CGA

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Exporters of fruit to Russia urged to demand full payment on loading

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South Africa’s Citrus Growers’ Association (CGA) has warned fruit growers of risks of defaults by Russian importers.

Describing the current economic situation in Russia as ‘extraordinary’, the CGA said it is one that demands “extraordinary measures to be taken to prevent losses to SA fruit industry.”

In a message from the CGA representative in Moscow, it advised SA exporters not to ship fruits without 100% payment on the date of loading. “In our view as experts on the spot such condition will be understood and positively accepted by prudent Russian importers. For importers commodities now present better guarantee against losses, than cash in Rubles.”

Forecasts of further decline of oil prices, the present devaluation of Chinese currency, economic problems in Far Eastern countries, and unfavorable news from the New York Stock Exchange are factors expected to see the strengthening of the USD and further weakening of the Ruble, it said.

“So far retail has been loyal to their word given to government to keep prices stable. But with weakening of the Ruble purchasing power in the international markets they will not be able to subsidise the prices, and first of all of imported commodities,” it cautioned.

source: CGA FROM THE DESK OF THE CEO (33/15) 28 August 2015

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Southern Africa’s citrus growers urged to stay cool in tricky market

citrus

Southern Africa’s citrus growers are entering a season that has “difficult” written all over it, according to Justin Chadwick, CEO of the Citrus Growers Association of Southern Africa,

in his newsletter for this week, he said Southern Africa’s volumes available for export continue to grow but amid a context of markets still under recessionary pressure, geopolitical decisions leading to uncertain market conditions, and protection of domestic producers becoming a priority.

“Responsible decision making will mean keeping unwanted or oversupplied fruit out of the market (sell domestically or processed),” Chadwick said.

In one of his newsletters last month, he had explained why the Southern African citrus industry had asked officials to suspend the issue of phytosanitary certificates for fruit to be exported to Spain, amid concerns over how tests for citrus black spot (CBS) are carried out there.

Russian importers looking to secure fruit at lower prices

In his latest newsletter, Chadwick said there had been reports from Russia of “a lot of Egyptian oranges of substandard quality available, selling at very low prices”, a situation that would continue to the end of May. With the weak ruble resulting in food inflation of 16-17%, buyers are seeking to source fruit at lower prices and growers need to be careful, he said.

The Middle East: seller beware

Chadwick said care is also needed in the Middle East. Strict payment conditions should be imposed and growers need to ensure they fully understand the terms and conditions their export agents are negotiating as “at the end of the day the grower bears the losses resulting from a poor deal,” he said.

Export volume estimates for 2015

Chadwick also reported that the forecast is for this year’s packed for export volume to be 113.1 million 15kg cartons, down 2.2% on last year.

  • Oranges: valencia down 3.5% to 49.1 million cartons; navels down 3.5% to 25.1 million cartons. These decreases mainly due to hail in Senwes and Western Cape growing regions
  • Lemons: up 2.9% to 13.6 million
  • Grapefruit: down 2% to 15.3 million cartons. Exporters have said this estimate could be revised further downward as the season unfolds and quality specifications become clearer
  • Soft citrus exports: steady at 10 million cartons
  • Satsuma: to increase 2% to 1.8 million cartons
  • Mandarins: to rise 4% to 5.3 million cartons
  • Clementines: down 5%

Read the newsletter here.