Argentine lemon production to "rebound", orange volumes to fall

February 19 , 2019

Argentine lemon production is expected to rebound to 1.6 million metric tons (MT) in 2019 and exports are set to rise to 290,000MT, according to a U.S. Department of Agriculture (USDA) report.

The production rise in the world's top exporting country is attributed to favorable growing conditions and would compare to last season's 1.5 million MT. 

The increase in exports, from 265,000MT the previous season, is attributed to higher volumes available as well as opportunities in several foreign markets.

Argentina has recently re-opened the Japanese market, and is now gearing up for its second export season to the U.S., which re-opened for the country in mid-2017 following a 17-year hiatus. Argentina last year exported 10,640MT to the U.S. and is expected to ship more this season.

Meanwhile, orange production is projected to decrease from 600,000MT to 500,000MT, while tangerine volumes are set to decline from 350,000MT to 280,000MT. The USDA explained that as the trees are expected to cycle through a lighter fruit blossom and negative returns squeeze financial resources for reinvestment in grove management, yields will be negatively affected.

Government's policies could impact lemon industry's advantage

The USDA report noted that compared to other regional industries in Argentina, such as sweet citrus, which has seen its competitiveness
fall, the fresh lemon export business remains profitable despite high costs.

"However, if production costs, such as labor, inputs, energy, inland and ocean freight and inflation rates, estimated at 45 percent for 2018, continue to rise, the lemon sectors competitiveness will suffer," it said.

"Furthermore, although the depreciation of the Argentine peso in 2018 made exports more competitive in foreign markets, a reinstatement of export taxes, a decrease in export rebates and high interest rates this year partially offset that advantage."

In December 2015, the Argentine government lifted export taxes on all fruits. In addition, one year later, export rebates were increased for several products, including citrus fruit, to provide support to regional rural economies.

However, in 2018, the government reinstated export taxes and reduced export rebates on all fruits to generate government revenue in response to the country’s economic and financial crisis.

 

 

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