Citrus exporters feel the squeeze

Non-tariff barriers (NTBs) remain the biggest stumbling block for South African fruit exporters – adding exponentially to already burgeoning costs. Moving fruit competitively from a faroff destination such as South Africa is challenging enough in itself, but with traditional export markets remaining under pressure thanks to ongoing global economic woes, few exporters can truly carry the added cost of NTBs. And NTBs are on the increase, said Justin Chadwick, CEO of the Citrus Growers’ Association of Southern Africa. “What is also very concerning is that they are starting to affect more markets, especially in the East where it is becoming more prevalent. Countries such as Indonesia, Vietnam and Thailand are now starting to use these new technical regulations or barriers to trade.” South African citrus exporters have for some time now been under severe strain thanks to an increasingly strict European Union upping its regulations on citrus black spot after some shipments of fruit from South Africa were found to have the disease. Chadwick said while more and more countries were implementing NTBs, especially in emerging markets, in what has been described by many as “heightened protectionism”, the EU was at present the biggest challenge when it came to NTBs and perishable products. The National Agricultural Marketing Council and the Perishable Products Export Control Board (PPECB) agreed. And in their strategic annual performance plans for 2013 that found that if exports of citrus to Europe had to stop, this could lead to a R40-million deficit within the PPECB. According to Chadwick the biggest NTB challenges are sanitary and phytosanitary (SPS) requirements under which citrus black spot falls. “We believe that the standards placed on the import of fruit by these countries in terms of SPS requirements is unnecessary,” said Chadwick, who added that especially with the emerging economies now introducing these barriers to trade, export growth would be impacted negatively in the long run. With South Africa being the world’s second biggest exporter of whole oranges and the second largest shipper of grapefruit, the impact of NTBs is big. Chadwick said in order to ensure compliance there was ongoing effort to ensure that the country’s fruit exporters complied with regulations not only in the EU but also across the world. This, however, does have a direct and indirect impact on costs as measures to address especially phytosanitary requirements often include an increase in the spraying of protective chemicals and added inspections of fruit. “The only way we can really overcome this situation is to create the technical capacity locally to ensure our fruit going out is of the best quality, while at the same time there is the political will and knowhow to address these NTBs on an intergovernmental level. It is essential that from a political point of view there is engagement with governments that have introduced barriers and that they are being challenged and hopefully overcome.” Fruit exporters maintain this is essential for the country to grow its fruit exports – a big contributor to South African GDP. Citrus exports alone contribute an estimated R6 billion. “The black spot measures we are dealing with is affecting some 40% of total exports which go to Europe,” said Chadwick. “Ultimately our farmers are erring on the side of caution in order to be compliant and holding back fruit that could easily have been exported and entered the market place. Ultimately it means we are exporting less into Europe than we could have.”