Industry bodies CGA and Sati express concerns about competitive disadvantage against other Southern Hemisphere producers and potential ripple effects in European markets as negotiations continue
Citrus exporters from South Africa will scramble this week to get their last fruit shipped before the new 30 per cent tariff implemented by the US Government kicks in.
While all eyes will be focused on beating the shipping deadline, the long-term effects of the new US tariffs are beginning to emerge.
In 2022 exports of citrus, mainly for the Western and Northern Cape, were estimated at R2.4bn, with around 100,000 tonnes exported each year.
Although exports of table grapes to the US represent only 3 per cent of the country’s total, at 2.2mn cartons, they have been growing significantly.
South African grape exporters previously stated that they would increase their exports to the US next season, but those plans must now been in jeopardy.
The Citrus Growers Association (CGA) said it hoped South Africa’s Department of Trade, Industry and Competition will use these coming days to get a mutually beneficial deal over the line.
“South African citrus can have duty free entry purely based on counter-seasonality to US growers,” it stated. ”We see that a US tariff exemption will apply for Brazilian orange juice, which is positive news for citrus in general, and hopefully points towards a potential precedent.”
Reacting to the US announcement of the impending new tariffs, South Africa’s table grape industry organisation, Sati, said it will be extremely difficult for the country to compete with other Southern Hemisphere producers in the US market.
“Specific regions and production units are more reliant on the USA market and may be disproportionately affected,” it said.
The association explained that South Africa supplies the US with a high specification product, in line with the market’s requirements, and over the last 20-plus years had built a reputation for providing ”top quality, counter-seasonal produce” to the market.
“Sati is particularly concerned that South African producers will be at a competitive disadvantage compared to other Southern Hemisphere exporters like Chile and Peru, which currently have a 10 per cent tariff in the USA market,” said CEO Mecia Petersen.
“We will continue to engage with the South African government in ongoing negotiations with the USA to advocate for a fair tariff that places our exports on a level playing field with other Southern Hemisphere countries,” she noted.
Petersen explained that Sati is equally concerned about potential secondary effects of the tariffs on global markets, including increased supply from other countries facing high tariffs to South Africa’s main markets, such as the EU and the UK.
“Sati remains committed to supporting the South African government’s efforts to refine its offering and secure a fair tariff for South African exports, recognising the strategic importance of the USA market to our industry’s growth and export diversification objectives,” she added.
