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June 16, 2009

Chilean orange shipments concern South African exporters

by Chris Koger

When it comes to South African orange exporters’ concerns about competition with Chile, the talk turns to clementines. The U.S. Department of Agriculture approved clementine shipments from Chile to the U.S. in 2005. Within two seasons, South Africa’s exports had dropped from 13,800 metric tons to fewer than 5,000 metric tons, according to the USDA’s Foreign Agricultural Service.

“Our market just collapsed,” said Gerrit van der Merwe, owner of A.L.G. Estates, a Citrusdal grower-shipper.

“It was a huge blow to us,” said Piet Smit, chief executive officer of the Western Cape Citrus Producers Forum. “But we’ve started to build the market up again.”

The USDA approved imports of Chilean oranges and grapefruit this spring. At more than 33,600 metric tons in 2008, South African orange shipments to the U.S. dwarf the nation’s biggest competitor, Australia, which exported 21,500 tons to the U.S. in 2008.

Even with that much of the market, shippers in South Africa are wary about it eroding.

“The environment has changed with the entrance of Chile,” van der Merwe said May 28 to a group of growers gathered at his house. “They have the potential to take a big slice of the market.”

South African shippers can’t compete with Chile on price, van der Merwe said, so they focus on providing top quality and service.

That, he said, should allow South African exporters to maintain accounts in the U.S.

“When a season starts, I know what my program is with Wal-Mart,” he said, which is about 55,000 cartons total this season.

Smit said exporters are seeking stronger partnerships with U.S. retailers to promote their clementines, navels and midknights.

By next season, South African shippers might have another citrus item to promote — grapefruit.

The USDA’s Animal and Plant Health Inspection Service, which clears areas based on phytosanitary issues, is considering a request for the Orange River district (which borders Namibia), which specializes in grapefruit.

The Packer

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