“Longer lasting European product has effect on South African season”

“The predictions came true,” says Ed Heijnen from Jaguar The Fruit Company, summing up the start of the South African citrus season. For the early Navels it was a difficult season, but the later citrus has fewer problems. South African growers mostly invest in planting late tangerines, but the sales could become challenging, considering Europe is becoming increasingly self-supporting. Geographically speaking there’s plenty of room, but the cold supply chain is a challenge.

“Of the early Navels we actually received less volume,” Ed says. “We had a difficult season with the early Navels. The tearing has had its effect. That was disappointing but expected.” Plenty of information about disappointing qualities came from the production areas. “Some valleys were much affected, while there was less damage in other valleys.” Especially in Western and Eastern Cape, where growers were badly affected.

The tearing in early Navels decided the mood on the market. As the fruit was kept on the trees longer, tearing increased. Some growers therefore decided to start harvesting early, which wasn’t always beneficial to quality and flavour, Ed knows.

On the other hand, importers and growers were anticipating a higher price as a result of the smaller supply. “If 30 to 40 per cent of the early Navels are lost, you’d have a core problem in South Africa. Pickers and packers have been arranged and the machines have to be operated. That has consequences for the quality, and we saw that on the market.” Because of the smaller production of Navels, some packing stations started packing lemons and Valencias earlier. Because of that, these production stations are about two to three weeks ahead in Eastern Cape, and the season will therefore finish earlier there as well.

For growers who were affected by tearing, the consequences were enormous. The damage cannot be fixed. Because most growers have their production spread out, bankruptcies aren’t immediately imminent. “We’re not seeing that, especially not with the growers we work with,” Ed explains. “Most growers spread their production, especially in Western and Eastern Cape, and they grow Navels, Valencias, lemons, tangerines, and some even grow grapefruits.” Besides, it only affected early Navels. The arrival of later varieties is ... “just fine. Volumes of those are at a regular level.”

That improvement in the quality of the oranges is immediately picked up by the market. “When the market sees good quality, confidence increases right away. That free market system is really fantastic. Quality is picked up, which is often also good for pricing.” Other countries in southern Africa, such as Swaziland and Zimbabwe, play too small a part to really influence the market. “These countries play their parts quite well, like Uruguay and Chile, but their volumes are just too small for the European market. Of course it can be a major supplier for an individual importer, but they don’t have a significant effect on the market.” Both countries are improving their position on the market, Swaziland is known for its good quality, and Zimbabwe is an emerging market that might enter into a trade protocol with China this year.

In the tangerine cultivation, early varieties are grubbed up and replaced by later varieties. “In tangerines, they’ve had a few bad years with the early varieties, such as Satsumas and clementines, with low yields per hectare and a price that wasn’t always as expected.” This cultivation becomes attractive with late varieties with a good yield per hectare, such as Valleygold, Nadercott, Tango and Mandalate. This trend combined with an increasing consumption is the motive behind the current planting, according to Ed.

This trend is partly driven by investments in late tangerine and lemon cultivations in Europe. The continent is becoming more self-supporting in citrus. “Europe’s season is longer. The early tangerines have always been a delicate product and susceptible to decay and diseases, and it’s therefore a logical result that, as a South African grower, you start planting when you’ve found a good alternative and a growing global market.”

“We have noticed a trend that European product will be dominant on the market for a longer period, due to the planting of late varieties in Spain, Egypt and Morocco. That will have an effect on the import season from South Africa.” This year, Europe had a regular season, so that a good volume was available longer, and new plants are also coming into production. South African exporters will then have a choice of exporting to Asia, America and the Middle East. 

For the European market, growers are becoming more dependent on varieties that fall between the European seasons. The market situation in Europe also makes this continent a less appealing market. “I don’t know if our import requirements are that much stricter. It’s something I’ve heard before,” Ed explains. “Europe is one of the few markets on which cold treatment is not yet an issue. It will be next year, but even in America you’re dealing with MRLs and quality requirements. They’re at a very high level there, especially when it comes to flavour and cosmetic deficiencies.” MRLs are also on the agenda in the Middle East, and China has food safety requirements as well. “Combined with the dangers implicit in a young market and cold treatment, China is a very difficult market. What we are seeing is that pricing in places like America and Asia is better, and consumers are willing to spend more on citrus than in Europe. I think that’s the biggest difference.”

According to Ed, there’s still plenty of room for new plants on the Southern Hemisphere, although the current distribution model could curb global growth. “South African growers have to develop markets worldwide for the volume that’s being planted, that’s for certain.” Geographically speaking, there’s plenty of space, according to Ed. He doesn’t just mention Asia and the Middle East, but also the growing middle class in West Africa as a growth market. “Creating a cold supply chain that succeeds in delivering the citrus to its final destination at the right price is another challenge. It would be easier if the European market grew by 30 per cent, because we have the distribution in order and plenty of capacity. Markets such as Vietnam and Nigeria are more difficult to reach.”

“When we look at the figures we have good support for Europe from South Africa this year. We have more grapefruits and lemons, and a good volume of tangerines, the final volume of oranges won’t be lower than last year,” Ed sums up in closing. The South African sector has an advance on the new cold treatment requirements, which will be in effect for South African growers from next year. Normally, the citrus is shipped at temperatures between 4 and 6 ºC. This year, the cooling motors will be set to 2 ºC. “That’s an enormous change and will have an effect on certain varieties, but it’s a good trial for the coming season.”

Not every variety can withstand the cold treatment. The Dutch importer will therefore carefully monitor the quality with which the different varieties arrive. This data about quality, harvesting and packing conditions and the area of origin will play an important part in the choice of import next year. “This year we had too many varieties that aren’t good enough qualitatively, which disrupted the market. We have experience with China, where we have been working at variety level for each country of production for two years now. We are now also doing that in the Netherlands.”

Jaguar The Fresh Company

Ed Heijnen