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.
2017 saw the first season for a few years in which the number of fresh fruit and those fruits sent for processing declined. The official number wouldn’t suggest a huge impact but global demand growth and perhaps expectations that Argentina would do better than it did, put huge pressure on the market.
In their bi-annual report the USDA stated in July 2017 the following:
‘For MY 2016/2017, Post revised fresh lemon production down from 1.37 MMT to 1.27 MMT. This decline is due to frost that affected the main lemon growing region in early September 2016 during the fruit set, extremely high temperatures in the summer time, and excess rain in March, which delayed the harvest and marginally affected the fruit quality.’ These figures looked to have been very accurate and have been later supported again by the USDA and Federcitrus.
Processing figures followed the trend of the fresh fruit market as 80% of all lemon fruit go to the processing market in Argentina, unlike in other countries where the fresh market is more dominant.
With global oil demand up around 5% the net affect of any decline in production puts pressure on the market as little carry over was reported from 2016. We can confidently say that with the market active in the final quarter of 2017, we are again in a situation where there will be no carry over of oil supplies into 2018 so we will wait with some caution the forecasts for the 2018 Argentinian season. There is also a close eye being kept on fresh fruit export opportunities with both the USA and Brazilian doors recently opening for future fruit supplies, which could reduce the amount of fruit heading for the processing market.
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