Challenging Valencia campaign could require market assistance

South Africa still has significant volumes of Valencias that need to be marketed, but there aren’t a great many markets pulling significant volumes and therein lies the challenge, says Rowan Vickery, Citrus Executive at Capespan South Africa.

“There are opportunities, but they are only opportunities if the price is right. The period after the Mid-Autumn Festival in China could be an opportunity, while the Middle East is fairly stable, but we don’t know for how much longer. Meanwhile the Northern Hemisphere’s navel crop is coming on apace. Bangladesh is another market taking our Valencias.”

The Western and Northern Cape can still continue with Valencias to the EU, as they’re free of citrus black spot and unaffected by the decision to pro-actively end the export season of Valencias from summer rainfall areas by 22 September, but the added export duty from mid-October may not make it worthwhile for much longer.

“In Russia the sales and consumption haven’t been great and we’re not really geared for that market this season because they prefer larger sizes. I wouldn’t be surprised if there’s a request for market assistance from them and other markets. I have a great deal of sympathy for the markets this season – South Africa has in some cases overshipped unwanted counts and it’s then unrealistic to expect high prices if receivers can’t shift volumes. One needs to take the long term view, to nurture partnerships in order to be the preferred supplier, both individually and as a country, in our established markets. I think any request warrants consideration and it would need to be done in a transparent manner.”

The Western and Northern Cape provinces have the US market open to them, sending seedless Valencias (Midknights and Deltas). “The market is ok, but not great. South Africa overshipped navels and Chile came in outside of our expectations. The early to mid-season was good but the latter part has been a bit of a challenge.”

However, he points out, there’s more to it than sending more than markets could absorb. “There’s been a combination of factors – the global economy, and plenty of inexpensive Northern Hemisphere summer fruit like stonefruit, berries and melons, coupled with, on our side, a very different crop from what we initially expected, both in terms of volumes and in terms of counts.”

In the major Valencia production areas in the north of the country there was a heavy crop set – as much as 20t per hectare more than last year, in some cases – but it came with the corollary of smaller sizes. The early Valencias were slightly larger but late Valencias are half a count to a count smaller than last year, averaging 72 to 88, but 105s to 125s are also present. 

In the Western Cape, because of the drought, there was a lighter crop set, yielding bigger fruit.

And then there’s Egypt, on the doorstep of Europe and the Middle East. “Egypt can react quicker to changes in the market while we have four weeks’ worth of fruit on the water, and this year they had a record crop and they remained in Europe and the Middle East as late as the end of July. Egypt was a major price influencer this year.”

He acknowledges that there’s some uncertainty in the South African industry as to whether this year’s record crop could in fact be the new normal, pointing out that the acreage under citrus in Egypt is far in excess of South Africa’s approximately 77,700ha.

Do clients question them about the situation regarding land expropriation? “They do want to know what we’re thinking, but there’s no anxiety at this point. The biggest concern is how do we communicate better with our clients and move closer to our partners. There are plenty of problems elsewhere in the world, so we just focus on what we can control.”

One factor that the South African industry has been able to control admirably is false codling moth. “We have it well in hand and we’ve done an incredible job, driven by all of the additional practices brought in at the orchards and the packhouses, as well as the new shipping protocols.”

For more information:

Rowan Vickery

Tel: +27 21 917 2600

Email: rowan_vickery@capespan.co.za