Protocol does little to juice up citrus trade with China

EXPECTATIONS OF significant citrus trade between South Africa and China have yet to be met, two years after a protocol was finally signed – and it may be some time before producers and exporters make significant inroads. The protocol was first signed in 2004 and confirmed two years later, allowing South African citrus access to China and China access to South Africa for apples and pears. Despite this, exports through the ‘official’ channel, direct to mainland China, are a mere trickle – 230 000 cartons of oranges, around 5 000 cartons of grapefruit and 2 000 cartons of soft citrus in the past year, according to Justin Chadwick, CEO of the Citrus Growers’ Association. Exports through the unofficial, so-called ‘grey’ channel via Hong Kong, are considerably higher. Chadwick believes a number of factors are responsible for the slow pace to mainland China, including still prevailing ignorance of the South African product and greater concerns by Beijing surrounding food safety and cold sterilisation, a costly procedure at best. What is more, the number of citrus exporters registered to export to China has hardly grown beyond 500-odd in the past two or so years. Chadwick believes China’s insistence on better trading in terms of the protocol may well give rise to the demise of the grey channel. “In time, the grey route will come under increasing pressure as more and more large Chinese supermarkets open. “They simply will not accept a grey channel by demanding imports come via the official channel.” As to the purpose of the two-country protocol, given its relative inactivity, Chadwick comments: “There are two issues here. If one has access to a market, it can be used to advantage in negotiating prices – in other words telling other recipients if they don’t want our product we can go to China, even though it is difficult.”