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AN OVERVIEW OF THE SOUTHERN AFRICAN CITRUS INDUSTRY

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

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AN OVERVIEW OF THE SOUTHERN AFRICAN CITRUS INDUSTRY

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  1. 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 NDA TRADE AWARENESS WORKSHOP

  2. FORMAT OF PRESENTATION • Production trends • Risk Assessment • New Phyto risks • Riverside IDC Citrus initiative NDA TRADE AWARENESS WORKSHOP

  3. Southern African Citrus Production Trends:2008-2022

  4. 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

  5. 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

  6. All Citrus Types

  7. 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

  8. HOW LONG INTO THE FUTURE? Looking at the scenario over the next five years NDA TRADE AWARENESS WORKSHOP

  9. Risk Factor # 1 INTRODUCTION OF NEW PEST/DISEASE OR CHANGED STATUS OF EXISTING PEST/DISEASE (Phytosanitary) NDA TRADE AWARENESS WORKSHOP

  10. 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. NDA TRADE AWARENESS WORKSHOP

  11. HIGH ROAD Government 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 ROAD Government 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) PHYTOSANITARY: HIGH ROAD AND LOW ROAD NDA TRADE AWARENESS WORKSHOP

  12. Risk Factor # 2 ABILITY TO PRODUCE CITRUS OF THE DESIRED QUALITY NDA TRADE AWARENESS WORKSHOP

  13. 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 DEFINITION OF QUALITY NDA TRADE AWARENESS WORKSHOP

  14. HIGH ROAD Grower 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 ROAD Growers 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. Quality – high road and low road NDA TRADE AWARENESS WORKSHOP

  15. Risk Factor # 3 Government Capacity NDA TRADE AWARENESS WORKSHOP

  16. DEFINITION GOVERNMENT Governments ability to enact industry friendly policies, to implement these policies and to police them. NDA TRADE AWARENESS WORKSHOP

  17. HIGH ROAD Government 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 ROAD Government 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. GOVERNMENT: HIGH ROAD AND LOW ROAD NDA TRADE AWARENESS WORKSHOP

  18. Risk Factor # 4 Costs of getting the produce produced, packed, stored, transported and distributed increase to unprofitable levels NDA TRADE AWARENESS WORKSHOP

  19. DEFINITION: SUPPLY CHAIN COSTS Specifically referring to big ticket items: People, fertilizer, chemicals, packaging, transport (oil). NDA TRADE AWARENESS WORKSHOP

  20. 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). SUPPLY CHAIN COSTS: HIGH ROAD AND LOW ROAD NDA TRADE AWARENESS WORKSHOP

  21. 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” NDA TRADE AWARENESS WORKSHOP

  22. 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. NDA TRADE AWARENESS WORKSHOP

  23. HIGH ROAD Government 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 ROAD Rail 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. INFRASTRUCTURE: HIGH AND LOW ROAD NDA TRADE AWARENESS WORKSHOP

  24. 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 NDA TRADE AWARENESS WORKSHOP

  25. OUR ASSESSMENT NDA TRADE AWARENESS WORKSHOP

  26. MARKET ACCESS

  27. WTO-SPS Agreements 1995 1995 The basis for non-discriminatory, fair, predictable and transparent international trade is the set of rules that national governments have agreed to follow

  28. WTO • Explicitly states that countries retain their right to take/implement measures to protect human, animal and plant health • Countries must base these protection measures on scientific facts • Countries must provide reliable information to trading partners regarding the presence of pathogens and pests within a country

  29. WORLD FRESH CITRUS EXPORTS 2006/2007 (Thousand tons)

  30. South Africa is the Top Non-EU Fresh Citrus Exporter

  31. South African Fresh Produce Exports (Tons)

  32. 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

  33. COMPETITIVENESS IN GLOBAL CITRUS ARENA Identify phyto trade restrictions Provide scientific evidence to overcome phyto trade restrictions

  34. CHINA

  35. EU

  36. JAPAN

  37. SOUTH KOREA

  38. USA

  39. Bactrocera invadens NEW PHYTO THREATS

  40. NEW PHYTO THREATS Bactrocera invadens

  41. NEW PHYTO THREATS Bactrocera zonata

  42. NEW PHYTO THREATS Bactrocera zonata

  43. Citrus canker NEW PHYTO THREATS

  44. NEW PHYTO THREATS Citrus canker

  45. Asiatic greening disease and its primary vector Diaphorina citri NEW PHYTO THREATS

  46. NEW PHYTO THREATS Diaphorina citri Diaphorina citri

  47. NEW PHYTO THREATS Pseudocercospora angolensis

  48. NEW PHYTO THREATS Pseudocercospora angolensis

  49. NEW PHYTO THREATS Citrus propagation material - Angola Citrus Canker Citrus Greening (American and Asian) Citrus Variegated Chlorosis Leprosis disease Sudden death

  50. NEW PHYTO THREATS Citrus propagating material - Angola

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