The Mintec price of oranges from South Africa declined by 39.1% month-on-month (m-o-m) to ZAR 2,680/MT, in June 2022. This price movement is in line with historical trends, with prices declining significantly following a peak in February. However, the seasonal price drop in June was sharper than historic trends, down 26.4% year-on-year (y-o-y), due to an oversupply of citrus on the market resulting from the high volumes of fruit harvested. Growers are struggling to find buyers and therefore have had to lower prices to prevent losses before the fruit spoils. This is combined with logistical disruptions at South Africa’s ports, which have limited export potential, and thus caused a decline in exports.
South African citrus exports are also at risk due to new sanitary requirements introduced in the EU on the 14th of July 2022, requiring all imports of citrus fruit to undergo specified mandatory cold treatment processes and precooling prior to importation. The regulation was introduced to prevent the spread of False Codling Moth, which could have infested South African fruits. Many South African exporters are concerned that citrus fruit shipments in transit to the EU could be destroyed as they will not withstand the required processes to enter in the EU, threatening significant fruit losses. According to market participants, up to 3.2 million cartons of citrus valued at USD 38.4 million are at risk.
A combination of low market prices, and fruit losses are expected to lead to lower profit margins for South African producers, threatening the sustainability of the citrus sector due to potential financial losses.
