SA’s fruit exports to Middle East face major problems

Logistical disruptions due to the war between the US, Israel and Iran have elevated the cost and risk profiles of South African agricultural exporters, which face increased freight costs driven by higher bunker fuel surcharges, doubled surcharges on some routes and restricted vessel availability.

Longer transit times raise the risk of fruit arriving in poor condition, potentially missing optimal market windows, banking group Absa said in the latest edition of its AgriTrends report, a bi-annual analysis of agricultural economic trends, market risks and commodity forecasts.

“Beyond currency effects, the conflict influences the agricultural value chain through rising input costs, disrupted trade flows and heightened logistical risk. The conflict has intensified instability across major shipping routes,” the report said.

“With the Strait of Hormuz partially disrupted, carriers are suspending routes, rerouting vessels or omitting ports to manage delays and operational risks.”

While demand for South African produce in the Middle East currently remains firm, exporters should prepare for a volatile trading environment if the conflict persists for a prolonged period.

Diversions to alternative markets may reduce sales value, especially where phytosanitary rules or size specifications restrict market access.

In 2025, approximately 8% of South Africa’s total agricultural exports were destined for the Middle East, with a notable share directed to Gulf economies currently affected by the conflict.

“This trade exposure creates differentiated risks across commodities. Pome fruit (such as pears and apples) exports face the most acute vulnerability, as the season is already under way and consignments have largely been committed, limiting exporters’ short‑term ability to adjust market strategies,” the Absa report says.

The citrus industry represents a secondary but growing source of exposure, and while the season has only recently commenced, its early phase remains sensitive to logistical disruptions and cost developments that could influence overall export performance.

About 19% of South Africa’s citrus exports and another 19% of stone fruit — such as apricots and peaches — are exported to the Middle East.

For pome fruits, apples hold a 12% market share, while pears account for 21%. Exposure is lower for grapes, whose export share is about 4.1%.

“These figures illustrate the vulnerability of high‑value fruit categories should conditions deteriorate,” said Absa.

But in other markets, the current outlook for citrus exporters is favourable, according to Loffie Brandt, a sector executive for agriculture at Absa AgriBusiness.

“EU markets in particular look promising and for oranges specifically, duty-free access to the US and tightening Northern Hemisphere supply is expected to contribute to a favourable pricing environment,” Brandt said.

The most immediate effect of the Middle East war on South African agriculture stems from rising cost pressures.

Urea, a fertiliser used to boost crop yields, has reached its highest level in several years, and was trading above $650 by early April.

Producers who have not secured their fertiliser stock will face higher costs and tighter supply availability as global supply chains remain strained, Brandt warned.

The rand has lost ground against major currencies in volatile trade, but while its weakness typically supports export earnings by lifting local‑currency returns, these gains are increasingly outweighed by higher fuel and logistics costs, Absa said.

“In the current environment, producers and exporters may consider using forward exchange contracts to manage currency exposure,” it said.

“The interest‑rate differential between South Africa and the US remains relatively narrow by historical standards, which keeps the cost of hedging comparatively low. With global uncertainty rising, managing currency risk has become as important as managing production risk — monitoring rand movements is now essential.”