The Citrus Growers’ Association of Southern Africa (CGA) has urged to the government to redouble negotiations with trading partners to mitigate disruptions to the industry caused by the war in Ukraine.
Russia accounts for 7% to 10% of total SA citrus exports annually, with 11.2-million 15kg cartons of fruit shipped there in 2021, but sanctions against Russia in response to its invasion of Ukraine last month are set to affect shipments.
Russia accounts for almost a quarter of ammonia production globally, 14% of urea and 21% of potash production, and a ban on its fertiliser exports will worsen already high prices of the input.
“It will take our collective effort to help ensure the continued profitability and sustainability of our local citrus industry, which sustains over 120,000 jobs and generates R30bn in export revenue for the country, particularly after a tough 2021 season,” CGA president Justin Chadwick said in a statement.
The association, which was established in 1997, represents about 1,400 growers of export citrus throughout Southern Africa, including Zimbabwe and Swaziland.
About 14% of global fertiliser exports are stuck in Russia and with the price of oil and gas continuing to climb as a result of the war, SA can expect further increases in fertiliser, fuel and agrochemical prices, placing additional strain on growers, the association warned.
“The CGA calls on government to redouble their negotiations with trading partners to optimise present market access conditions, to retain access where this is threatened and to gain access to new markets,” it said.
Morocco, Turkey and Egypt are also major exporters of citrus to Russia and, like local producers, are looking to divert sales, raising the prospect of oversupply and a slump in prices as producers compete in a smaller market.
The sentiment is shared by the Fresh Produce Exporters Forum (FPEF), which says fruit diverted to other markets will lead to oversupply, cheaper prices, and lower returns for SA exporters and farmers.
CGA said producers were already battling a sharp increase in a number of input costs over the past year. Fertiliser prices have almost doubled while the cost of agrochemicals has risen by by 50% on average. Rising fuel prices and freight costs, which soared by a third in 2021, are further squeezing margins.
CGA said major European ports used by the SA fresh produce industry were heavily congested resulting in consignments taking up to 90 days to be dispatched instead of the usual 24 days.
No fresh produce has been shipped to Eastern Europe in recent weeks, affecting the first exports of lemons to Russia. Should the situation persist, other fruit such as grapefruit and soft citrus would also be affected once the export season gets under way in April, the CGA warned.
In addition, the depreciation in the rouble will increase the price of imported fruit there, while restrictions on Russian money flows makes exports there increasingly risky.
The conflict has also slowed down budding momentum in fruit exports to Ukraine, according to the CGA.
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