The run-up to the South African citrus deals should produce favorable market conditions at the start of the deal, importers and officials said.
“Demand for imported clementines should be good since California mandarins are expected to finish around mid-May this year, and Peruvian and Chilean clems will start arriving in early May with light volumes and are expected to get good prices on the early fruit,” said Tom Cowan, South African citrus manager for DNE World Fruit Sales, Fort Pierce, Fla.
DNE expects California navels to finish in mid-June, with South Africa ready to fill any void. “The freeze last December in California, plus the recent high temperatures in the valley, lack of rain and water restrictions are all combining to put a rush on marketing the remaining crop in California,” Cowan said. “Those conditions should open the U.S. market earlier than the past few years for both imported clementines and navels.”
Cowan also expects another season of exchange rates favorable to South African shippers.
“Last season the exchange rates were favorable to the South African growers during the season, and this year we expect it to be even better,” he said.
On April 25, the exchange rate was 10.65 South African rands to $1 U.S. The year before, it was 9.12-to-1.
Growers often are tempted to chase a better exchange rate in other markets, said Kim Flores, marketing director for Vero Beach, Fla.-based Seald Sweet International.
But for long-term sustained growth, Flores said, it’s important for growers to be consistently committed to growing the U.S. market.
“The growers with a long-term strategic vision are more committed to staying in the market even when the exchange rate may be lower than other markets,” she said.
Gray Vinson, Seald Sweet category manager, agreed with other importers and officials that demand for South African fruit should be strong because of California’s early finish.
Marc Solomon, senior vice president for St. Laurent, Quebec-based Capespan North America, said South African shippers will likely be the beneficiaries of the state of other spring and summer citrus deals.
“Demand is expected to be strong as a result of the Californian freeze, which will probably mean that the market will be empty when the South African fruit arrives,” he said. “The Chilean clementine crop is also expected to be light, so this may further increase demand.”
Solomon said the exchange rate shouldn’t affect the supply of South African citrus this summer one way or the other.
Suhanra Conradie, CEO of the Western Cape Citrus Producers Forum, also expects brisk movement of South African fruit this summer, thanks in part to some help from California.
“We’re hearing from our importer partners and also from retailers that there will be strong demand for South African Summer citrus this season, particularly at the start,” she said. “We understand that domestic citrus is likely to exit markets early.”
The exchange rate always plays a role in South African citrus grower-shippers’ decisions to ship to the U.S., as do many other factors, Conradie said.
Because of the strong demand, though, it’s easily worth the effort.
“Exporting to the U.S. is costly, but the return is positive to both the U.S. and South Africa,” she said. “The program creates and supports jobs in both countries, and U.S. consumers have access to excellent citrus throughout the U.S. domestic citrus off-season.”
Efforts over the past few years to enable South African fruit to arrive in the market more quickly will bear fruit in 2014, Conradie said.
“Cold (sterilization) protocol has been reduced from 24 to 22 days,” she said. “This will enhance the shelf life of fruit.”
In addition, working closely with conventional and container lines and other service providers on both sides of the Atlantic, Conradie said, helps to ensure a cost-efficient, disciplined and continuous flow of fruit.
Forum’s promotional plans
The Western Cape Citrus Producers Forum plans to work closely with the industry’s importer partners to define promotional programs that work for retailers, Conradie said.
“In the past, POS demos coupled with recipe and meal solutions have been popular and well-received, and result in greater sales,” she said. “King Citrus will be present again in a bigger way on packaging, in stores and at various trade shows.”
In addition, the industry’s social media presence is increasing and is aligned with retail promotional programs, Conradie said.
And there’s ample room for growth.
“The idea with in-store promotions is to offer consumers a taste of our product from South Africa in order to create more demand among consumers,” she said. “Ultimately we would like to grow our program in U.S.”