The outlook for South African citrus this season is fairly positive, according to the Citrus Exporters Forum, a sub-chamber of the South African Fresh Produce Exporters’ Forum.
Southern hemisphere Navels could have a good season despite difficult growing conditions in the north, and the forum believes there could also be a positive scenario for South African grapefruit.
However, chairman Jan Van Nes says that it must be remembered that the previous season was an exceptional one that is unlikely to be repeated for some time. Van Nes says: “After a disappointing deciduous season, we are looking forward to the citrus campaign. Early indications are reasonable and we are hopeful that we can have a good season.”
According to Justin Chadwick, chief executive officer of the Citrus Growers’ Association, the country is looking to build on the success of last season. He says: “2003 produced the biggest export volume of citrus from South Africa with more than one million tonnes of citrus being exported for the first time ever. This represented approximately 70m 15kg cartons.”
Van Nes says that the first arrivals of Navels are beginning to hit the UK and the continent. “Europe is an increasingly important market and South Africa is seeing more and more competition. The South African produce will be looking to replace the Spanish Navels in the market,” he says.
Derek Sutton, marketing director at Lona, believes 2004 will see a good performance with normal volumes. He says: “We hope to see the fruits of our labour of all the hard work in our off season. We have streamlined our business to concentrate on citrus and we are looking to reap the rewards.”
Lona is continuing to work hard to improve its business with UK partners. Sutton says: “We supply a major UK retailer with Jaffa, and our direct line. To improve our operations we have recently bought a major share in the Amanzi packhouse in the Eastern Cape. This is shortly to be renamed Inqweba.” For Lona it is important that the company is located nearer the product and is able to control both quality and cost-efficient programme delivery. The company has also invested in a state of the art cold room in Durban.
Difficult growing conditions have caused some problems in the northern regions. Although improved rainfall in the latter months of the growing season has boosted optimism among the growers. Capespan’s procurement director Martin Dunnett says that the South African season is marginally later than normal. He says: “In the pre-Christmas period the weather was not ideal. One such factor has been the drought experienced in the northern regions particularly in Mpumalanga. At one time it was feared that our crop could be as much as 50 per cent lower than 2003 but rainfall did steadily improve and although our volumes won’t be as high as last year it will not be too bad. We have also had some samples from the Natal region which were looking good. We will be seeing good volumes from the Eastern Cape region.”
Dunnett also says that early Navels and lemons arriving in the market are expected to perform well. “There has been a lot of investment in these areas and they have gained a lot of respect due to the reliability of the produce,” he says. Erratic supply can have a limiting effect on the lemon market. So far we have had a good early response and the lemon market is looking to build upon last year’s success.”
The South American market continues to pose strong competition according to Dunnett. “With the South Americans shipping on a weak dollar this does increase competition, but the South African quality is particularly good and this is what they must continue to trade on. Last season we sold 300,000 cartons of lemons in the UK and we are looking for a 10 per cent increase this season,” he says. “We are expecting our Navel volumes to be just under 300,000 cartons, while we are confident of a buoyant Valencia crop of around 700,000 cartons from Capespan, which forms around 30 per cent of South Africa’s total output.”
Dunnett also feels that there could be more lemons in the UK market due to a shift in the production of Coca Cola. He says: “A lot of the manufacturing division of Coca Cola has been moved from South Africa to South American countries, as a great deal of lemons are used in its production it is likely that some of this volume will now reach the UK.”
The easy peeler market began buoyantly but prices have begun to slip in recent weeks mainly on the continent says Van Nes. “Prices began well between e12 - e13, but have dropped to around e8 - e9. We believe these price drops which we have seen in the Netherlands, Germany and the UK are down to increased caution on consumer spending.”
The grapefruit job is looking to build upon the success of 2003. Van Nes says that the Star Ruby had a great 2003 season and growers are hoping for more of the same, but he warns that it will be difficult to repeat last season’s efforts. “At the moment it is difficult to predict what prices will be when the fruit enters the market.”
Dunnett feels that South African growers now have a world picture in their minds when it comes to trading and that the UK has to pay a top price to continue to receive quality produce. “Markets are growing stronger for grapefruit all the time, the Russian market is strong and people pay well for the produce. The exchange rate continues to play a large role and we are seeing a rate of 11 rand to the pound which is much more favourable for the grower.
“The grapefruit market is best described as strange. We always require volume in this market in the UK and we tend to need at least 60,000 cartons a month. Volumes are in the hands of fewer people and with strategies in some cases leaning towards Japan and Russia, this means that UK could have a supply situation on its hands. There is not the oversupply that there was five years ago, and with more harmonised production there is little flexibility.”
Michael Orpin, produce department manager at Geo Logistics, believes that importers are anticipating a profitable season. He says: “Due to the availability of a good exchange rate the mood is good. This season is just kicking off and the early shipments of South African citrus have arrived. Over the space of the next months we are expecting to deal with around 6,000t of containerised and 2,000t of breakbulk at Sheerness and we should see larger volumes than last year.”
Some smaller South African suppliers are frustrated at the lack of opportunity available in supplying to the UK. Many farmers are forming grower co-operatives to enhance their position. But increasing supermarket demands in the UK have frustrated their efforts. Fruit Trade International is a co-operative of four farmers who have built a packhouse and production unit. Joe van den Berg feels that the opportunities of entering the UK market are diminishing due to rising pressures. “Due to the size of our operation we cannot supply the UK as we cannot get the volumes required,” he says. “We can reach the UK through a larger exporter but we do not like to do this as we feel as we lose our identity.
“Supermarkets are putting excessive pressure on growers with their increasing list of requirements. We are in favour of good agricultural practices and always look to produce quality fruit. The proliferation of agricultural codes from supermarkets makes it difficult. We follow standard EurepGAP guidelines and we feel that the long list of demands by the retailers do not offer any benefits to the producers. As much as we would like more of our produce to reach the UK, we feel we have to concentrate on supplying our niche markets on mainland Europe.”
It is hoped that the improving logistical situation in South Africa will bring about improved results. Chadwick explains: “At the peak of the season the Durban port is always stretched to the maximum, and cold stores are particularly limited. This has been addressed to a certain extent in the erection of commercial cold stores at Maydon Wharf - a state of the art facility which increases available capacity at a time when it is sorely needed. Also a lot of work is being done on improving efficiency of the rail system.”
Chadwick also feels that there are certain issues which need to be addressed in the coming months. “In terms of market access on the sanitary side we have employed resources to make sense of the new EU MRL legislation,” he says. “During 2003 we were blindsided by the introduction of new legislation, and we are doing what we can to ensure that this does not happen again. Although given the complexity of the matter this cannot be guaranteed.”
Additionally Chadwick feels that traceability, food safety and good agricultural practices are issues that need closer attention. “In terms of traceability, it can be argued that all citrus consignments are presently traceable to origin. A unique Production Unit Code (PUC) identifies each farm from which citrus is exported. Should it be necessary to trace a carton back to this PUC it can be done almost immediately.
“There are concerns regarding food safety and agricultural practices, not in terms of ability to comply but who bears the cost,” he says. “Most production units in southern Africa already comply with food safety and GAP requirements, but the myriad of commercial compliance requirements are a heavy burden to pay - both in terms of time and money.”
Chadwick also feels perturbed that traceability seems to be driven by commercial interests. He says: “Given that 90 per cent of food contamination happens after the farm gate, why is there an obsession with certification at farm level and tracing back to the farm? I believe it is time that other links in the supply chain also take responsibility, in particular the distribution centres, wholesalers and retailers.”
No comments yet