Exporting lychees to Europe

Lychee is a specialty fruit that is slowly gaining popularity in Europe, although average consumption per capita is still limited. It is most popular in France. Madagascar and South Africa supply the majority of lychees during the winter season (from October to February). Supply during the summer season is much more limited but offers opportunities for countries such as Vietnam, Thailand and Israel.

1. Product definition

The lychee (Litchi chinensis) is a fruit of the evergreen trees from the genus Litchi of the soapberry family. The trees originated from China and are cultivated mainly in Southeast Asia. Growing conditions should be frost-free in winter and warm temperatures in summer with high rainfall and humidity. A wide variety of cultivars are grown commercially. The fruit from the tree is 5 cm long and 4 cm wide. The inedible skin of a lychee is pink-red and roughly textured. Its flesh is white and sweet tasting. Lychees can be eaten right out of the skin.

Table 1: Combined Nomenclature (CN) commodity code for fresh lychee

Source: Eurostat Comext

Product specification

Quality:

Import of fresh lychees from third countries to the EU must conform to general marketing standards for Fresh Fruits and Vegetables. The general marketing standards for fresh fruit and vegetables contain minimum quality requirements. Products should be:

• intact, clean and sound;
• (practically) free from pests, damage, abnormal external moisture, internal browning;
• in a condition to withstand transport and handling.

These standards are in conformity with the CODEX Alimentarius standard for Litchi.

The lychees must be sufficiently developed and mature to withstand transport and arrive in a satisfactory condition at the place of destination.

Lychees are classified in three quality classes:

“Extra Class” are products of superior quality. Products in this class must have the shape, development, and colouring that are typical of the variety or varietal type. Extra Class produce is free of defects, with the exception of very slight superficial defects. Slight defects should not affect the general appearance of the produce, the quality, the keeping quality, and presentation in the package.

Class I Lychees are of good quality that can only contain slight defects (slight misshaping, colouring or skin defects not exceeding 0.25 cm2).

Lychees that satisfy the minimum requirements but do not qualify for Class I or Extra Class can enter the EU market classified as “Class II”. However, the market for Class II produce is very limited. Class II lychees can have e.g. skin damage, provided that these do not exceed 0.5 cm2.

Size and colour:

According to the CODEX Alimentarius standard for Litchi, size is determined by the maximum equatorial diameter of the fruit.

• The minimum size for “Extra” Class is 33 mm.
• The minimum size for Classes I and II is 20 mm.
• A maximum size range of 10 mm between fruit in each package is permitted.

Size tolerances for all classes is 10% in number or weight of lychees not satisfying the requirements of the minimum size. The diameter is not less than 15 mm in all classes and the maximum size range is 10 mm.

Size is usually given in a range in mm. Some countries, e.g. Thailand, have developed agricultural standards that indicate size codes (1-3) for different varieties.

The colouring of lychees may vary from pink to red in the case of untreated lychees; from pale yellow to pink for lychees that have been fumigated with sulphur dioxide.

Packaging:

Wholesale packaging:

• Usually in boxes of about 2 to 2.5kg. Larger boxes may be used as well, especially if produce is repacked in Europe. Be sure to check the desired packaging with your customer.
• The contents of each package must be uniform and contain only lychees of the same origin, variety or varietal type, quality, size, and colour. The visible part of the contents of the package must be representative of the entire contents.
• The containers shall meet the quality, hygiene, ventilation, and resistance characteristics to ensure suitable handling, shipping, and preserving of the lychees. Packages (or lots for produce presented in bulk) must be free of all foreign matter and odour.

Consumer packaging:

fresh lychees are sold either right out of the wholesale box or in plastic trays (punnets) of various sizes.

Labelling:

Consumer package labelling must be in accordance with the rules and regulations applying in the European Union. Regulation (EU) No. 1169/2011 establishes the general principles, requirements, and responsibilities governing food information, and in particular food labelling. Labels cannot contain any toxic ink or glue.

Each package (non-retail package) must bear the following particulars, in letters grouped on the same side, legibly and indelibly marked, and visible from the outside:

• Identification: Name and address of exporter, packer and/or dispatcher. Identification code (optional);
• The nature of the product: Name of the produce if the contents are not visible from the outside. Name of the variety or commercial type (optional);
• Origin of product: Country of origin and (optional) district where grown or national, regional or local place name;
• Commercial identification: class, and optionally size (code), and/or net weight;
• Traceability code;
• Official Inspection Mark (optional).

In addition, for retail packaging, if the produce is not visible from the outside, each package must be labelled with the name of the produce and may be labelled with the name of the variety or varietal type. Any certification logo or retailer logo may be on the labelling if requested, in the case of private label products.

2. What is the demand for fresh lychee in Europe?

General information about production and trade developments in the European market for fresh fruit and vegetables is provided on the CBI Market Intelligence Platform.

This section provides you with more detailed statistics about trade and consumption of fresh lychee in Europe.

NB: Trade data below concern lychee as well as other tropical fruit in the same product group.

Imports

Interpretations and opportunities

• The total size of the European import market for lychees is estimated at around 20,000 to 25,000 tonnes annually. Madagascar is by far the biggest supplier of lychees to Europe, with an exotic fruit supply (mostly lychees) of 15.5 thousand tonnes in 2017. Most of this supply was destined for France.
• A large part of the lychees arrives by sea through the port of Zeebrugge, giving Belgium an important role in the logistics and re-export of lychees to France. But in 2017, France registered a direct supply and Belgian imports dropped from 14,000 tonnes in 2016 to 7,000 in 2017. This data shows a change in logistics and a more direct trade with France. For exporters, it is most important to realise that France determines most of the demand of lychees in Europe, and that there is also a market for air-freighted lychees.
• The most common varieties of Lychees sold on the European market are in the so-called Mauritius group. Varieties in this group include HLH Mauritius (also known as Tai So), Muzaffarpur, Late Large Red, Hazipur, Saharanpur, and Rose-Scented. On the French market, the variety Yellow Red is also popular. Other less well known varieties are Fay Zee Siu (green, small stone, and good taste), Red MacLean, Emperor and Chakrapad (with large fruits, Thailand).

Exports

Interpretations and opportunities

• The trade volume of fresh lychees within Europe consists mostly of re-exports from Belgium and a smaller volume from the Netherlands. The Netherlands and Belgium have several specialist importers of exotic fruit that supply wholesalers and retailers throughout Europe.
• Spain also appears among the more significant and growing exporters in Figure 3, in spite of not trading much lychee volume. What drives the Spanish numbers in this graphic is its growing specialisation in the production of other types of exotic fruits. In the case of lychees specifically, France has actually more export potential than Spain.

Production

Interpretations and opportunities

According to a 2014 publication from Cirad/EDP Sciences, the global production of lychees is 2.8 million tonnes. Most of this production is in China (1.9 million tonnes) and India (0.4 million), mainly for domestic consumption. Madagascar is the largest producer in the southern hemisphere with an estimated 100,000 tonnes.

Lychees require specific climatic conditions. The production has a substantial water requirement and is best cultivated in a subtropical climate with short, dry, and cool (frost-free) winters and long summers with high temperatures, high rainfall, and humidity.

Lychees do not ripen after harvesting. Therefore, lychees should only be harvested when they are fully ripened. To prevent the fruit from deteriorating after picking, it can be fumigated with sulphur dioxide. This treatment makes sea transport possible, as long as the fruit is kept in cooled conditions. It will also change the colour of the fruit to yellow, while European buyers prefer its natural red colour.

In the Malagasy season – under normal circumstances – supply is sufficient. The other months from February to November show better prospects for other suppliers, although general demand is lower. There are however still gaps in the supply of fresh lychees between March and July and from September to November, which may be interesting windows of opportunities for new suppliers.

Consumption

Interpretations and opportunities

Data on the exact consumption of lychees are not available for Europe. About 60 or 70% of the annual consumption takes place during the holiday season at the end of the year and the first months of the year with the Chinese New Year. However, countries and markets differ greatly in terms of volumes.

Lychees are used in fruit salads, in ice cream dishes (desserts), or as individual fresh fruit in-between meals. Lychees are especially popular with ethnic Chinese Europeans. They are a well-known ingredient in Chinese cuisine, as well as other Asian restaurants throughout Europe. The fruit is also combined with liquor or champagne in cocktails.

3. What trends offer opportunities on the European market for fresh lychee?

CBI Trend mapping provides you with general trends in the European market for fresh fruits and vegetables. This section provides more details about specific trends in the market for fresh lychees.

Growing interest in sustainable fruit: Consumption of fresh fruit in Europe is developing towards a more sustainable approach to production and processing. Environmental and social issues are becoming more and more important. Social and environmental certification schemes include actions to strongly reduce and register the use of pesticides, take action on the safety of employees and/or even include price guarantees for producers. Certification schemes that are in line with the Global Social Compliance Program (GSCP) will have a higher chance of being accepted by European supermarkets.

Attention to health food: Consumers in Europe are becoming more aware of health issues and pay more attention to their diet. Lychees are well known for being a healthy fruit. Since European consumers embrace healthy and tasty fruits, health benefits are one of the main drivers for market success.

Organic niche: Thanks to the increased attention to health and environment, there is also a growing interest in organically produced fruit and vegetables. Although organic lychees are not sold much yet, this might be a niche worth exploring. There are specialized importers of exotic fruit and organic produce. In some countries however, organic is associated with local produce and air transported produce will not easily be accepted as organic.

Taste is important: European consumers want the lychees to be at the optimal ripeness when bought. Exotic fruit is generally expensive, thus increasing the importance of taste and appearance. The taste of lychees should be sweet, while the texture of the fruit is firm.

4. What requirements should fresh lychees comply with to be allowed on the European market?

Buyer requirements can be divided into (1) musts, requirements you must meet in order to enter the market, such as legal requirements, (2) common requirements, which are those most of your competitors have already implemented, in other words, the ones you need to comply with in order to keep up with the market, and (3) niche market requirements for specific segments.

For general information see also the buyer requirements for fresh fruit and vegetables on the CBI Market Intelligence Platform for fresh fruit and vegetables.

Requirements you must meet

Pesticides

Pesticide residues are one of the crucial issues for fruit and vegetable suppliers. To avoid health and environmental damage, the European Union has set maximum residue levels (MRLs) for pesticides in and on food products. Products containing more pesticides than allowed will be withdrawn from the European market. Note that buyers in several Member States such as the UK, Germany, The Netherlands and Austria, use MRLs which are stricter than the MRLs laid down in EU legislation.

Plant Health

Fruit and vegetables exported to the EU must comply with the EU legislation on plant health. The EU has laid down phytosanitary requirements to prevent introduction and spread of organisms harmful to plants and plant products in the EU. The requirements mainly imply that:

• Certain listed organisms are not allowed to be imported into the EU, unless specific circumstances apply. EU control measures are subject to change.
• Plants or plant products specified in Part B, Annex V of the Plant Health Directive 2000/29/EC must be accompanied by a plant health certificate. A model phytosanitary certificate can be found through Annex VII of the Plant Health Directive.

Contaminants

Contaminants are substances that have not been intentionally added to food, but which may be present as a result of the various stages of its production, packaging, transport or warehousing. To avoid negative impact on the quality of food and risks to human health, the EU has set limits for several contaminants.

Control of food imported to the EU

To ensure food safety and avoid environmental damage, the EU has restricted the use of certain chemicals in several Regulations and Directives. Your products will be subjected to official controls. These controls are carried out to ensure that all foods marketed in the EU market are safe, i.e. in compliance with the requirements applicable to them. There are three types of checks:

a) Documentary checks

b) Identity checks

c) Physical checks

In the event of repeated non-compliance of specific products originating from particular countries, the EU can decide that controls will be carried out on an increased level or lay down emergency measures. Controls can be carried out at all stages of import and marketing in the EU. However, most checks are done at the points of entry in the EU.

Switzerland, Norway, Iceland and Liechtenstein are not EU members, but are part of the European Free Trade Association (EFTA). Their food laws are to a large extent identical with EU legislation. However, some aspects of legislation may differ. In Switzerland, import checks are the responsibility of the Swiss Customs Administration and the Federal Office of Public Health.

Common buyer requirements

Certification as guarantee

As food safety is a top priority in all EU food sectors, you can expect most buyers to request extra guarantees from you in form of certification. GlobalG.A.P. is the most commonly requested food safety certification scheme, essential for exporting lychees to the EU, especially via supermarkets. GLOBALG.A.P is a pre-farm-gate standard that covers the whole agricultural production process, from before the plant is in the ground to the non-processed product (processing not covered).

Examples of other food safety management systems that can be required are:

• BRC (British Retail Consortium)
• IFS (International Food Standard)
• FSSC22000 (Food Safety System Certification)
• SQF (Safe Quality Food Programme)

These management systems are additional to GLOBALG.A.P. and are recognised by the Global Food Safety Initiative (GFSI).

Quality standards

The General EU Marketing Standards also apply to lychees. EU buyers often require compliance with the standards of the United Nations Economic Commission for Europe (UNECE) or the Codex Alimentarius Commission (CAC). It should be noted that quality refers to both food safety and food quality.

Social and environmental compliance

There is growing attention in Europe for the social and environmental conditions in producing areas. Most European buyers have a social code of conduct which they expect suppliers to adhere to. For lychees it is important to adopt social and environmental standards and for supplying to most large retailers, it is a must.

An important way to prove yourself as a responsible supplier of lychees is by getting certified through:

• GRASP, a social add-on of GLOBALG.A.P. and an accessible certification that is gaining importance in Europe.
• SMETA, which stands for the Sedex Members Ethical Trade Audit. SMETA was developed by the non-profit member organisation of Sedex with the objective to facilitate the exchange of information on social compliance.

You increase your chances by implementing standards that are recognised by the Sustainability Initiative Fruit and Vegetables (SIFAV), which consists of an initiative from traders and retailers to become 100% sustainable in sourcing fresh produce from Latin America, Africa and Asia by 2020.

Niche markets: Organic and Fair trade requirements

Organic, a growing niche market

An increasing number of EU consumers prefer food products that are produced and processed by natural methods. The market for organic lychees is still small, but with a growing demand and limited supply.

To market organic products in Europe, you have to use organic production methods according to European legislation and apply for an organic certificate with an accredited certifier. Furthermore, you have to use these production methods for at least two years before you can market the fruits and vegetables as organic.

After being audited by an accredited certifier, you may put the EU organic logo on your products, as well as the logo of the standard holder (e.g. Soil Association (especially relevant in the UK), Naturland (Germany) or Bio Suisse (Switzerland)). Some of these standards are slightly different, but they all comply with the EU legislation on organic production and labelling.

Fair trade

The focus of fair trade certification in the fresh fruit business in general has been redirected to other social compliance schemes such as GRASP and SMETA (see above). On the other hand, 30,000 families in Madagascar depend on lychee production, and fair trade could help increase their sales in the future.

Examples of social or sustainable labels for fresh fruit and vegetables are Fairtrade and Fair for Life.

5. What competition do I face on the European lychee market?

This section provides information about the market competitiveness of the EU market for fresh lychees.

Company competition: Worldwide production of lychees is volatile and rivalry is fierce most of the time. Temporary shortfalls in supply (e.g. due to harvest problems) have a huge impact on prices. New companies can improve their competitive position by innovating and adding value to the product, i.e. ready-to-eat products or recipes for (elements of) meals.

• China is the world’s largest producer of lychees with a production ranging from around two to three million tonnes per year depending on the climatic conditions. Despite these large volumes, China does not supply much to Europe due to sufficient local demand.
• The Madagascar, or Malagasy, season starts at the end of November. Madagascan supply is concentrated at the year-end Holidays of Christmas (December 25) and New Year. Chinese New Year is also a very important period for the lychee market. Madagascar’s 2016 production was estimated at 50 thousand tonnes, according to the French ‘Centre de coopération internationale en recherche agronomique pour le développement’ (Cirad).
• Other supplying countries in the winter season are South Africa, Reunion, and Mauritius. Vietnam, Thailand, Israel and Mexico are supplying lychees from June to August.
• Supply from Reunion, South Africa, and Mauritius is much smaller than from Madagascar and although in the same season, these sources are targeting a different, more exclusive market. Suppliers from these countries clearly try to set their produce apart in terms of quality, size grading, and freshness. Cirad provides estimates and price information of some of these origins in 2015–2016.

Market entry: Certification and meeting both legal and non-legal requirements form a major hurdle for producers and exporters wishing to enter the European market. Certification applies to good agricultural practices, legal requirements mainly to MRLs, plant health issues, and food safety. For lychees that have been treated with sulphur dioxide, strict limits to residues exist.

Product competition: There is a clear distinction between different qualities in the supply of lychees. Fresh air-freighted lychees are higher priced than the sulphur treated sea-freighted lychees. When supplying fresh high-end lychees, you must consider to supply trussed or on-stem lychees, as these are higher valued than destalked fruits.

In the last decade the diversity of fruit and vegetables supplied to the European market has increased. Exotic tropical fruits compete with other fruits, but can also complement them. They are distinguished by a higher price, a more exclusive image and perceived health benefits.

Fresh lychees experience competition from Rambutan, Longan, and similar fruit. In addition, fresh lychees face competition from preserved lychees (cans and jars). Outside of the winter season, you can also expect more competition from seasonal and local fruit in Europe.

6. What do the trade channels and interesting market segments look like in Europe for fresh lychees?

This section provides information about the various marketing channels through which lychees are marketed in Europe.

Figure 4: Market channels for fresh lychees in the European market

Specialised importers: Exotic fruit, as well as organic fruit, is traded through specialist market channels. In typical trade hubs such as the Netherlands and Belgium there are various importers that have built expertise in the trade of new exotic fruits, including lychees. Importers/distributors differ in their relationship with the retail sector. Some are suppliers for private label products; others have their own brand, while others market the brand of a producer (cooperation).

Regional differences for tropical fruit market channels: In Europe, there are differences between the compositions of market channels. Northern countries like Germany, the UK, the Netherlands, and Belgium have a very dominant retail channel and tropical fruit is sold by large supermarkets. France and Spain go beyond that with large hypermarkets, alongside smaller specialist shops. Countries in the Alpine region, such as Switzerland and Austria, are more favourably disposed towards small local shops.

Ethnic segments: Lychees are sold in larger supermarkets as well as specialist fresh fruit stores and markets. However, the out-of-home segment, such as Asian restaurants, is one of the main places for consumption. For lychees, the ethnic Asian population is important. Ethnic food stores and street markets are main sales channels. European consumers are gradually becoming more familiar with Asian (and other) cuisines. This increases the market for lychees.

7. What are end market prices for fresh lychees?

Figure 5 gives an idea of the added value for each step in the supply chain for lychees.

Figure 5: Price breakdown

Consumer prices for lychees vary around €11-14 per kilo. They are usually available in packages of 200 to 500 grams.

When there is abundant supply by sea, consumer prices can drop well below €10 per kilo. During shortage or peak season (Christmas) prices can expected to be higher. Larger sizes generally have a higher value.

Figure 6: Example consumer prices

Lychees in the Netherlands, 250g 2,79 euro

Source: www.ah.nl

Lychees in France, 250g 3,49 euro

Source: www.auchandirect.fr

Please review our market information disclaimer.