the U.K. which is the biggest market.

"But we are sourcing from lower income countries. You cannot do high automatization like you do with normal potatoes, and that helps for social development."

Headline photo: www.shutterstock.com




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