THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Reprt - public distributin Date: 2/11/2019 GAIN Reprt Number: Argentina Citrus Annual Lemn, Orange and Tangerine Apprved By: Lazar Sandval Prepared By: Maria Julia Balbi Reprt Highlights: Fr MY 2018/2019, Pst frecasts a fresh lemn prductin recvery t 1.60 millin metric tns with sweet citrus prductin estimated dwn t 500,000 metric tns fr ranges and 280,000 metric tns fr tangerines. Fresh lemn exprts are frecast t increase t 290,000 metric tns while range and tangerine exprts fall t 50,000 metric tns and 30,000 metric tns, respectively. After regaining market access in 2017, Argentina exprted 10,640 metric tns f fresh lemns t the U.S. in 2018 with exprts in 2019 expected t cntinue an upward trend.
Executive Summary: Fresh lemn prductin fr MY 2018/2019 is frecast up t 1.6 millin metric tns due t gd weather cnditins during the seasn. Orange and tangerine prductin will fall t 500,000 metric tns and 280,000 metric tns, respectively, n expectatins f smaller prductin and lwer investment in grve management that stalls prductivity gains. MY2018/19 lemn exprts are estimated at 290,000 metric tns driven by strng supply and psitive price signals while range and tangerine exprts are prjected dwn t 50,000 metric tns and 30,000 metric tns, respectively, n lwer prductin and falling cmpetitiveness in glbal markets. Dmestic cnsumptin f lemns fr MY2018/19 is frecast unchanged at 100,000 metric tns frm the previus year, with range and tangerine cnsumptin dipping t 230,000 metric tns and 150,000 metric tns, respectively, due t reductins in supply and dmestic demand. Cmmdities: Lemns, Fresh Oranges, Fresh Tangerines/Mandarins, Fresh Prductin: Lemns Fr MY 2018/2019, fresh lemn prductin is frecast t rebund t 1.6 millin metric tns (MMT), cmpared t the previus calendar year, due t favrable grwing cnditins. Fr MY 2017/2018, fresh lemn prductin is revised dwnward t 1.50 MMT frm the previus USDA fficial estimate f 1.55 MMT. Althugh adverse weather affected the main lemn grwing regin, the impact was less severe than expected and the quality f the fruit remained gd. Fr MY 2016/2017, fresh lemn prductin remained unchanged at 1.45 MMT, in line with USDA fficial estimates. Genva and Eureka are the main lemn varieties grwn in Argentina. Oranges and Tangerines Fr MY 2018/2019, fresh range and tangerine prductin is prjected t decrease t 500,000 metric tns (MT) and 280,000 MT, respectively. As the trees are expected t cycle thrugh a lighter fruit blssm and negative returns squeeze financial resurces fr reinvestment in grve management, yields will be negatively affected.
Fr MY 2017/2018, fresh sweet citrus fruit prductin is revised upwards t 600,000 MT fr ranges and 350,000 MT fr tangerines frm fficial estimates, as drught impacts during the prductin seasn prved less significant than expected by the private sectr. Pst estimates fr fresh range and tangerine prductin in MY 2016/2017 remains unchanged at 700,000 MT and 320,000 MT, respectively, frm USDA fficial estimates. The main range varieties grwn in nrthwest Argentina are Hamlin, Pineapple, Rbertsn and Navel and in the nrtheast are Navel, Salustiana and imprved Valencia (Midnight, Delta Seedless). The main tangerine varieties are Clementina, Clemenvilla, Ellendale, Malvasi, Mntenegrina, Murctt, and Ortanique. Expansin f sweet citrus includes seedless varieties, such as Tang fr ranges, and Clementines and Clemenules fr tangerines. Area Planted Fr 2017/2018, area planted t lemns is frecast t remain unchanged at 48,000 hectares, in line with fficial estimates, with n change expected fr 2018/2019. Nevertheless, tree remval and resetting is prjected t increase the plant per hectare rati and imprve prductive efficiency and yields. Fr sweet citrus, area planted is expected t decrease in MY 2018/2019 due t the ecnmic crisis that the sectr is facing and the lack f incentives fr investment. Planted area t ranges is estimated at 39,000 hectares, frm 41,000 hectares planted in MY 2017/2018. Planted area t tangerines is prjected at 25,000 hectares, frm 28,000 hectares planted the previus year. Prcessing Lemns Fresh lemns fr prcessing in MY 2018/2019 are expected t increase t 1.21 MMT frm MY 2017/2018 levels due t increased prductin. Fr MY 2017/2018, fresh lemns fr prcessing are frecast dwn t 1.13 MMT, frm the fficial estimate f 1.18 MMT, due t lwer prductin. Pst estimate fr lemn fr prcessing in MY 2016/2017 remains unchanged at 1.12 MMT frm fficial estimates. In general, as industry executes strict quality standards fr fresh lemn exprts, a high vlume f fruit will cntinue t be allcated fr prcessing. Oranges and Tangerines Fresh ranges and tangerines fr prcessing in MY 2018/2019 are estimated t fall t 223,000 MT and 100,000 MT, respectively, frm the previus year due t lwer prductin. Fr MY 2017/2018, sweet citrus fruit fr prcessing is frecast t increase significantly t 257,000 MT fr ranges and 130,000 MT fr tangerines, respectively, frm USDA estimates, due t larger prductin than expected.
Fr MY 2016/2017, Pst estimates fr bth range and tangerine fr prcessing remained unchanged at 273,000 MT and 110,000 MT, respectively, cmpared t fficial estimates. Investment Larger prducers cntinue t invest in the replacement f unprductive trees and in the genetic materials t imprve yields althugh capital investment in area expansin is expected t be marginal and fcused in the prvinces f Salta and Jujuy. The industry is als investing in prcessing and packing facilities, irrigatin, and research and develpment prjects in anticipatin f expanding exprt markets, such as the United States. Cnsumptin: Lemns Fr MY 2017/2018, Pst estimates that lemn cnsumptin will remain unchanged at 100,000 MT frm fficial estimates, and n change is expected fr MY 2018/2019. Fr MY 2016/2017 cnsumptin remained stable at 90,000 MT, in line with USDA fficial estimates. Oranges and Tangerines Fr MY 2018/2019, dmestic cnsumptin f fresh ranges and tangerines is frecast t decrease t 230,000 MT and 150,000 MT, respectively, due t lwer supply and a lss f cnsumer purchasing pwer due t dmestic ecnmic cnditins. Fr MY 2017/2018, dmestic cnsumptin f fresh ranges and tangerines is expected t increase t 280,000 MT and 180,000 MT, respectively, due t larger prductin. Fr MY 2016/2017, Pst estimate fr dmestic cnsumptin f ranges and tangerines remains stable at 350,000 MT and 169,000 MT, respectively, frm fficial estimates. Trade: Exprts Lemns Fresh lemn exprts in MY 2018/2019 are frecast t increase t 290,000 MT as expected prductin increases flw ut in respnse t exprt pprtunities in several freign markets. Pst estimates f fresh lemn exprts in MY 2017/2018 is revised dwn t 265,000 MT frm the fficial estimate f 270,000 MT. Lemn exprts in MY 2016/2017 ttaled 241,000 MT, cnsistent with fficial estimates. Cmpared t ther reginal industries in Argentina, such as sweet citrus, which has seen its cmpetitiveness fall, the fresh lemn exprt business remains prfitable despite high csts. Hwever, if prductin csts, such as labr, inputs, energy, inland and cean freight and inflatin rates, estimated at 45 percent fr CY 2018,
cntinue t rise, the lemn sectrs cmpetitiveness will suffer. Furthermre, althugh the depreciatin f the Argentine pes in 2018 made exprts mre cmpetitive in freign markets, a reinstatement f exprt taxes, a decrease in exprt rebates and high interest rates this year partially ffset that advantage. Oranges and Tangerines Fr MY2018/2019, exprts f sweet citrus are frecast t decrease t 50,000 MT fr ranges and t 30,000 MT fr tangerines, due t a drp in prductin and strng cmpetitin frm ther Suthern Hemisphere prducers, primarily Suth Africa. Fr MY 2017/2018, range and tangerine exprts are expected t increase t 68,000 MT and 40,000 MT, respectively, due t an increase in prductin, but remain significantly lwer than histrical levels f arund 150,000 MT and 100,000 MT, respectively, due t challenging dmestic ecnmic cnditins. Fr MY 2016/2017, Pst exprt estimates remain stable at 80,000 MT fr ranges and 41,000 MT fr tangerines, in line with fficial estimates. Exprt Destinatins Argentine fresh sweet citrus is exprted t abut 60 markets. The main exprt destinatins (market share by vlume) in CY 2017 and January-September 2018 were as fllws: Fresh Citrus Fruit Destinatin Market Share % 2017 Jan-Sep 2018 Lemns EU 68 70 Russia 18 15 Oranges EU 51 86 Paraguay 35 8 Russia 4 4 Tangerines Russia 49 48 Philippines 16 27 Canada 13 14 Indnesia n/a 7 UAE n/a 2 Singapre n/a 1 EU 4 0 Surce: FAS Buens Aires, based n data frm the Glbal Trade Atlas (GTIS) Fr MY 2018/2019, the Argentine citrus sectr lks t capitalize n a gradual expansin in Asian markets. In 2018, Argentina exprted its first shipment f fresh lemns t Japan under a stringent cld treatment plan thus creating ptimism abut access t the Chinese market which impses similar phytsanitary imprt requirements. Lemn exprts were interrupted in 2005 when China established cld treatment fr all citrus
fruit, hwever, the Chinese market remains pen t fresh sweet citrus varieties. Since 2017, Argentina has had access t Krea fr ranges and t Indnesia and the Philippines fr lcal citrus fruit. Als in 2017, Argentina regained market access t the U.S. with exprts during the 2018 marketing seasn ttaling 10,640 MT. The Brazilian market was pened t all Argentine citrus fruits n May 9, 2017. Althugh Argentine exprters have high expectatins, especially fr sweet citrus, they cntinue t face cmpetitive challenges in this market. Frm January-September 2018, the EU remained the largest exprt market fr Argentine fresh lemns with a 70 percent market share, fllwed by Russia, with a 15 percent share. Orange exprts t the EU increased significantly t 86 percent, and exprts t Paraguay and Russia decreased t 8 and 4 percent, respectively. Fr tangerines, Russia remained the largest exprt market with 48 percent share fllwed by the Philippines with a 27 percent share and Canada with 14 percent. Tangerine exprts t traditinal markets, such as the EU, have decreased ver the past few years t becme negligible in 2018 due t a lack f cmpetitiveness and strng cmpetitin frm Suth Africa. Imprts Citrus imprts are expected t remain negligible in MY 2018/2019 as Argentina is a net citrus fruit exprting cuntry. Fruit imprt vlumes will remain limited as lcal fruit prductin is sufficient t supply the dmestic market. Plicy: Imprt and Exprt Regulatins In December 2015, the Argentine gvernment lifted exprt taxes n all fruits. In additin, ne year later, exprt rebates were increased fr several prducts, including citrus fruit, t prvide supprt t reginal rural ecnmies. Hwever, in 2018, the gvernment reinstated exprt taxes and reduced exprt rebates n all fruits t generate gvernment revenue in respnse t the cuntry s ecnmic and financial crisis. Exprt and imprt tariffs fr all citrus types are as fllws: Exprt and Imprt Tariffs All Citrus Fruit (HTS cdes: 080510, 080550, 080520, 080521, 080522, 080529) Fr cuntries utside MERCOSUR AREA % Imprt Tariff 10.00 Statistical Tax 0.50 Exprt Tax 12 Exprt Rebate fr cases cntaining less than 16 kg. 2.50 Exprt Rebate fr cases cntaining 16 20 kg. 1.25 Exprt Rebate fr cases cntaining mre than 20 kg. 1.00 Fr cuntries within MERCOSUR AREA Imprt Tariff 0.00 Statistical Tax 0.50 Exprt Tax 12 Exprt Rebate fr cases cntaining less than 16 kg. 2.50 Exprt Rebate fr cases cntaining 16 20 kg. 1.25 Exprt Rebate fr cases cntaining mre than 20 kg. 1.00 Surce: FAS Buens Aires based n data frm Tarifar
Phytsanitary Issues Citrus Greening: In July 2014, a nn-cmmercial case f Huanglngbing (HLB) was fund in Mcreta, Prvince f Crrientes (Nrtheastern regin f Argentina clse t the brder with Uruguay). The Argentine gvernment immediately implemented its mnitring system in the area, as per the Natinal HLB Preventin Prgram (created by Secretariat f Agriculture Reslutin N. 517/2009, and ratified by Natinal Law N. 26.888/2013, and SENASA Reslutin 336/14), and subsequently fund n ther signs f the disease. On July 4, 2012, APHIS was fficially infrmed that a case f HLB had been reprted in ne infected tangerine tree in Puert Desead, Prvince f Misines (Nrtheastern regin f Argentina clse t the brder with Brazil). The infected tree was destryed as a precautinary actin. In additin, SENASA intensified the surveillance fr citrus species in the area with sampling in 150 premises with negative results fr bth: the symptms and vectr (Diaphrina citri) f the disease. SENASA stated that, since the lcatin is nt a citrus cmmercial area, and it is surrunded by natinal parks, it is likely that this was an illegal intrductin frm utside the cuntry. Despite this, Diaphrina citri was reprted in ther areas f Argentina. A few additinal cases were detected in Misines and Crrientes Prvinces and, in 2016, fr the first time, in citrus cmmercial areas (i.e. vectr presence, n disease). In Nvember 2017, the Ministry f Agrindustry and the Argentine Citrus Federatin (FEDERCITRUS, in Spanish) signed an agreement t wrk jintly n the preventin f HLB int Argentina. In Nvember 2018, the Gvernment f Entre Ris Prvince, thrugh Decree #3757, declared a Phytsanitary Emergency in the prvince after finding the HLB vectr in cmmercial farms and in urban areas. Marketing: Prices Internatinal (FOB) Prices fr Fresh Citrus Fruit In 2018, FOB prices fr fresh lemns remained strng due t lwer fruit supplies in the Nrthern Hemisphere, hwever, they did nt exceed 2017 prices, which were very high thrughut the marketing seasn, especially in the EU. Overall, range FOB prices increased slightly while tangerine prices decreased, cmpared t the previus marketing year, primarily during the mid-marketing seasn. The highest FOB prices fr lemns during 2018 was $978/MT (August); fr ranges, $564/MT (July); and fr tangerines, $1,000/MT (March). Fr all three citrus fruits during 2018, FOB prices remained relatively high cmpared t 2017 prices and, fr ranges and tangerines, were still nt sufficient t cver csts thus resulting in increased financial difficulties fr the lcal fruit sectr and damaging Argentine exprters cmpetitiveness in exprt markets. Lemn FOB Prices (US$/MT) 2016 2017 2018 January 699 -- -- February -- 1,100 -- March 948 1,096 811 April 991 980 916 May 1,036 1,019 956
June 1,036 1,047 973 July 1,037 1,047 972 August 1,050 1,034 978 September 1,073 988 840 Octber 946 1,000 n/a Nvember -- 1,111 n/a December -- 1,111 n/a Average 980 1,048 Orange FOB Prices (US$/MT) 2016 2017 2018 January -- -- -- February -- -- -- March -- -- -- April 110 -- -- May 257 261 -- June 540 518 123 July 494 511 564 August 495 508 539 September 481 473 524 Octber 591 130 -- Nvember 265 -- n/a December -- -- n/a Average 370 400 n/a Tangerine FOB Prices (US$/MT) 2016 2017 2018 January -- 219 -- February 704 849 -- March 857 905 1,000 April 846 914 949 May 871 971 903 June 859 963 925 July 922 1,028 907 August 909 958 884 September 909 884 840 Octber 188 220 -- Nvember 205 -- n/a December 215 -- n/a Average 680 791 n/a
Dmestic Retail Prices fr Fresh Citrus Fruit FAS Buens Aires based n GTIS trade data Citrus Fruit US$/kg Lemn Orange (Navel) Orange (Valencia) Tangerine (Murct) 1.02 1.53 0.76 1.01 US$1 = AR$39.10 (December 19, 2018) Surce: FAS Buens Aires based n supermarket prices Prmtin ALL LEMON Tested & Certified fr Exprt is an audit prgram f the 16 leading lemn prducers/exprters in Argentina that certifies quality standards fr exprt f abut 80 percent f Argentina s ttal lemn prductin. Lemns identified under ALL LEMON parameters must cmply with: Safety Traceability Freshness Firmness Durability High juice cntent Skin in ptimal cnditin Balanced clr Unifrm frmat. In January 2015, ALL LEMON fficially launched Think Lemn, a wrldwide marketing campaign, which includes a thrugh digital surce f infrmatin abut lemns. Its main bjective is t infrm cnsumer s abut the uses, applicatins and nutritinal aspects f fresh lemns. (Surce: http://www.all-lemn.cm) Prductin, Supply and Demand Data Statistics: Lemns/Limes, Fresh 2016/2017 2017/2018 2018/2019 Market Begin Year Jan 2017 Jan 2018 Jan 2019 Argentina USDA Official New Pst USDA Official New Pst USDA Official New Pst Area Planted 48000 48000 48000 48000 0 48000 Area Harvested 45000 45000 45000 45000 0 45000 Bearing Trees 11000 11000 11000 11000 0 11000 Nn-Bearing Trees 800 800 800 800 0 800 Ttal N. Of Trees 11800 11800 11800 11800 0 11800 Prductin 1450 1450 1550 1500 0 1600 Imprts 3 3 1 1 0 0
Ttal Supply 1453 1453 1551 1501 0 1600 Exprts 241 241 270 265 0 290 Fresh Dm. Cnsumptin 90 90 101 100 0 100 Fr Prcessing 1122 1122 1180 1136 0 1210 Ttal Distributin 1453 1453 1551 1501 0 1600 (HECTARES),(1000 TREES),(1000 MT) Oranges, Fresh 2016/2017 2017/2018 2018/2019 Market Begin Year Jan 2017 Jan 2018 Jan 2019 Argentina USDA Official New Pst USDA Official New Pst USDA Official New Pst Area Planted 43000 43000 43000 41000 0 39000 Area Harvested 41000 41000 41000 39000 0 37200 Bearing Trees 20200 20200 20200 19300 0 18300 Nn-Bearing Trees 1700 1700 1700 1600 0 1500 Ttal N. Of Trees 21900 21900 21900 20900 0 19800 Prductin 700 700 450 600 0 500 Imprts 3 3 3 5 0 3 Ttal Supply 703 703 453 605 0 503 Exprts 80 80 40 68 0 50 Fresh Dm. Cnsumptin 350 350 260 280 0 230 Fr Prcessing 273 273 153 257 0 223 Ttal Distributin 703 703 453 605 0 503 (HECTARES),(1000 TREES),(1000 MT) Tangerines/Mandarins, Fresh 2016/2017 2017/2018 2018/2019 Market Begin Year Jan 2017 Jan 2018 Jan 2019 Argentina USDA Official New Pst USDA Official New Pst USDA Official New Pst Area Planted 28000 28000 28000 28000 0 25000 Area Harvested 26000 26000 26000 26000 0 23000 Bearing Trees 14100 14100 14100 14100 0 12600 Nn-Bearing Trees 1530 1530 1530 1530 0 1400 Ttal N. Of Trees 15630 15630 15630 15630 0 14000 Prductin 320 320 250 350 0 280 Imprts 0 0 0 0 0 0 Ttal Supply 320 320 250 350 0 280 Exprts 41 41 25 40 0 30 Fresh Dm. Cnsumptin 169 169 150 180 0 150 Fr Prcessing 110 110 75 130 0 100 Ttal Distributin 320 320 250 350 0 280 (HECTARES),(1000 TREES),(1000 MT)