“Long-term citrus production will decline despite current excellent international prices,“ said Justin Chadwick, chairperson of the Citrus Growers’ Association of southern Africa have stressed that last season’s high price levels should continue this year as Mediterranean countries experienced a lower than usual crop, leaving the EU market undersupplied. That’s good news for South African producers, as 50% of their export volumes are destined for the EU.
he Eastern and North American markets should experience some price pressure due to a good North American crop this year. That market traditionally represents 40% of SA’s exports. The remaining 10% goes to Russia, where price levels were good last year and are expected to stay high, Chadwick added.
Estimates predict a crop volume similar to last year’s bumper crop, and with a 25% depreciation in the rand’s value since last year, farmers would receive more rand for their fruit.However, input costs have increased drastically, especially fertiliser and transport costs, and there is an energy-price increase looming.
Chadwick said farmers may receive more money for their fruit, but these factors could reduce profit. Furthermore, many farmers in Limpopo and Mpumalanga are facing land claims and therefore aren’t prepared to expand their production capacity, as it’s difficult to raise working capital on land with a claim hanging over it. Some banks refuse to do further business once a claim is registered, and selling a farm with a claim pending is difficult. added that farmers need stability and security to farm progressively.
Citrus trees have a production life of up to 40 years if managed correctly, but when farmers stop replanting and suspend maintenance schedules, production drops. Chadwick predicted the effects will become visible over the next two to three years as production decreases, first subtly and then more drastically after five to seven years.“Farmers can weather input price shocks and exchange volatility, but the current uncertainty regarding property rights is too much,” he warned. – Wouter Kriel
