Citrus on rocky road to recovery

South Africa’s citrus industry experienced a significant recovery in exports during 2010, achieving a record export crop of 99 million cartons of fruit after a tough 2009 season.

But sustaining the recovery during the 2011 season could be challenging, warned Citrus Growers Association CEO Justin Chadwick.Tough global economic conditions impacted heavily on the 2009 season and, as a result, export volumes fell by 9%. “At the start of 2010, the sluggish demand continued, especially in the developed markets – continental Europe, the US and Japan in particular.

But the newer markets such as Russia and the Far- and Middle East showed strong demand with record volumes sold,” said Chadwick.While opportunities remain to further increase citrus exports to eastern Europe and China, countries in the Mediterranean basin are forecasting a normal crop after a poor season in 2009/10. So most markets will already be well-supplied when South Africa enters the market later in 2011, he said.

The US is expecting another big crop and predictions are that southern hemisphere countries will be in a better position to compete in 2011, meaning more supply and price pressure. South African grapefruit exports are set to increase (12,2 million cartons exported in 2010, compared to 13,7 million in 2009) and a total citrus export crop similar to 2008 and 2010 (between 94 and 99 million cartons) is forecast. “Given the more competitive market conditions that are expected, it’s likely that the volume will be at the lower end of this range,” said Chadwick.
 
“We have to enhance our reputation as being a reliable supplier of good quality fruit. If we do this, the market will be there. The biggest challenge will be the exchange rate. If it continues at present levels, profits will be severely impacted."