The situation of the lemon and orange supply in the processing industry presents unique challenges and opportunities this year due to global and local market conditions. "For oranges, we are facing a significant worldwide shortage, exacerbated by production losses in the United States and Mexico, as well as low yields in Spain due to severe droughts. This has led to prices reaching record levels globally and very little orange being processed this year. The scarcity and high cost of the raw material has resulted in a reduction of our stocks and in our competitiveness being affected," says Diego Costa, commercial director of Riverbend Spain.
"In contrast, lemons are in a more favorable situation this year in Spain, with a production surplus compared to previous years which has allowed the industry better access to raw materials. However, the market remains highly competitive, especially as producers in other countries, such as Argentina, have lemon varieties that are specially intended for the industry, with up to 30% higher yields of juice, pulps and essential oils. This allows those producers to be more competitive."
"It is worth noting that Spain, unlike countries such as Argentina, is primarily focused on the export of fresh fruit, which forces the local processing industry to work with discarded fruit. This dependence on the discard market limits our ability to ensure a constant supply of raw materials, which in turn impacts our ability to meet the demand in a competitive market."
This campaign, in fact, in which the supply of oranges has decreased and that of lemons has been noticeably higher, "the price of orange derivatives has tripled, while lemons have seen a depreciation of almost 50% in recent years due to the excess production worldwide."
"In Riverbend's case, this atypical situation represents an opportunity, since the company has been primarily focused on lemons and is able to process more than 80,000 tons annually. The abundance of lemons will allow us to maximize our production and possibly increase our market share."
Riverbend, in fact, has spent 35 years devoted "to producing the best juices, concentrates, essential oils and pulp" since it was founded in 1988 in Santomera, Murcia, and has become an "undisputed leader in the supply of high-quality citrus ingredients for the food and beverage industry, as well as for sectors producing food aromas, fragrances and cosmetics," says Diego.
"Spain is facing the challenge of maintaining its competitive position in the European and global market"
The Spanish citrus industry holds a prominent position in the European market thanks to its leadership in the production and marketing of fresh lemons. However, in the field of processing, Spain is dealing with a complex market dynamic, facing strong competitors and significant challenges, says Diego.
"Unlike Argentina, which dominates the global lemon processing market, transforming approximately 85% of its production into derivative products, such as juices and concentrates, Spain only processes around 30% of its total lemon production, and the rest is allocated to the fresh market. This model reflects a preference for the added value of the fresh product, but also suggests that there is room for growth in the processing segment."
"Traditional competitors in the citrus processing market include Italy and Greece, while emerging markets, such as Turkey and South Africa, are gaining ground. The latter stand out for their growing production capacity and their advantages in terms of costs and yields, which makes things more challenging for Spain. The Argentinian industry, in particular, benefits from its integration with the agricultural sector, which allows it to access high-quality raw materials more quickly and at lower costs. As a result, its lemon derivative products are highly competitive globally."
However, a crucial aspect that is affecting the citrus processing industry is the limits in the global demand for juices and concentrates. "Overproduction can lead to a significant reduction in prices, affecting the profitability of producers and processors. Furthermore, in years with abundant fresh fruit productions, the entry of new competitors such as South Africa and Turkey can further complicate the marketing of both fresh fruit and processed products."
"In this context, Spain is facing the challenge of maintaining its competitive position in the European and global market. This could involve a greater investment in processing technology, the search for efficiencies in the supply chain, and adaptation to market trends, such as the growing interest in organic and sustainable products. Also, collaboration between producers, processors and the Government could be key to addressing these challenges, promoting innovative and sustainable agricultural practices, and exploring new markets for Spanish processed citrus products."
For more information:
Riverbend
Carretera de Abanilla 30
30140 Santomera, Murcia, Spain.
Tel.: +34 968 277 050
[email protected]
http://riverbend.es