Limes are in a spiral of hyperinflation, with prices doubling every month this year
Those hardest hit are working class Mexicans, who rely on limes for their dishes
Profits are being squeezed and the pain may soon be felt beyond Mexico
Dressed in a white cowboy hat and shirt in the merciless sun, 63-year-old Juan Leana Malpica proudly pulls a branch down in his lime grove and cups a fruit. His limes, he says, set themselves apart by their juiciness.
He has been growing the fruit for the last 12 years and has never experienced a time of such upheaval.
Officially, lime prices are in a spiral of hyperinflation, the national average jumping at a monthly average of around 50% this year.
Leana Malpica says he is receiving an even wider margin for his produce in the state of Morelos. He pinpoints a variety of factors in Mexico for the soaring prices.
“There’s the devastation caused by a citrus disease,” he says. “Then there is climate change. With the arrival of winter there has been a cold snap in nearby states. And what I feel is most devastating are the price speculators.”
Another factor is the continuing violence in the state of Michoacan, a top lime producer. Vigilante groups there are battling drug cartels, with the federal government caught in the middle. Many growers can’t – or won’t – put trucks on the road.
Those hardest hit are inevitably working class Mexicans, who rely on the staple for drinks, garnishes and ingredients for most dishes.
“I normally buy two kilos,” one shopper at a market in Mexico City tells me. “But now I buy a half and only use them for absolute essentials.”
Mexico is the world’s largest lime producer and export markets have also felt the brunt of rising costs. Some U.S. airlines have announced they are restricting the service of limes on flights and Mexican restaurants are absorbing greater costs.
U.S.-based Rosa Mexicano is a high-end chain with 19 locations around the world. They buy more than one million limes a year.
“I can tell you this time last year we were paying approximately $36 a case,” says manager Jay Holmes. “The first delivery this morning was $110 a case. We’ve not passed that onto the guest and don’t plan to.”
So while you may not be paying more for your margarita right now, profits are being squeezed. If lime prices stay the same, Rosa Mexicano estimates it will have to pay an additional $650,000 this year.
For Mexican producers like Juan Leana Malpica who have not been hit by shortages, all this represents a big payday. He plans to use the profits to expand, upgrading his fertilizer and irrigation systems.
The Mexican government, too, is trying to boost supply. Although the scale of the lime crisis is unique this year, the early months traditionally see a shortfall.
“We have just generated a technology in Morelos which will launch in September,” says Agriculture Ministry official Rafael Ambriz Cervantes.
“We will trim the branches of lime trees and immediately apply nitrogen to induce flowering. And this flowering in the month of October will produce limes in February, March and April.”
Consumers and businesses will have to wait until 2015 to see how effective the program is. The hope is that the brand of a key Mexican crop has not been tarnished.