Argentina’s citrus sector faces further headwinds after a delayed start to the 2023 season due to drought, with the country facing the world’s worst inflation of over 100% and currency challenges. Despite these challenges producers say they have long term investments and commitments to honour and will continue to supply world markets.
According to citrus growers and exporters from Tucuman and other production areas of Argentina, who due to the challenges are very sensitive about releasing information and asked to remain anonymous: “The season started late due to weather problems. There was a significant drought, and in April, there were periods of rain, which caused the harvest to only begin later in May with a reduced volume.”
Official industry sources contacted, did not respond in time for publishing.
Although the Argentinian Government declared a state of agricultural emergency for the main lemon production province of Tucuman, producers and exporters say they are trying do to their best to “just hang in and survive the tough period our country faces.”
Argentina had some rain during last month (April), but producers says it came too late to improve the sizing of the early citrus fruit that was ready for harvesting. “Small-sized fruits are currently prevailing. It is expected that we will export a smaller volume to the United States. Europe continues to be the largest recipient of Argentine fruit. Market prices should improve. At the moment we will only do programs with organic lemon.”
The much weaker currency to the dollar and 108.8% year-on-year inflation increase in April 2023 has seen a more than doubling in prices of most consumer goods. Earlier this week Argentina’s government announced the lifting of import tariffs to get more food imported and make it more affordable for people. Interest rates were also increased to the highest in the world at 97% to help stem the inflation increases, but it will take a while to work through the system. Experts are also uncertain if this aggressive hiking of rates will work.
The agricultural state of emergency for Tucuman’s lemons, as stated on the website of Argentina’s main citrus body FederCitrus, is to provide tax relief for one year. Factors that led to the declaration are said to be due to the increased citrus production of Uruguay and South Africa.
Argentina’s President Alberto Fernández, who is facing a crucial election in October this year, has met with the US President and the IMF to transfer loans to the country sooner to help avert the fiscal crises. His government is trying to avoid a collapse of the currency and prevent the worse from happening in Argentina to the detriment of the 46 million citizens. The new measure just announced to import food at zero tariffs is not likely to affect exports a producer commented.
Another grower and exporter has commented on the internal as well as market challenges Argentina’s citrus sector faces. “At least the aid on having a special Argentinian peso for citrus exports is on its way, which could help. So far the season has been slow, with less fruit than usual and smaller sizes, but luckily rains started just in time so that varieties now from Nova onward we should start having normal sizes and almost as normal quantities. Markets are strong, with slightly better prices in some and the freight costs, which are going back to normal numbers.”
“Canada seems to have a big need for fruit now that in two to three weeks there won’t be any more mandarins from the northern hemisphere. The Russian rouble to USD seem to have stabilised on 80, which earlier in May looked like it was going to go back to 100, which would be terrible. But they are still asking for fruit as usual and even though we are shipping less than previous years they are still our strongest customers. The Philippines are also having some needs but prices are not as high as we would like for such a distant destination and also because now they accept South African mandarins.
“Europe is having some real needs on oranges as they are ending their season (and Egypt’s) sooner than usual, but because they put extra restrictions to South Africa and our usual restrictions, I don’t know how easy it will be for them to have the fruit they need! We would love to be able to work more with the EU but the restrictions and customs fees really kill us,” the producer stated.
“Although we have been working with lemons for so many years, no year is the same,” another Argentinian grower concluded.