South Africa, the world's biggest grapefruit exporter, just had a record season – why that could spell trouble for farmers

Oct 27, 2018
South Africa packed 16.4 million cartons of grapefruit for export, end-of-season numbers show, an all-time record that will help keep it the top global supplier.
But SA's dominance has a lot to do with other countries cutting back on grapefruit growing because it has not been profitable in recent years.
A reduction in American marketing spend has seen grapefruit's popularity fall in Japan, but Chinese consumption is more than making up for that.
 
In the 2018 year South African growers packed an all-time record of 16.4 million cartons of 17kgs each of grapefruit for export, end-of-season numbers from the Citrus Growers Association (CGA) show.
 
That will easily be enough to keep SA ranked as the top exporter of grapefruit in the world, and essentially the only southern hemisphere supplier for high-demand markets in Europe and the East.
 
But that record could still come back to haunt the farmers responsible for the bumper crop.
 
"It could be that some fruit that should have stayed at home were exported."
 
The price reconciliation for the exported fruit will only be available late in the year, but early indications are the grapefruit prices were down around 27% in Europe compared to an average of the last three years, and there are reports of even more depressed prices.
 
And grapefruit wasn't exactly been a huge profit spinner to begin with.
 
"Grapefruit as a commodity went through many years of negative returns," says Chadwick. "For quite a few years it has been a marginal if not risky crop to grow."
 
While farmers in the likes of Argentina and Swaziland pulled out grapefruit in favour of crops with better returns, a surprisingly large number of South Africans stuck with it, in part because grapefruit are harvested early enough to not interfere with the harvesting and packing of oranges and other citrus.
 
In 2018 that translated into 70,000 tonnes of grapefruit exports to the Netherlands, the usual top buyer of SA's exports, an increase of 11% over 2017. Japan, last year's second-biggest importer, was easily overtaken for the number two slot as exports to China more than doubled to 51,000 tonnes.
 
In some eastern markets, particularly South Korea, South Africa has benefited from big marketing drives by growers in Florida keen to popularise grapefruit, Chadwick said. Such investments have been dwindling of late, and that shows in markets such as Japan, but for the time being at least the Chinese appetite is masking such declines.
 
Now the question is whether South African growers exported smaller fruit than they arguably should have to feed that demand, so pushing down prices and final profits across the board.
 
That's the problem with having a hemisphere – and a growing season – pretty much all to yourself, said Chadwick.
 
"If the market is bad, we have only ourselves to blame; nobody else is playing."
 
 
Source: Business Insider

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