File photo: Reuters

Johannesburg - Complying with the requirements to export citrus fruit to the lucrative EU market had cost the local industry as much as R1 billion in the past year, Justin Chadwick, the chief executive of the Citrus Growers’ Association of SA, has said.

In taking measures to minimise citrus black spot, the local sector has had to pay for orchard treatment, repackaging of fruit and possible diversion of containers from the final destination if they are found to be contaminated.

South Africa exports about 650 000 tons of citrus fruit to the EU every year, which is estimated to bring in R4bn.

Chadwick said that while growers would benefit from the weaker rand, in the longer term those benefits would be absorbed by input costs, including the costs associated with shipment, which were in dollars.

A ban on local citrus exports to Europe was lifted last month but the local industry was recently notified that citrus exports might be further scrutinised by the EU.

Domestic citrus exports were banned from the EU in November last year after it was found that the introduction of citrus black spot fungal disease would pose a threat in Europe’s citrus-producing areas.

The European Food Safety Authority has revised its pest risk assessment on citrus black spot and found that there was still some risk associated with imports from South Africa.

According to the statement by the authority, it was recommended that the EU regulations should be retained and compliance should be enforced.

Chadwick said the cost of preventative measures was eating into citrus growers’ returns. Growers were losing R300 million in orchard treatment, with more costs incurred for picking contaminated fruit out of containers.

“If there is a fruit that is found to have [citrus black spot] on a certain container destined for Europe, one will have to unpack the whole container to get the fruit out. In some instances a container will have to be diverted into other markets,” Chadwick said.

Although no research had been done on the total cost implications of this, he estimated that prevention had cost the industry between R500m and R1bn in the past year.

Chadwick said the latest EU pronouncement created uncertainty. Despite this, the citrus industry was ready to comply with the EU’s import requirements. “It is not what the industry would have hoped for, but is nonetheless something we have anticipated and have prepared for,” Chadwick said.

Citrus growers would give the report careful consideration. “We will also continue our engagement with all parties to ensure that the highly successful trade that has been maintained with Europe for more than a century continues without interruption,” he said. - Business Report