News and insight for North America's fresh produce buyers
Gill McShane

BY GILL McSHANE

Wednesday 28th May 2008, 18:00 Central Time

Chilean lemons step in as US production falls short

Significant shortfalls in the US have opened the door, according to the USDA

Chilean lemons step in as US production falls short

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A 30 per cent reduction in US lemon production has boosted demand for Chilean lemons this season. The US states of California and Arizona have both experienced "significant" shortfalls, according to a recent United States Department of Agriculture (USDA) report, resulting in the export of larger volumes to overseas export markets and a deficit in domestic supply.

Chile, Mexico and South Africa are gearing up to plug the supply gap on the US market, the USDA reports. However, Chilean production is also forecast to be smaller in 2008 following frosts in July and August last year.

As a result, prices are expected to stay high during most of the year, which should increase imports significantly when compared to the previous year. Export volumes, meanwhile, should reach 47,800 tonnes, the USDA said, up from 46,904 tonnes last year.

The US is Chile's main lemon export market in volume terms, representing 59 percent of total exports (or 27,476 tonnes in 2007). Other markets include Japan (which received 18,785 tonnes in 2007), South Korea (409 tonnes), Italy (74 tonnes), the Netherlands (50 tonnes), Hong Kong (50 tonnes), Canada (41 tonnes) and Panama (16 tonnes).

Lemons are harvested on a year-round basis in Chile, with the bulk of output available from June through December. The main varieties currently under production are Sutil, Eureka and Genova.

According to industry reports, lemon production in Chile is expected to continue expanding at a slow and steady rate over the next few years on the back of new plantings and the renovation of other groves with higher-density plantings.

Future exports, meanwhile, will depend upon the interplay of domestic production and foreign demand combined with comparative prices in the domestic versus the export market, according to the USDA.

The exchange rate in Chile will also play an important role given that the strengthening of the Chilean peso has already lowered returns to many Chilean fruit growers and exporters in recent years.

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