Goods returns for South African citrus
“The volumes have lived up to the estimates, although Valencias are down slightly on last year’s volumes, it was originally estimated at 49.1 million cartons this year and 50.9 million last year. It looks like this estimate was a bit under the reality. The latest prediction is 50 million cartons. The other varieties are all virtually finished, there are still some lemons to go, I believe. We should end with around 14.4, whereas last year’s crop was 13.2, so there has been an increase. A lot of this is planting that is now coming into production, the lemon market has been good for a number of years now and this has encouraged people to plant more crop. This is being done all around the world so soon we will have a lot of lemons.”
Lemons/ mandarins
Fortunately, demand has also picked up, as lemons are used as a supplement to limes, as lime production has been a bit up and down in some places. There is also a large pull factor from the health side, people often drink water or tea with a bit of lemon in it, people have even started putting them in beer.
“We hope that when all the supply comes into play the demand will absorb it. We are expecting it to be at around 20 million from new lemon plantations in the next four or five years, up from our current 14.4 million.
“We have packed 9.6 million cartons of soft citrus, our original estimate was 10, so we have a bit to go especially with late mandarins. I think we might get a little over the original estimates.”
South Africa is sending more mandarins to the European market at the moment, at least 50% of the earlier soft citrus goes to the UK.
“For Navels we have packed 24.2 million cartons, the original estimate was a little bit higher than that but it’s very much on estimate.”
The winter rainfall in the Western Cape and Eastern Cape has so far been sufficient for the crops.
“The Rand is very weak at the moment, it has taken a dive, which is good for us as exporters in the short term. In the long term it pushes all the prices up, for instance shipping, packaging and many other important inputs. I think the Chinese currency has devalued by about 2 percent, whereas if you look at ours it’s much more than that, so we’re not too worried about that.”
Grapefruit
All Eastern markets have been good, in fact all markets have been good for returns, even, surprisingly, for grapefruit, which is usually the difficult one. Grapefruit has been good this year because it wasn’t all sent at the same time, and it was more organised, according to Justin.
“We had a dry summer during the rainy period, so there were concerns about the size of the grapefruit, as most people prefer a bigger grapefruit. When growers get grapefruit they pack them like mad, to make space on packing for Valencias. They want to finish the grapefruit and move onto the Valencias. There was a group that called themselves ‘TASTES’ that formed a company that looked at all the markets and said, ‘What is the demand plan in all the markets? How can we get a supply schedule that’s going to meet the demand plan rather than just have supply?’ So they spread the packing and shipping of grapefruit and as a result the market held up a lot more. What usually happens is that a huge volume comes in and the price drops, then the volumes dry up and the price goes up again. Now it has been flattened. We have seen around 600,000 or 700,000 cartons go to South Korea and this is only our third year with access.
We have also sold a lot on the Chinese market, despite people saying they have a sweet palate and yet they seem to have a taste for grapefruit.”
The South African grapefruit doesn’t face much competition from the pomelo on the Asian market, as the seasons don’t clash. The pomelo is also a different product, it’s a big product and it tastes quite different.
Citrus Black Spot
“The Europhyt numbers came out last Friday (4th Sept) regarding CBS for August, since the beginning of this year we have had 9 interceptions, Argentina has had 9, Uruguay has had 5 so it’s better than last year, when we had 12 by the same time. All of our interceptions have been in the north of Europe, so that’s very far away from the growing areas in the EU. We also had the FBO report that came out, which was very positive about the South African system for controlling CBS. From all those points of view I think there’s a much better idea of what we’re doing and how we control it. There is a feeling that it’s under control.”
No additional measures will be implemented at the present time.
“Obviously the circumstances can change, we still have 16 million cartons of Valencia’s to go and normally the Valencia’s are the high risk product, so we’re not resting on our laurels believing we have made it. We will watch every day to see if there are any more inceptions, and if there is an issue we will make a decision accordingly.
“We are hoping to push through the season normally, but we will take measures if we have to. The 5 inceptions written into the emergency measure says that after 5 they will investigate so that’s why there was the discussion on the 28th August, as this limit had been breached, to see whether there was a need for additional measures."