Global Lemon And Lime Market - Key Findings by IndexBox

Posted Jun 25, 2018

Global Lemon Market Accelerated Amid Strong Demand and Increased Output in Major Producing Countries

According to the report "World: Lemons And Limes - Market Report. Analysis And Forecast To 2025", recently published by IndexBox, the global lemon market totaled $13.9B in 2016, which was 19% more than the year before. This figure reflects total revenue of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price). 

In physical terms, the global lemons and limes market consumption grew by +1.0% per year, amounting to 17.5M tonnes in 2016. After a sharp decline in 2010, global lemon market leveled off and fluctuated through to 2014, then in accelerated noticeably over the last two years. The decrease in total volume of consumption in 2010 and the subsequent stabilisation was due to supply constraints as the result of a reduction in acreage under lime and lemon cultivation in China and, since 2011, in India, as the result of unfavourable weather conditions. Other countries saw no significant market reduction. 

In money terms, market growth in recent years has been more pronounced due to rising prices, which are subject to noticeable fluctuations as the result of crop reduction in the major producing countries. 2015 was an exception to the general upward trend due to the fact that world prices fell slightly amid the growth in supply, which quickly recovered after the unfavourable year of 2014 in Argentina.

Global Lemon Market Is Set to Continue Moderate Growth 

Lemons and limes are one of the most popular citrus in the world. The world lemon market is quite stable, as lemons enjoy great demand both in producing countries and in countries where lemons do not grow but are imported in large quantities. Deteriorating weather conditions pose the greatest threat to the market. The decline in yields can cause a rise in prices, as it had already happened in 2014. 

It is expected that the current upward trend in lemon and lime cultivation should retain in the medium term, conditioned by strong demand from rising global population worldwide, the growth in demand for fresh food (including fresh ingredients, fresh fruits for jams, bakery and confectionery), coupled with investments into lemon cultivation in China and other countries. Taken all these factors into consideration, market performance is forecast to grow with an anticipated CAGR of +0.8%, which should bring the market volume to 18.8M tonnes by 2025.

Global Production of Lemons Undergoes a Tangible Growth

Production of lemons and limes reached 17,387K tonnes in 2016, accelerating noticeably over the last two years. Prior to that, a sharp reduction was recorded in 2010 due to the reduction in acreage in China as the result of severe floods on the island of Hainan and abnormal frosts in the Sichuan province. After that, from 2011 to 2014, the world production volume remained relatively stable, and only in 2015 exceeded the level of 2008.

India, Mexico, China, Argentina, Brazil, Spain and Turkey Remain Largerst Lemon Producers Worldwide

The output of the eight major producers of lemons and limes, namely India (2,978K tonnes), Mexico (2,430K tonnes), China (2,330K tonnes), Argentina (1,678K tonnes), Brazil (1,262K tonnes), Spain (858K tonnes) and Turkey (822K tonnes), represented more than three-quaters of global lemons and limes production. In Spain  production levels increased by on average +6.0% annually from 2007 to 2016. The other countries showed mixed trends in lemons and limes output. While the growth rates were modest in India (+2.9% per year), Mexico (+2.6% per year), Argentina (+2.0% per year), Brazil (+2.4% per year) and Turkey (+3.0% per year), China (-4.9% per year) experienced negative dynamics over the period under review.

Driven by Robust Demand Worldwide, Lemon Trade Will Remain Strong

Lemons and limes are widely traded commodity, with the share of export in total global output stood about 17% in 2007-2016. High trade intensity is determined mainly by the substantial distances between the main countries of lemons production and key consuming countries.

Lemons will continue to be highly traded, fueled by increasing consumption,  intense global and regional integration. However, the trade expansion could be restrained by softening growth of lemons and limes production due to climate changes and the risks of tightening trade barriers, especially in the U.S., which is the largest importer in the world. The revision of the NAFTA agreement announced by the U.S. administration could damage the exports of lemons from Mexico, with the U.S. being the main market for Mexican lemons. Also, the recently introduced standards for the colour of imported lemons cause significant difficulties for Argentinian suppliers, which can not always get the required colour due to weather conditions.

Mexico, Spain, Turkey, Argentina and South Africa Remain the Largest Exporters

In 2016, the volume of global exports totaled 3,013K tonnes, expanding gradually from 2007-2016, with a with a slight acceleration over the last two years; this was driven by rising demand for lemons worldwide. In value terms, global exports amounted to $3,320M in 2016. It had been rising robustly over the last four years, given the increase in physical terms and export prices. The year of 2015 was the only exception because the prices declined that year due to largely improved supplies after a problematic season of 2014 in some of major exporting countries; in 2016, the value of exports bounced back again.

Mexico (668K tonnes), Spain (546K tonnes), Turkey (449K tonnes), Argentina (279K tonnes) and South Africa (237K tonnes) were the main global suppliers of lemons and limes in 2016, with a combined share of 72% of global exports. From 2007 to 2016, Turkey (+5.1% per year), Mexico (+4.2% per year) and South Africa (+8.2% per year) constituted the fastest growing suppliers among the major exporters. Despite being the largest global producers of lemons and limes, China and India did not export much of their production, meaning that it was consumed domestically.

The U.S., Russia and Europe Constitute the Largest Markets for Imported Lemons Worldwide

The volume of global imports totaled 3,101K tonnes in 2016, which equated to $3,730M in value terms. Imports trend pattern generally mirrored that of exports: this trade flows globally complement each other. 

In 2016, the U.S. (654K tonnes), the Netherlands (198K tonnes), Russia (192K tonnes), Germany (177K tonnes), France (156K tonnes), the UK (148K tonnes) and the UAE (122K tonnes) remained the leading destinations of lemons and limes imports, together comprising 53% of global imports. Amongst the major importing countries the UAE (+12.8% per year), the U.S. (+4.7% per year) and the Netherlands (+6.1% per year) gained the highest annual growth rates from 2007 to 2016. The Netherlands, however, re-exported approx. 84% of previously imported lemons, meaning that this country constitute a transit hub for further distribution of lemons to other EU countries.