Food services and nightlife are roaring back throughout much of the world.
Hard-hit by the pandemic due to decreased demand from hotels, catering companies, and bars, the lime sector suffered from low prices throughout much of the pandemic crisis, especially in Europe.
But with food service and nightlife roaring back throughout much of the world, limes are experiencing some of their strongest demand ever. In fact, high lime prices in the world’s major import markets have been sustained throughout the year in spite of the large volume being brought in from both Mexico and Brazil.
This trend hints at a transformation in the lime market that goes beyond the pandemic recovery. What we’re witnessing is a fundamental shift in the lime market’s dynamics, a shift that has broad implications for growers, importers, and consumers alike.
Lime Markets At A Glance
It’s common knowledge that the world’s largest producers of limes have historically been Mexico and Brazil. These markets supply North America and Europe respectively, a relationship that has been stable for decades.
In a general sense, these markets function exactly as you might expect – when supply is low, prices go up, and when supply is high, prices go down.
But something interesting has been happening over the past few months – even as large quantities of limes have entered the markets of North America and Europe, prices have stayed high. This is a trend that has rarely been seen before.
This phenomenon has caused surprise throughout the industry. “Prices have now risen to between 8 and 10 euros (per 4.5kg box). If you look at the export statistics, it has been a long time since Brazil has sent so many containers to Europe,” said an importer from the Netherlands in an interview with Freshplaza.
The Netherlands, a critical shipping hub that receives the bulk of Europe’s lime imports, is a good litmus test for demand across Europe.
The anonymous importer also had this to say: “Limes are predominantly finding their way to the hotel and catering industry and everyone wants to go outside again. The demand is therefore very good.”
Conditions in the UK are also encouraging. Prices have risen over 50 percent since May, spurred on by the reopening of the catering industry and a successful vaccination campaign. Italy and Spain report similar circumstances.
Meanwhile in North America, markets are receiving large volumes of quality fruit. “The supplies of limes have been pretty high this year and we’re starting to see a slightly higher increase in fruit–it’s about 25-30 percent more,” says one distributor from Texas who spoke with Freshplaza.
Yet the abundance of supply has not led to a decline in price. The distributor continues: “Pricing has been at a higher level than normal considering the supply in hand. The only thing that’s changed is the market reacted in an aggressive way to where we’re basically at a summer price point.”
Clearly, the market can absorb more production. But where might that extra supply come from?
The Potential For New Suppliers
It’s becoming clear that there are gaps in the market that need to be filled by new points of origin.
But where will these limes come from? Which markets are prepared to compete with Mexico and Brazil?
There are several countries that have made a concerted effort to increase their lime exports in recent years.
South Africa, for example, has climbed into the number 4 spot among exporters, and mainly serves the European market. The value of the country’s lime exports has nearly doubled over the last 10 years, reaching $392 million in 2020. The country also has a robust domestic market, and even imports some limes from Brazil.
Vietnam is another up-and-comer, serving the growing import markets of China, India, Russia, and Dubai. The country is now capable of harvesting over 100,000 tons of lime per year, and allocates around 70 percent of its production to exports. Vietnam faces little competition in its target markets.
But there’s one country that stands above the rest in terms of its potential as an exporter of limes: Colombia.
Limes From Colombia
With its temperate climate, high levels of rainfall, burgeoning infrastructure, and close proximity to North American and European markets, Colombia is a country whose potential as an agricultural powerhouse is just beginning to be revealed.
Nowhere is that more evident than in lime exports. Colombia is the world’s fastest-growing exporter of limes, and it has increased its exports by a whopping 449 percent since 2015.
Colombia possesses some unique characteristics that set it apart from other countries. First, the country’s wide range of altitudes and ideal growing temperatures allow for year-round production, something that Mexico and Brazil do not have.
Another boon to Colombia’s lime production is the ideal balance of rainfall and sunlight that is a characteristic of the country’s climate. As opposed to its competitors, this Andean country has no summer or winter; it simply alternates between dry and wet seasons. These conditions create a robust, richly colored lime.
Notably, the country is also in the midst of a major infrastructure scale-up, which will connect the productive interior regions with coastal port cities such as Cartagena and Apartadó. This effort, known as the Fifth Generation (5G) Project, has already dedicated billions of dollars to build and improve numerous highways, sea ports, and airports.
The country’s market access also beats out its Mexican counterparts, both in terms of cost and time-to-market. A container of fruit leaving from Cartagena can reach port in New York in only 5 days, compared to nearly 2 weeks for trucked fruit from Mexico.
In terms of logistical costs, a single container can be up to 39 percent less expensive than Mexican fruit when sent to the Eastern seaboard. Colombian producers have an opportunity to make lasting inroads into this region based on logistical considerations alone.
The behavior of international lime markets very clearly indicates the need for new suppliers. Even the higher quantities entering global markets haven’t been able to curtail prices, indicating a demand that is well above what the world’s major producers can currently supply.
With rapidly increasing lime exports, Colombia is poised to carve out a place for itself in the growing lime import markets of the world. With ideal access to markets, unbeatable climatic conditions, and a booming infrastructure sector, Colombia is a country with enormous potential as a lime exporter.
How You Can Benefit
At Farmfolio, we’re perfectly positioned to take advantage of these developments in the lime sector. We’ve acquired some of Colombia’s best-performing lime farms, and we are now offering subdivided portions of those farms to individuals through LOTs (Land Ownership Titles). With LOTs, you can benefit from the rise of Colombia’s lime exports without having to worry about farm management or fruit sales.
Colombia’s status as the world’s fastest-growing lime exporter is not to be overlooked. As we’ve seen with other sectors, growth can happen at lightning speed, creating immense value for stakeholders in the process. Don’t miss out on this incredible opportunity to participate in the growth of Colombia’s lime industry. Click here to learn more about Farmfolio’s lime LOTs.