Recession has little effect on deal’s strength - The Packer

Recession has little effect on deal’s strength

06/15/2010 02:05:28 PM
Abraham Mahshie

Suppliers of Peruvian citrus say the recession did not have a negative impact on the summer citrus deal, but some of last year’s players will still sit out the deal in 2010.

“Would it be a better seller though if the economy was better? Yes, yet consumption of imported citrus was up,” said David Mixon, senior vice president and chief marketing officer for Seald Sweet International, Vero Beach, Fla.

“We actually shipped more fruit last year than the year before.”

Mixon said the real question will be whether pricing structures will be acceptable to some of this year’s exporters.

Beatriz Tubino, director of agro exports for the Peruvian Association of Exporters, Lima, said that exports of Peruvian citrus overall fell, but not as a result of lower demand in the U.S.

“With respect to 2008, in the year 2009 the net tonage fell by 22%,” she said.

“Nonetheless, we must consider that the exports to the U.S., the country that represents our number one destination for citrus exports, grew by 12% with respect to the year 2008.”

Fernando Cilloniz, general manager of data analyst Inform@ccion, Lima, said last year’s volumes overall fell as a result of the agricultural phenomenon of alternation —“a year of strong production is followed by a year of low production.”

He said Peruvian citrus will increase in volume again this year with high prices.

Ismael Benavides, former Peruvian Minister of Agriculture and general manager of the Huamani Group, Lima, said that as the economic crisis affected the European market and the exchange rate from euros to dollars dropped by 17%, the income of the Peruvian citrus industry fell as a result.

“The demand is uncertain due to the advent of the Greek crisis,” he said. “In the USA we expect demand will not increase substantially, so the outlook for prices is uncertain.”

Uncertain prices mean uncertain grower returns, though suppliers do not expect returns to be as poor as they were when the market was flooded in 2008.

“Two years ago returns were poor but it wasn’t because of lack of consumption,” Mixon said.

“It was an improper manner of marketing, nothing to do with the production side.”

Mixon said the Peruvians are more mature in the market and they understand market desires and processes better now.

“They will continue to be successful if the market conditions remain at a level that is acceptable in their returns,” he said.

Estuardo Masias, general manager of Lima-based Prolan and part owner of La Calera, Chincha, Peru, said that in 2009, climactic conditions led to lower volumes especially in satsumas and clementines, but the international economic crisis did not really affect the deal.

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