Summary
An EC analysis has found that contrary to Spanish citrus industry claims, imports from South Africa are not the cause of the current difficulties in the Spanish citrus sector. The lack of well organised producer organisations is seen as the root cause of many of the sectors problems. This view is supported by the latest data posted on the EU’s Citrus Market Observatory website. The Citrus Growers Association of South Africa has welcomed the EC’s findings and has called for joint action with Spanish producers to boost global citrus consumption in the face of competition from other fruits. The heightened consumer health consciousness linked to the Covid-19 pandemic could provide a springboard for such a longer-term citrus promotional campaign.
At the beginning of March Spanish citrus producers continued their campaign for action against South African citrus imports, which they blame for the current difficulties in the Spanish citrus sector. It was claimed ‘South Africa has increased its shipments to the EU by almost 140,000 tons in just these three months (mainly in September and October), going from 217,989 tons in the 15/16 campaign to 365,379 tons in the present campaign’. It was implied this 67.6% growth in South African exports had a direct relationship to the more than 120,00 ton fall in Spanish exports since the 2015/16 season (1).
It was argued ‘the increase in South African imports during this period of the campaign has a special impact … since the start of the citrus campaign continues to be a strong point for citrus exports from Valencia and Castellon’. The continued presence of South African oranges on the EU market in December was seen as having an impact on ‘the negotiation capacity of Valencian and Castellon companies with European importers’ (1). This negotiating weakness is seen as depressing both the demand for and prices of Spanish Clementines.
This ongoing campaign needs to be seen in the context of the findings of an EC review of the situation in the Spanish citrus sector which found ‘crisis affecting the citrus sector in the Region of Valencia is structural in nature, and that “there is no data” backing the argument that the problems are caused by imports from third countries’. The EC suggests that far from the data showing ‘an increase in imports” from the African country…the opposite is true’. It was held that ‘other problems affecting the Valencian production, such as the impact of the weather, which has resulted in a more limited production, with citrus fruits of smaller size and quality, and a drop in the demand because of the milder winter temperatures’ alongside ‘problems on the French border’ and ‘the lack of unity of producers in the Region of Valencia’ were more significant factors (2).
The EC has highlighted how the absence of formally constituted producer organisations in the Valencia region limits the ability of the EC to extend support using existing EU-wide policy tools available for deployment in the fruit and vegetable sector. Valencian producers were urged to formally constitute themselves into EU recognised producer organisations in order to be ‘eligible to receive certain EU funds or benefit from crisis measures aimed at reversing the situation’ in the Spanish citrus sector. This support it was maintained could help manage the current crisis and help improve competitiveness, if the appropriate organisational arrangements were set in place (2).
Not surprisingly the Citrus Growers Association of South Africa (CGA) welcomed the EC’s finding that South Africa ‘citrus exports were not a contributing factor for the price collapse of the 2018/2019 Spanish campaign’. The EC’s finding that ‘although South African exports to Europe showed a 5% growth in totality over the season…the volume over the late South African campaign have been significantly lower’ was welcomed by the CGA. This, it was held reflected a level of voluntary export restraint on the part of the South African industry. CGA representatives have called on the Spanish and South African industries to work together to enhance ‘the consumption of citrus commodities by consumers worldwide’ given the growing variety of fruit options open to consumers. Such cooperation it was held would ‘bolster the strength of the citrus category vis-à-vis other fruit categories because the competition doesn’t lie between citrus north and south but comes from other competing fruit products’ (3).
The promotion of such cooperation needs to be seen in a context where the South African citrus industry expects to see an expansion of exports by ‘a further 500 000 tons over the next three to five years’, spread across markets ‘including China, USA, India, Philippines, Japan, Vietnam and the EU’ (4). If logistical challenges arising as a result of the covid-19 virus can be addressed, then in 2020 the South African citrus sector expects an increase in exports of 13% over 2019 (up to 143,3 million cartons from 126,7 million cartons) (5).
Spanish citrus producers however continue to lobby the European Parliamentary Committee on Agriculture for a European policy response to the Spanish citrus sectors problems, with the EP’s Agriculture Committee still having to present its own analysis and conclusions of ’the impact of the free trade agreement with South Africa’ on the Spanish citrus sector (2).
The latest figures posted on the EU’s Citrus Market Observatory however show Spanish citrus prices in February 2020 at the second highest level in the EU. These prices were some 125% of the level of the five-year average (6). These higher average prices were a consistent feature of the first 4 months of the 2019/2020 season (7). These figures also show Spanish citrus production on an upward trend since 2015 (8). In contrast between 2015 and 2017 EU citrus consumption showed a downward trend of 1.9% (9).
| Comment and Analysis The EC analysis would seem to support the argument weakness in the organisation of Spanish citrus farmers in negotiating collectively with traders elsewhere in European is an important underlying cause of the current difficulties in the Spanish citrus sector. Against this background the call from the South African Citrus Growers Association for a joint initiative to boost global citrus consumption could not come at a better time. The Covid-19 pandemic is seeing a growing consumer awareness of the importance of healthy eating, with the consumption of increased levels of vitamin C being promoted in some areas (10).It would thus appear an appropriate moment to seek support from the EC for a long-term promotional campaign around the health benefits of citrus consumption. This should aim to build on the current level of heightened consumer awareness of the need for healthy eating.Given the current discussions on the creation of ‘green lanes’ to facilitate the continued cross border movements of food and medical supplies in the face of Covid-19 related national border control restrictions, opportunities could also arise to address both border issues and wider supply chain issues which have to date plagued the Spanish citrus sector. It would appear to be important to ensure that discussions on short term measures aimed at strengthening the functioning of food supply chains in response to the Covid-19 pandemic are extended to address wider shortcomings in the functioning of trans-European citrus supply chains. However, the ability to design and implement such initiatives would appear to come back to the basic problem of the under-developed nature of producer organisations in the Spanish citrus sector. This leaves the Spanish citrus industry poorly equipped to make use of EU policy tools designed to strengthen the functioning of EU fruit and vegetable supply chains. |
Sources:
(1) valenciaplaza.com, ‘South Africa exports half the volume of oranges to the EU that Spain does’, 3 March 2020
https://www.freshplaza.com/article/9195141/south-africa-exports-half-the-volume-of-oranges-to-the-eu-that-spain-does/
(2) europapress.es, ‘The EC insists that the Valencian citrus crisis is not due to South African imports’, 24 February 2020
https://www.freshplaza.com/article/9192289/the-ec-insists-that-the-valencian-citrus-crisis-is-not-due-to-south-african-imports/?utm_campaign=highlights&utm_medium=email&utm_source=28-02-2020
(3) freshplaza.com , ‘South Africa welcomes EC decision on alleged damage to Spanish citrus campaign’, 28 February 2020
https://www.freshplaza.com/article/9193918/south-africa-welcomes-ec-decision-on-alleged-damage-to-spanish-citrus-campaign/
(4) freshplaza.com , ‘Citrus industry expects record export season’, 17 March 2020
https://www.freshplaza.com/article/9199991/citrus-industry-expects-record-export-season/
(5) farmersweekly.co.za, ‘Record citrus harvest expected for 2020’, 18 March 2020
https://www.farmersweekly.co.za/agri-news/south-africa/record-citrus-harvest-expected-for-2020/
(6) EC, ‘Citrus prices €/100kg and % changes’, DG AGRI DASHBOARD: CITRUS FRUIT, 9 March 2020
https://ec.europa.eu/info/sites/info/files/food-farming-fisheries/farming/documents/citrus-dashboard_en.pdf
(7) EC, ‘SPAIN – Orange prices (€/100kg)’, DG AGRI DASHBOARD: CITRUS FRUIT, 9 March 2020
https://ec.europa.eu/info/sites/info/files/food-farming-fisheries/farming/documents/citrus-dashboard_en.pdf
(8) EC ‘Citrus fruit production (in 000 tonnes)’, DG AGRI DASHBOARD: CITRUS FRUIT, 9 March 2020
https://ec.europa.eu/info/sites/info/files/food-farming-fisheries/farming/documents/citrus-dashboard_en.pdf
(9) EC, ‘Key Market Balance Indicators for Citrus Fruit (oranges, small citrus, lemons) – tonnes’, DG AGRI DASHBOARD: CITRUS FRUIT, 9 March 2020
https://ec.europa.eu/info/sites/info/files/food-farming-fisheries/farming/documents/citrus-dashboard_en.pdf
(10) nutraingredients.com, ‘Hospital turns to high-dose vitamin C to fight coronavirus’, 26 March 2020
https://www.nutraingredients.com/Article/2020/03/25/Hospital-turns-to-high-dose-vitamin-C-to-fight-coronavirus#