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Citrus Estimate for the 2020 season

Citrus Estimate for the 2020 season

Southern Africa is expected to export a record 143.3 million cartons of citrus fruit to over 100 countries in 2020. This is a 13% increase when compared to 2019, which saw 126.7 million cartons being exported, generating R20 billion in export revenue and creating 120 000 jobs.

This increase should translate into more job opportunities, foreign exchange revenue and will contribute towards national government’s goal of increased agricultural exports over the next few years.

The growth is largely as a result of new orchards coming into production and good rains across some regions.

Valencia oranges make up the biggest portion of the citrus export market at 35%, followed by navel oranges (19%), lemons (18%), soft citrus (16%) and grapefruit (12%).

The soft citrus and lemon categories are expected to show the highest growth in 2020. Soft citrus will see an increase of 28%, with the Boland region contributing 12% more cartons than last year. Regions in the northern parts of the country, including the Burgersfort/Ohrigstad region, Senwes and Hoedspruit will also see exponential growth in their soft citrus outputs.

The Sunday’s River Valley, which exports almost half of the region’s lemons is expected to export 12 million cartons this year, an 18% increase from 2019.

While we are confident that the 2020 season will be a success, we are also aware that there are events beyond growers’ control that could impact final export numbers.

Most notably, the Coronavirus (Covid 2019) outbreak presents a new challenge to fresh produce exporters across the globe. It is encouraging that China’s logistics services are expected to be fully operational soon, with cargo volumes and ship calls having swiftly rebounded over the past two weeks.

However, the outbreak across the European Union, the largest export market for South Africa’s citrus, remains a concern and could still result in a decrease in demand and a shortfall of containers when the export season kicks off in May. It is therefore critical that exporters confirm that there are containers available before they start shipping,

Challenges at South Africa’s ports, including aging and out of service infrastructure as well as unresolved labour issues remain a threat to export volumes. However, the Citrus Growers’ Association is proactively engaging with Transnet and welcomes recent steps taken by the company to improve operations at a number of the ports. This includes the procurement of new equipment for both the Port Elizabeth and Durban ports, which is expected to arrive before the start of the export season.

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SPAR South Africa’s rural hubs show promise

SPAR South Africa’s rural hubs show promise

 

Sustainable local supply chains for produce grown in remote areas are at the project’s heart

SPAR South Africa sees small-scale rural farmers as the key to a sustainable future for the vast nation. It believes they can help improve food security, affordability and nutrition for its rural communities. With the Dutch-founded SPAR Group and support from the Dutch government, it has created a rural hub business model based on packhouses serving as mini distribution centres in outlying areas of South Africa. The idea is to develop local supply chains of fresh produce in a cost-efficient and environmentally responsible way. And while its initial two hubs have not been without challenges and are not yet profitable, SPAR South Africa believes “we have created a sustainable model that can be rolled out nationally.”

More rural farmers starting to thrive 

SPAR’s first rural hub was established in Mopani, in Limpopo, South Africa’s northernmost province, in June 2016. It is based on the concept of a central fresh assembly point (FAP), which acts as a collection point for a range of fresh produce sourced from smallholder farmers to supply local SPAR stores within a radius of up to 200 km. SPAR says that over July 2018 / June 2019, 10 farmers/groups supplied the Mopani hub, many of whom could finance a portion of their business themselves for the first time – a sign that they can now stand on their own feet. The hub bought produce worth R1.26 million (≈€80,300) from them, with crops including green beans, baby marrows, butternuts, baby corn, cabbage, watermelon and lettuce. The hub in turn supplied 41 customers, most of which were SPAR stores, and in the past year sold more produce to informal traders, something seen as a significant development. A second rural hub business was established in Ikhwezi, in the northeastern province of Mpumalanga, in October 2017, with a group of 36 smallholder farmers. Over the same period, the Ikhwezi hub purchased produce worth R1.16 million (≈€74,000) from 24 farmers. Crops included tomatoes, cabbage, butternut, green beans, bitter melon, lettuce and sweet potatoes. The packhouse supplied 27 customers, most of which were SPAR stores.

Overcoming challenges

SPAR chairman Mike Hankinson says the rural hub project shows early signs of being financially sustainable for a group of small emerging farmers, but there was a need to find new ways for the economics around delivery and packing to make sense. One challenge was that low-margin products, such as cabbage and spinach, continued to be sourced by local SPAR stores directly from smallholder farmers in close proximity to the stores. However, many of these small businesses were at risk as they lacked food safety accreditation to sell their produce directly to stores. Routing these products through the FAPs, on the other hand, incurred unnecessary transport and handling costs. To address such issues, SPAR has developed a model to transport certain produce directly from farmer to store, while other items are distributed through the central FAP. Also, the farmers have received food safety training in order to get local.g.a.p certification, and technology solutions were introduced to help farmers grow high value crops and extend their growing seasons, thereby improving their sustainability. “We remain committed to the concept of rural farmers supplying fresh produce to SPAR stores. It has the potential to provide employment, grow rural economies, ensure food security and improve nutrition, while reducing transport costs for SPAR, shorten lead times, and increase freshness and shelf life,” Hankinson said.

SPAR South Africa acts as a supermarket supplier

Established in 1963, SPAR South Africa grants licences to independent retailers to operate stores under one of four formats, with almost all of its current store portfolio independently owned. “The SPAR Group in Southern Africa acts as a wholesaler distributing the entire range of goods stocked by a typical supermarket, including fresh produce,” SPAR South Africa fresh food manager Peter Gohl told ED. “We supply a range of about 450 fresh produce products to about 850 independently owned and managed SPAR retail stores through 6 strategically located distribution centres. Excluding our SPAR Group Ltd European and UK/Irish holdings, the Southern Africa turnover in fresh produce amounted to about €320 million over the past 12 months. Of this, the fruit category contributed €130 million and imports in the fruit category amounted to €28 million,” he said.

Source: https://investor-relations.SPAR.co.za

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South African stone fruit sector battles through sustained drought

South African stone fruit sector battles through sustained drought

As South Africa’s farmers continue to battle the sustained drought the country has undergone in recent years, Hortgro, the organisation which represents South Africa’s stone and top fruit industries, has been supporting producers and agricultural workers to manage their product during the harvesting season. Hortgro Science provides research-based information to enhance the quality of South African stone and top fruit. Growers reportedly receive regular notes and technical updates from Hortgro Science, highlighting the primary fruit quality aspects to be adhered to during heat waves. The organisation works in collaboration with the Canning Fruit Producers’ Association, Agri Western Cape, Agri SA and Wine TU to help producers financially to through the rest of the production season and contain risks to crops. Hortgro delivered 1,000 food parcels to affected farmworkers in the Ladismith area and held a ‘resilience workshop’ to empower them mentally with coping strategies at the end of 2019.

The good news is that the drought has broken in some areas, like Stellenbosch and Franschhoek. This means that Hortgro is optimistic that volumes will continue to increase throughout the season. Jacques du Preez, general manager trade and markets at Hortgro, said: “We are projecting an increase of 21% for nectarines compared to last season’s volumes, an increase of 14% for peaches and a 10% increase for plums. The continued droughts in some areas have, of course, impacted on the 2019/20 season’s full potential, but volumes and quality have certainly improved compared to last year.”

 

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SRCC becomes more Mediterranean

SRCC becomes more Mediterranean, photo of Hannes de Waal, managing director of Sundays River Citrus Company
Hannes de Waal, managing director

 

 

 

Leading grower, packer and exporter of South African citrus SRCC (Sundays River Citrus Company) is seeking to consolidate itself in Europe and expand to new markets. Speaking at the firm’s stand at Fruit Attraction in Madrid, managing director, Hannes de Waal, said, “A few years ago, we established a ten-year plan to grow our customer base and we decided to become more Mediterranean. Spain has a great food culture and we have a lot to learn here. There are also a lot of opportunities as Spain’s excellent service providers allow us to work well.” Indeed, there is a window of between ten and twenty weeks during which Spain imports citrus from the Southern Hemisphere, and this provides SRCC with a great opportunity. “We have produced 9 million cartons this year and aim to raise this level to 12 million. With the stronger competition and our larger volumes, we need new markets, which is why we have now opened a new sales office in St Petersburg in Russia. Our many chemical-free products appeal especially to the northern European markets.” To cope with this increased production, the firm has recently opened a new storage facility with double the previous capacity.

Founded in 1924 in the renowned Sundays River Valley, SRCC has grown into the largest grower, packer and exporter of quality South African citrus and one of the biggest growers of clemenules in the world. Owned by its 100 citrus growers, the firm hires 300 permanent workers and 40,000 during the season. SRCC packs for its own growers and directly markets its products to customers under its brands: Sundays, Ada, Kirkwood.

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Record season for South African soft citrus exports

Record season for South African soft citrus exports, Source: CGA
Source: CGA

 

 

South Africa set a new export record in 2019 for volumes shipped of soft citrus, up 12%. Coming off the back of a good 2018 season, when 16.2 million cartons were exported, the 2019 season saw 18.2 million cartons shipped, according to data released by South Africa’s Citrus Growers Association. The main exporting region is Boland, followed by Western Cape, and Patensie, which is still suffering the effects of water shortages. The main destination market for South Africa’s soft citrus is the UK, although shipments there dropped from slightly to 61,200 tons. The second leading destination, the Netherlands, saw volumes rise by around 10% to 55,300 tons, while, in third place, Russia saw a drop 9% drop to 24,400 tons. In fourth position, the US recorded a rise in shipments of around 32% to 16,600 tons. Similar growth was recorded for exports to Bangladesh, up from 10,600 to 14,300 tons.

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South Africa’s soft citrus crops defy expectations

South Africa’s soft citrus crops defy expectations, credit image: Alexandra Sautois, Eurofresh Distribution

South Africa’s 2019 soft citrus season presented a varied picture across the country’s diverse geography. The estimates of the major organisations (e.g. Citrus Marketing Forum) were realised, with exports amounting to 18.2 million 15kg cartons, according to data published by the CGA . However, the accuracy of the estimates appears to have been a fluke, as South Africa’s fourth largest production area, Sundays River, exported 31% more than the initial estimate, while the fifth biggest, Senwes, exported 42.6% less than had been forecast. The largest soft citrus region (Boland) exported 17% more than the estimate, and the second biggest region (Western Cape) shipped 14% more than had been projected. The Patensie region in the end exported 6% less than was expected.

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Vietnamese push for greater access to South African markets

Vietnamese push for greater access to South African markets

 

Although Vietnam and South Africa already have strong trade ties, the Vietnamese are asking South African officials to open their market further for its fresh produce exports, which include dragon fruit, lychee, longan, rambutan and star apple. Bilateral trade between the two countries was worth over US$1 billion in 2018, and, in 2019, the figure had already reached US$951 million by September, with Vietnam showing a net surplus. Vietnamese deputy minister of industry and trade, Cao Quoc Hung, highlighted the many similarities the two countries share in terms of agricultural production but also their great potential to complement one another’s productions.

TAGS: Vietnam, South Africa

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Spanish citrus sector appeals to supermarkets not to buy South African citrus

Spanish citrus sector appeals to supermarkets not to buy South African citrus

 

Valencia’s main agricultural professional organisation, La Unio-Uniò de Lluradors, has asked retailers in the country to minimise purchases of South African citrus. The appeal comes after the discovery of prohibited substances in South African fruit. There are 62 active substances used in South Africa that are banned in the EU, 13 of which are defined as “very dangerous” for human health by the WHO.

La Unio has defined its appeal: “a form of sensitivity towards farmers, but above all consumers”. Meanwhile, the organisation is also asking Brussels to block imports from countries where banned active substances are allowed in agriculture.

 

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South Africa spies openings for citrus in Japan

South Africa has seen a general decline in shipments of citrus to Japan. Since 2013, citrus volumes (mainly grapefruit) shipped to the Asian country have slipped from 62,000 pallets per year to 41,000 pallets. Japan represents a key grapefruit market for South African, with trade between the two countries stretching back to the 1970s. South Africa is now looking to increase exports of other citrus varieties. South Africa has been applying for a review of the protocol and the cold treatment requirements with no response as yet from Japan. Another complication is that Japan’s policy is to require access applications per variety of soft citrus, in contrast with international standards.

 

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South Africa introduces Carbon Tax 

 

South Africa has introduced a new Carbon Tax to reduce the country’s dependence on fossil fuels. The first phase of the tax will run until December 2022, with the second phase running from 2023–2030. Agriculture will not be included in the first phase, but may be included in the second phase, although it is not clear what form it will take.

Fossil fuels are included in the first phase of the Act. As a result, we are likely to see a shift of the additional tax burden for energy producers passed on in the value chain, resulting in higher prices for the affected goods. The effect of the tax on liquid fuels is already being felt, with the fuel price increasing by 9c/litre on petrol in June and 10c/litre on diesel.

Electricity prices are not expected to see an immediate increase, as Eskom has requested exemption from the tax until 2022 to support investment in renewables. However, from 2023 onwards, there is likely to be a significant rise in electricity bills.

For firms to deal with this change, it is vital to understand where emissions are coming from and the relative carbon intensity of different agricultural inputs. The Confronting Climate Change (CCC) Initiative provides data to guide firms to adjust their practices over time.

 

Source: Confronting Climate Change