Citrus body cuts deal to improve pricing. New arrangement will prevent oversupply

Leonard Neill
CITRUS GROWERS in South Africa can expect to earn revenue of R2,5billion this year, as opposed to a massive loss last year, following international arrangements made by the recently established producers’ co-operative, Citrus Southern Africa (CSA), says director Chris Chance.
In terms of a new deal, navel orange producers who have targeted the US market can now sell their fruit through a single importer for a minimum price of R80 a carton, he says.
An estimated R800 million loss was incurred last season when European and Middle East markets collapsed. But, says Chance, this was because of poor co-ordination after the industry was deregulated five years ago.
CSA has now established an agreement with Australian producers to collaborate on pricing which will enable South African producers to get between R80 and R120 a carton, he says, which is regarded as “an excellent price for navels”.
The new arrangement will also stop further incidents such as that of last season when the US market was flooded after being opened to the Western Cape for the first time.
This has been an ongoing problem, according to Chance, which was first manifested in 1997 when 12 ships carrying southern African citrus arrived in Japan within six weeks of each other. As a result the oversupply caused the price of grapefruit - of which Chance is a farmer - to crash from R60 to R3 a carton.
Gerrit Booyens, CSA’s chief executive, says the primary goal of the co-operative is now to re-engineer the supply chain. In co-operation with accredited exporters from the Citrus Exporters’ Forum, it plans to secure minimum prices from exporters, put in place rigorous quality standards, and establish key resistance levels in offshore markets.