Passage to China for SA citrus exports
After an application process that has taken four years, SA is finally able to export citrus to China using break-bulk shipping.
In break-bulk shipping, the fruit is stored in pallets which are put into the ship's hold instead of being transported in containers, the method used for more than 85% of SA's citrus exports.
"Until now, the Chinese protocol has only allowed us to buy containers. Last year, we finally got permission and the protocol was revised and changed to allow us to now use these break-bulk vessels," says Justin Chadwick, CEO of the Citrus Growers' Association of Southern Africa.
It is easier to maintain the temperature at the required level with break-bulk shipping due to better airflow, he says. Another advantage is that it would ease congestion in the container-shipment areas of ports.
Podcast | Business Day Spotlight - Huawei vows it will not crack under pressure
Subscribe: iono.fm | Spotify | Apple Podcasts | Pocket Casts | Player.fm
SA's first break-bulk citrus shipment to China was loaded in Durban on Monday. The vessel can take up to 5,200 pallets of fruit.The downside is a possible oversupply in the export market, leading to decreased prices. But SA is countering this by loading the fruit destined for China along with that headed to Japan, says Chadwick.SA is set to export an additional 500,000 tons of citrus - lemons, mandarins, oranges and grapefruit - in the next three to five years, which will come from trees that have already been planted. Chadwick says it is anticipated that most of the additional citrus will be exported to China.SA started exporting citrus to China in 2004, reaching 100,000t in 2017 and almost 170,000t in 2018.South African avocado farmers are likely to face similar protracted negotiations in trying to get access to the Chinese market.In a market update, Wandile Sihlobo, head economist at the Agricultural Business Chamber (Agbiz), highlighted the potential of the Chinese market for local producers, but Kenyan growers have a head start.SA was the world's eighth-largest avocado exporter in value terms in 2018, despite not being in the top 10 global avocado-producing countries, according to Agbiz. Kenya came in at no 7, producing 30% of Africa's avocados - twice what SA produces.Last month, Kenya and China signed an MOU on sanitary measures, opening the way for Kenyan exports.China imported 43,859t of avocados in 2018, compared with four tons in 2008.Derek Donkin, the CEO of the South African Avocado Growers' Association, says it could be years before SA sold avocados to China."Generally, the process takes years because it's government to government, and because of the expanding trade all over the world, they have applications from different countries," Donkin says.He adds that starting the process would have to wait because SA was finalising a deal to export pears to China, and Beijing would deal with only one commodity at a time...