South African citrus producers face tough choices as US tariffs loom
Image: Ayanda Ndamane / Independent Media
South African citrus producers find themselves in a tight spot as they prepare to absorb the blow of a staggering 30% tariff imposed on their exports to the United States.
This emerging challenge comes at a time when South Africa serves as a counter-seasonal supplier of citrus fruits to the US, with the primary exporting period spanning from July to October.
As pressure mounts, producers must navigate whether American consumers can withstand large price hikes or if they will need to bear some of the cost themselves.
Dr Marlene Louw, senior economist at Absa AgriBusiness, explained that although South Africa’s oranges and mandarins are coveted in the US market, they may soon become uncompetitive due to the tariffs.
“With other notable Southern Hemisphere exporters like Chile already sending 75% or more of their orange exports to the US during this period, there is limited capacity for other exporters to fill the gap left by South Africa,” Dr Louw noted.
This limited pipeline can lead to prices skyrocketing for consumers, while producers must consider their margins and sustainability as they grapple with the duty increases.
As the situation unfolds, experts believe the larger segment of the tariff burden is likely to land on US consumers.
However, whether consumers will accept the price increases remains uncertain.
“There is a risk that competing fruits may shift consumption patterns, compelling other players in the citrus value chain to absorb some of the tariff’s impact,” she added.
These insights are part of the Autumn edition of the Absa AgriTrends Report, an essential resource for stakeholders in the agricultural industry.
The announcement of tariffs by President Donald Trump, dubbed ‘Liberation Day’, ignited concern worldwide, with analysts expressing surprise at the magnitude of the duties introduced on April 2, 2025.
While the full impact is still under evaluation, stakeholders within the supply chain are waiting anxiously for any further announcements, which could offer the possibility of concessions or exemptions from the hefty rates.
Dr Louw highlighted that consumers’ ability to pay may be a critical factor that legislators will keep in mind when considering future actions.
Unlike oranges, South African mandarins—which are exported from June to October—face a different set of challenges. Competing countries, particularly Peru and Chile, are also significant players in the US market.
Peru, with a notably lower duty of 10% compared to the proposed tariff on South African produce, could potentially redirect its exports to the US, further complicating South Africa’s position.
Dr Louw elaborated, “Peru’s exports are well poised to increase due to substantial expansion in mandarin production, while Chile's capacity to replace South African volumes is restricted.”
All eyes will be on the US consumers and their capacity to absorb increased prices for these perishable goods, as well as the potential for value chains to redirect citrus volumes to other markets.
With mounting pressure on stakeholders, reinforcing relationships to advocate for tariffs that are competitive with those of other Southern Hemisphere exporters will be vital to preserving market share.
In 2024 alone, South Africa exported about R1.8 billion worth of citrus to the US, accounting for 5.4% of its total citrus exports.
For the Western Cape citrus-producing region—exclusive to the US market—this figure reached around 20%. As tariffs and trade dynamics evolve rapidly, controlled trade governed by World Trade Organisation rules appears increasingly tenuous.
IOL
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