Most regions of South Africa are still in a critical drought situation which has led to problems this citrus season.
"There were issues of split-ends in the navels this season and the lemons were very small," comments Hannes. "We have had a tough year as a result of the drought. Although we will not be able to harvest the Valencias while it is raining we still have plenty of time and we would rather have the rain."
Lemon
The lemon markets are pretty full at the moment but according to Hannes its not been too bad, "One must see it in context, we have seen South Africa, Argentina and Spain all up in volumes, so there were plenty on the market. In my opinion the global lemon industry is going to have to push consumption. At the moment there are no major promotions going on."
Hannes says that a lemon is more a food than a fruit and to succeed in the food business you have to compete with food companies of the world who can promote a product to the sum of a couple of million dollars with ease. The supply of lemon is a proliferated supply and there are a lot of smaller suppliers making it difficult to get a consolidated promotion campaign under way.
"Here in South Africa we have been trying to get one started and I hear the Americans and Argentinians are thinking along the same lines."
South Africa will export more than 18 million lemon cartons this season which is more than Argentina, both of these country's export volumes will continue to grow in coming years, Spanish volumes will also continue to increase.
"It has been good for South African lemons these last years, we have had the Middle East market which grew a lot in the last decade as well as Russia, although it is up down there is still growth there. South East Asia has also been good for us.
"In the past you just took lemons to the markets and people bought them, but now we are going to have to promote them and if we don't do this the volumes will continue to increase but not the prices." We also still see opportunities for our juice business and continue to invest in it to the benefit of producers in our valley.
Oranges
Hannes said it has been a tough year on Navels and there have been quality issues on some markets but less than he had expected. "We are happy about the volumes we got to market and we have had some very good quality fruit, but 50% didn't even make the packhouse, most of this fruit went for juice and Navels just don't get a good price for juice. Navels growers are quite a bit down on returns now, although the Valencia prices are quite stable at the moment. The fresh juice machines you seen in the European markets have given the Valencia market huge push and we are advising our growers to plant more more of them. But it is not only in Europe that we have seen a push, it is also in the Middle East and Russia."
Despite South Africa only exporting 20 million cartons of Navels instead of the expected 26 million, the prices did not increase as you would have expected or received if it was another category being short, Hannes reckons that this is because there is so much competition with other fruits. "I expect some producers to change from growing Navels which is a difficult variety to get good yields with and to step over to growing Valencias which are easier and demand a better price / yield relationship often."
"The season will be ending around a month earlier than usual, we will be sitting at 6.5 export cartons instead of the 9.5 million on our projected growth table, which is a big drop in volumes, mostly due to the Navels, but the hot winds that blew through the valley while the Garden Route burned also burned the trees, affecting Valencias really negatively."
For more information:Hannes De Waal
Sundays River Citrus Company
Tel: +27 42 23303320
Email: hdewaal@srcc.co.za
www.srcc.co