facing challenges

The South Africa citrus industry is the second largest exporter of citrus in the world, only surpassed by Spain. Last year, we packed 164.8 million 15kg cartons of fruit for global markets.

By Justin Chadwick, CEO of Citrus Growers’ Association (CGA) of South Africa

Positive growth in our sector over the past few years has positioned the local industry as a major economic contributor. It sustains close to 140 000 jobs and generates R30 billion in revenue. Further growth is also predicted. If all opportunities are seized, an additional 100 million cartons can flow from packhouses to ports over the next decade, growing to 260 million being exported by 2032. This means the industry could potentially sustain a further 100 000 jobs and generate an additional R20 billion in annual revenue.

This is good news, but for the growth to be realised a number of challenges need to be addressed.

Limited market access is a concern

While Southern African citrus is exported to a number of overseas markets, blockages are restricting wider access to the USA, India, Vietnam, Japan and Thailand.

In most instances these barriers can be resolved at a diplomatic level as all technical issues have been resolved.

Protectionist phytosanitary measures

Another threat is the protectionist phytosanitary measures enforced by the European Union (EU). In particular, the new and unfair false coddling moth regulations passed last year, during the citrus export season, require the stringent mandatory cold shipping of SA oranges entering EU markets.

This is despite our industry having put in place world-class and highly effective risk management systems, which has resulted in over 99% of local oranges entering Europe being pest free.

Rising cost of production

The rising costs of production is also a concern to growers.

For example, fertiliser prices increased just over 56% between 2020 and 2021, due to tight supplies, rising raw material costs, increased demand, logistics constraints and high freight rates.

Freight challenges

Freight itself is also a separate challenge. The problem is two-fold. Firstly, we need better functioning ports. While there have been some improvements because of financial and operational interventions driven by Transnet during the 2022 season, the Durban, Ngqura and Cape Town ports continue to run below full efficiency. 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. Secondly, large parts of the rail network are inoperable because of mismanagement and cable theft, as well as a shortage of locomotives and rolling stock. A well-functioning and wellmaintained rail network is essential for economic growth because it offers more cost-effective transport and simplified logistics. Around 95% of fruit is currently transported to ports through the use of trucks. Only 3 000 containers out of a potential 100 000 were transported by rail to Durban in 2022 as a result of inoperable rail lines.

Loadshedding challenges

Increased periods of loadshedding is of course a major challenge. It affects growers' ability to irrigate, harvest and pack citrus; cold stores' ability to store fruit and the ports' ability to process and ship citrus to overseas markets.

While some growers have invested in alternative power sources, this has obviously required further capital outlay.

Ensuring future sustainability, profitability & growth of the industry

Regardless of all these challenges, there are steps that can be taken to ensure the future sustainability, profitability and growth of the industry.

At an industry level, over R1 billion will be invested in the next five years into research and innovation to continuously improve efficiency of production and ensure the long-term competitiveness of South African citrus in overseas markets.

On the level of government engagement, the CGA is committed to dialogues and initiatives that can establish increased access to overseas markets. This access is a sure way growers can offset increasing input costs that are squeezing their profit margins. The CGA also welcomes all ways in which private-public partnerships can help in the improvement of the rail network and creating workable solutions to the country's electricity crisis.

Truly transforming citrus production is a priority

Truly transforming citrus production is also a priority. The industry is becoming more representative and relevant by the day. The CGA has a separate entity, the CGA Grower Development Company, which has done remarkable work with emerging farmers.

Black-owned citrus operations are now farming 7 869 hectares of citrus in South Africa. Their yields have increased over the past three years from just over 2.4 million cartons in 2020 to just over 15 million cartons in 2022. This is encouraging, but there is work that still lies ahead of us.

Addressing environmental and sustainability issues

Another priority for ensuring the bright future of citrus in Southern Africa is addressing environmental and sustainability issues. The CGA’s Citrus Sustainability Forum (CSF) takes a variety of environmental considerations into account, including carbon emissions, packaging, and soil health.

The CGA’s CSF also advises growers on how to take advantage of opportunities in the green economy. The impact that the European Green Deal (which aims to move to a low-carbon future) and Farm to Fork Strategy (which aims to promote food sustainability) will have on the South African citrus industry is also taken very seriously by the CSF.

Industry has potential to become even more significant contributor to SA economy

With all of this taken into consideration, it is clear that the industry has the potential to become an even more significant contributor to the South African economy over the next 10 years. For this to happen growers, government and key role-players across the value chain must come together to address current challenges.

South Africans truly have reason to be proud of their citrus industry. The quality of our oranges, mandarins, lemons, and grapefruit is respected across the world. We have proven ourselves by being innovative and resilient in the past. The challenges the industry is facing right now are not insurmountable. If role-players focus on the priorities set out above, the industry won't just endure, it will thrive. 