The tough 2022 season saw citrus growers exporting lower-than-predicted volumes to global markets, as local growers packed for export 164.8 million (15kg) cartons to be delivered to global markets this year, the Citrus Growers Association of Southern Africa (CGA), said in a statement yesterday.
While this was an increase of 3.2 million cartons when compared to last year, it was 5.7 million cartons less than what was predicted at the start of the season
Justin Chadwick, the CEO of CGA, said these figures highlighted the extremely tough season growers have had to endure that has negatively impacted their returns and the volumes they were able to export.
This has threatened the future sustainability of the industry, which sustained more than 140 000 jobs and brought in R30 billion in revenue to South Africa each year.
Chadwick said the challenges faced by the industry this season included a surge in farming input prices and transport costs as well as astronomical shipping price hikes, which made the cost of getting fruit to market commercially unviable for many growers.
As a result, while there was modest growth in fruit packed and exported across some citrus varietals when compared to last year, the final figures were far lower than what was predicted when the season started in March.
CGA said the perfect storm of challenges also resulted in a drop in packed export volumes of some varietals when compared to last year.
The decline in fruit being shipped this season was said to be a particular concern in light of the current forecast predicting that fruit produced and available for exports would continue to grow by 10 million cartons per year (on average) for the next decade, hitting 200 million cartons in the next five years and growing up to 260 million in the next 10 years.
Chadwick said this meant the industry could potentially sustain a further 100 000 jobs and generate an additional R20bn in annual revenue, bringing its total contribution to 240 000 jobs and R50bn in revenue, as long as key markets and logistical infrastructure was secured and optimised to absorb this increased growth.
CGA said it remained committed to working with the government to optimise, secure and retain as many market access opportunities as possible to ensure growers were able to export their fruit at good returns. It said key markets that offered major potential for expanded access and required particular attention ahead of next year’s season were the US, India, China, Japan, Vietnam and the Philippines.
Addressing some of the astronomical costs faced by growers was another priority.
“The significant shipping 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. This is why the CGA has commissioned a project with other fruit sectors to investigate options to bring about structural change in the shipping environment to control freight rates and improve service delivery,” Chadwick said.
The CGA maintained the view that the new EU food contact materials (FCM) regulations, which would require mandatory cold treatment of SA oranges entering the region, were a major threat to the future sustainability of the industry.
While there have been some short-term improvements at the country’s ports as a result of interventions by Transnet during the 2022 season, the expected annual increase in containers of fruit being shipped from South Africa over the next few years would pose a major strain on the ports, if ongoing infrastructure and operational issues were not addressed.
Chadwick said while it was clear that the challenges faced this season have squeezed growers’ profit margins and continued to threaten the future profitability and sustainability of the industry, the CGA hoped to work with the government and other value chain partners to ensure the sector did not only survive over the short-term, but remained the number one South African agricultural exporter and top agricultural employer in the years to come.
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