High costs, low prices, reduced domestic consumption have pushed producers crisis point
A combination of falling consumption, rising costs and a loss of competitiveness on the international market are making orange and mandarin production in Argentina “unsustainable” according to local producer groups.
The situation is particularly critical in the NEA (Northeast Argentina) and Litoral regions. The Entre Ríos Citrus Federation (FeCiER) described the situation as “critical”. According to the organisation, domestic consumption is down 10 per cent year-on-year, while exports have contracted by 34 per cent, and prices rose by 17 per cent – below the rate of inflation.
For the first time, the three major outlets for fresh citrus – the domestic market, the processing industry, and exports—are in crisis simultaneously. Historically, when one main outlets for fresh citrus – the domestic market, the processing industry and export market – was in trouble the others served as a safety net. But right now, all three are facing significant difficulties.
“It is a crisis the likes of which haven’t been seen in years,” FeCiER president Pablo Molo told Clarín.
Roberto Varela, executive manager of the Chamber of Citrus Exporters of Northeast Argentina (CECNEA) said: “The combination of rising logistics costs, an unfavourable exchange rate, and sanitary restrictions in destination markets creates a scenario of high uncertainty for exporters in the Northeast. Even if we had the best oranges, with this burden, we are not competitive”.
Northeast Argentina used to export more than 100,000 tonnes of oranges and mandarins a year, but shipments are currently well below these levels.
In some parts of Entre Ríos – where there is 36,625ha of production – the situation has become so bad that some fruit is being left unpicked as growers are unable to cover the costs of harvesting and transportation.
