Citrus Exports Stagnate as South Africa Grapples with Infrastructure Challenges

The Citrus Growers’ Association of Southern Africa (CGA) has raised concerns as South Africa’s citrus exports barely showed growth during the turbulent 2023 export season. Plagued by persistent infrastructure and logistic challenges, the industry was unable to meet its export targets, which could have far-reaching consequences for a sector significant to the nation's economy.

South Africa, the world’s second-largest citrus exporter after Spain, aimed to ship 170 million cartons of citrus in 2023. However, it fell short by nearly 5 million cartons, marking an underwhelming increase of less than 1% from the previous year. According to the CGA President, Justin Chadwick, South Africa exported 165.1 million cartons of fruit this season.

The stagnation in citrus exports is attributed to two significant factors. Firstly, the country's persistent power cuts have wreaked havoc on crucial agricultural processes. South Africa's electricity supply has been unreliable due to the deterioration of the coal plants, leading to disruptions in irrigation systems, packing operations, and cold storage facilities—all vital for maintaining the quality and consistency of fruit exports.

Additionally, the poor performance of the state-run Transnet, responsible for freight rail and port operations, has severely impaired the export of not only citrus but other commodities as well. According to Chadwick, congestion at ports combined with a dysfunctional freight rail network has cost farmers substantially and hindered the growth opportunities for the citrus industry.

These infrastructure woes underscore the broader challenges facing the South African export sectors. If unresolved, these problems could threaten the future growth and sustainability of the industry. The citrus sector is a critical part of the country’s agricultural exports, with the European Union as its biggest market, making up 33% of shipments in 2022. The Middle East follows with 19%.

Apart from logistical and electrical woes, South African citrus exporters face regulatory challenges. In particular, disputes have arisen over the European Union's phytosanitary requirements that have led to a decrease in orange exports to the region. These regulations are designed to protect against the introduction of the False Codling Moth, but they have been a point of contention for South African growers. Last year marked a significant step when South Africa lodged its first-ever World Trade Organization (WTO) dispute complaint, challenging these requirements.

The CGA is pushing for the South African government to submit another WTO complaint against the EU concerning the citrus black spot regulations. These regulatory hurdles, compounded by the logistics and power constraints, cast a shadow on the outlook for the next season with Chadwick predicting a further decline in exports for 2024.

The issues are multifaceted and require a strategic and cooperative approach between industry stakeholders and the South African government. This would not only be to resolve current disputes with international trading partners but, more pressingly, to address the internal systemic issues stifling the sector's potential. The citrus industry, a significant agricultural employer and earner of foreign income, is at a critical juncture where decisive action is needed to ensure its sustainability and growth.