Where are Spain’s orange trees going?

With favourable weather conditions and expected increased production, why are Spanish farmers cutting down their iconic orange trees?

Valencia is a name synonymous with oranges, with the association going back centuries. Spain is the primary orange producer in the EU-28, and according to recent data from the Spanish Ministry of Agriculture, Fisheries, Environment, and Food (MAPAMA), beneficial weather conditions are expected to yield increased volumes of oranges this year, with the same area providing over half a million metric tonnes more than the 2015/2016 harvest. Recent rainfall is also likely to improve the fruit quality, while Spanish citrus consumption is expected to remain stable.

However, the low price of oranges due to oversupply is tempting farmers to hack down their trees and use the space for more lucrative crops, such as bomba rice, which is used in Spanish paella dishes. Bomba rice is an authentic, old-fashioned rice that is relatively difficult to grow and is much more expensive than other short-to-medium grain varieties. In the presence of better growing conditions, Spanish farmers can continue to grow similar amounts of oranges on a smaller acreage while investing in local demand for authenticity in their traditional paellas.

Spain exports around half of its oranges, and the decline of juice consumption can be seen in many other countries, including Germany, France, Italy, and the UK.

Consumers in these countries are growing more health-conscious and increasingly avoid sugary drinks. Spain has also had to re-orient citrus exports to new markets in Asia to compensate for the loss of the Russian market following sanctions and political issues around Russian actions in Syria and Ukraine.

According to GlobalData, juice consumption is forecast to grow slowly in Spain in 2017, with volumes growing at approximately 0.8% compared to 2016. In the meantime, the global prices of oranges are in decline, reaching an annual low in June 2017. For Spanish farmers, the replacement of traditional oranges with traditional bomba is simply a matter of economics.

Related links

https://www.globaldata.com/store/report/cpg9348mp–juice-soft-drinks-market-in-europe-outlook-to-2020-market-size-growth-and-forecast-analytics/