The Andalusian citrus fruit campaign, just like the Valencian one, is going through hard times. The economic uncertainty has taken over the season, particularly for oranges
José Rodríguez, Managing Director of SAT Síntesis, explains how the company from Seville is coping with this situation.
From your point of view, which factors are influencing this impasse or the slowness of the citrus fruit campaign?
There is a convergence of variables: firstly, in Andalusia the campaign started around twenty days late. Added to this was the surplus of produce from the southern hemisphere, which arrived late due to the docking problems and that coincided with the start of our campaign. And finally, we must add that our Navelinas are small and medium-sized and they come up against the goods from South Africa that were also small as it was the end of their season. A perfect mix so that prices could collapse.
Good-sized oranges are coping slightly better, but in general it is a slow season. There is no fluidity in the departures from the warehouses and the planned promotions are not reaching their expectations. Some deliveries have even been cancelled because the sales are not working well.
There is serious underlying unrest and the lockdown situation in Europe is generating a great deal of uncertainty. In mandarins, owing to the shortage, the situation is better, but we are experiencing an important slowdown in oranges.
Are there any hints that the European lockdowns could generate greater demand as occurred during the toughest period of the pandemic?
No, not at all. This time the situation does not help. The population has lost its fear of the virus and it has no intention of eating more Vitamin C.
The forces are unbalanced; the business must pass on the price increases in cardboard, transport and wood. These increases have occurred both in the warehouses and in the fields, where all the inputs needed for the production have gone up in price.
All of this placed in the cocktail shaker of a handling centre, means lower prices for the fields. And if the costs are much higher in the fields, the situation becomes significantly complicated.
I suppose that the chaotic sea shipping situation has also added to this.
Indeed. The problems that are derived from this circumstance are on the table every day. Delays in the arrival of the ships and the uncertainty about departures are very usual. We are learning to live alongside these complications.
How are these logistics difficulties assumed in a company that is so export-orientated?
By maintaining a lower rate of departures and running the risk that orders are cancelled or delayed. We are all experiencing a global problem, which we cannot resolve ourselves and for which we have no alternatives. These are some of the consequences of what occurred in the first months of pandemic with the daily shipping traffic, and that has yet to recover its balance.
At the moment the docking problems are more obvious in the ports in the United States and it seems that they are moving forward somewhat in Asia.
Indeed. At the moment the worst situation is in America. We are suffering not only delays, but also an increase in the price of freight never seen before: rising from 5,000 euros to 12,000. It also means that consumers look for other alternatives if the goods are very expensive. We are entering a spiral of weak demand.
In spite of these disadvantages, personally, I prefer to see the bottle half full rather than half empty. We have seen how the situations can vary greatly from one year to the next and I prefer to think that when the transport problems come to an end, the markets of China and India will have many mouths to feed with our produce.
What must happen for the campaign to pick up speed?
In order for the course of the Navelina to straighten out, many circumstances must converge: the weather at the destination could help with the arrival of a very cold snap or that here, at the source, a frost or important rainfall occurs and the oranges get worse because they are already ripe. This is the only sad circumstance that will take kilos off the market. Either we clean up at the source or they eat more at the destination. It is sad, but there is no other alternative.
And I should point out, looking to the next campaign, that the significant drought being suffered by the water catchment basin of the Guadalquivir could compromise the 2022-23 campaign.
In specific terms, what are the latest developments from your company?
We have made an investment of over 2.2 million euros in the first phase of infrastructures in the field reception and handling area. We are also concentrating all our activity in a single warehouse.