Lemon oil from all corners of the world is one of Ultra’s core products and is obtained by cold expression or steam distillation of lemon peel.
Lemon has a place in many culinary uses from soft drinks and cocktails to marmalade. However, it can also be used and found in household cleaning products since it can disinfect, deodorise, remove grease and dissolve wax and grime to name but a few uses.
Lemon is also used in aromatherapy to enhance moods and can be used for its anti-bacterial properties in other medicinal applications. In fragrances it gives a fresh uplifting and zesty note to any perfume as it is highly volatile.
Interestingly the three top producers of fresh lemons in the world are not the countries we would associate with oil production; the top 3 being China, India and Mexico, which account for over 40% of the world production.
Today we associate lemon oil production with Italy and Spain (Europe), Argentina and USA (Americas) and even South Africa.
Over the past 40 years Argentina's processed lemon volumes have increased significantly decade on decade, from an average annual volume of 80,000 MT in the 1970s, to 200,000 MT in the 1980s, to 540,000 MT in the 1990s and 900,000 MT since 2000. This is why today its contribution is very important to our markets.
Argentina's 2014 crop disaster put huge pressure on the global market, something we are still recovering from. Argentina contributes around 10% of the global fresh lemon fruit market. When you think that over the past 5 years Argentina has processed an average of 860,000 MT of fresh lemons then any crop 'disaster' will have a major impact on the global market.
As reported previously, Argentina’s 2019/2020 fresh fruit production is estimated to be 1.6 million MT, i.e. 11% lower than the previous crop. This is primarily due to lower cyclical production combined with unfavourable weather conditions, especially high temperatures and the lack of rain in January, February and March. This resulted in a delay in the maturing of lemons and therefore smaller fruits, reducing weight and crop size. This reduction in crop size, together with the newly opened export markets for fresh fruit, will result in a reduction of fruit for processing of approximately 18% to an estimated 1.15 million MT. Annual fresh fruit exports are predicted to grow by 25% to 300,000 MT encouraged by the growth of new markets in India, Vietnam and China, although the EU still takes over two-thirds of fresh exports.
There is no doubt that the outbreak of COVID-19 will have both positive and negative impacts on the sector. The increased demand for vitamin C sources around the world could be beneficial for lemon producers in Argentina. However, supplying the demand could represent a problem in terms of fruit picking and processing due to the social distancing that pickers and processors may have to follow, delaying both the harvesting and processing of fruits. Moreover, the concentration of Argentinian lemon production in the Tucumán region could be a positive, neutral or negative factor depending on the relative regional impact of COVID-19 and when cases peak in Argentina. Nevertheless, the COVID–19 pandemic has added further to the problems being faced by the Argentine economy, which was already in recession and facing reduced international competitiveness as well as major structural problems that have been pushing up production costs.
On a positive note, despite COVID-19, it is hoped that the current season will be less challenging than the previous year. In 2018/2019, heavy rains led to a delay in harvesting while an increase in the global supply of lemons combined with reduced global demand for lemon oil led to a price collapse. As a result, the incomes of growers and processors were substantially reduced and an estimated 130,000 to 140,000 MT of fruit was discarded because it did not meet export standards and was not processed. The gradual increase in prices expected during the 2019/2020 year should create a more favourable market opportunity for Argentinian producers.
USDA ESTIMATED LEMON PRODUCTION AND PROCESSING 2016/17 TO 2019/20 (‘000 MT)
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