South Africa’s Citrus Industry at a Crossroads: Challenges and Opportunities
South Africa’s citrus industry is poised at a pivotal moment, with the sector set to convene at the fifth Citrus Summit from March 11 to 13 in Gqeberha. Hosted by the Citrus Growers’ Association of Southern Africa (CGA), the event will bring together government officials, industry leaders, and other stakeholders to address the critical question: How can obstacles hindering growth in the citrus sector be removed?
Citrus is South Africa’s largest agricultural export industry, supporting 140,000 livelihoods directly on farms alone. Last year, the industry packed 164.5 million 15kg cartons for global markets. With significant new plantings in recent years, production is expected to rise substantially. If all stakeholders collaborate effectively, the industry could achieve its ambitious goal of exporting 260 million cartons by 2032, creating an additional 100,000 jobs.
Two key issues are likely to dominate discussions at the summit: logistics and market access. The manner in which these challenges are addressed will determine whether South Africa can sustain its citrus success story or face setbacks that could have severe economic consequences.
Logistics: A Major Hurdle
Inefficient logistics remain a formidable obstacle for the citrus industry. According to a recent study by the Bureau for Food and Agricultural Policy (BFAP), the combined direct and indirect costs of logistical inefficiencies amounted to R5.27 billion during the 2024 season alone. This represents a significant loss of foreign revenue and a barrier to job creation.
South Africa’s ports continue to suffer from inefficiencies and congestion, leading to delays that erode the competitiveness of South African citrus in international markets. To maintain profitability and retain its standing among global buyers, it is imperative to streamline port operations, invest in infrastructure, and enhance cold chain management for timely and cost-effective produce delivery.
President Cyril Ramaphosa has emphasized the need for public-private partnerships to improve long-term efficiency at port container terminals. However, legal challenges have delayed a landmark partnership between Transnet and International Container Terminal Services Inc. (ICTSI) at Durban’s Pier 2 container terminal. Without encouraging competition and leveraging private expertise, South Africa’s ports may struggle to handle the growing volume of citrus exports, jeopardizing the industry’s ability to translate increased production into jobs and revenue.
The publication of Transnet’s second Network Statement in December 2024 highlights the urgency of rail reform. Currently, over 90% of citrus reaches ports via road transport. A functional rail network would provide a more cost-effective alternative and alleviate congestion on already strained roads. The CGA projects that weekly truck trips from northern citrus regions will increase from 2,200 to over 3,800 trips within three years, underscoring the pressing need for improved logistics solutions.
Market Access: Expanding Horizons
Market access is another critical issue on the summit agenda. President Ramaphosa has identified increasing market access for agricultural produce as a priority. The European Union (EU), which accounts for more than one-third of South African citrus exports, remains a vital destination. However, South Africa is challenging unnecessary and unscientific EU trade measures at the World Trade Organization (WTO). A resolution that includes scientifically grounded plant health measures would level the playing field and boost the industry immediately.
China represents a significant opportunity, with potential to expand beyond the current 180,000 tonnes it imports annually. Current tariffs place South African exporters at a disadvantage compared to competitors benefiting from free or preferential trade agreements. Negotiating better terms could unlock the full potential of agricultural trade between the two nations.
India is another promising market, where citrus exports have nearly tripled since 2020, reaching 30,000 tonnes. Approving in-transit cold treatment for citrus by the Indian government would benefit many growers immediately, while addressing India’s steep 30% import tariff on South African citrus could yield long-term gains.
The African Growth and Opportunity Act (AGOA) is crucial for the citrus industry. Although only fruit from the Western and Northern Cape is currently exported to the United States due to unwarranted plant health regulations, the U.S. market holds substantial potential. Citrus exports to the U.S. have almost doubled since 2017, and granting access to other provinces could stimulate rural economies nationwide while meeting U.S. demand for high-quality citrus.
Navigating the Complexities of Global Trade
The complexities of international trade will undoubtedly feature prominently in summit discussions. As production increases, South Africa must secure every available market to ensure sustained growth. The stakes are high; failure to act decisively could result in job losses, reduced revenue, and damage to South Africa’s reputation as a reliable supplier of premium agricultural products.
However, with strong leadership and a commitment to collaboration, the industry can overcome its challenges. Platforms like the Citrus Summit provide an opportunity for growers, government officials, and value chain participants to unite and chart a course that benefits not only the citrus industry but also the broader South African economy.
As the industry gathers in Gqeberha, the focus will be on finding innovative solutions to drive growth, create jobs, and solidify South Africa’s position as a global leader in citrus production.
