Summit is a pivotal moment for South Africa's citrus industry - CGA
Justin Chadwick
South Africa's citrus industry stands at a critical juncture. The industry will gather at the fifth Citrus Summit on March 11 - 13 in Gqeberha, hosted by the Citrus Growers' Association of Southern Africa (CGA).
The government, industry and other stakeholders will come together to help answer the central question - how can we remove the obstacles impeding growth in the citrus industry?
Citrus is South Africa’s biggest agricultural export industry. It supports 140 000 livelihoods on farm level alone. Last year, it packed 164.5 million 15kg cartons for delivery to global markets. Over the past few years, a considerable amount of new plantings were made and citrus production is estimated to increase substantially. If all role-players work together, it is possible for the industry to reach its stated goal of exporting 260 million cartons by 2032. This will create an additional 100 000 jobs.
Two topics will almost certainly dominate discussions at the Citrus Summit: Logistics and market access. How these two issues are addressed will determine whether South Africa will be able to continue its citrus success story, or whether our impressive trajectory will be interrupted, with potentially severe consequences for the economy.
Logistics is a formidable obstacle. A recent study by the Bureau for Food and Agricultural Policy (BFAP) has found that the combined direct and indirect cost of inefficient logistics to the citrus industry was a staggering R5.27 billion in the 2024 season alone. This represents a debilitating loss of foreign revenue to the country and a setback to creating desperately needed jobs.
South Africa's ports have been plagued by inefficiencies and congestion. Delays erode the competitiveness of South African citrus, threatening its profitability and jeopardizing its standing among global buyers. It is essential to streamline port operations, invest in infrastructure, and improve cold chain management to ensure the timely and cost-effective delivery of produce.
As President Cyril Ramaphosa has recognised, public-private partnerships will be necessary to ensure we improve long-term efficiency at our ports' container terminals. But legal action by a losing bidder has regrettably delayed the historic partnership at Durban's Pier 2 container terminal between Transnet and International Container Terminal Services Inc. (ICTSI).
Without encouraging competition and utilising private expertise, our ports will not be able to handle the increasing volumes of citrus that will be heading their way soon - which will mean the citrus industry won’t be able translate increased production into more jobs and foreign revenue for the fiscus.
The publication of Transnet's second Network Statement in December 2024 was an event that must be followed up with swift action on rail reform. The Statement sets out the parameters within which the private sector can enter the rail network. Right now, more than 90% of all citrus reaches ports via roads. A functioning rail network would be a more cost-effective form of transport and would alleviate congestion on our already busy roads.
The CGA calculated that in three years' time, the weekly truck trips from the Northern citrus regions would increase from 2 200 trips per week to well more than 3 800 citrus truck trips per week. We are running out of road and we are running out of time.
Market access is the other key issue at the Summit. Increasing market access for agricultural produce was also highlighted by president Ramaphosa as a priority. The European Union (EU) is the destination for more than one-third of our citrus. The South African government is challenging the EU's unnecessary and unscientific trade measures on SA citrus at the World Trade Organisation. A satisfactory conclusion to the dispute, which must include a commitment to scientific plant health measures, will create a fair playing field and give our industry an almost immediate boost.
China's appetite for SA citrus presents a significant opportunity, with the potential to expand beyond the current 180 000 tonnes it imports from us. Currently, citrus exports to China face duties that place our exporters at a disadvantage compared to competitors benefiting from free or preferential trade agreements. This situation underscores the need for trade negotiations that could unlock the full potential of agricultural trade between the two nations.
India is another citrus frontier. While citrus exports to India have increased significantly - just since 2020 it has almost tripled to 30 000 tonnes - there are hurdles that must be cleared before our growers and the citrus-loving Indian consumer can benefit. If the Indian government were to approve in-transit cold treatment for citrus, many growers will benefit immediately. India's steep 30% import tariff on SA citrus is something that could be addressed in the long run.
The African Growth and Opportunity Act is essential for the citrus industry. Even though - because of unwarranted plant health regulations - only fruit from the Western and Northern Cape is currently exported to the United States, the US market has significant potential. The amount of citrus exported to the US is on an upward trajectory, having almost doubled since 2017. Should the US allow access for SA's other provinces, it could stimulate rural economies across our country, while satisfying the clear US demand for our citrus.
The complicated and unpredictable landscape of international trade will surely be at the centre of many discussions at the Summit. The essential truth is, though, that South Africa needs every available market because of the increase in production.
The stakes are high. Failure to act decisively will cost South Africa jobs and revenue, but also undermine its reputation as a reliable supplier of high-quality agricultural products. But with bold leadership and a commitment to collaboration, South Africa can address its challenges.
It is at spaces like the Citrus Summit where growers, government leaders, and other role-players up and down the value chain can come together and plot a course that will benefit not just the citrus industry, but the entire South African economy.
Chadwick is the CEO of the Citrus Growers' Association of Southern Africa
BUSINESS REPORT