In 2023, German manufacturers of food processing and packaging machinery achieved a nominal export growth of 8.6 percent, reaching a record value of 9.85 billion euros. However, German manufacturers were not the only ones to benefit from the strong global demand. According to the data available to date, the global trade in food processing and packaging machinery is expected to rise to over 52 billion euros in 2023.
Beatrix Fraese (VDMA/Uwe Noelke)
With an export turnover of 86 percent, the German food machinery and packaging machinery industry has an above-average level of activity in foreign markets. “On the one hand, we benefit from the continuing high level of investment in automated, efficient and sustainable production and packaging technologies in industrialised countries and, on the other, from the growth momentum in populous countries,” says Beatrix Fraese, economic expert at the VDMA Food Processing and Packaging Machinery Association. Last year, 53 per cent – and therefore more than half of exports – were delivered to countries outside Europe, with the focus on Asia and North America.
Food and beverage sector strongest industry in many countries
In many emerging economies, including the populous countries of India, Indonesia, Mexico, Brazil and Nigeria, for example, the food and beverage industries are the strongest industrial sectors (source: United Nations Industries Development Organisation UNIDO).
By investing in hygienic processing and packaging technology, these often resource-rich countries are increasing local value creation and self-sufficiency in safe, long-live food and beverages. They are increasingly moving away from exporting pure raw materials and instead exporting their own products in the region and, in some cases, worldwide. “The potential is far from exhausted and will continue to ensure a strong demand for machinery,” believes Beatrix Fraese.
The food and beverage industry is also the largest industrial sector in many industrialised countries, especially in the USA. In the United States, the sector employs almost 2 million people and generated a production value of over 1.1 trillion Euros in 2023 (source: Euromonitor International). Against the backdrop of a lack of skilled labour, the sector continues to invest in automated, efficient and stable processes. This ensures that imports of machinery are constantly reaching new records. German manufacturers have been the USA’s most important trading partner in the food processing and packaging machinery segment for many years.
USA remains number 1 market – India and Mexico among the TOP 10
The strongest impetus in 2023 also came from the USA. German deliveries of food processing and packaging machinery to the United States rose by 19 percent to €1.7 billion, which corresponds to an all-time high.
The USA has led the ranks of the top 10 sales markets for many years. France, China, the United Kingdom, Poland, Switzerland, Mexico, the Netherlands, India and Italy followed far behind in 2023.
From a regional perspective, German manufacturers sold 33 percent of exported machines in EU countries. A further 14 percent went to other European countries, 19 percent to North America, 17 percent to Asia, 8 percent to Central/South America, 4 percent to Africa, 3 percent to the Near/Middle East and 2 percent to Australia/Oceania.
Global machinery trade reaches record level in 2023
The global trade in machinery – the sum of exports from around 50 industrialised countries – reflects the global demand for imported food processing and packaging machinery and has been growing dynamically for years. Over the last 10 years, global trade in machinery has increased by 43 percent from €33.9 billion in 2012 to €48.6 billion in 2022, with EU countries accounting for a good 60 per cent of this. This makes the European food machinery and packaging machinery industry the most successful mechanical engineering segment in Europe, with Germany and Italy leading the way.
According to the data available to date, the global trade in food processing and packaging machinery will increase to over EUR 52 billion in 2023 despite difficult conditions, which corresponds to an increase of around 7 percent.
“We also see growth for our industry in 2024, as the global demand for safe and high-performance machines remains immense,” explains Beatrix Fraese, pointing to the strongest investment drivers, namely hygiene and food safety, automation and efficiency improvements, resource conservation and sustainability in production and the packaging process.
The higher demand for orange juice from the United States raised the Brazilian exports of the commodity in the first two months of the 2023/24 exporting season (July and August). The average price paid for the national juice increased in that period too, influenced by low inventories and the lower output in Brazil. The higher volume exported and the valuation of the Brazilian juice abroad resulted in a significant increase in the revenue of exporters.
According to data from Secex (Foreign Trade Secretariat), Brazil exported 182.9 thousand tons of Frozen Concentrate Orange Juice (FCOJ) Equivalent in July and August, 4% more than the volume shipped in the same period of 2022. Revenue totaled USD 397.9 million, a staggering 20% up in the same comparison.
As for the types of juice exported, shipments of Not-From-Concentrate (NFC) orange juice increased 19 %, and revenue, 25 %; of FCOJ, the volume exported decreased 3 %, while the revenue rose 17 %. The different performances of the exports of these types of juice are linked to the higher demand from the US for NFC juice, whose volume sent to the North-American country rose a staggering 51 %.
The United States
For one more season, the US have been importing orange juice from Brazil. In the first two months of the current season (23/24), the US imported 50.5 thousand tons of FCOJ, an increase of 38 % compared to that in the same period of 2022/23. Revenue totaled USD 113.2 million, 57 % higher, in the same comparison.
Lower orange production in the US because of the 2022/23 crop of Florida – which has decreased 62 %, according to the USDA – and lower supply from Mexico, the second major supplier of orange juice to the US, led the country to raise imports from Brazil.
European Union
To the European Union, Brazil exported, in July and August, 112.6 thousand tons of orange juice, a slight 3 % up from that last season. Revenue totaled USD 241.9 million in the two first months of the season, 14 % higher, in the same comparison.
Crop Estimates
According to data released this week by Fundecitrus, the 2023/24 harvest in the citrus belt (São Paulo State + the Triângulo Mineiro) is expected at 309.34 million boxes of 40.8-kg each, stable compared to that estimated in May but 1.5 % lower than the output from last season. It is important to highlight that this volume is a lot lower than the industry’s needs to meet the demand from abroad and replenish inventories, which are currently very low.
The Brazilian exports of orange juice increased in the first months of the 2022/23 season (July and August 2022). According to data from Secex, Brazil exported 175.9 thousand tons of Frozen Concentrate Orange Juice (FCOJ) Equivalent in July/August, 8 % more than that in the same period last year. Revenue totaled USD 332.6 million, 32 % up in the same comparison.
The exports of non-concentrate juice (NCJ) have had the highest increase this season, totaling almost 292.7 thousand tons, with a revenue of USD 108.3 million, 14 % and 24 % up from that in July/August last year. On the other hand, the revenue from FCOJ exports rose higher than that for NCJ, by 36 %, totaling USD 224.3 million in the first two months of the current crop; the volume shipped increased by 6 %, totaling 122.7 thousand tons.
These increases were already expected for this season, considering that, in 2021/22, the Brazilian exports were limited by estimates for low stocks of orange juice.
In August, CitrusBR reported that, in June/22, only 143 thousand tons of FCOJ were stocked, a steep 55 % down from that in June/21. CitrusBR considered a possible increase in the exports to the USA because of the low orange production in Florida, due to the high incidence of greening.
DESTINATIONS – The European Union continues as the number one destination for the Brazilian orange juice, with a share of 62 % in the total exported – in the same period last season, its share was at 64 %. The second major destination for the national juice is the United States, with a share of 21 % in the total, against 25 % in 2021. The share of other destinations increased from 12 % last season to 17 % this season (considering the months of July and August).
South Africa is set for record citrus exports of 2.7 million tons in marketing year 2021/22 despite ongoing challenges. Favourable weather conditions, new areas under production, and higher demand in premium markets, such as the United States, are driving the growth in exports. Duty-free exports of citrus to the United States under the African Growth Opportunity Act reached a historic high of 100,234 MT in 2021. However, several challenges are facing the industry, including, soaring input costs, especially fuel and fertiliser, a major surge in shipping costs, ongoing operational challenges at the country’s ports, and the impact of the Russia-Ukraine conflict on established trading patterns. As a result, profitability and sustainability of the industry are under threat and could limit future investments …
The World Apple and Pear Association (WAPA) has released the Southern Hemisphere apple and pear crop production forecast for the upcoming season. According to the forecast, which consolidates the data from Argentina, Australia, Brazil, Chile, New Zealand, and South Africa, apple production is estimated to increase by 6 % in 2021 compared to the previous year, while pear production is projected to stabilise.
The World Apple and Pear Association (WAPA) has released its 2021 apple and pear crop estimate for the Southern Hemisphere. This report has been compiled with the support of ASOEX (Chile), CAFI (Argentina), ABPM (Brazil), Hortgro (South Africa), APAL (Australia) and New Zealand Apples and Pears, and therefore provides consolidated data from the six leading Southern Hemisphere countries. WAPA’s Secretary General Philippe Binard commented on the usefulness of gathering the insights from these major producers: “Elaborating this collective data has previously proved a valuable exercise for the global apple and pear industry and a reliable source of information when the season progressively shifts from the Northern to the Southern Hemisphere”.
Regarding apples, the aggregate Southern Hemisphere 2021 crop forecast suggests an increase of 6 % (5.090.000 T) compared to last year (4.818.000 T), with increases in Australia, Brazil, and South Africa of 23 %, 20 % and 6 % respectively, a decrease in New Zealand of 5 %, and stable figures in Argentina and Chile. The aggregate increased by 2 % compared to the average of crops between 2018 and 2020. Chile remains the largest Southern Hemisphere apple producer in 2021 with 1.512 million T, with Brazil in second place (1.130 million T), followed by South Africa (1.013 million T), Argentina (617 million T), New Zealand (547 million T), and Australia (271 million T). Gala remains the main variety (39 %), followed by Fuji (14 %) and Red Delicious (13 %). Export figures are estimated to stabilise at 1.691.562 T, with stable figures for Chile (650.773 T), a 4 % increase for South Africa (476.000 T), and a 7 % decrease for New Zealand (372.000 T).
Southern Hemisphere 2021 apple production (Photo: WAPA)
Regarding pears, the Southern Hemisphere growers predict a stabilisation of the crop at 1.346.000 T and an increase of 2 % compared to the overall average of years 2018-2020. The increase in South Africa, Australia, and Argentina of 3 %, 2 %, and 1 % respectively are expected to compensate for the 3 % and the 10 % decrease in Chile and New Zealand. As in previous years, Packham’s Triumph and Williams BC/Bartlett are the major varieties, with 36 % and 28 % respectively. Forecasted export figures for pears are reported to increase by 6 % compared to the previous year and reach 708.690 T, with a 12 % increase for Argentina (373.996 T), a 2 % increase for South Africa (214.361 T), and a 3 % decrease for Chile (108.315 T).
The Brazilian exports of Frozen Concentrate Orange Juice (FCOJ) Equivalent (2019/20 crop) are ending, and the volume sold to all destinations continues higher than that last season.
From July/19 to May/20, Brazil shipped 1.03 million tons of juice, 13 % more than that exported in the first 11 months of the 2018/19 season (913.4 thousand tons), according to data from Secex. Revenue, in turn, rose by 1 % (in the same comparison), totaling 1.7 billion USD.
To the European Union, specifically, Brazilian juice shipments totaled 723.7 thousand tons, 23 % up compared to that in the same period last season (587.7 thousand tons). Revenue amounted 1.2 billion USD, for an increase of 10 %. To the United States, Brazilian exports have decreased by 19 % this season, to 154.5 thousand tons, and the revenue downed 25 %, to 248.96 million USD.
Low demand explains the decrease in the volume sent to the US, due to the forecast for a recovery in the 2019/20 season in Florida for the second consecutive year. The state has faced several problems involving weather and plant health this season and in previous crops.
However, due to the covid-19 pandemic, juice sales in the American retail market have increased significantly – data from Nielsen indicate that, this season (from October/19 to April 11, 2020), the volume sold was 6.1 % higher than that in the same period of the crop before.
In this scenario, local juice stocks are being consumed. Although inventories are higher than that in the season before, projections indicating an increase in stocks are lower than those at the beginning of the year.
BRAZILIAN MARKET IN JUNE – The trading pace for citrus was weak in the first half of June, but the volume of oranges available in the in natura market was lower, since processing plants were receiving fruits in that period. Therefore, the average price for pear oranges in the first fortnight of the month was 25.25 BRL per 40.8-kilo box, 4.7 % down compared to that in the first half of May.
Players surveyed by Cepea reported higher sales of ponkan tangerine in São Paulo between June 1 and 15. Thus, the harvesting of this variety stepped up in that period, so that growers could take advantage of the high price levels, although fruits have not reached the ideal maturation stage yet.
The Brazilian exports of Frozen Concentrate Orange Juice (FCOJ) Equivalent have been increasing for three months. Between July and September/19 (2019/20 crop), Brazil shipped 299.7 thousand tons of the product, 27 % more than that exported in the same period last year, according to Secex. Revenue, in turn, rose 17 %, in the same comparison, totaling 520.58 million USD.
The good exports performance is largely linked to the replenishing of European inventories (the European Union is the number one destination for the Brazilian orange juice) – last season, exports to the EU had decreased. Thus, this season, juice shipments to the EU have already reached 230.4 thousand tons, 47 % up compared to the volume exported between July and September last year.
To the United States, however, the Brazilian exports of FCOJ Equivalent have been decreasing (17% between July and September), totaling only 37.1 thousand tons since the beginning of the season, in July/19. This scenario reflects the supply offset in Florida in the 2018/19 crop as well as estimates for a positive scenario in 2019/20.
For the coming months, Brazilian juice exports are expected to keep on the rise, due to the higher orange production in the citrus belt (São Paulo and Triângulo Mineiro) and the needs of European bottling plants to replenish inventories. To the USA, in turn, the increase in the demand for the Brazilian orange juice will depend on the orange production in Florida (although greening has been controlled in the American state, local groves still suffer the effects of the disease).
BRAZILIAN MARKET IN OCTOBER – Despite the higher demand for oranges in the Brazilian in natura market in the first fortnight of October, the supply of high quality fruits was low (oranges are wilted and small). Thus, prices for higher quality oranges increased in the Brazilian market in the first half of the month. Between October 1 and 15, pear orange prices averaged 21.38 BRL per 40.8-kilo box, on tree, 12.6 % up compared to that in the first fortnight of September.
As regards tahiti lime, quotes increased in São Paulo in the same period – some deals reached 100.00 BRL per 27-kilo box, harvested. The scenario was linked to lower supply, since the fruits still on tree had not reached the ideal size and maturation stage to be harvested.
Between October 1 and 15, tahiti lime prices averaged 79.94 BRL per 27-kilo box, harvested, 68.3 % up compared to that in the first half of September. On the other hand, rains in the first fortnight of October may have favored fruits growth on tree, raising expectations for an increase in supply still in October.
The combination of lower orange supply in the Brazilian citrus belt (São Paulo and Triângulo Mineiro) in the 2018/19 crop with the recovery of Florida production is keeping the Brazilian exports of Frozen Concentrate Orange Juice (FCOJ) Equivalent low. This season (from July/18 to March/19), Brazilian juice shipments to all destinations have totaled 783.4 thousand tons, 14 % down compared to that in the same period last season, according to Secex. Revenue, in turn, has reached 1.4 billion USD, 12 % lower in the same comparison.
To the European Union, the biggest purchaser of the Brazilian juice, shipments have totaled 506.29 thousand tons this season, 8 % down compared to the same period last year. Revenue, in turn, has reached 941.2 million USD, 6 % down in the same comparison.
To the United States, the Brazilian exports of FCOJ Equivalent totaled 167.8 thousand tons between July/18 and March/19, 26 % less than in the same period of the previous season. Revenue reached 296.7 million USD, 27 % down in the same comparison.
The American demand for the Brazilian orange juice should not decrease too much in the coming seasons, due to the damages caused by greening, a disease with severe effects on production in the long term.
CROP END – Fundecitrus (Citrus Defense Fund) announced, on April 10, that the orange production in the citrus belt (São Paulo and Triângulo Mineiro) has totaled 285.98 million boxes of 40.8 kilos this season, 28.2 % down compared to the output in 2017/18 (398.35 million boxes). Compared to the average in the last 10 years, the current production is 11.6% lower.
Lower productivity was triggered by the weather (heat and drought) during fruit development. Low supply, in turn, kept high the need of Brazilian processing plants for oranges in 2018, limiting availability in the in natura segment.
MARKET IN APRIL – The higher availability of early oranges in the 2019/20 crop pressed down the quotes of all varieties surveyed by Cepea in the first fortnight of April. With the maturation stage below that demanded in the in natura segment, trades were limited. Between April 1 and 15, pear orange prices averaged 35.17 BRL per 40.8-kilo box, on tree, 18.8 % down compared to that in the first fortnight of March.
TAHITI LIME – Tahiti lime prices have been firm in Brazil this year, which is not typical for a first quarter. Although harvesting stepped up (which is common for the beginning of the year, due to the crop peak), high demand for exports as well as from Brazilian processing plants is controlling supply in São Paulo State.
In this scenario, the average price in April (until April 15) is already the second highest for the month, in nominal terms, considering Cepea series, which started in 1996 for this product. The same was observed in the first quarter of 2019, when the nominal average in January was only lower than in Jan/18 and the nominal averages in February and March were only lower than in the same months of 2016 – tahiti lime quotes reached nominal records in Feb. and Mar. 2016 and in Jan. 2018, in the historical series.
Agents’ initial expectations were that the harvesting of the fruits from the second blossoming would increase tahiti lime supply in the in natura market in April, despite the smaller volume compared to that in the crop peak. However, mainly in January and February, the demand from processing plants was high and prices, appealing. Thus, many growers harvested all the fruits early in the year, reducing supply in March.
Some citrus farmers accelerated the tahiti lime harvesting early in the year, aiming to prepare the trees for production in the second semester of 2019 (when prices usually rise).
In early April, according to purchasers, it was still difficult to find high quality tahiti lime in the in natura market. While mature fruits were missing, the new ones were still green – for that reason, harvesting was postponed. Higher quality fruits, in turn, were allocated to the international market. Thus, between April 1 and 15, tahiti lime quotes averaged 23.49 BRL per 27-kilo box, harvested, a staggering 63.6 % up compared to that in the first fortnight of March.
Cherry export amounts to over 20,000 tons in January – May period, rising 165 percent year-on-year
Turkey’s cherry exports may hit a record high this year by reaching some 85,000 tons with a value of $200 million, vice chairman of the Uludag Fresh Fruit and Vegetable Exporters’ Association (UYMSIB), said Wednesday.
