According to some sources, the lime market hit $80 for a 40-pound carton during mid-March, and the demand-exceeds-supply situation should remain in force for at least several weeks and could last as long as several months.
“We had an $80 market this week,” Ronnie Cohen, vice president of sales for Vision Import Group LLC in River Edge, NJ, told The Produce News March 18. “I don’t think I have ever seen it go over $55 before. It got to $50 and it just kept rising, going up $5 at a time.”
Richard Ruiz, president and chief executive officer of Ruiz Sales in Edinburg, TX, agreed, and in fact said March 19 that the market keeps on climbing.
“It is $80 and higher today,” he said.
Though he wasn’t disputing the extreme demand-exceeds-supply situation, Alex Villarreal, who is sales manager at Paulmex International Ltd., also in Edinburg, TX, told The Produce News that he hasn’t yet sold any fruit at $80. “We’ve had some $76 sales and we went up to $78, but haven’t had any sales at that [$80] price.”
He quipped that the guys quoting $80 and above might not have any fruit and they are just trying to stop the phone calls from desperate buyers.
In any event, the market is hot and supplies are minimal. In fact, growers are currently stripping their trees, which should make the short supply situation drag on.
Villarreal said that typically, limes, of which more than 90 percent come from Mexico, with the Persian lime variety being dominant, peak in the 175-200-count size, indicating the number of limes that fit into a 40-pound carton. Because growers are chasing the hot market, the Paulmex executive said close to two-thirds of the volume crossing the Texas border are the smaller 235-size fruit.
In practice, this means it takes more limes to fill the carton and those limes aren’t being allowed to grow to their more traditional size. That ultimately means less fruit on the trees for the weeks, and possibly months, ahead.
Cohen said the lack of supplies is the result of bad weather in December that caused a bloom drop. Those blooms that failed to turn into limes are the limes that would have been marketed now.
In addition, the same bloom drop hit the Key limes that fill Mexico’s substantial domestic demand. With no Key limes, there is added demand pressure on the Persian limes, which are typically exported.
And then by stripping the trees, growers are currently picking the limes that would normally be ready in April.
Cohen said, “We could see a hot market through June. Not as high as $80, but it could be $40 for the next couple of months.”
He said it is not unusual to have a strong market in January, February and March, as that is a period of lighter supplies. But he said a typical strong market might be in the neighborhood of the mid- to upper $20s per carton f.o.b.
Ruiz said he is getting mixed messages from Mexican lime growers as to just how long this shortage will last.
“Some say several more weeks, others say longer than a month,” said Ruiz. “We just have to wait and see.”
While there are other points of origin in the Caribbean and Central America for limes, Villarreal said the volumes from the Dominican Republic, Honduras and Guatemala are very small in comparison to Mexico and cannot come close to making up the lost volume.
Echoing those same sentiments, Cohen said supplies from all the other sources amount to just a “drop in the bucket” compared to Mexico.
Villarreal believes the market itself will take care of the over-demand situation. He said soon the retail price will begin to reflect the high f.o.b. price and that will affect movement at the consumer level.
Already, he said the smaller fruit (235-size) is being priced at a discount to the retail trade compared to the larger fruit. That could create an inventory backup at the produce warehouses for 175-200-size fruit, which will then result in a downward price pressure on that fruit.
“I expect the normal dynamics [of supply and demand] to kick in and for the price to start to drop in a couple of weeks or so,” Villarreal said.