“Somewhat chaos” is the way Lukassen AGF’s sales staff perceive the market for citrus in the last week of December. The Dutch firm that imports fruits and vegetables from around the world attributes this lower demand to a weaker market. Climate conditions are making supply of lower quality and smaller quantities.
“The current drought that has hit Morocco is an issue of serious concern. It’s impacting all important areas of citrus production: Berkane, Agadir, Gharb, Beni, and Mellal. Farmers who don’t have wells rely solely on rain and don’t have enough water available for their orchards. They are getting worse and there’s smaller and lesser quality fruits. Numerous growers, big and small, are being forced to shut down or plant in smaller areas,” the sales department commences.
Spreading riskLukassen AGF suggests that this creates a problem in getting an accurate view of production. “That is different for each producer and location. Some years ago the situation in the production areas as well as quality and size was more apparent because farmers were able to continue farming as normal and have a view. Nowadays, we are focusing on the import of the top varieties from the most prestigious regions. Mandarins are the best, and that’s Berkane and for Nadorcott and Nadorcott, it’s Nadorcott, Marrakesh region. And for juicers of oranges, Gharb as well as Beni Mellal.”
Lukassen AGF also puts more efforts into partnership. “Having reliable partners in orchards that control the entire manufacturing process, from packing to shipping to the Netherlands is sure to provide the possibility of selling high-quality Moroccan citrus. If you do not seek these partnerships, you rely on several small groups that don’t have control over the entire chain. This is the main reason for the current market crisis. We collaborate with experienced traders who have their own orchards as well as packing facilities in order to offer our clients the required quality, size as well as packaging. Keeping to agreements made is vital in our trade, and that’s only possible if there are good partnerships with producers/suppliers,” the traders say.
Cost-effective price
Lukassen AGF knows some Moroccan farmers could cultivate with the groundwater that comes taken from wells. “But it is also getting more difficult and expensive.” In the past there was a need to dig just 40m deep to get water. nowadays, according to Lukassen AGF Sometimes, you must dig as deep as 300 to 200 meters. “Also it’s more suitable for fruit trees over groundwater. In addition to that, the higher international and cost of transportation across the country, as well as more expensive fertilizers and packaging costs has increased the price of citrus costs dramatically.”
According to the firm it is the reason of the slowing demand. “Moroccan buying prices for citrus increased excessively. After a certain time, there is a decrease in demand,” the sales reps describe. In this case, Egyptian juicing oranges have almost completely been replaced by Moroccan varieties in the Dutch market. “That’s due to the decline in production in Morocco and a significant portion of the fruit that is sold local on the market, since they are selling at very high costs. It’s almost impossible for a lot of shippers to sell anything.”
Competition
“Egypt’s extremely strong when it comes to juicers of oranges, particularly during Jan. and June. This country is able to take over the supply of the Dutch market. It’s a good alternative to Morocco. Cost-wise, it’s very competitive. As of August 20, 2023, the median purchase cost for Moroccan oranges was between EUR18 and EUR20. In the past it was EUR10 to EUR12. It’s an almost 40 percent growth, while Egypt’s more affordable, having an EUR13 selling price minimum,” the commercial team notes.
The months of November and December are when Lukassen AGF’s offerings do include Moroccan mandarins. However, there is a general relatively calm. The importer is aware that price plays a part as well, noting that demand can be extremely fluctuating. “There’s there is no structure for sales or any consistency. Some clients require multiple pallets within a single day, but no more for two weeks. It’s difficult to meet by new arrivals. Nobody wants to have excessive stock. The whole point of trading is quality and freshness.”
Even though Lukassen AGF sees that Berkane Mandarins are excellent quality, it is extremely difficult to promote this year. “Buyers were used to being ready to spend more money to get the best quality product, however these days, they are looking for top quality, and aren’t willing to spend more. The goal is to market high-quality, reasonably priced products to ensure that clients keep coming back” the sales representatives continue.
Attention is not as important
The company admits that these costs make Moroccan citrus off the table. “There were once seasonal promotions during the holidays that included small bags packed with Moroccan mandarins. It’s not so common any more. After a certain amount of time the products are ignored because they’re priced too high over a prolonged period. Moroccan Mandarins, for instance, have been unable to get some of the commercial interest.”
However, Lukassen AGF still has great hopes for Nadorcott season that is taking place in Morocco that should begin in December. “That supplies will continue through April, with the promise of four months of high-quality goods. It is essential to believe in the quality of your product. If it’s one with the right brand name and the supply is consistent You’ll have sales for the rest of your life,” the team concludes.
G.H. Lukassen & Zn. BV
Laagraven 11-13
3439 LG Nieuwegein
T +31 (0)30 2885557
info@lukassenagf.nl
www.lukassenagf.nl
Source: The Plantations International Agroforestry Group of Companies