RUSSIA’S invasion of Ukraine has left a sour taste for South Africa’s citrus farmers, who are facing millions of dollars in losses due to sanctions that have closed off the Russian market. South Africa is the world’s second largest citrus exporter and farmers are scrambling to find other markets before the fruit spoils.
South Africa normally sends about 10 percent of its annual $2bn in citrus exports to Russia.
That’s now on hold because of sanctions imposed after Russia launched its invasion of Ukraine.
Following two years of export disruptions caused by the coronavirus pandemic, unrest, and cyberattacks on the ports, the loss of the Russian market is another blow to South African farmers.
Citrus farmer Piet Engelbrecht pulls a lemon off a tree in the 5,000 hectares he farms in Groblersdal, about a three-hour drive northeast of Johannesburg.
‘It’s going to be a tough year … Although demand is growing in the current markets, it’s not going that fast, rapidly that it can absorb this, the 10 percent,’ he said.
Engelbrecht was forced to reroute a shipment of lemons this season that was on a vessel bound for Russia.
But finding new markets isn’t simple, say industry insiders, even for well-established family farms.
‘Our markets are very susceptible to oversupply. And because the product obviously can’t be stored for any length of time, if there’s too much in the market, it either has to be seriously discounted to move the fruit quicker or it just it just wastes eventually,’ Justin Chadwick, the CEO of the Citrus Growers’ Association of Southern Africa, told VOA.
Russia’s war on Ukraine has also pushed up production costs with effects beyond the current season.
‘A lot of our fertiliser and a lot of our fuel is also from Russia and Ukraine, so… I think it will have more of an effect in the coming few months,’ said Engelbrecht.
And it’s not just exporters having to pay higher costs to get their goods to the warehouse and sent to customers.
Rising fuel costs are hitting all areas of South Africa’s transportation and trade.
Economists warn that will have a long-term effect on the economy, mainly for consumers and the poor, who spend most of their income on food.
Dawie Roodt, chief economist for the South Africa-based Efficient Group said, ‘We’re going to see inflation going through the roof. What is really, really going to be bad for South Africa is that the kind of inflation that we’re going to experience will be very high levels of food inflation, because of the Ukraine and Russia being major grain producers and also other soft commodities.’
While South Africa’s farmers are hopeful that they can survive the loss of the Russian market, if future growing seasons are disrupted, they may have to cut jobs.
With South Africa’s unemployment rate hitting a record 35 percent, the citrus industry’s 120,000 workers want to see a recovery soon, so their jobs won’t be at risk.