South Africa’s citrus industry reached something of a landmark last year, celebrating 100 years of exports to the discerning UK consumer.
A trawl through the archives reveals that the first shipment hit UK shores in 1906, and that by 1907, some 3,000 cases of South African oranges had been sold over here. The growth rate was outstanding; by the following year, the figure had risen to some 14,454 cases. The UK market soon expanded to encompass the continent, and Europe is now firmly established as one of the most important markets for the fruit.
Citrus is by far the country’s largest fruit production sector, exporting up to 70 million 15kg cartons annually. After Spain, South Africa ranks as the world’s second-biggest citrus exporter, and the fruit is produced in seven of the country’s nine provinces, its varied microclimates permitting production for nine months of the year.
A century on from its first stab at exports to the UK, and South Africa’s citrus industry is gearing up for a 2007 crop expected to largely reflect that of 2006 in terms of volume and quality. Quantities sent to the UK last season totalled 8.46m 15kg cartons, and some 22.3m cartons to all of Europe.
This season’s first soft-citrus shipment set sail in week nine, amounting to 2,400 cartons of satsumas. Exports up to week 19 totalled 225,000 cartons to northern Europe, 30,000 cartons to southern Europe and 1.1m cartons to the UK.
The first grapefruit bound for the EU left South Africa in week 14, totalling some 22,000 cartons. To week 19, a total of 700,000 cartons were sent to the EU - some 90,000 to the UK, 480,000 to northern Europe and 130,000 to southern Europe.
Initial shipments of lemons also left South African shores in week 14 - 2,000 cartons - while to date 40,000 cartons have gone to the UK, 35,000 to northern Europe and 10,000 to southern Europe.
“Only 6,000 cartons of oranges have been sent to date, all in week 17,” explains Justin Chadwick, ceo of the Southern African Citrus Growers’ Association (CGA). “Thus far, there have been no major weather incidents to significantly affect estimates. However, we did endure hot, dry weather in March in northern regions, which could produce two contrary effects. On the one hand, where irrigation systems were not sufficient to ensure that the orchards were well watered, some fruit may be a bit smaller in size. But the dry conditions will have also created good internal and keeping quality. Internal quality of grapefruit is also expected to be very good this season, despite the hot spell.”
Soft citrus and lemons account for 9.1 per cent and 8.3 per cent of the country’s citrus plantations respectively. The earliest citrus fruit produced in South Africa is the lemon, and this year’s harvest is likely to be of a similar size to 2006. Although lemon production starts at the end of February, traditionally the fruit is mainly shipped to markets other than northern Europe until May, to allow the latter to clear the bulk of its northern-hemisphere supplies. One of the less positive aspects of the past season was that the oversupply and continued presence of Spanish lemons late into the season on the European and UK markets severely depressed the selling price of South African and other southern-hemisphere lemons. Lemons and limes represent roughly 10 per cent of South Africa’s citrus crop.
Soft citrus also ripens early, starting with satsumas in early April, currently available in UK supermarkets. The season has started well and fruit has proven to be of good quality. “Soft citrus has experienced a stable pre-season period, with good flowering and not too much rain, so the quality is looking fine this year,” says Charl Du Bois, market manager for Afrifresh. “Growers in the Western Cape have finished harvesting the early Marisol varieties and have now started with later-season Clemenules, and quality is looking exceptional.”
The early end to South American satsuma production has proved a boon for South African growers, and the UK market for South African soft citrus is currently in fine fettle. Clementine production will commence in a few weeks’ time. Soft citrus accounts for only 10 per cent of total production and is marketed mostly in the UK and North America, as there is little demand for soft citrus in northern Europe. The North American market is shaping up as an increasingly lucrative market for soft-citrus producers from the Western Cape region.
Valencia is the most cultivated citrus variety in South Africa, making up 42.5 per cent of planted area at 23,975 hectares. The variety also continues to be the most popular in terms of new plantings, with around 500ha of the fruit planted in 2004-05. Navels make up 13,661ha of the country’s citrus production, or 23.8 per cent, while grapefruit stands for 14.8 per cent of planted area.
The grapefruit harvest kicked off at the end of April and represents approximately 15 per cent of the total production figure. This year, weather conditions have been more favourable, and producers are expecting a better yield than the small 2006 crop. The addition of 350ha of grapefruit plantations in 2004-05 saw the fruit overtake Navels, of which just an extra 325ha were added, as the most popular choice for new citrus cultivation.
“We believe that quite a lot of the new grapefruit plantings are for industrial or processing purposes,” explains Chadwick.
Yet despite the rise of the grapefruit, oranges remain by far the largest citrus type produced in South Africa, representing about 65 per cent of the total harvest. The first production starts with Navels during May and continues until October with Valencias. Production areas in the north of the country enjoyed good levels of rainfall in the period leading up to the harvest and conditions have been generally favourable for crop development this season. “South Africa’s Navel export figures are likely to be very similar to those of last year,” says Pieter Nortje, chairman of the Navel Focus Group. The crop forecast for Valencias is up against 2006 by approximately 1m cartons, but as the harvest is still two months away, it remains to be seen if this prediction is borne out.
“Over the last few years, peak productions of the Navel harvest from the Eastern Cape has moved later in the year, due to a variety shift towards the late Navel group of cultivars such as Cumbria, Autumn Gold and Lane Late. These produce fruit of a better quality and arrive in the market when the bulk of northern-hemisphere oranges have been sold,” explains Nortje. He adds that during the last year, the South African citrus industry took a decision to increase the export standards for Navels based on colour, acid and sugar levels, in order to provide a superior product to the market. Previously, producers aimed to provide Navels to the market as early as possible and the fruit was harvested prior to optimal quality development. This year, the Navel harvest is commencing two weeks later than usual, largely due to the adherence to these new, higher standards.
And this increase in the minimum standard for export-worthy fruit has not been limited to Navels. During 2006, the citrus industry revised a number of minimum standards in order to improve quality. “The improvement in our export standards forms an important part of our co-ordinated effort to increase our marketing edge in a highly competitive arena,” says Martli Slabber, chairperson of the Soft Citrus Focus Group.
South Africa’s major citrus markets are Europe, which receives around one quarter of the country’s production, followed by the Middle and Far East, North America and Russia.
“At this stage the prospects for the season look positive, particularly for fruit destined for supermarket programmes,” says John Morgan, citrus product manager for Colors Fruit. “There seems to be a slight shortage of early easy peelers in the UK market at the moment, and we have recently started harvesting grapefruit and have been pleasantly surprised by the size of the fruit.”
UK importer Janic brings in a full range of cultivars throughout the season, including easy peelers, Marsh and pigmented grapefruit and Navels and Valencias.
“Volumes are expected to be more or less the same as last season, but reports are clearly showing that quality levels are expected to be higher,” says the company’s Steve Smith. “We have seen this for ourselves, with our first satsumas far better than the first arrivals last season and certainly better than we have seen from Argentina.
“We have been importing South African citrus for more than 20 years and have long-standing and close relationships with our suppliers there,” continues Smith. “We are very aware of the financial pressures they are under and work very closely with them to help minimise their costs and maximise their returns. We feel very strongly that it is our responsibility to advise them if other European markets could give them better results and help them to redirect their produce if they so require.” Consequently, Janic’s South African citrus volumes fluctuate from year to year, although the minimum level is 350,000-500,000 cartons per season.
Although not a beleaguered sector, the citrus industry is certainly not making the same impact in the UK as other fruit categories. The constant competition between categories for shelf space means consumer demand patterns are forever shifting, and the citrus sector has felt the squeeze in recent years. “Citrus has a fairly balanced demand throughout the year, but while there may be a reduction in the purchase of some airfreighted fruits, I do not see demand for citrus rising as a result,” says Smith.
Easy peelers are making the biggest splash in the UK market at the moment because of their accessibility in today’s convenience-driven world.
“If you stopped a consumer and asked them where the oranges they had just purchased came from, nine out of 10 would probably say Spain - whatever time of year it was. South Africa cannot differentiate itself, because all fruits lose their identity when on sale, and there is no such thing as a brand anymore. The upside to this means continuity of demand, but the downside is that countries of origin almost disappear, which is to their detriment,” explains Smith.
Aside from a fairly level consumption rate, another of the key issues facing the South African citrus industry is transformation and land restitution, according to Chadwick. “Unresolved land claims create uncertainty, stagnation and a short-term outlook on planned operations,” he says. “Another limiting factor is oil prices, which have an impact on transport costs, which in turn influence the sustainability of companies transporting fruit for long distances.
“Added to the cost burden,” he continues, “are ever-increasing requirements from retailers and receivers, who pass the responsibility of good agricultural practices and food safety back down the line, with no discernible advantage to the South African grower.”
The general impact of transformation to date has been negative, according to Chadwick - the land reform process has resulted in poorly equipped and resourced farmers moving into a challenging industry that requires high skill levels and adequate resources to produce the right fruit. “As a result, in most cases, those orchards that have been redistributed have dropped in export volumes,” he says. “The most successful transformation initiatives have been those where growers have formed workers’ trusts and given the workers a stake in farming operations.”
The strength of the rand has also had a significantly negative impact on grower returns in recent years, but from the second half of 2006 onwards, producers gleaned some respite as the currency weakened by 20-30 per cent against the pound sterling and the euro. But they cannot afford to rest on their laurels just yet. “Although the rand is still weak compared to other major currencies, during the past two to three weeks, the currency has again strengthened, illustrating the volatility of our situation,” says Chadwick.
The 2006 harvest produced lower yields than the previous year, and this translated to an improvement in returns for producers after three tough seasons. Despite this, the varying trade tariffs payable by the different suppliers to the market continue to play havoc with producers’ competitiveness, and logistical and re-packaging costs in the EU have become increasingly expensive for producers, detracting value from the supply chain. The owner of a soft-citrus packaging plant comments: “Besides the tariffs, our fruit often competes with fruit produced in countries where farmers receive subsidies, whereas we receive none and our government is not generally supportive of agriculture. The continuous consolidation of demand and the fragmentation of our supply base have further weakened our position.”
But it is not all doom and gloom. The South African industry is reaping the benefits of a monitoring system for the various varieties and markets voluntarily implemented during the 2006 harvest. The steady growth of citrus exports from South Africa and the related marketing challenges provided the impetus for growers to take a pro-active stance in the management and marketing of their producers.
“The feedback we have received from growers is that the variety focus groups that were created and elected by growers prior to the start of the season last year have been very helpful to producers in making technical and marketing decisions,” says Chadwick. “These groups liaise with the Citrus Marketing Forum and the CGA’s information manager, and this flow of information has proven to be a very valuable tool for the industry.”
Also on the plus side, an electronic data interchange initiative is underway to standardise coding of pallets and track the fruit from capture at packhouse level to the ports. And as one of its empowerment initiatives, the Citrus Academy was launched by the CGA to facilitate training on all aspects of citrus production. The academy has launched a bursary fund and has developed training material with the help of industry experts.
The CGA’s key functions are to gain and retain access to markets, set standards for fruit quality, fund and control research, drive industry transformation, represent growers’ interests, and communicate effectively with producers. Growers fund all research done in the citrus industry in South Africa, according to Chadwick, and 70 per cent of the statutory levy is spent on this function.
“This research is primarily aimed at pest and disease management, as these are the factors that challenge access to markets,” he says. “In addition, funds are aimed at crop load and fruit quality, and new varieties. A further 10 per cent is aimed at transformation - this includes the Citrus Academy, and emerging grower development,” he says.
The CGA provides the industry with twice weekly updates on what has been packed and shipped, per variety and per destination market, monitors the progress of shipments compared to previous years, and also encourages the variety focus groups to get involved should markets look to be over- or under-supplied. The organisation plans to publicise its 100-year celebrations as widely as possible through various media outlets. “We are not doing anything over the top, as we are sure our growers would rather see their money spent on the factors that matter to them, rather than wining and dining all and sundry,” says Chadwick.
A century of Eurocentric exports aside, new markets further afield are now beckoning South African growers. Although the domestic market has seen substantial growth in the consumption of high-value fruit and vegetables, this has not made a big impact on the citrus industry, considering the huge volumes of the fruit that the country produces. Access to new markets is therefore vital.
After many years of lobbying to send to the Chinese market, in 2006 the South African citrus industry finally secured access for growers. This was delayed during the 2005 harvest in order to reword the protocol governing phytosanitary aspects, and now a sizeable number of growers have registered to supply this market.
So to what does this industry attribute its historical popularity in the UK, and now its emergence as a highly credible player in other, newer export arenas? According to Chadwick, South Africa can be differentiated from other citrus-exporting countries by its superior quality fruit, well-coordinated shipping, long packing season and counter-supply to the northern hemisphere. The growers’ focus on technical resources has meant that South Africa can answer the many new technical barriers to trade in terms of phytosanitary and sanitary regulations and requirements. “A strong private-public partnership with the Department of Agriculture also ensures that we meet these challenges head on,” adds Chadwick.
UNIFRUTTI SURVIVES THE HEAT
Exporter Unifrutti expects to send some 244,000 cartons of citrus to the UK this season, and 747,000 cartons to Europe. “This is out of a total of five million cartons that we plan to export this year, and our first shipment left South Africa on March 31,” says chief financial officer Nicolas Kolatsis.
“The major issue was the dry summer we had in the northern regions, which affected the production areas of Limpopo and Mpumalanga.”
Unifrutti South Africa’s main varieties are Navels, Valencias, lemons and grapefruit. “There has been strong growth in citrus in South Africa, compared to other fruits,” says Kolatsis. Logistical innovations such as new software and traceability systems and more efficient truck technology are boosting the industry further still, he adds.
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