Citrus industry faces hurdles
About 7,800 containers of citrus fruit destined for export from the Western Cape and Eastern Cape were affected by the Transnet strike.
The southern African citrus industry has grown to become the second largest exporter of citrus globally which is reflected in record-breaking export figures over the past three years. This growth has positioned the industry as a major economic contributor sustaining close to 140,000 jobs and generating R30bn in revenue in 2021.
The industry offers further potential as a key exporter, says Citrus Growers Association (CGA) CEO Justin Chadwick. “Current forecasts predict exports will continue to grow by 10-million cartons per year, on average, for the next decade, hitting 200-million tons being shipped overseas in the next five years and up to 260-million in the next decade. This means the industry could potentially sustain a further 100,000 jobs and generate an additional R20bn in annual revenue.”
But to achieve these forecasts requires addressing the export challenges facing citrus exporters. “In terms of market access, blockages in some countries are restricting our citrus fruit from securing the wider access it requires to help absorb our increasing production figures,” says Chadwick. “In most cases, these barriers can be resolved at a diplomatic level. A more serious threat is the protectionist phytosanitary measures enforced by the EU when it comes to citrus black spot and false coddling moth, an arguably misinformed policy which has been effected against local orange exports.”
INCREASING COSTS
Rapidly increasing freight costs
128% increase between early 2020 and 2022 has also had an impact, as has a shortage of shipping containers and a global average delay when it comes to vessel arrivals, which has impacted fruit quality.
Chadwick says government need to work with its diplomatic counterparts in the US, India, Vietnam, Japan, Phillipines and Thailand to unblock obstacles as key markets are the only way citrus growers will be able to offset increasing input costs squeezing their profit margin.
In partnership with other exporting fruit sectors, the CGA has commissioned a project to investigate alternatives that could create more stable shipping costs in the future.
Citrus growers are concerned that if there is no improvement in operations local ports will not be able to manage the forecasted increase in citrus exports over the next few years. The CGA welcomes government’s move to bring in public-private partnerships into Durban and Ngqura ports as well the announcement in the mediumterm budget policy statement that funding will be allocated to upgrade and repair port infrastructure, says Chadwick.