Local citrus growers exported lower than predicted volumes to world markets in 2022, in line with the Citrus Growers’ Association (CGA) of Southern Africa.
The affiliation says that regardless of packing 3.2 million extra cartons of fruit for export markets this 12 months, the trade packed and exported 5.7 million cartons much less (164.8 million cartons) than what was predicted at first 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 whereas there was modest progress within the fruit packed and exported throughout some citrus varietals in comparison with 2021, the ultimate figures have been “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 provides.
He says the “perfect storm of challenges” additionally led to a drop in packed volumes compared to 2021, as seen with grapefruit the place 800 000 much less cartons have been packed for export this 12 months. Valencia’s additionally noticed a decline in packed cartons for export with solely 53.8 million cartons exported in comparison with 55 million in 2021.
On a extra optimistic notice, Chadwick says quantity progress in lemons continued unabated with 34.7 million cartons packed for export in 2022, a rise of three.6 million cartons from 2021, and a pair of.4 million cartons extra 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 noticed challenges together with a surge in farming enter costs and transport prices together with “astronomical” delivery worth hikes which affected the price of getting fruit to be commercially viable for a lot of 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’s the new False Coddling Moth (FCM) laws which have been handed by the European Union in the course of the season, putting further monetary pressure and threat 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 points
He says that whereas there have been some short-term enhancements on the nation’s ports, the anticipated annual improve in containers of fruit being shipped from South Africa over the subsequent few years will pose a significant pressure on the ports, if ongoing infrastructure and operational points will not be addressed.
Nevertheless, the affiliation careworn that it stays dedicated to working with Transnet and different stakeholders in the course of the upcoming 2023 season to determine and resolve port-related points.
It additional notes that it nonetheless believes that the brand new EU FCM laws are a significant risk to the long run sustainability of the trade and can proceed to help the departments of commerce, trade and competitors and of agriculture, land reform and rural growth within the present dispute lodged with the WTO (World Trade Organisation), on 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.
