President Cyril Ramaphosa has correctly highlighted that it will take an extraordinary effort – across all industries – to recover from the economic impact of the Covid-19 pandemic and the national lockdown.
The citrus industry is well-positioned to contribute towards the country’s economic recovery. Last year, the sector exported two million tons of citrus, and is on track to break this record by the end of the 2020 season. However, with the projected growth forecast of an additional 500 000 tons of citrus in the next three to five years, we could achieve even more for South Africa – if given the opportunity to expand our access in overseas markets.
The growth projections for soft citrus, lemons and valencias alone envisages an additional R6.8 billion in foreign exchange earnings and the creation of 22 250 sustainable jobs over the next three years. However, in order to avoid oversupplying the region’s exports, which would result in lower prices for our citrus, we need to gain, retain and optimise a number of our key markets over the short-term.
A lot of ground work has been done to realise this objective. However, delays in the finalisation and signing of protocols in a number of markets have hampered increased shipments to these countries over the past few years.
For example, simple technical issues have blocked our expansion to China and India. Our figures indicate that the Chinese market could import an additional 50 000 tons of lemons annually, securing R700 million in export revenue while securing 2 500 sorely needed new jobs back home. However, there have been several delays in consolidating a revised lemon protocol between China and South Africa – thereby hampering our market access efforts in China.
Exports to India have also been constricted by a requirement that does not allow in-transit cold treatment. While trial shipments of oranges were conducted a few years ago, the necessary clearance for in-transit cold treatment has not been consolidated, despite several attempts to engage with the requisite authorities.
Japan also offers local citrus growers with great potential for market expansion, potentially creating 750 new jobs and increasing our revenue by R205mn by 2024. Unfortunately, strict market access conditions have restricted our ability to capitalize on Japan’s growing demand for South African citrus.
Another key market we are aiming to gain re-entry into is Vietnam. In 2012, the citrus industry exported two thousand tons of fruit to the country, however, South Africa lost access in 2013, due to an administrative error. This issue remains to be resolved, despite the frequent and ongoing discussions between both our governments on the ratification of a new protocol. We have lost seven years of export revenue to Vietnam as a result of these delays.
Then there is the US. Citrus growers from the Western and Northern Cape are expected to export a record breaking 77 000 tons to the US in 2020. However, the industry could import an additional 75 000 tons of grapefruit and soft citrus within the next four years, creating another 3 750 new jobs within the industry and generating over R1 billion in export revenue. Unfortunately this growth will only be possible if growers in other provinces are given access to the US market, which requires a long delayed final rule being finalised between our governments – a process which has already dragged on for the past six years.
While we have enjoyed a strong 2020 export season when it comes to European Union (EU). There is potential to export an additional 80 000 tons of lemons and soft citrus over the next three to four years. This would create 4 000 new jobs and generate R1bn in export revenue.
On a more positive note, we are thrilled to announce that we are now able to export to the Philippines, after eleven years of engagements between both governments on gaining entry into the market. This new market presents an export potential of 20 000 tons of citrus and export earnings of close to R205m annually and we hope to begin shipping citrus to the country in early 2021.
It is clear that when it comes to many of our key markets, all that is required to optimise and expand citrus exports, is the finalisation of existing protocols and discussions that have been ongoing for a number of years. There has never been a more urgent time to finalise these processes, so that the citrus industry can generate more revenue and create the job opportunities, which our country so desperately needs.
The Citrus Growers’ Association of Southern Africa is committed to working with DALRRD, South African embassies and the relevant authorities within these key markets to ensure that these processes are finalised ahead of the 2021 export season. We also look forward to playing our part in the Economic Reconstruction and Recovery Plan and driving increased agricultural exports over the next few years.
Justin Chadwick is the chief executive of the Citrus Growers’ Association of Southern Africa
BUSINESS REPORT