South African Citrus Exports Set for a Record-Breaking Season Amid Looming Operational Challenges

According to the South African Citrus Semi-annual USDA report, South Africa is forecast to export 2.7 million MT of all citrus products in the 2021/22 season. The export volume will be at an all-time high for the citrus industry, which has consistently grown its exports over the last years.

Citrus production in South Africa has been growing at an accelerated rate in all of their main products, driven by a surge in global demand, especially in Europe, Asia, and the Middle East. As a result, grapefruits, oranges, mandarins, and lemons have exponentially grown in their harvested area over the last ten years to fulfill a rising global demand for citrus fruits.

For MY 2021/22, all South African citrus products are expected to increase their production from the last MY. Grapefruit production is expected to grow 8% YoY to 380 thousand mt from the 351 thousand mt last MY. Summer rains have provided sufficient irrigation water and conducive growing conditions that positively impacted grapefruit production. The production of oranges is estimated to grow by 6% to 1.6 million MT, driven by steady growth in planted areas and above-average rainfall received throughout the season. The production of mandarins is expected to continue its aggressive growth, increasing by 12% to 660 thousand MT from 591 thousand MT in MY 2020/21. Ultimately, the production of lemons and limes is estimated to reach a historical high of 670 thousand MT for a 7% YoY increase.

In terms of the citrus exports forecast for MY 2021/22, all products, except grapefruits, are set to increase and reach record export volumes. These export increases and record volumes are strongly driven by the growth in the US market as duty-free exports of citrus to the US under the African Growth Opportunity Act reached a historical high of 100 thousand MT in 2021.

Grapefruit exports will drop by 5% to 275 thousand mt in MY 2021/22, mainly due to heavy rainfalls across the KwaZulu-Natal province that led to severe flooding. However, exports of oranges are estimated to grow by 5% to a record level of 1.36 million MT. The rise in production, and a continuous spike in demand due to the benefits of vitamin C in boosting immunity against COVID-19, are driving the growth in exports. Similarly, mandarin exports are estimated to surge by 12% to a record level of 570 thousand MT, based on increased production and higher global demand. Moreover, South Africa’s exports of lemons and limes are estimated to rise by 6%, also to a record level of 530 thousand MT, based on higher production and growth in demand from the Middle Eastern and Asian markets.

Despite the very positive forecast for MY 2021/22, the South African citrus industry is facing a looming crisis that threatens the profitability and sustainability of the whole sector. The most critical of these challenges is the recently announced EU cold treatment requirements, for which South African citrus exports will likely be severely impacted. The EU will require South Africa to implement extreme cold treatment procedures that are currently not in place, threatening the future of the citrus trade with South Africa’s primary partner.

Other significant challenges the industry faces include soaring input costs, especially fuel and fertilizer, a major surge in shipping costs, ongoing operational challenges at the country’s ports, and the impact of the Russia-Ukraine conflict on established trading patterns. As a result, the profitability and sustainability of the industry are under threat and could limit future investments.