The 2024 citrus season has ended – on a high, with just a slight dip in export numbers. That’s no mean feat for an industry that generates about R30bn in foreign revenue every season, but which has been severely hamstrung by persistent snarl-ups in South Africa’s ports. It’s an industry that has immense growth potential in the next couple of years, but only if the efficiency of our ports is urgently improved.
So what helped us in the 2024 season? A massive jump in global orange juice prices, due to extreme weather. Orange juice futures skyrocketed the past year.
Severe drought and the dreaded citrus disease Huanglongbing decimated Brazilian orchards in their past season. Brazil usually produces 70% of the world’s orange juice, so the shortage from that country’s orchards drove a 66% increase in orange juice futures. (Incidentally, only coffee futures have had a wilder year: they climbed to an almost 50-year high this week and are just under 70% higher this year, also due to the Brazilian drought.)
Back home, sources in the local processing industry reported a significant increase of between 60% to 80% in volumes of oranges processed at their facilities, compared to the 2023 season. It’s estimated that at least 6-million cartons of oranges destined for exports were diverted to juice plants.
This year, Southern African citrus growers packed 164.5-million 15kg cartons for delivery to global markets. While this is 600,000 cartons less than last year, the slight decline is still a strong performance for the sector, given the uniquely demanding circumstances growers faced.
No less than three severe weather events had an impact on South African exports: freezing temperatures in Limpopo, floods in the Western Cape (Citrusdal) and strong winds that caused fruit to drop in the Eastern Cape resulted in a reduction of fruit packed for global markets.
Abnormally hot and dry conditions led to smaller fruit sizes, which meant that approximately 4% more fruit was required to fill the same carton than in the previous year.
Still, the overall decrease in citrus exports was just 0.3%. This is not only due to the resilience of the local growers, but also the large number of new orchards planted in the past couple of years that are starting to bear fruit. And they will continue to bear fruit. If all role players work together, the long-term growth target of the Citrus Growers’ Association of exporting 260-million cartons by 2032 is achievable.
FURTHER DOWNWARD ADJUSTMENT OF ORANGE EXPORT FIGURES AFTER BAD WEATHER
The ports problem
However, there remains a significant impediment to this growth: logistics. While our underutilised rail network is a concern, port inefficiency remains the biggest challenge, and must be addressed urgently. At the beginning of 2024 a lot of attention was given to South Africa’s “logistics crisis”. And while Transnet and the national logistics crisis committee have tackled some issues at the ports – which the industry is greatly appreciative of – the truth is that we are still facing a crisis.
This past citrus season the lower-than-expected citrus export volumes reduced peak volumes at ports dramatically, which eased pressure on the container terminals. However, all indications are that this is just a temporary reprieve. If it was a normal citrus season, disastrous bottlenecks would have followed. And volumes will increase over the next few seasons.
If ports are not improved and capable of handling more product, citrus exports and the wider economy will suffer greatly. Hundreds of millions of rands were lost towards the end of the season because port inefficiencies meant local growers couldn’t fully capitalise on a spike in orange prices. The fruit went out, but too late.
The only long-term answer to increasing container terminal efficiency is public-private partnerships. Yet the partnership between Transnet and International Container Terminal Services Inc on Durban Pier 2 has been delayed because of a legal challenge by another bidder.
Such a delay only reinforces the need for renewed urgency in improving the performance at our container terminals.
Things are just moving too slowly. The very real danger exists that the citrus industry will not be able to realise its current remarkable moment of growth. If given the chance to increase exports, it could add no less than 100,000 jobs on farm level by 2032.
Transnet has made significant improvements under the leadership of CEO Michelle Phillips, but we have reached a crucial moment. Either renewed vigour in reform will push through changes that will unlock massive growth, or we will stagnate. This would be a tragedy, particularly for local farmers, considering the opportunities in the current global citrus market.
April 2025 is when the global citrus season starts; South Africa, the second-largest citrus exporter in the world, must step up and seize the moment.
Justin Chadwick is the CEO of the Citrus Growers’ Association
