South African Citrus Sector Face Increased Input Costs and Decreased Prices

Experienced South African citrus industry representatives are of the view that less than 20% of producers are likely to achieve above break-even returns at the end of the 2022 season. This poses a major threat to the sustainability and profitability of the sector and the USD 1.76bn in export revenue it generates annually. The most serious challenge facing producers, which is having the biggest impact on their bottom line, is price hikes across a number of inputs. For example, fertiliser prices increased just over 63% between August 2021 and 2022 and fuel prices are up by 58% over the same period. Of even greater concern is record high freight rates, with shipping lines hiking their prices by 128% between 2020 Q1 and 2022 Q1. This means growers are having to pay virtually twice as much to ship their fruit, than what it costs to produce it during a production season. At the same time, there has been a decline in real export prices across all citrus varieties which is expected to continue for the next few years.