Citrus supplies under pressure

JUICE MAKER Trade Winds Citrus Limited says fruit supplies continue to fall, affecting both local supplies and exports.

The volumes of citrus sold by the company was down nine per cent last year, but revenue still climbed by 10 per cent, said Managing Director Peter McConnell.

The company exports citrus to the Caribbean, mainly Barbados and Trinidad & Tobago, but those sales also declined due to inadequate volumes.

Amid the downturn, that sees McConnell describing the citrus industry as being on life support, Trade Winds is currently investing in planting out 300 acres with fruit trees that can withstand the tenacious greening disease. Capital investment in its agricultural operations is currently running at an average of $200 million.

Trade Winds, which operates orchards and factories in St Catherine, mainly trades in citrus products that it manufactures, but over time, as fruit supplies dwindled from disease and other impacts, the company has diversified into milk beverages to offset the decline.

It also sells fruits such as pineapples, oranges and tangerines that are grown on its farm.

On the local market, consumers now pay about $100 each for tangerines and oranges are scarce and high-priced. McConnell also warns that the supply dynamics could end up with orange juice being priced beyond the average consumer’s pocket.

At his company, revenue contribution from agriculture operations has declined from about 40 per cent a decade ago to 15 per cent today.

“There has been a steep learning curve with the new agricultural projects of pineapples and dairy farming, but we are learning fast and seeing very positive results. The key is to invest in modern technology and to have the trained persons to apply this technology,” he said.

Nationally, the citrus industry has been “devastated” by the Citrus Greening disease over the past 12 to 15 years.

“Current production is approximately 20 to 25 per cent of what it was when the disease started to take effect,” McConnell said.

“National production figures are not accurately tabulated but I estimate that total annual local production is now 200,000 to 225,000 field boxes coming from over one million in 2008.”

Each box of citrus represents around 90 pounds of fruit.

In 2007, Trade Winds itself was producing 551,000 field boxes of citrus from 2,737 acres, but that is now down to 148,000 boxes from 1,171 acres.

Back in 2008, there were two factories purchasing oranges and manufacturing FCOJ or frozen orange juice concentrate for use on the local and export markets, and Jamaica was then self-sufficient in orange and orange juice production, said the juice maker.

“The Jamaica Citrus Growers factory has since shut down leaving Trade Winds Citrus as the only factory processing oranges,” he said.

“While TWCL continues to make FCOJ with our own oranges, there has been no citrus available for purchase since 2015.”

The greening disease pushed the company into diversifying into dairy and pineapples.

“The disease is still present in Jamaica and there is no apparent cure,” said McConnell.

Nonetheless, in 2017 the company set up a 15-acre experimental plot on which it grew irrigated citrus and applied the latest technology to combat the disease.

“The trial was very successful and it gave us the confidence to reinvest in citrus. We have since planted a total of 125 acres of irrigated citrus and are in the process of installing another 300 acres of irrigation to continue the replanting of citrus as aggressively as we can afford.”

Jamaica is not the only citrus producing country being affected by the plant disease. Greening has severely impacted citrus production in the entire Americas from Brazil to the United States and everywhere in between, the manufacturer noted.

Trade Winds is a privately owned beverage company located in Bog Walk, St Catherine, from where the company produces various brands, namely, Tru-Juice juices, Freshhh juice drinks, Squeezz fruit drinks, Wakefield Juices and Calico Jack rum punch.

Its manufacturing facility consists of a fresh fruit-packing house, a concentrate plant, purée plant and a juice blending and bottling plant, as well as refrigerated distribution.

The company makes use of local fruits and vegetables to make its drinks, but it also imports raw material to produce 100 per cent juices with no sugar added.

From its packing house, Trade Winds prepares fresh citrus fruits for the local and export market which are shipped as refrigerated cargo to markets in Europe and the Caribbean. It has the capacity to pack over 200,000 pounds of fruit per day.

McConnell said that so far this year, the capital spending on Trade Winds’ agricultural operations was $195 million.

“In 2024, capex on agricultural operations will be $220 million, which will be on citrus irrigation and the dairy farm,” he said.

Still, he remains a bit cautious about the overall prospects for the citrus industry, which is in decline in some of the big international markets.

McConnell said global orange production for 2022-23 was down by five per cent to 47.5 million metric tonnes. Lower production in the European Union and the United States was only partially offset by a larger crop in Egypt. The leading producers are expected to Brazil and China.

Global orange juice production is also forecast to fall by seven per cent to 1.6 million metric tonnes, due to reduced availability of the fruit processing in Brazil, the European Union, Mexico, and the United States.

The result is that price of orange juice is at an all-time high.

Trade Winds, he said, has seen a 65 per cent increase in the cost of imported frozen concentrate orange juice this year. And the company is trying to claw back some of that additional cost from consumers of its products.

“We have already started to increase our prices on our orange juice products but we are unable to pass on all of the necessary increases at one time. However, the harsh reality is that orange juice will likely become a luxury item,” he said.