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Ongoing load shedding hampers the ability of farmers to fully comply with the new EU regulations by the time the 2023 export season kicks in at the end of March.
- Ports will be exempt from power cuts, but cold stores outside port terminals will struggle to maintain oranges at temperatures required by the EU, warns the Citrus Growers Association of SA.
- The citrus export industry supports 140 000 jobs and generates R40 billion in export revenue annually.
- In July last year, the EU suddenly implemented new False Coddling Moth (FCM) regulations which apply to all oranges shipped to the region.
- For more financial news, go to the News24 Business front page.
Up to a quarter of South African oranges destined for the European Union (EU) might not be shipped due to the impact of load shedding, in addition to new EU regulations – posing a potential loss of more than R500 million for local farmers this year.
This warning went out from the Citrus Growers Association of South Africa (CGA) on Thursday.
More than 400 000 tons of SA oranges were shipped to the EU in 2022. The citrus export industry supports 140 000 jobs and generates R40 billion in export revenue annually.
Government has announced that ports will be exempt from power cuts. However, according to the CGA, cold stores outside port terminals will struggle to pre-cool and maintain oranges at temperatures required by the EU until containers can enter the ports and are shipped off.
In July last year, the EU suddenly implemented new False Coddling Moth (FCM) regulations which require all oranges shipped to the region to be pre-cooled to below 2 degrees Celsius and then maintained it at this temperature for 20 days. The CGA claims the new regulations are driven by Spain to keep SA citrus out of the EU.
The CGA regards the new EU regulations as unjustified and discriminatory. It claims the local industry already has world-class and highly effective FCM risk management systems in place.
Therefore, the impact of load shedding on the citrus value chain is an additional threat on top of the challenge and cost brought on by the new FCM requirements.
Ongoing load shedding hampers the ability of farmers to fully comply with the new EU regulations by the time the 2023 export season kicks in at the end of March.
To comply, growers will have to use costly, specialised container equipment, which is in short supply. As a result, an investment of R1.4 billion in cold storage technology and capacity is required to enable full compliance. This puts further financial strain on growers.
The Departments of Trade, Industry and Competition, and of Agriculture, Land Reform and Rural Development have already challenged the new EU regulations at the World Trade Organisation (WTO).
The CGA said in a statement on Thursday that it has again written to Minister of Trade, Industry and Competition Ebrahim Patel requesting that he urgently convene a WTO panel to adjudicate on the new FCM regulations.
“This action becomes even more critical in light of ongoing load shedding which makes the ability of growers to comply with the new regulations by the time the 2023 export season kicks even more of a challenge,” says Justin Chadwick, CEO of the CGA.
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