SA and Eastern Cape citrus exports flourishing but collaborative efforts needed to improve infrastructure logistics
While you’re squeezing a lemon over your fish ’n chips in Gqeberha, a consumer anywhere from Dubai to Shanghai could be doing the same — and the chances are very good the lemons were grown on our doorstep, in Addo.
This is a small illustration of the global reach of our local citrus industry, with the Eastern Cape the country’s biggest lemon producer and exporting more lemons than the US, Brazil, Egypt or Italy.
SA is the world’s second largest exporter of citrus fruit, with about 65%, or 2.25m tonnes, of our crop of lemons, limes, oranges, grapefruit and soft citrus destined for international markets, leading the country’s agricultural exports in value.
Citrus exports have grown by more than 40% in the past decade to about R20bn annually and this trajectory is set to continue — the Citrus Growers’ Association (CGA) forecasts an increase from the current 150m 15kg cartons per year to 200m in the next five years, and 255m by 2030.
The Eastern Cape is the second largest citrus producing-province, while the Sundays River Valley is the country’s biggest production area, with 2021’s harvest projected to reach more than 30.5m cartons, increasing to 40m over the next five years.
Black citrus farmers are gaining encouraging momentum in the export market, with a 40% increase in volumes pushing their exports to 1.6m cartons in 2020.
This progress towards a more inclusive industry is driven by the CGA and Sundays River Citrus Company through the Grower Development Company that assists black citrus farmers with business and technical support, funding and equipment to develop sustainable, export-driven, operations — a development initiative that is considered a benchmark in the agriculture sector.
Government, in the National Development Plan and other policies, sees the citrus industry, with its strong exports and labour-intensive employment, as a priority sector with growth potential, especially in stimulating rural employment and sustainable livelihoods.
Employment in the citrus industry nationally is estimated at more than 40,000 jobs on farms and in packhouses (including over 4,000 in the Sundays River area), and more than doubling in the picking and packing season.
The coming expansion in citrus production has the potential to create new jobs throughout the entire value chain.
Forecasts range from 5,500 to 11,800 permanent jobs, and 15,000 to 25,000 temporary or seasonal, and up to 58,000 upstream and downstream from the orchards.
All in all, an industry with a great success story and a bright future.
However, we will be growing into a vacuum if we can’t master the logistics infrastructure chain that puts our fruit in a supermarket in London or Kuala Lumpur.
SA’s ports are congested and under-equipped; freight costs are rising; there is a chronic lack of shipping containers to pack fruit into; and, despite major investments at Addo and in the ports, cold storage facilities are pressured for space.
The reasons are complex, and both local and global, and no one role-player can fix the situation.
There is the global Covid-19 pandemic, weather affecting port operations, the effect of the July unrest and the cyberattack on Transnet’s IT network, and the US’s stimulus of consumer demand to kick-start their economy, leading to huge demand for sea freight from east to west, and a lack of capacity on the routes we need to the Middle and Far East.
Shipping lines faced with spending a month in SA waters to make all their port calls, at a cost of about US $30,000 (R453,000) a day when waiting outside a port, have changed their schedules, some skipping Eastern Cape ports, or have reduced their capacity or taken the country off their schedule altogether.
While 27% of SA’s citrus is exported through the metro’s ports of Ngqura and Gqeberha, much of the province’s production is trucked to the Durban and Cape Town ports for export, adding to congestion and delays there and taking work and money out of our local economy.
It’s not all doom and gloom though as the citrus industry is seen as a priority by government, and we have its financial and policy support.
We know Transnet senior management are acting, and the move of its headquarters to the Port of Ngqura is a positive.
Transnet’s ports master plan and recent requests for information to gauge the interest of potential private partners in infrastructure and operations at the ports of Durban and Ngqura are very welcome, and essential.
The CGA and its members meet regularly, virtually, with Transnet to assess the situation, and the association has met in the last week with some of the major shipping lines to outline the problems.
We need to get all these “moving parts” and role players working together with the same level of synchronisation we need from the logistics infrastructure.
If the logistics infrastructure works, our ports and container terminals will have more capacity and productivity, more shipping lines will be eager to call at SA ports, freight costs will be reduced, and our country will have greater ability to export.
Progress is being made and we are optimistic of smoother sailing ahead for those lemons (and oranges, naartjies and grapefruit) from Addo to overseas tables.
Hannes de Waal is the Sundays River Citrus Company CEO, Sundays River Valley Citrus Producers Forum chair, and a Nelson Mandela Bay Business Chamber board member.
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