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.
Due to the lack of rain during the spring of 2020/2021 that affected fruit setting and growth of the fruits, the size of the lemons was expected to be smaller, and the volumes were expected to be 30% less than the previous crop. However, timely rainfalls during the summer allowed lemon trees to recuperate, and the new estimate for 2020/2021 production increased from 1.03 to 1.15 million metric tonnes.
Because of the larger crop size and the decline of exports of fresh fruits, lemon for processing is expected to increase 13.5% from initial estimate, to 831,000 metric tonnes.
Despite crop size being better than anticipated, Argentina faced many difficulties with the current crop for several reasons.
Internally, labour strikes in Tucumán slowed down production and export of fruits; domestic economic contraction has negatively impacted the lemon sector; the competitiveness of the lemon sector in Argentina has been affected by production costs constantly increasing due to high expenses and high inflation rates; investment and expansion have decreased following poor financial performance after having to discard fruit in MY 2018/19.
Externally, supply seemed to be higher than demand. The predictions of a lower crop size triggered a buying frenzy, and as a result, most companies covered their requirements and this could be the main reason for a lower demand. Last year’s suspension of Argentine lemons / citrus exports to Europe because of citrus black spot was beneficial to other origins such as South Africa. Even though Europe suspended the ban in May 2021, Argentina may suffer difficulties in regaining business which was lost. Processors have large stocks of processed lemon products because of the oversupply of fruit in the previous season when Argentina voluntarily withdrew from the EU market approximately 20,000 MT of fresh lemons, which were reoriented to processing and/or exported to non-traditional markets like the United States. New crop lemon oil prices from Argentina are up but have not increased to their post-decline level.
The new crop 2021/2022 is expected to start around March/April of 2022 and, so far, there is no indication at this time as to the crop size, because processors and growers are hesitant to provide a forecast. However, since the time for frost and freeze have passed, a typical crop is expected for next season.
Argentina Historical and Current Lemon Production (‘000 MT)
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