By Semakaleng Motsoere
(Bloomberg) –Southern Africa’s citrus industry is battling a “perfect storm” of increased production, rising farming input costs and a decline in export prices that threaten to erode its profitability, according to the head of a regional industry body.
While fruit production is set to grow by 500,000 tons over the next three to five years, soaring fertilizer and fuel prices stemming from Russia’s invasion of Ukraine, high freight rates and inefficiencies at South African ports put the industry’s long-term survival at risk, Justin Chadwick, the chief executive of the Citrus Growers’ Association of Southern Africa said in opinion piece in the Johannesburg-based Business Day newspaper.
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Prices of all citrus varieties are also expected to drop during the course of the decade, Chadwick said, citing a CGA-commissioned study. Modeling shows “most local growers face the threat of moving into a negative profit margin — before even considering interest on long-term loans and taxes — which will continue to worsen up to 2030,” he said.
Citrus producers in Southern Africa, including South Africa, Zimbabwe and Eswatini, exported 161 million cartons of fruit in 2021, he said. In South Africa, the world’s second-largest exporter of citrus fruit after Spain, the industry generated export revenue of 30 billion rand ($1.9 billion) and sustained more than 100,000 jobs last year, CGA data show.
–With assistance from Prinesha Naidoo.
© 2022 Bloomberg L.P.
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