APS2017: The changing dynamics of global mandarin trade

APS2017: The changing dynamics of global mandarin trade

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Global mandarin production has shot up six-fold since 1970 to around 30 million metric tonnes (MT), as with this leap have come some significant changes in global trade dynamics. 

Speaking at the Amsterdam Produce Show & Conference, citrus industry veteran Daniel Kass explained that while the mandarin category back then represented just 16% of citrus production, by 2015 that figure had nearly doubled to 27%, far surpassing the rate of growth for citrus as a whole.

He said the shift from seeded to seedless mandarins over the last couple of decades was a key factor behind the sharp increase in the proportion of global citrus volumes represented by easy peelers over recent years.

In tandem with these changes has come the explosion of trade, from what was in 2000 a far less complex global picture than what it is today.

Click here to see the Powerpoint presentation from the seminar, including graphs and graphics

Kass said that a couple of decades ago the Mediterranean areas were the leading seedless mandarin production areas and had been largely focused on selling in the European market.

“The US access [from those areas] really took off during the 1990s. So you had the Mediterranean areas, mainly Spain and Morocco…now coming into North America,” he said.

He explained while there was of course other trade in seedless mandarins taking place elsewhere around the globe in 2000, the vast majority was represented by supplies coming out of Mediterranean countries and sold either in Europe or North America.

“Then we jump ahead just 15 years later, and boom. There are seedless mandarins grown everywhere in the world and they move around everywhere in the world,” he said.

“It’s not just Mediterranean suppliers supplying Europe and a little bit to the US – now the US is a mandarin grower going into Asia. We [the US] import citrus and easy peel mandarins from the Southern Hemisphere, South Africa now goes into Asia., etcetera.”

He added that while his presentation was focused on the seedless mandarin trade, these dynamics were also representative of global citrus now.

“I was in China earlier this year in the wholesale market I saw Egyptian citrus, Spanish, Moroccan, Turkish, and 15 years ago I wouldn’t have seen any of that.

“So now…the trade is much more sophisticated and global, and when we think about the effects on the global market, it’s just not ‘the California Navel crop is light this year so the market’s going to be strong’, but we have to think about what’s happening in Egypt or South Africa and other suppliers.

“To me, it’s quite interesting how it’s impacted the business. There are 195 countries in the world and 140 grow citrus, and that’s the competitive world that we live in today in terms of the citrus trade.”

Business getting “tighter and tighter” in Europe

Also taking part in the seminar discussion was Marcel van der Welle of Netherlands-based produce importer Van Ooijen Citrus, who was asked by Kass how business had evolved in Europe over the last couple of decades.

“The growers and suppliers now have a lot more options. So whereas traditionally they would send everything to Europe and it would work out just fine, that has completely changed,” he said

He added that before importers would have simply received the consignments, now fixed-price programmes had become more commonplace.

“They are saying ‘we can sell it to Asia or to the Middle East and they pay us that kind of money, if you want to have the fruit that is the option that you have’.”

He also said the margins had been getting smaller.

“It’s not easier than it used to be, but that’s the way it is,” he said.

“In the Netherlands specifically you see that the [price] levels in the supermarkets are at the lowest of all of Europe. Wherever we go, France, Switzerland, Scandinavia, Germany, the prices in the retail are more or less always higher than in the Netherlands…so it gets tighter and tighter.”

Kass pointed out that the US was the number one returning market for citrus in the world, followed by Asia and then Europe – the latter of which he described as “so much more competitive” with “fewer restrictions to access the market, let alone the retail landscape and the hard discounters, things that have been born here in the European market.”

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