The press recently announced that Peruvian citrus reached 21 markets last October. Are citrus fruits in Peru experiencing a good moment? According to Sergio Del Castillo, general manager of ProCitrus, the citrus sector in Peru achieved historic figures in 2024, exporting more than 300,000 tons for the first time and generating over $300 million in export revenue.

However, this record in both volume and foreign exchange does not mean the outlook is entirely encouraging, as costs must also be considered. “Margins on citrus have been reduced quite a bit since the repeal of the Agrarian Promotion Law in 2020,” Del Castillo said.

Following the repeal of Law 27360 and its replacement by Law 31110, production costs have risen considerably, particularly impacting non-patented varieties and reducing the profitability of exports.

“The best time for Peruvian citrus was between 2020 and 2021 when costs were lower. But then margins dropped quite a bit; only those that produced efficiently, with good yields and a high percentage of exportable fruit, could end up in the black. Those that didn’t achieve productivity and quality ended up in the red. The years 2022 and 2023 were particularly bad, with substantial losses in the sector. This year has been one of recovery, but it is not a panacea,” said Del Castillo.

Law 31110 introduced new labor and tax conditions that increased operating costs, disproportionately affecting small and medium-sized producers who struggle to compete in a global market without sufficient margins.

For Del Castillo, it is crucial to understand that citrus, as a high-volume, low-price crop, requires exceptional production efficiency to remain profitable.

The record achieved this year is largely due to plantings made during 2020 and 2021, which have now reached their maturity stage and began producing this year. “Although no new plantations have been established in the last three years, the existing ones are increasing their productivity as they transition from young to mature plants,” he explained. This productivity boost has enabled the sector to better capitalize on opportunities in international markets.

However, Del Castillo warned that the industry will peak in two to three years if no new plantings are initiated. “We will reach a plateau in production. It will stagnate if we don’t plant more citrus in the next few years.”

Peru, a Leader in Citrus Exports

Del Castillo emphasized the need to review and improve agricultural policies to revitalize the crop. “Citrus is a business of volume and low prices. If you don’t produce more than 60 tons per hectare and at least 60% of the fruit isn’t exportable, you are in trouble,” he said.

He further pointed out that the lack of adequate incentives threatens the crop’s sustainability and could lead producers to shift toward other, more profitable crops.

In terms of production volume, Peru ranks fourth in the southern hemisphere, behind Brazil, South Africa, and Argentina. If only South America is considered, excluding South Africa, Peru ranks third. However, in mandarin exports, Peru leads South America and ranks second in the southern hemisphere, surpassed only by South Africa. This achievement is a testament to the quality of Peruvian fruit and the collaborative efforts of producers and exporters.

The Port of Chancay represents a vital opportunity to enhance the sector’s competitiveness, especially in Asian markets. Peruvian citrus takes over 30 days to reach Asia, which can impact quality.

“Reducing these times by 10 to 12 days will allow our fruit to arrive in better condition, with more benevolent cold treatments—necessary due to fruit flies. The Port of Chancay will be an opportunity to develop citrus exports across the Pacific Basin. With this more favorable cold treatment, the fruit will arrive with better skin quality and longer shelf life, which is very important,” Del Castillo explained.

He also highlighted the approval of a three-degree cold treatment for markets such as Japan, Vietnam, the United States, and New Zealand. This measure will help maintain fruit quality during transport, a critical factor for consolidating Peru’s position in the highly competitive Asian market.

Despite the accomplishments of 2024, the sector’s future hinges on addressing several structural challenges. Improving fruit productivity and quality, while ensuring public policies support the sector’s sustainability, will be crucial. As Del Castillo warned, growth could stagnate in the coming years without new plantings and supportive legislation.

“This year, 2024, has seen record volumes, and next year we may achieve record citrus production overall. Today, Peru produces roughly 1.7 million tons of citrus annually, and next year, we will likely surpass that figure,” he concluded.