Lime is a staple fruit. Present in everything from cocktails to ethnic foods to desserts, this ubiquitous citrus fruit has become a mainstay on grocery store shelves worldwide.
That isn’t to say that the international lime market is set in stone. Far from it. In fact, the international trade dynamics have changed drastically over the last decade, and are likely to keep changing.
From declining volumes in traditional countries of origin to increased demand in countries with growing middle classes like China, in lime trade is evolving at a rapid pace. Let’s look at some shifts in the global lime market.
The North American Lime Market
Devastated by hurricanes, climate change, and disease, along with rapid urbanization, the US’s once vibrant Florida citrus market is fading.
Hurricane Andrew crippled the US citrus industry in the 90s, then in the early 2000s bulldozers were sent in by the Florida government to flatten orchards thought to harbor the ‘citrus canker,’ a disease later discovered to not be anywhere near as dangerous as scientists thought.
US sales of exported lemons and limes dropped -11.5% from 2015 to 2019. By 2014, the US was importing 97% of its limes from Mexico, and it is now the largest net importer of limes in the world.
U.S. fresh Tahiti lime supply from 1980–81 to 2011–12. The figure shows that the bulk of the fresh Tahiti limes consumed in the United States is imported (U.S. production ended in 2002 because of the mandatory eradication program); 1 lb = 0.4536 kg.
Mexico’s lime industry suffers from bad weather and disease as well, mixed with organized crime. The US relies heavily on Mexico for its lime exports, and the cocktail of dwindling domestic supply, growing demand, and industry inefficiencies mean domestic prices for limes in the US have skyrocketed.
Let’s not forget about Europe.
The Netherlands serves as the gateway to the rest of Europe. It’s the largest net importing country of limes in the world at 110 thousand tonnes (2017) and sees the fastest growth of imports. The gateway to Europe re-exports more than 84% of its lime imports, giving us a magnified look at the demand for this superfruit throughout Europe.
The Netherlands, together with Germany, France, Italy, and the UK, comprises over a quarter of the world’s lime imports. It’s often recommended for producers to find an importer in The Netherlands, so they can supply all of Europe through a single partner.
While Europe imports a large percent of its limes from other regions of the world, Spain was the global top producer of lemons and limes in 2019, with a total export value of $828.6 million (24.7% of total lemons/limes exports).
By comparison, Mexico is a runner-up for top producer at $523.1 million (15.6% of total lemons/limes exports) and the largest producer in the southern hemisphere.
Mexico is likely the current top global producer of Tahiti limes, especially the states of Veracruz and Oaxaca, with the main destinations for exports being predictable: The United States, The Netherlands, and the United Kingdom.
Seasonal demand fluctuations are significant.
In 2018 prices more than doubled during the months of February and April before returning to the average. This period corresponds with the lull in harvesting and winter in the Northern hemisphere, demonstrating that Tahiti lime prices react dramatically to comparatively small shifts in available volume.
Between 2013 and 2017 imports of fresh limes to Europe grew by 33%. Tahiti limes made up the majority of this increase due to the market favoring larger, seedless fruit.
Import volumes and values have soared in recent years, from $1 billion in 2000 to over $4 billion in 2017. That’s a 400% increase in under two decades.
While European nations like the Netherlands and Spain have seen modest increases in exports, the United States hasn’t materially increased its exports in almost thirty years. As the largest importers of Tahiti limes, the United States’ and Europe’s increasing demand is being absorbed by producers in emerging economies.
The fastest-growing exporters of lemons or limes since 2015 were Colombia (up 449.6%), China (up 333.0%), Egypt (up 170.3%) and Mexico (up 42.5%).
The elephant in the room – China
Explosive production as well as domestic demand for limes in China has put this country on the map for lime producers and value-adding companies in the industry.
Since 2015, China’s import-export surpluses for lemon and lime sales increased a staggering 9,811%. Also, the country’s exports in this category leapt 60.8% between 2018-2019. Export dollar value is on the rise, topping $153.2 million in 2019, 4.6% of total global lemon and lime exports.
What’s that mean for the lime market? Despite rising international demand, it hasn’t been enough to absorb China’s surplus. With the US-China trade war setting the stage for heavier import tariffs, Chinese producers may be stuck between a rock (mixed reception from the domestic market) and a hard place (international tensions, price stagnation).
A closer look at Latin America
To meet the exploding demand, Latin American countries have dramatically amped up production. While nearly all lime-producing countries in the region have seen rising import-export surpluses, with Colombia standing out with its net export surplus up 465.2% since 2015.
Considering the US’s net export deficit is up 162.4% by the same measure, the opportunity for Colombian producers and midstream companies along the supply chain to address the US market is enormous.
Colombian Tahiti lime can be produced year-round and remains in steady supply even during the seasonal ruts in Mexico and Brazil. Colombia can address the winter market in both the US and Europe.
Colombia and other emerging exporters are ideally situated to take advantage of the current fluctuations in global lime markets. With rising consumption in China, declining supply in North America, and a health appetite for lime in Europe, these countries could emerge as powerhouse lime producers.
What’s next for the world’s lime producers? There are several factors to consider. The gradual reopening of bars and restaurants will drive a short-term spike in demand, but fears of a second wave could have a severe impact on markets. In the long term, climate change will be a major factor, and we will likely see lower levels of rainfall in certain areas, like Mexico. This could put the country’s lime industry at serious risk.
As the industry moves forward, look for rising volumes from emerging producers like Vietnam, Chile, and Colombia. Meeting a rising global demand will be a challenge, but could result in a major opportunity who can rise to the occasion.