SOUTHERN African citrus growers delivered 161.6 million cartons of local citrus across the world during the year, an increase of 18.6 million cartons from last year, according to the Citrus Growers Association (CGA).
CGA’s acting chief executive, Paul Hardman, said yesterday that this was achieved despite an extremely difficult and complex season that put the entire industry under severe strain.
“The sector faced a number of serious challenges including the global shipping crisis, stringent additional phytosanitary measures by the EU that were costing the industry more than R4 billion annually, as well as serious operational challenges at South African ports,” Hardman said.
He said the ongoing issues at the ports were intensified by the violence and looting that hit parts of KwaZulu-Natal and Gauteng in mid-July, that cost at least 340 lives, which resulted in Durban port being closed for days on end. This was followed by Transnet declaring a force majeure across all ports as a result of a cyberattack, which coincided with the height of the citrus export season. These challenges were said to have had a major impact on the timeous arrival of fruit programmes in overseas markets, thereby negatively affecting grower revenue.
Growth was seen across a number of citrus varieties with 29.5 million cartons of soft citrus exported, which was an increase of 5.9 million cartons from last year. Grapefruit volumes also increased by almost 16 percent, with 17.2 million cartons shipped this season.
A record 27.2 million cartons of navel oranges were also packed, up from the previous record of 26.7 million cartons shipped in 2018. Export volumes of lemons also increased by nearly 5 percent, with 29.7 million cartons shipped in this year.
THE CGA said despite this impressive growth, the global shipping crisis saw logistics prices soaring, while the slow turnover of ships caused major uncertainty in shipping schedules and backlogs at ports across the world. As a result, there was a dramatic increase in logistics prices (on average freight costs increased by approximately 30 percent to 40 percent when compared with last year) and a global shortage of containers which meant cargo had to be stored at ports, and across the supply chain, for longer and at a greater cost.
On top of this, vessel schedules also became erratic as a result of shipping lines responding to a strong demand on the East-West trade routes. These changing schedules meant that growers were also unable to optimise between markets, in particular the fast-growing Far East market. Shipping to the Middle East from southern ports in the country became near impossible at times, which meant growers had no choice but to ship from the Durban port infrequently.
Hardman said compounding these global challenges was the unprecedented domestic events in July that resulted in South African ports being shut down at the peak of the season causing major backlogs across the citrus value chain that saw growers requested to stop packing fruit in August.
Subsequently, fruit arrived way too late in some markets (in some cases by over a month) while there was an under-supply in other regions. The global and domestic challenges also resulted in an over-supply in other key markets, which drove down prices particularly for lemons and soft citrus. As a result, the increased volumes of citrus exports this year did not translate into higher returns for local growers.
The ongoing challenge faced by South African growers, was said to be the EU’s import measures on citrus black spot (CBS), which was a major threat to future growth in this market, currently costing the local industry in excess of R4 billion annually (with FCM measures) in order to comply with these market access conditions. This was despite the fact that there was scientific evidence that citrus fruit without leaves was not a pathway for the spread of the CBS pest.
With the local industry expected to export 200 million cartons of fruit within the next five years, the CGA said it was critical that challenges experienced during this season were resolved before next year.
Absa Agribusiness senior agricultural economist Dr Marlene Louw said an increase in citrus volumes exported was usually good news for the agricultural sector and broader economy, however this year, on-farm returns and subsector value growth were expected to be impacted by factors such as lower global prices and a relatively strong exchange rate.
“The increase in citrus cartons, as reported by the CGA, amounts to around 13 percent growth compared to the 2020 season, but in contrast to this, the exchange rate in quarter 2 and quarter 3 of 2021 was approximately 17 percent stronger than the exchange rate in the second and third quarter of 2020. Thus, while volumes are higher, export returns would be the same or lower compared to the previous season. As a result, we expect that citrus contribution to agricultural growth will be substantially lower for 2021 when compared to 2020,” Louw said.
Louw said, nonetheless, citrus continued to play an important role in the broader agricultural sector as an earner of foreign exchange and in terms of providing employment and the ability of the sector to export increased production volumes. Despite challenging circumstances this should be commended.