South Africa’s 2023/24 Season Citrus Export Outlook: Lemons and Mandarins Drive the Growth

The projection for the 2023/24 marketing year anticipates a 10% year-on-year (YoY) increase in South African lemon production, supported by ample irrigation and increased investments in inputs by producers. Similarly, mandarin production is expected to see a 4% rise. Contrastingly, other citrus varieties are anticipated to experience slight declines, with grapefruit decreasing by 5% and oranges by 1%. This decline is attributed to a reduction in the planted area, as producers exhibit less optimism regarding the prospects of these citrus types and refrain from replacing older trees. Additionally, orange juice production is forecasted to decrease by 3%, influenced by a higher diversion of oranges to the export market.

Source: United States Department of Agriculture (USDA)

Orange: Challenges and Shifts in South Africa's Output

In the 2021/22 season, the total citrus planting area in South Africa witnessed a 1% decline, dropping from 97.5 thousand hectares (ha) in the previous season to 96 thousand ha. This reduction can be attributed to various industry challenges, including logistical hurdles, escalating input costs, an inconsistent electricity supply, and stringent phytosanitary requirements, particularly within the European Union (EU) market.

Anticipating a 1% reduction in the harvested area, orange production for the 2023/24 season is expected to decrease by a corresponding percentage. Despite these challenges, regions cultivating oranges have benefited from abundant rainfall, ensuring efficient irrigation and sustaining the relatively high yields observed in the past two seasons. Furthermore, South Africa's orange exports are projected to strengthen by 2% in the 2023/24 season, hinting at the potential for robust growth due to high volumes of exportable fruit and reduced shipping costs.

Being the predominant citrus type in South Africa, oranges constituted 40% of the total citrus planting area in the 2021/22 season. In contrast, mandarins have experienced a notable shift, increasing their share of total citrus production from approximately 16% in the 2015/16 season to 24% in the 2020/21 season.

Mandarin: Projected Growth with Foreseen Challenges

The once rapid expansion of mandarin and tangerine cultivation in South Africa has tempered, projecting a modest 2% increase for the upcoming 2023/24 season. Driven by global demand and favorable profit margins, the allure of seedless mandarins and tangerines has captivated farmers, leading to extensive cultivation. As a result, the 2023/24 season anticipates a 4% increase in mandarin and tangerine production, with further growth expected as more trees reach maturity in the coming years.

Additionally, fueled by escalating production and investments in quality enhancements, South Africa foresees a 5% surge in tangerine and mandarin output during the 2023/24 season. Despite these positive projections, potential risks loom in the form of port operations. Growing concerns about operational constraints may impede the movement of produce to the export market, posing a challenge for the upcoming season. However, in the 2022/23 season, the export of tangerines and mandarins experienced a robust 15% increase, which was attributed to high production volumes and the availability of more reasonable shipping rates.

Lemon and Lime Exports Set To Hit Record High

Robust market demand is poised to propel South Africa's lemon and lime exports to unprecedented heights, with an anticipated 12% increase in the forthcoming 2023/24 season. The noteworthy surge in exports is attributed to China's relaxation of cold treatment requirements in Aug-21. South Africa experienced a remarkable 1202% increase in fresh lemon and lime exports to China during the 2021/22 season, reaching 9.3 thousand metric tons (mt). In the initial nine months of 2023, exports to China further rose to 10.3 thousand mt, marking a 16% increase compared to the same period the previous year. Prospects indicate continued export growth fueled by sustained demand expansion in the Middle East, the United Kingdom (UK), the EU, and Asia.

This export upswing is underpinned by the substantial expansion of lemon and lime cultivation areas in South Africa over the past seven years, responding to global demand and escalating prices. Forecasts for the 2023/24 season predict a 10% YoY increase in South African lemon production, propelled by improved water availability and heightened investments in fertilizer and pesticide inputs. More optimistic about prices than in the preceding season, local growers contribute to this positive outlook.

Despite the overall deceleration in South Africa's lemon and lime cultivation area expansion, with orchards aged five years or less now representing only 14% of the total area, output is forecasted to surge by 10%. Paradoxically, the total planting area is projected to decrease by 4% to 16.9 thousand ha in the 2023/24 season, highlighting a nuanced landscape of cultivation dynamics and output growth.

Grapefruit: Exports Volumes Set to Recover

The grapefruit cultivation area is expected to remain largely unchanged at 8.5 thousand ha in the upcoming 2023/24 season, projecting a 5% decline in output. Despite this, grapefruit exports are anticipated to increase by 6% to 230 thousand mt. The decrease in grapefruit production is attributed to average yield and minimal growth in the harvested area. Notably, the current dams supplying key producing regions in Limpopo possess ample water levels, ensuring effective irrigation comparable to the previous season.

In the 2022/23 season, exports are estimated to have declined by 8% as certain grapefruit regions reduced the packing of class 2 fruit for exports, redirecting it towards domestic processing and consumption. Moreover, in the 2021/22 season, grapefruit exports witnessed an 18% YoY decrease due to escalating input costs and higher shipping rates, rendering certain grades of grapefruit unprofitable for export. However, shipping costs have rebounded for the 2023/24 season, although still not at par with pre-Covid levels. If these costs are sustained at current levels or lower, grapefruit exports are anticipated to rise by 6% YoY.