It has been another difficult season in the Sundays River Valley, with slumbering labour unrest (against the background of 'expropriation without compensation') and a drought, the impact of which was more severe than anticipated, coupled with a slack market for most citrus categories except lemons.
Three weeks to go, with the last of the Valencias and grapefruit being packed, and export volumes are reckoned to be between 10 and 20% lower, says Hannes de Waal, managing director of the Sundays River Citrus Company, but in terms of returns the outlook is more favourable, primarily because of lemons.
“The lemon markets pulled us through, and it was strong because of Argentina’s enormous problems with quality.”
“The orange market was never spectacular, with Egypt staying in the market for so long, but on large counts the Valencia price isn't bad. Problem is, we mostly had smaller counts, and Valencia exports will be 8 to 10% down on last year which is unheard of, since we had the heat and wind damage on the Valencias last year.”
As for grapefruit, of which the Sundays River Valley is not a dominant producer, in total South Africa had 2 million cartons more on the market, also smaller counts, making this a very difficult season.
The Rand has weakened by 7% over the past month as all developing markets were hurt by the woes of the Turkish lira and the South African economy is officially in recession, it was announced this week. “We believed, as many economic advisors did, that the Rand would move to R10 or R11 to the US Dollar [it’s R15.42 today], so we’re not benefiting much from the current weakening.”
