South African citrus feels uncertainty from China, E.U.
The Citrus Growers’ Association of South Africa lamented the effect of market uncertainty on consumer habits on Friday. CEO Justin Chadwick highlighted the particular influence of China, the European Union and Russia.
“The market likes certainty – any uncertainty leads to a perception of risk amongst buyer,” Chadwick said.
“Unfortunately the 2013 citrus season is throwing up quite a few uncertainties.”
China halting citrus imports from California stood out as a key point of uncertainty for the nation.
“The likelihood is that a fair amount of citrus that would have been exported to China will now stay within the [US] domestic market – swelling domestic market volumes and extending the domestic season. This will impact on southern hemisphere exporters hoping for an early start to their US campaign,” Chadwick said.
“Any advantage gained by additional Chinese opportunities will be more than offset by the uncertainty in the US market. US fruit will also be diverted from China to other destinations, potentially destabilising those markets.”
China’s emerging role as the world’s number one citrus producer also created a point of interest.
Chadwick cited a number of significant areas of growth in China, including 88% soft citrus growth since 2000 and 1245% growth for pomelos and grapefruit.
“With most of this citrus consumed locally, Chinese consumers have increased their per capita consumption of citrus. Exports are also growing – with China exporting about 1 million tons annually – sixth largest exporter in the world,” he said.
Recent concern from the European Union over citrus bacterial spot was also mentioned, as South African fruit undergoes increasing pressure over the disease.
“The same level of uncertainty remains in the EU market, where those exporting from countries with CBS (most southern hemisphere citrus exporters) have already been influenced by traders nervous about what will happen should intercepted consignments exceed what is deemed acceptable to EU plant health.
“In some cases these traders have extended their purchasing of northern hemisphere fruit, while others have moved to alternative products,” he said.
“Although there are international bodies that have been formed to reduce uncertainty, they have proved extremely cumbersome and slow in their reactions; prolonging uncertainty.”
Russia offered an alternative market possibility. The nation ranks as the third biggest fresh fruit importer in the world, Chadwick said. Citrus accounts for the largest share of the category, accounting for 28% of imports.
At the moment, the top fresh fruit suppliers to Russia are Ecuador, Poland, Turkey, China, Argentina and Chile.
In contrast to the concerns expressed Friday, Chadwick highlighted the joy of trying the season’s first grapefruit.
“The best part of this week was that I had my first grapefruit of the new season on Monday – it must be the best way to start the day and I cannot understand why consumption of this product is declining in most markets,” he said.
“The first million cartons of grapefruit have been shipped and the packing tempo has increased. Sizing is reported to be better than last year (2012 was characterised by small fruit), fruit shape and internal and external quality are reported to be very good.”
The lemon forecast was decreased by 1 million cartons to 10.2 million due to reassessment in the Sundays River Region. 80% of the predicted 1,765,947 cartons of Satsumas had been packed.