SA citrus farmers have reason to be upbeat after weathering El Niño

5 May 2024

The drought-inducing phenomenon may have left maize producers at their wits’ end, but citrus growers are expecting a bumper harvest. And even if the fruit is smaller, good juice prices will provide a boost.

South Africa’s citrus sector has emerged from the latest El Niño weather event relatively unscathed, and growers are forecasting record exports of 181.7 million cartons in 2024, a roughly 10% increase on last year’s historic high of 165.1 million.

El Niño thankfully faded in April, but while it leaves a stunted maize harvest in South Africa and neighbouring countries in its wake, citrus farms remain a relative oasis in a parched agricultural landscape.

Producing citrus is water-intensive – juice literally grows on the trees – and the key to its success lies in the capital-intensive input of irrigation.

“In spring there were fairly good rains and as a result the dams and the rivers were fairly full. We irrigate all our fruit so there was enough water available for irrigation,” Justin Chadwick, chief executive of the Durban-based Citrus Growers Association, told Daily Maverick.

In contrast, less than 10% of South Africa’s maize crop is irrigated, and the summer-growing grain belt was seared by the now-departed El Niño. This has left such farmers high and dry, and the production of the staple white variety is expected to be 25% lower this year.

Chadwick noted that El Niño also had an effect on citrus farmers, though hardly on the same scale, as the dearth of rains set in as the summer progressed alongside sweltering temperatures.

“There’s nothing to beat rain. You can irrigate, but there’s nothing to beat the impact of a good rain, because it reaches every part of the orchard where irrigation might not reach,” he said.

“That’s what the guys are a little bit concerned about in all the estimates, particularly from the north – Limpopo, Mpumalanga and North West,” Chadwick said.

“What the rain does is it sizes the fruit up. Your fruit gets bigger if you have really good rainfall and good water gets absorbed into the trees.”

Smaller fruit, in turn, has an impact on what in citrus industry lingo is called the “count”. It works like this: if the fruit that is harvested is smaller – say lemons or mandarin oranges – you might fit 56 into a box. But if it has been “sized up” by good rains, only 50 will fit.

The bottom line is that smaller fruit means fewer cartons available for sale or export.

So, the current estimate of 181.7 million 15kg cartons could change, but the outlook remains generally upbeat, not least because South African exporters last year held back on 5 million cartons of late variety Valencia oranges to the EU out of fear that they could have been quarantined.

“There were concerns that, if we had quarantine interventions for pests in the EU, and if that got too high they could have closed the market on us,” Chadwick said.

Those jitters seem to have dissipated somewhat this season, though the vexed issue of EU phytosanitary regulations on the fungal disease citrus black spot has led South Africa to approach the EU for consultations with the World Trade Organisation on the matter.

Juiced juice prices

South African citrus exporters are keen to tap into red-hot global juice prices. “There is a big incentive to move your marginal fruit to juicing because the juice price is so good,” Chadwick said.

The global bellwether in this regard is the US Orange Juice futures market, known as OJ futures, which scaled record highs last year after bad weather reduced Florida’s crop to its lowest level in 80 years.

Brazil’s citrus harvest has also been hit by drought and disease, and OJ futures prices remain near the peaks reached in 2023.

It all represents an opportunity for South African citrus farmers and exporters.

In a wider South African economic veld that is also arid, this is a green shoot of note because young orchards hold the promise of a more than 60% increase in exports over the next eight years for South Africa, according to calculations by the Citrus Growers Association.

South Africa is the world’s number two citrus exporter, and though it is dwarfed on this front by Spain, which exports more than twice as much of the fruit, it can certainly close that gap in coming years.

This is literally low-hanging fruit to be plucked for wider economic prosperity – including badly needed export revenues, seeding prospects for emerging black farmers and job creation – at a time when South Africa needs to grasp every opportunity that dangles from a branch. The citrus industry employs 140,000 people and is South Africa’s top agricultural exporter, generating billions of rand in revenue.

The unfolding failure of the state, including notably the logistics crisis, is one of many shadows being cast on this potential. It would certainly help the citrus industry if Transnet could keep its trains on the tracks, because growers in Limpopo are a long way from the sea, raising trucking costs.

Still, it’s positive to note that peeling away at South Africa’s agricultural story can reveal some good news in the aftermath of El Niño.

And most forecasts see a return of its opposite climate pattern, La Niña, in coming months. Whereas El Niño typically heralds drought in this region, La Niña usually brings good rains. And if they materialise, the fruit from next season’s citrus harvest should be bigger, translating into even more cartons for export. DM

This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R29.

Categories:

Tags:

DM is much better if you are signed in...

Business Maverick

Juiced juice prices