20 September 2020
South Africa’s agricultural sector has been one of the few bright spots in the economy, posting brisk growth of more than 15% in the second quarter (Q2) of 2020 when everything else imploded under the weight of the pandemic and associated lockdowns. Of course, farming was allowed to continue even under the hard lockdown and the weather has also been generally good. But the pandemic itself has given the sector a boost.
According to the Pretoria-based Bureau for Food and Agricultural Policy (BFAP), the pandemic has sparked demand for vitamin C products. This in turn has consumers and companies scrambling for citrus fruit, which in most cases is like a vitamin C bomb.
“Export volumes for Q2 increased by 33% for oranges, 43% for soft citrus and 44% for lemons and limes. Prices were also higher due to both local and international demand for Vitamin C in light of Covid-19,” it said in a recent research note.
“Agricultural performance is expected to remain strong in quarters 3 and 4, with strong citrus exports continuing through Q3 and early expectations pointing to a good winter crop.”
South Africa is the world’s No 2 exporter of citrus, behind Spain, and the economy can use all the foreign currency inflows that come with exports that it can get right now. As the central bank noted in its Monetary Policy Committee statement last Thursday, “South Africa’s terms of trade remain robust. Commodity export prices are high, while oil prices remain generally low.” Much of this stems from precious metals such as gold. The citrus sector is also playing a role here.
“We have now packed 95% of the crop, and the final prediction is 147 million 15kg cartons – above an initial estimate of 143.3 million, and 2019 exports of 127.5 million,” Justin Chadwick, CEO of the Citrus Growers Association of Southern Africa, told Business Maverick. That would be overall growth of 15%, which is still pretty solid.
Chadwick said the citrus sector generated R19-billion in export revenues in 2019, but the 2020 number won’t be clear until April 2021.
The long-range weather forecast remains favourable, with a La Nina event predicted to bring normal to above normal rain in the summer rainy regions. That also bodes well for the staple maize crop, which is expected to yield a bumper harvest of more than 15 million tonnes.
On the citrus front, it will be interesting to see if farmers are switching to the fruit in response to the spurt in demand. Chadwick said a “tree census” will be conducted at the end of 2020 and that should give an indication. One concern in the past has been logistical bottlenecks in getting the product to and out of the ports, but Chadwick said that “logistics have improved and are flowing pretty well now”.
That is a good sign. An industry such as citrus is low-hanging fruit for this economy. Having policies and infrastructure in place to support it are crucial to ensure its growth, which offers opportunities to emerging black farmers in impoverished rural areas as well as established commercial farmers. Health and wellbeing too are growth areas that will help maintain demand for vitamin C.
Source: Daily Maverick