Citrus exports lower than forecast

Local citrus growers exported lower than predicted volumes to global markets in 2022, according to the Citrus Growers’ Association (CGA) of Southern Africa.

The association says that despite packing 3.2 million more cartons of fruit for export markets this year, the industry packed and exported 5.7 million cartons less (164.8 million cartons) than what was predicted at the beginning of the 2022 season.

“These figures highlight the extremely tough season growers have had to endure that has negatively impacted their returns and the volumes they were able to export and threatens the future sustainability of the industry, which sustains over 140 000 jobs and brings in R30 billion in revenue to South Africa each year,” notes Justin Chadwick, CGA’s CEO.

Chadwick says that while there was modest growth in the fruit packed and exported across some citrus varietals compared to 2021, the final figures were “far lower” than anticipated.

“This can be seen when it comes to mandarins, where 31.8 million cartons were packed for export to key markets this season, which is an increase of 900 000 cartons from 2021, but is 2.7 million less than the season forecast,” he adds.

He says the “perfect storm of challenges” also led to a drop in packed volumes in comparison to 2021, as seen with grapefruit where 800 000 less cartons were packed for export this year. Valencia’s also saw a decline in packed cartons for export with only 53.8 million cartons exported compared to 55 million in 2021.

On a more positive note, Chadwick says volume growth in lemons continued unabated with 34.7 million cartons packed for export in 2022, an increase of 3.6 million cartons from 2021, and 2.4 million cartons more than the prediction.

“The only other category that saw positive growth was navels with 27.8 million cartons packed for export in 2022, which was an increase of 600 000 cartons when compared to last year. However, it was 900 000 cartons less than the 28.7 million cartons forecasted at the start of the season.”

Reflecting on this season’s output, Chadwick notes that the 2022 season saw challenges including a surge in farming input prices and transport costs along with “astronomical” shipping price hikes which affected the cost of getting fruit to be commercially viable for many growers.

“The significant price hikes, that has seen freight costs increase by over 150% over the past two years, has had a devastating impact on growers’ profit margins, putting many of these local businesses at risk.”

He says added to that is the new False Coddling Moth (FCM) regulations which were passed by the European Union in the middle of the season, placing additional financial strain and risk on growers.

“These challenges were coupled with ongoing decay of public infrastructure such as roads, rail and port operations, erratic electricity supply and a decline in real export prices.”

“This means that already tight margins for citrus producers were squeezed to the point where only one in five farms are likely to make a positive return this season,” Chadwick warns.

Infrastructure and operational issues 

He says that while there have been some short-term improvements at the country’s ports, the expected annual increase in containers of fruit being shipped from South Africa over the next few years will pose a major strain on the ports, if ongoing infrastructure and operational issues are not addressed.

Nevertheless, the association stressed that it remains committed to working with Transnet and other stakeholders during the upcoming 2023 season to identify and resolve port-related issues.

It further notes that it still believes that the new EU FCM regulations are a major threat to the future sustainability of the industry and will continue to support the departments of trade, industry and competition and of agriculture, land reform and rural development in the current dispute lodged with the WTO (World Trade Organisation), in this regard.

“While is it clear that the challenges faced this season have squeezed growers’ profit margins and continue to threaten the future profitability and sustainability of the industry, the CGA hopes to work with government and other value chain partners to ensure the sector not only survives other short-term [issues] but remains the number one South African agricultural exporter and top agricultural employer in years to come.”

Nondumiso Lehutso is a Moneyweb intern.