an overview of the southern african citrus industry
DESCRIPTION
AN OVERVIEW OF THE SOUTHERN AFRICAN CITRUS INDUSTRY. Colin Painter Riverside Advisory Services Fort Beaufort Kat River Eastern Cape. Sources of Information Justin Chadwick CRI Paul Hardman CGA Vaughn Hatingh CRI PPECB. FORMAT OF PRESENTATION. Production trends Risk Assessment - PowerPoint PPT PresentationTRANSCRIPT
28 August 2008
AN OVERVIEW OF THE SOUTHERN AFRICAN CITRUS
INDUSTRYColin PainterRiverside Advisory Services
Fort Beaufort
Kat River
Eastern Cape
NDA TRADE AWARENESS WORKSHOP
Sources of InformationJustin Chadwick CRIPaul Hardman CGAVaughn Hatingh CRIPPECB
28 August 2008
FORMAT OF PRESENTATION
Production trends Risk Assessment New Phyto risks Riverside IDC Citrus initiative
NDA TRADE AWARENESS WORKSHOP
Southern African Citrus Production Trends:
2008-2022
Introduction
Update of the 2006 Crop Growth Model– CGA & Dux Solutions
Objectives– Observe trends per Variety– Project export volumes per Variety– Purpose mainly for logistics and infrastructure– Not a market lead tool
Key Assumptions
Yield per ha per commodity per age category per region
Budwood sales decreasing at 20% per annum 15% of budwood will not reach maturity 10% is assumed to be for replacement purposes Trees culled between 26 and 33 years. GF at 18
years. Regional constraints on land and water
availability taken into account
All Citrus Types
0
10
20
30
40
50
60
70
80
90
100
110
120
130
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
x 1m
15k
g ca
rtons
Citrus 00-07 Citrus 07-22 Citrus 05-20
Conclusions
SA Citrus industry in phase of 90M 15kg cartons– 10% deviation means = +/- 9M cartons– Change of a count size = 10% deviation
Looking at 110 million cartons
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HOW LONG INTO THE FUTURE?
Looking at the scenario over the next five years
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Risk Factor # 1
INTRODUCTION OF NEW PEST/DISEASE OR CHANGED STATUS OF EXISTING
PEST/DISEASE
(Phytosanitary)
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DEFINITION PHYTOSANITARY
The ability of southern Africa to deal with phytosanitary requirements of trading partners.
The ability to ensure no new pests and diseases become established.
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PHYTOSANITARY: HIGH ROAD AND LOW ROAD
HIGH ROADGovernment is well equipped to
deal with phyto issues raised by trading partners, research is available to contest challenges, new innovation and treatments are developed.
Government has a well thought through early warning system and eradication/reaction plan.
LOW ROADGovernment fails to capacitate
to address phyto challenges, research results not available to meet challenges, no new tools to battle phyto issues are developed.
Southern Africa becomes exposed to establishment of new pests, crisis management ensues (and fails)
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Risk Factor # 2
ABILITY TO PRODUCE CITRUS OF THE DESIRED QUALITY
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DEFINITION OF QUALITY
Those factors that will make the product attractive to the buyer.
Includes compliance with a number of buyer requirements:
Appearance Size Taste (sugars, acids etc) Range of cultivars
Consumer safety Traceability Ethical production Environmental aspects Packaging
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28 August 2008
Quality – high road and low road
HIGH ROADGrower skills and capacity are
maintained (or improved) ensuring growers produce quality products, packaging is enhanced to assure quality retention, standard setting and policing mechanisms remain (are improved), investment in research and technology by public and private is increased, leading to a bigger pool of expertise, immediate access to information and new cultivars.
LOW ROADGrowers lack skills and capacity to
produce to the required global standards, no investment in packaging improvements, standard setting is deregulated and quality assurance inspections cease, government does not rise to the challenge of assisting growers with research and technology funding (leading to a brain drain), information is proprietary and not shared, no access to new cultivars.
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Risk Factor # 3
Government Capacity
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DEFINITION GOVERNMENT
Governments ability to enact industry friendly policies, to implement these policies and to police them.
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28 August 2008
GOVERNMENT: HIGH ROAD AND LOW ROAD
HIGH ROADGovernment instills confidence
in the agriculture sector by adopting policies that ensure rights and promote investment. Government sorts out land restitution backlogs, and brings certainty into the process.
Government employs the necessary capacity to be able to do its job well.
LOW ROADGovernment decides that
support of activist groups more important than agricultural growth and food security, and goes along a path of redistribution no matter what the outcome.
Government employs staff that are incompetent and unable to deliver.
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Risk Factor # 4
Costs of getting the produce produced, packed, stored, transported and distributed increase to unprofitable levels
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DEFINITION: SUPPLY CHAIN COSTS
Specifically referring to big ticket items: People, fertilizer, chemicals, packaging, transport (oil).
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28 August 2008
SUPPLY CHAIN COSTS: HIGH ROAD AND LOW ROAD
HIGH ROAD
Oil prices meteoric rise is halted (and reversed), climatic factors improve and global inflationary trend comes to an end. Supply and demand for essential inputs comes into balance.
LOW ROAD
Oil prices continue meteoric rise, global recessionary factors continue, demand for inputs outweighs supply (with resultant price increases).
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Risk Factor # 5
Infrastructure cannot cope with demand to transport, store, handle and ship produce
from southern Africa
“All Dressed Up And No Place To Go”
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DEFINITION INFRASTRUCTURE
In this context refer to infrastructure necessary to get product to port (road and rail), infrastructure at the ports in SA (terminals, plug in points, cranes etc), ships and containers and infrastructure at port of arrival.
Availability of necessary infrastructure and equipment to ensure integrity of cold chain.
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28 August 2008
INFRASTRUCTURE: HIGH AND LOW ROAD
HIGH ROADGovernment invests heavily in
rail and incentivises movement off road, ports have necessary equipment and personnel to perform as well as (or better than) those of competing ports, containers and conventional ships available as needed (or planning done to negate impact of shortfall).
Ports of entry invest in required infrastructure.
LOW ROADRail continues to deteriorate,
more road freight leads to more congestion, ports do not invest as required, unavailability of containers, plug in points etc. compromising ability to deliver a quality product as required by buyers. Buyers go elsewhere.
Infrastructural development at ports of discharge not improved.
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Other Government / industry challenges
Plant Bio security- take the leading role PPECB – capacity Industry Stats –legislation to standardize pallet
codes & EDI codes Trade – more bi-lateral talks, address the duty
rates Brain drain Labour scarcity
28 August 2008 NDA TRADE AWARENESS
WORKSHOP
28 August 2008
OUR ASSESSMENT
Quality Govt Costs Phyto Infrastructure
High Road . .Low Road . . .
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MARKET ACCESS
The basis for non-discriminatory, fair, predictable and transparent international trade is the set of rules that national governments have agreed to follow
1995
WTO-SPS Agreements
1995
Explicitly states that countries retain their right to take/implement measures to protect human, animal and plant health
Countries must provide reliable information to trading partners regarding the presence of pathogens and pests within a country
Countries must base these protection measures on scientific facts
WTO
WORLD FRESH CITRUS EXPORTS 2006/2007 (Thousand tons)
South Africa is the Top Non-EU Fresh Citrus Exporter
0
0.2
0.4
0.6
0.8
1
1.2
1.4
S Africa USA Turkey Argentina China Mexico MaroccoMillio
n M
etr
ic T
on
2006/07 2007/08
2002 2003 2004 2005 2006
All Fruit Citrus
South African Fresh Produce Exports (Tons)
COMPETITIVENESS IN GLOBAL CITRUS ARENA
GAIN: Opening of new markets
RETAIN: Ongoing inputs to keep existing markets open
OPTIMISE: Ongoing inputs to improve terms and scope of access to existing markets
COMPETITIVENESS IN GLOBAL CITRUS ARENA
Identify phyto trade restrictions
Provide scientific evidence to overcome phyto trade restrictions
CHINA
EU
JAPAN
SOUTH KOREA
USA
NEW PHYTO THREATS
Bactrocera invadens
NEW PHYTO THREATS
Bactrocera invadens
NEW PHYTO THREATS
Bactrocera zonata
NEW PHYTO THREATSBactrocera zonata
Citrus canker
NEW PHYTO THREATS
NEW PHYTO THREATS
Citrus canker
Asiatic greening disease and its primary vector Diaphorina citri
NEW PHYTO THREATS
Diaphorina citri
NEW PHYTO THREATS
Diaphorina citri
NEW PHYTO THREATS
Pseudocercospora angolensis
NEW PHYTO THREATS
Pseudocercospora angolensis
Citrus propagation material - Angola
NEW PHYTO THREATS
Citrus Canker
Citrus Greening (American and Asian)
Citrus Variegated Chlorosis
Leprosis disease
Sudden death
NEW PHYTO THREATS
Citrus propagating material - Angola
28 August 2008
Some other stats
In 2008 RSA should export 90 million cartons of citrus
Value at packshed door – R 4.5 billion rand Area under citrus is 56 623 ha’s Provides about 52 000 direct and upstream
annualized jobs jobs at 0.93 jobs per ha. Eastern cape ha’s – 10 054 ha’s
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IDC Riverside development initiative
Phase 1– rehabilitating 275 ha citrus & pomegranates in Kat River, Tyumie &
Lower Keiskamma over next 2 years– 9 BEE farmers loans approved,
Phase 2 – Developing a further 536 ha’s on 9 business entities, over next 3 years– Includes 4 cpa’s, one workers trust and the remaining are individual
family businesses or cc’s Riverside provides technical, administrative packing and marketing support All farms are clustered around Riverside packing, cooling and marketing
operations
Enkosi ,Ndiyabulela Thank you$ Dankie
QUESTIONS ?
28 August 2008 NDA TRADE AWARENESS
WORKSHOP