Previous Page Table of Contents Next Page

5. Horticultural products


General characteristics

· Citrus = 4 main commodities: oranges (70 percent of total output), tangerines, lemons/limes and grapefruits.

· Perennial crops that grow in tropical and “Mediterranean type” climates.

· A significant share of output is processed (40 percent for oranges and grapefruit).

· World’s most exported fruit in terms of value.

· Represents a significant source of income and employment for many developing countries.

Pattern of Production and trade

· Global production has risen steadily and was estimated at 100 million tonnes in 1998/2000 up 138 percent from 42 million tonnes in 1970/72 due to increased areas (+130 percent).

· The main producing countries are Brazil, the United States, China and the Mediterranean countries.

· World exports of fresh citrus have increased steadily, rising by 40 percent from 6.5 million tonnes in the 1970s to 9 million tonnes in 1998/2000.

Fresh citrus:

· The main exporting regions are the Mediterranean rim (with a predominance of Spain) and the United States. Exports have increased rapidly in Spain and some Southern Hemisphere countries (South Africa, Australia, Argentina), reflecting improvements in storage and transport technology.

· After a period of growth, per capita consumption of fresh citrus in developed countries has declined since the mid-1980s. It is still growing in developing countries.

Orange juice:

· The bulk of world supply is produced in only two areas: Florida, United States and Sao Paolo state, Brazil.

· Brazil is by far the largest exporter, followed at a distance by the United States.

· The EC is by far the largest importer, accounting for over 80 percent of world orange juice imports.

· The EC and Japan import overwhelmingly from Brazil.

· The United States and Canada source their juice in Florida, with some imports from Brazil.

· Consumption has increased strongly in developed countries, while it is still very low, albeit rising, in developing countries.

Economic, market and institutional structure

· Multitude of medium-sized firms involved in fresh citrus trade. Some trend towards vertical integration by certain producer groups.

· Trade in orange juice is dominated by a very small number of processing companies operating in Brazil and Florida. These companies tend to be vertically integrated.

· Fresh citrus prices vary greatly with crop size every year, depending on weather, diseases, tree cycle.

· Prices for concentrated orange juice were very low in late 1990s due to large inventories in both Brazil and Florida that led to a price war between large processors in Brazil. Prices have firmed up recently due to smaller crops and reduced inventory.

· Price elasticity of supply low due to long time needed to reach full productivity in citrus grove.

Trade policy

· Reduction in tariffs on imported citrus and juice as a result of Marrakech Agreement on Agriculture.

· Increasing number of trade disputes arising from bans on citrus imports on phytosanitary grounds.

· If agreed, Free Trade Area of the Americas might have significant impact on world orange juice trade.

· EC’s system of tariff-quota, minimum entry price and processing subsidy for citrus criticized.

· Accession of China to WTO expected to open new market for citrus.

Current issues

· Rise in not-from-concentrate orange juice consumption is the most significant development in orange juice market. May reduce market share of concentrated juice.

· Large Asian citrus-producing countries set to increase output (China, India, Pakistan).

· Consumption of fresh citrus expected to continue to decline in developed countries.

· Therefore, risk of fresh citrus surplus in the medium to long term.

Citrus - Production

Fresh citrus - Exports

Orange Juices - Exports

Fresh oranges - Exports. 1998 - 2000 avg. Volume

Orange Juice - Exports. 1998 - 2000 avg. Volume

Fresh oranges - Deflated Wholesale Prices


General characteristics

· Perennial crop that grows quickly and can be harvested all year round in all tropical regions.

· World’s most exported fruit in terms of volumes; ranks second in terms of value.

· Represents a significant source of income and employment for several tropical countries.

Pattern of production and trade

· Global production has risen steadily and was estimated at 65 million tonnes in 1999/2001 up 103 percent from 32 million tonnes in 1969/71 due to increased areas (+60 percent) and yields (+33 percent).

· Virtually all exported bananas are of the Cavendish type.

· World exports have increased steadily, rising by 97 percent from 5.9 million tonnes in 1969/71 to 11.6 million tonnes in 1998/2000.

· More than 8 out of 10 bananas exported are shipped from Latin America. The other exporting regions are Asia (mainly the Philippines), Africa (principally Cameroon and Côte d’Ivoire) and the Caribbean. Exports have increased in all regions but the Caribbean.

· Economies of some Latin American and Caribbean countries are highly dependent on banana exports

· Developed countries account for over 80 percent of world banana imports.

· Consumption has increased steadily over the past decade following the rise in production, but wide difference between developed countries and non-producing developing countries.

· International trade follows a regional pattern:

United States and Canada import from Latin America
Japan imports mainly from the Philippines
The EC imports from ACP (Africa-Caribbean-Pacific) countries and Latin America
Central and eastern European countries import from Latin America.

Economic, market and institutional structure

· World banana trade is dominated by a very small number of vertically integrated companies. The 5 largest banana firms account for some 80 percent of world exports. They own and operate large-scale plantations worldwide directly or through capital participation in local firms.

· Banana prices have fluctuated considerably. Due to oversupply, they reached a very low level in 1999-2000, forcing many small growers out of business and large companies to scale down their plantations. Prices somewhat recovered in 2001. They have been generally higher in the EC than in other major markets due to restricted market access.

· Demand has become rather price inelastic as banana is among the cheapest fruits in developed countries.

· Lag in production response to price fall due to high capital investments in plantations/shipping.

Trade policy

· Free market access in North America, central and eastern European countries and Japan.

· Tariff-quota system in the EC with preference given to ACP countries. Trade dispute and repeated changes in system disrupted trade throughout the 1990s. Dispute seems to be over now. EC committed to establishing a tariff-only system by 2006.

· Import restrictions in some banana-producing countries (e.g. Australia, Morocco, Turkey).

Current challenges

· Production surplus due to optimistic expectations on future demand (EC market reform, growth in emerging markets) and lack of control over new plantings (notably in Ecuador and the Philippines).

· Opening of EC market from 2006 might lead to further weakening of prices in Europe.

· Excessive use of agrochemicals has led to environmental and health problems in producing countries.

· NGOs have criticized banana companies for not complying with basic labour standards.

· As a result, new niche markets for organic, ecofriendly and fair-trade bananas have emerged.

· Little success in breeding pest resistant varieties; GM may be solution but market acceptance unsure.

· Low market prices are leading to a gradual shift of production to countries with lower labour costs.

BANANAS: World Production

BANANAS: World Exports

Bananas: Exports by major countries. 1998 - 2000 average (volume)

Bananas: Imports by major countries. 1998 - 2000 average (volume)

Bananas: Deflated Import Prices

Previous Page Top of Page Next Page