Citrus fruits are one of the most important export products for the South African economy. For 2016 citrus fruit exports (1.7 million tonnes) were South Africa’s main agricultural export, with over 1 million tonnes of oranges exported to the Netherlands, United Arab Emirates (UAE), Saudi Arabia and Hong Kong.

The EU (including the United Kingdom (UK)) is one of the main destination markets for South African citrus fruits. In 2016, 41% of the citrus exports were destined for the EU, of which 48% went to the Netherlands and 27% to the UK. The Netherlands is the main destination for South African oranges and grapefruit and the UK for mandarin exports.

Although citrus exports to the EU have faced more stringent Sanitary and Phytosanitary (SPS) conditions due to the fungal disease Citrus Black Spot (CBS) since 2012, exports to the EU have shown an overall growth of 7.5% over the last four years. Since 2014, average annual exports growth rates to the EU are: 27% for mandarins, 22% for lemons, 11% for grapefruit and 4% for oranges. The SADC-EPA is expected to result in further growth in citrus exports from South Africa due to improved market access conditions for oranges and lemons, applicable tariff rate quotas for frozen orange juice and because citrus is a priority sector for cooperation on SPS matters.

Source: ITC TradeMap (2017); tralac calculations

SADC-EU EPA provisions governing South Africa citrus exports

Market access conditions for South African exports of certain oranges, lemons and frozen orange juice enjoy improved market access conditions under the EPA, as compared with the TDCA:

• Sweet oranges (HS 08051020): Between 1 June and 15 October South African sweet oranges enter the EU market duty free; the seasonal duty applicable between 16 October and 30 November will gradually be eliminated by 9% per annum until it is eliminated by 2027; and between 1 December and 31 May the entry price system will continue to be in place. The entry price system means that a specific duty will be applicable when the daily import price falls below the predetermined seasonally varying stipulated minimum price.

• The volume of frozen orange juice which can enter the EU market under the tariff-rate quota has been increased; for 2017 the allocated quota is 1057 tonne. Thereafter, the allocated quota will increase by 21 tonnes per annum for the continuation of the agreement.

• Lemons (HS 08055010) can enter the EU market between 1 May and 30 October duty-free and the entry price system will apply outside these dates.

Market access for other South African citrus fruits exports under the EPA has remained the same as under the TDCA – oranges other than sweet oranges (HS 08051080) and grapefruits (HS 080540) are still imported subjected to seasonal duties, while mandarins are still subject to the indicative price entry system.

Other EPA provisions relevant to South African citrus exports pertain to Geographic Indications (GIs) and SPS measures. Additional SPS measures introduced by the EU regarding CBS require a comprehensive spraying programme and additional SPS inspections at high cost to producers. The EPA in Article 13.3 allows for support to small and medium enterprises in the field of agriculture to address supply side constraints, and citrus fruits have also been earmarked as a priority sector for cooperation between the EU and SADC EPA states to find solutions for problematic SPS measures (Chapter VI of the EPA). Valencia oranges from Spain and red oranges from Sicily (Italy) imported into South Africa are receiving intellectual property right protection, as GIs; however, Protocol 3 states that existing names using varietal names which include ‘Valencia’ can be continued by South Africa, if consumers are not confused or misled as to the origin of the product.

The implications of Brexit

Post-Brexit negotiations between SACU and the UK may present an opportunity to consider market access conditions and concerns regarding the SPS measures applicable to citrus. Improved market access for SACU citrus should focus on: (a) increased import volumes under a tariff quota system; (b) liberalisation of current seasonal duties; and (c) abolishing the price entry system. The CBS SPS measures in place have been criticised as being an aesthetic issue, rather than public policy for the protection of human health. If the UK relaxes the SPS requirements pertaining to CBS, orange exports from SACU to the UK can increase. Brexit can present SACU with the opportunity to expand citrus exports (however, this will depend on the negotiations between the UK and the remaining EU countries).