Emerging Markets / September 24, 2019

As Demand for Lime Grows, New Sources Are Needed

One of the most dynamic and sought-after tropical fruits on the market, limes have become a mainstay for consumers all over the globe, and demand shows no signs of slowing. However, supply is limited to a handful of locations, namely Mexico, Brazil, India, and China. Though these regions produce huge quantities of limes, events such as extreme weather or disease can disrupt supply. Amidst ever-growing demand for limes, this can cause prices to spike and even leave consumers with shortages. In order to meet growing worldwide demand, suppliers and distributors will need to find new sources of this increasingly popular citrus fruit.

The USA and Europe, the principal markets for lime, source their supply from highly specific regions. For example, 95% of the limes imported to the United States come from Mexico, and this dependency has recently led to unpredictable price spikes. A particularly harsh El Niño climate cycle, combined with concerns over a possible tariff on Mexican imports, caused the price of limes in the United States to skyrocket last year, rising from $1 per kilo to $3 per kilo over a course of a single month.

Likewise, the EU imports almost 95% of its limes from Mexico and Brazil. A report from the CBI, an agency of the Ministry of Foreign Affairs of the Netherlands, notes that, “If one of these main supplying countries is unable to fulfil the demand due to climatic difficulties or other circumstances, opportunities for suppliers from other countries will arise.” Rising demand and weather issues have already caused prices to rise in the US and Europe.

New sources of supply are therefore needed to keep prices low, particularly supplies of the most important variety commercially, the Tahiti or Persian Lime. Already, limes from new growing regions have made significant inroads into high-end markets in Europe and the United States, arriving from regions such as Guatemala and Peru, as well as Vietnam. Guatemala exported its first full shipment of finger limes to Europe last year, and also exported Tahiti limes to the EU the previous year. Clearly, the market has ample room for new suppliers.

One of these new entrants to the lime game is Colombia. Its proximity to the USA, the availability of quality agricultural land, and favourable growing climates make it an ideal candidate for the large-scale production and exportation of limes. Currently, infrastructure issues have placed some strain on exports, however the government’s commitment to development projects promises to improve the situation.

Colombia is an emerging economy with strong growth potential and a stable political environment, making it an ideal location for lime growing and export to the USA. Given the on-going trade deficit in limes worldwide, caused largely by climate risks amidst growing demand, the introduction of Colombia with its vast natural resources and warm climate will help to alleviate some of the stress on Mexico and Brazil.

The dependency of the US and Europe on lime imports from such limited regions of production has placed pressure on exporters. This trend has made prices more volatile, hurting consumers and distributors alike. As demand continues to rise and climate concerns continue to grow, importers will look to new regions such as Colombia to fill the gaps in supply and provide consumers with delicious, nutritious limes.

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