New regulation puts citrus industry burdened by load shedding in a squeeze

The Citrus Growers Association has reiterated their concerns around the new False Coddling Moth (FCM) regulation which requires oranges shipped to the EU to be precooled to below 2 degrees Celsius and then maintained at this temperature for 20 days, especially in light of SA’s energy woes.

This new regulation will strictly govern the importation of South African oranges to European Union (EU) markets, and has again urged Minister Ebrahim Patel to intervene.

The association thus wants the minister to gather a World Trade Organisation (WTO) Panel to make a decision on this.

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Justin Chadwick, CEO of the Citrus Growers Association, said that this action step becomes even more critical in light of ongoing load shedding making the ability of growers to fully comply with the new regulations, by the time the 2023 export season kicks in at the end of March, even more of a challenge.

“To comply, growers will have to use extremely costly, specialised container equipment in short supply which will also not be able to accommodate the huge volumes of fruit exported from South Africa to the EU.

“As a result, an investment in cold storage technology and capacity of nearly R1.4 billion is required to enable full compliance putting further financial strain on growers,” he said.

New equipment won’t be operational by the time of season kick off

But Chadwick explained that this new equipment will also not be operational by the time the season kicks off at the end of the month, which means that an estimated 15% to 25% of oranges destined for the EU will more than likely not be shipped with the potential loss of income for local growers amounting to more than R500 million this year.

In addition to the existing problem, ongoing power cuts are making things worse for the citrus value chain.

Chadwick said that although the CGA is glad that the government has allowed ports to be exempt from power cuts during the current National State of Disaster, it will be difficult for cold stores located away from the port terminals to cool oranges below 2 degrees Celsius.

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“The fact is that these new requirements have been scientifically proven to be unnecessary considering South Africa’s existing rigorous Risk Management System ensuring that 99.9% of oranges entering the EU are pest free, with only 2 FCM interceptions detected in the over 400 000 tons of oranges shipped to the region in 2022,” he said.

Big gaps

Chadwick said that the regulations could create big gaps in the global supply chain and increase prices for people who buy oranges in Europe. “It seems the regulations are influenced by Spanish politics, and they aim to keep South African oranges out of the EU,” Chadwick claimed.

 Chadwick warned that thousands of local growers might not survive, putting the future sustainability of the entire industry, if this new regulation is implemented.

The industry provides over 140 000 jobs and brings in R40 billion in export revenue annually.

The citrus industry suffered a major blow last year, given the impact the Russian invasion on Ukraine had on local citrus growers and exporters.

Russia accounted for approximately 7 to 10% of the total South African citrus exports annually, with 11.2 million cartons of fruit exported to Russia.

But with exports to Russia placed on hold last year, major losses were seen by the industry.

Additional reporting by Nosipho Gumede