JUSTIN CHADWICK: Southern Africa citrus industry faces perfect storm that threatens its survival

This year marks the 25th anniversary of the Citrus Growers Association of Southern Africa , which was established by growers in the wake of deregulation in 1997. Since then the association has contributed to the growth of a thriving local citrus industry that is recognised for its superior quality fruit, which is in high demand across the world.

With citrus production expected to grow by a further 500,000 tonnes over the next three to five years, one would expect the local industry to remain one of the few good news stories within the context of a struggling SA economy, resulting in more returns for growers, more jobs and export revenue. However, several serious challenges facing the sector, which have recently emerged, pose a major risk to its long-term survival over the next few years.

This conflict has also placed further pressure on fuel supplies and costs, with soaring gas and fuel prices only expected to start declining towards 2023. This is reflected in the movement of Twenty Foot Equivalent Containers from SA’s most important fruit export ports over a 52-month period, from January 2018 to April 2022. The average monthly growth over this period is Durban -0.31%; Ngqura -0.64%; and Cape Town -0.33%. This despite the average annual growth rate for citrus exports between 2018 and 2021 standing at 4.5%, which has obviously increased the demand for containers and ports operating as efficiently as possible.

Concerningly, the model reveals that within the next two to three years most local growers face the real threat of moving into a negative profit margin , which will continue to worsen up to 2030. All of these scenarios have been put through the BFAP simulation analysis and show varied degrees of success when it comes to ensuring growers remain profitable over the next 10 years. These scenario options have been presented to the grower regions and are currently being considered as possible action steps at a farm level moving forward.

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