Lychee Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

Lychee Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The lychee market is projected to witness a CAGR of 3.5% during the forecast period (2022-2027). The year 2020 was not very promising for lychee farmers around the world. Due to the prolonged lockdown around the world, farmers were not able to market their produce, resulting in losses. Further, Vietnam faced challenges to export the fruit to Japan in 2020 due to disruption at the Vietnam-China border, restricting Vietnamese fruit exports.

The increasing demand for fresh produce in the emerging and developing nations worldwide and rising trade from the major producers and favorable government initiatives in the major producing countries are driving the growth of the market.

At the end of 2019, Vietnam entered an agreement with lychee farmers for the export of lychees to Japan. However, the pandemic trade restrictions posed a major roadblock for the exports from Vietnam. The substantial and unprecedented disruption in the functioning of both the market forces of demand and supply posed hurdles for all stakeholders, including consumers, in the market.

China is a major producer and exporter, accounting for a major market share of lychee exports across the world. According to ITC Trade Map, the total fresh lychee export from China was worth USD 53.2 million in 2020. Europe and United States are the major markets for lychee exports from China. The European consumers consider lychee a 'sweet, nutritious' super fruit, and larger volumes of litchi are imported every year. With the rising demand for healthy food in these markets, the export of lychee has considerably increased over the years. According to data from the General Administration Customs China (GACC), Guangdong province exported 5,902.1 metric ton of lychee in 2020, showing an increase of 72.3% in comparison to 2019. Lychee from Madagascar occupies a strong position in the European market. Hence, the rising demand and the favorable government support are expected to boost the market growth significantly in the coming years.

Consumers are becoming more aware of health issues and conscious about their diet. Lychees are well known for being a healthy fruit. Lychee is a specialty fruit that is slowly gaining popularity in Europe, although average consumption per capita is still limited. The fruit is gaining popularity in France as well. Consumption of sustainably produced fresh fruit offers greater opportunity in Europe.

The rising demand for lychee in France and other EU countries is expected to boost the lychee imports further in the coming years. Thus, the demand for lychee in many countries is increasing tremendously with each passing year. The exports to international markets, along with the domestic consumption, are expected to grow during the forecast period.

Lychee is experiencing an emerging demand from the cosmetic and fragrance industry, as well as for manufacturing perfumes and skin and hair care products. The fruit is witnessing an increasing demand from the expanding HORECA industry in United States offering continental cuisines. The lychee fruit is now finding its way into supermarkets across Canada. The majority of the consumption is based on importing the fruit from neighboring countries and Asian countries. Litchis are consumed in salads, ice creams, custards, and other desserts by the Canadian population.

China is the leading exporter of lychee fruit. The country had exported lychee fruit worth 53,195 thousand in 2020, with the main destinations being Hong Kong, Malaysia, United States, Indonesia, the Philippines, and Canada.

Lychee is primarily produced in China and India. China is the main producer of lychees, followed by India and other countries in Southeast Asia. According to the International Society for Horticultural Science (ISHS), in 2018-2019, Southeast Asian countries accounted for 19% of the lychee market. Madagascar accounted for 35% of the global exports, followed by Vietnam and China, with 19% and 18%, respectively.

Lychee is one of the prominent fruits grown in India. In India, the government and private companies have been taking initiatives to boost value addition, exports, and value realization of farmers. For instance, in 2020, Coca-Cola India, DeHaat, National Research on Litchi (NRCL), and Kedia's fresh partner launched an initiative called Unnati Litchi. The initiative is aimed at enhancing the efficiency of the agri value chain and farmers’ capability building on high-density plantations, farmer training for good agriculture practices (GAP), and the creation of demo orchards through appropriate technology interventions. Thus, the aforementioned factors are driving the market, which is anticipated to grow during the forecast period.

According to horticulture statistics, in India, in 2016, the area of cultivation under lychee was 90,000 hectares, and it increased to 96,000 hectares by 2019. Similarly, lychee production was at 559,000.0 metric ton in 2016, and it increased to 721,000.0 metric ton by 2019.

According to data from Guangdong Province's Agricultural and Rural Department, Guangdong, which accounts for over one-third of the global planting area, witnessed a heavy harvest in 2020. The export increased substantially. By June 2020, the Guangdong province exported around 4,000 metric ton of lychee, leading to a 20% year-on-year increase. Based on the figures from ITC TradeMap, the total export value of lychee from China in 2019 was USD 25,313 thousand, which doubled in 2020, reaching USD 53,195 thousand. The major importing countries from China are Hong Kong, Malaysia, and United States, which reported a significant increase in the import value from 2019 to 2020, reaching USD 17,032 thousand, USD 9,287 thousand, and USD 6,173 thousand, respectively.

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