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PRESENT SITUATION AND MEDIUM-TERM OUTLOOK |
1. In compliance with the Group's instructions to prioritize the monitoring of emerging citrus markets, this document summarizes the most important aspects of the present and medium-term tangerine market in the United States (US) which , although small in absolute terms, has shown rapid growth in recent years and has the potential to import greater quantities, thereby providing citrus export opportunities for a number of developing countries.
2. The growing importance attached to a healthy diet, in the US, European Community (EC) and other developed countries, has raised the consumption fresh fruit and vegetables because of the associated fibre and vitamin intake. Fruit is the food commodity with the highest growth in the US in the last fifteen years, both in absolute and relative terms, rising more than 35 percent, followed by cereals with 30 percent, and far above meat with 8 percent.
3. While the US is the leading consumer of citrus fruit (fresh and processed), its citrus consumption has not kept pace with its consumption of fruit in general, as it has remained at 50-60 kg/pers/year (Figure 1). Consumption of fresh citrus continues at about 11 kg/pers/year, which is far below that of other producer countries such as Spain, Italy and Greece which consume a corresponding 30 kg/pers/year and a total of 38 to 49 kg/pers/year (EC, 1997).
Source: Fruits and Tree Nuts, Situation and Outlook Report, Oct. 1996.
4. Tangerine production in the US is relatively insignificant in overall terms, accounting for just over 5 percent of total citrus production in the last three years, and has failed to match the increase of other citrus fruit. Yet, the higher tangerine imports point to growing demand.
5. Tangerine consumption in the US is negligible in absolute terms, with total consumption (domestic production + net trade balance) at just over 0.95 kg/pers/year. However, consumption is definitely being stimulated by the importation of clementines, a premium product that is easy to peel, tasty and seedless, which are all attributes that appeal strongly to the US consumer, according to recent market surveys [ Orts, V., 1997. Report on clementines campaign USA (1996/97), New York.] and evidenced by the increase in clementine shipments to the US.
6. Analysis of fruit consumption trends and configuration in the US indicates that the higher demand for imported tangerines has not been at the expense of other fruit but, rather, in direct competition with other citrus fruit, mainly oranges and traditional tangerine varieties. This is confirmed by importers and wholesale traders.
7. Spain is the main supplier of tangerines to the US, with imports rising from 8 650 tonnes in 1993/94 to over 35 000 tonnes in 1997/98 (Figure 2). Spanish tangerines took about 80 percent of the US import total in 1996/97, followed by Mexico with 10.9 percent and a season essentially from November to January, and Australia in third place with 3.6 percent and the main supplier during the "off-season" period from July to September (cf Table 1).
8. Spanish imports are mainly clementines (marisol, oronul, oroval, clemenul, clementina fina and hernandina), the only other supplier being Morocco which exports the clementina fina.
Source: Compiled using data from SOIVRE [ SOIVRE: Servicio
Oficial de Inspección, Vigilancia y Regulación de la
Exportación (Spain).] .
9. The markets for imported tangerines are concentrated along the northeast coast and in the Great Lakes region (New York, Boston, Philadelphia and Chicago) which absorb over 80 percent of imports, while California (Los Angeles and San Fransisco) receives somewhat less than 10 percent, which is logical given that this is the second tangerine producing area in the US, after Florida.
10. Transport from country of origin is almost exclusively by ship and is paid for directly by the exporter. By way of example, the cost between Spain and the US is about US$4 500 for each 20 tonne consignment.
11. The key link in the distribution chain (Figure 3) is the importer who handles 70-80 percent of the volume and who acts as the intermediary to whom exporters consign the fruit. The importer charges a commission of 8-10 percent of wholesale value, plus the expenses incurred on behalf of the exporter (charges, transportation to warehouse and point of sale, storage, etc) which in 1997/98 amounted to US$3-4 per 10 kg. About 90 percent of the volume handled by the importer is pre-sold to the distribution chains, the remainder passing directly through the terminal/auction markets or through wholesalers and then on to brokers or retail sellers. The supermarkets and retailers generally add a mark-up of 30 to 50 percent.
12. Prices rose steadily from 1993/94 to 1995/96 and appear to have firmed during 1996/97 and 1997/98, despite the favourable dollar exchange rate relative to exporting country currencies which continues to make importation attractive. The New York wholesale price for clementines is about US$5.00 for a small case (2.3 kg), with the higher prices being charged at the beginning and end of the season (Table 2) when there is, curiously, a higher incidence of poor quality and colouring or skin defects.
13. Measures regulating the access of tangerine imports to the US do not appear to constitute a serious impediment to market penetration, at least for the main suppliers. The situation might, however, differ somewhat for other countries. There are three basic tariffs for tangerines and citrus in general: the normal tariff, which in the case of this product is 2 cents per kg, as applied to Spain and the other EC countries; a special reduced tariff on account of the North American Free Trade Agreement, for Mexico and Canada, or of preferential trade agreements for developing countries such as Morocco; and for some countries, such as Israel, even tariff exemption. A slightly higher tariff of 2.2 cents per kg (cf Table3) is applied to the very few centrally-planned economies.
14. Market operators report that the key factors are the sanitary and phytosanitary measures because of the difficulties and costs they represent. Such measures are determined according to country of origin, its existing pests and associated treatments which might leave residues in the fruit. Authorized treaments are listed and inspections arranged at point of origin. A list of authorized phytosanitary treatments for Spanish clementines for the US market is annexed as an example.
15. There are two kinds of inspection, both carried out in country of origin following the cooperation agreement signed by the two countries, although shipments might exceptionally be inspected at point of landing. In the case of Spain, a visual check (phytosanitary) is made by an inspector of the importing country which basically involves checking that there are no leaves in the packing cases, that the fruit is clean and that the cargo vessels are equipped with temperature recorders for refrigerated transportation. The inspection costs are met entirely by the export agents and in the case of Spain amount to about 500 pesetas/tonne (about US$3.27/tonne), although this varies with size of shipment.
16. The other type of control (sanitary) also conducted at point of origin is analysis of chemical residues in the fruit. This is done by the services of the US Department of Agriculture (USDA) and the costs are met - at least in Spain - by the local government.
17. Spain and the US have a programme of cooperation between their market control and surveillance agencies, SOIVRE (Spain) and FDA (US) [ FDA: Food and Drug Administration.] , which lessens the risk to the exporter. Adherence to this programme is voluntary and requires inspections at point of origin as the merchandise is then shipped under refrigeration which, for the US, means 16 days at 36 0 F, although the temperature may vary a little if the crossing is shorter. Conditions during shipment can subsequently be checked from the temperature recorders fitted in the containers or cargo holds.
18. The outlook for US tangerine imports was assessed using traditional market survey methodology: statistics, publications, expert opinions, analysis and estimated potential demand from market situation and trends.
19. The conclusion was that demand for tangerine imports will continue to rise for at least the next 3 to 4 years and possibly reach100 000 tonnes, twice the present volume. Domestic supply is not expected to satisfy market demand during this period.
20. As regards changes in tangerine output in the US, and although there is some uncertainty over the possible response of domestic supply, particularly of clementines, the higher demand should stimulate production, especially in California with its better agro-ecological conditions for clementine growing and where trials have already been initiated. It is important, therefore, to stress that market opportunities beyond the next 3 or 4 years will also depend on changes in domestic production and on its relative competitive status - essentially in price - with the imported product.
21. Spanish fruit will continue to dominate the US import market in the medium term, with possible competition only from Morocco for clementines, as Mexico generally supplies the US with traditional tangerine varieties, as does Australia in limited quantities during the off-season (July, August and September).
22. Market opportunities for other developing and southern hemisphere countries do exist but are more long-term, as their current share of the US market is virtually nil even though many enjoy tariff concessions. Such opportunities, however, will only apply to tangerine varieties in demand by the consumer, which include clementines. There are likely to be openings for tangerine exports from Mexico on account of its proximity to the US and its preferential tariff, but only if it can meet the conditions for market access and satisfy consumer variety preference.
23. On the phytosanitary level, prior negotiation is required between any potential exporting country and the US government to determine permitted pest and disease control in the field, permitted growth regulators, herbicides and post-harvest or storage treatment and measures required during shipment. It is difficult to make any conjecture before such negotiations are completed, but in theory and according to the experts consulted, any resulting agreements could be the same as or very similar to those that already exist, such as that with Spain.
24. The following points need to be highlighted in this regard:
25. Given the organoleptic and dietary qualities of fresh citrus fruit and its benefits to health, consumption is likely to rise with the introduction of varieties that offer consumers new flavours and enhanced taste. This could occur with clementines which are greatly appreciated by the US consumer as they are tasty, easy to peel and seedless. This is the group of tangerine varieties with the greatest potential in spite of the higher price.
26. Although much appreciated by the American consumer, clementines are still not widely known in the US [ Recent market surveys indicate that after twelve years on the New York market, only 50 percent of the public are familiar with the clementine and only 27 percent report purchasing it during the past year.] . This suggests that generic and brand promotion could encourage market expansion.
27. Population groups interested in this import item have high quality expectations, which is an area that exporters need to address and where shipments, particularly in early and late season, are reported to have fallen short. Some operators believe that market penetration would have been greater if a higher-quality product had been made available.
28. The longer-term developments of this market need to be carefully monitored, particularly changes in the local supply and demand situation, for there are potential opportunities for developing countries able to modify or increase their market presence.
| Spain | Mexico | Australia | Morocco | Jamaica | Dominican Rep. | Korea | Japan | Italy | China | Total | |
| November | 8 630 174 | 810 750 | |
|
37 950 | |
20 700 | |
1 725 | |
9 501 299 |
| December | 8 480 099 | 872 850 | |
310 500 | 93 150 | 5 175 | 196 650 | 167 325 | |
|
10 125 748 |
| January | 5 642 474 | 945 300 | |
179 400 | |
13 800 | |
|
37 950 | 53 475 | 6 872 399 |
| February | 1 880 250 | 793 500 | |
3 450 | 98 325 | 13 800 | |
|
18 975 | |
2 808 300 |
| March | 1 638 750 | 132 825 | |
|
150 075 | 3 450 | |
|
|
|
1 925 100 |
| April | 20 700 | |
|
|
37 950 | |
|
|
|
|
58 650 |
| May | |
|
|
15 525 | |
8 625 | |
|
|
|
24 150 |
| June | |
|
|
|
|
|
|
|
|
|
|
| July | |
|
37 950 | |
20 700 | 189 750 | |
|
|
|
248 400 |
| August | |
|
476 100 | |
6 900 | |
|
|
|
|
483 000 |
| September | |
|
648 600 | |
12 075 | 5 175 | |
|
|
|
665 850 |
| October | |
|
|
|
|
|
|
|
|
|
|
| Total | 26 292 446 | 3 555 224 | 1 162 650 | 508 875 | 457 125 | 239 775 | 217 350 | 167 325 | 58 650 | 53 475 | 32 712 895 |
| 11/96 | 18-22 | 5-6 |
| 08/12/96 | 16-17 | 5-6 |
| 30/12/96 | 10-14 | 2-3 |
| 06/01/97 | 7-12 | 2-4 |
| 13/01/97 | 6-10 | 1-3 |
| 20/01/97 | 6-8 | (1.5-3.5)* |
| 03/02/97 | not available | 2-4 |
| 10/02/97 | not available | 5 |
| 18/02/97 | not available | 4-5 |
| 03/03/97 | not available | 5 |
| 10/03/97 | not available | 5 |
* Low prices are usually for smaller sizes and the lowest prices for fruit in poor condition.
Source: Office of External Trade Spain-Washington.
| Item/
subitem |
Suffix | Description of article | Unit | Customs tariff | ||
| 1 | 2 | |||||
| General | Special | |||||
| 0805 | Fresh or dried citrus | |||||
| 0805.20.00 | Mandarins (incl. tangerines and satsumas); clementines, wilkings and hybrids of similar citrus fruits | 2cts/kg | Exempt (CA, E, IL, J) see 9906.08.05- 9906.08.06 (Mx) |
2.2cts/Kg | ||
Note: CA = Canada, E = Caribbean Basin Countries; IL = Israel; J = Andean Pact Countries (Peru, Ecuador, Colombia, Venezuela and Bolivia); Mx = Mexico
Source: USDA.
Group 1 gives the tariff for countries with a general rate (most favoured nation), which include Spain and those of the EC in general, and a special more favourable rate or tariff exemption for countries with preferential treaties (Canada and Mexico, Caribbean Basin, Andean Pact) and other developing countries (Generalized System of Preferences).
Group 2 gives the tariff for countries with centrally-planned economies (basically China as the others do not export tangerines).
Active materials that must be used for fruit intended for export to the US
1. Field application
1.1 Pests and diseases
Mites: dicofol, tetradifon, phenbutestan, pyridaben
Scale: phosmet, methidathion, azinphos-methyl
Parlatoria: mineral oil, chlorpyrifos, methidathion, azinphos-methyl, omethoate.
Red scale: chlorpyrifos, ethion, azinphos-methyl, methidathion, omethoate.
Mussel scale: mineral oil, malathion, methidathion.
Aphids: dimethoate, chlorpyrifos, methomyl.
White fly: oil - ethion (only in summer), imidacloprid (no leaf spraying between 1 April and 1 June).
Ceratitis capitata: malathion.
Leaf miner: abamectin, diflubenzuron, imidacloprid (applied to stem).
Australian brown rot: copper oxychloride, phosetyl-Al.
Foot rot and gummosis: copper oxychloride, metalaxyl, phosetyl-Al.
Gibberellic acid.
Naphthaleneacetic acid
2,4 - D.
Diuron, Bromacil, Paraquat, Diquat, Glyphosate, Trifluralin, Terbacil, Norflurazon, Napropamida, Sulfasan.
Ortho-phenylphenol and its salts.
Thiabendazole.
Imazalil.
