SOUTH AFRICA – The demand for South African oranges in Europe continues to surge, mitigating the impact of the European Union tariff on South African orange imports.
The European Union tariff on South African orange imports is a component of the European Union-Southern African Development Community Economic Partnership Agreement (EU-SADC EPA).
Signed on 10 June 2016, the agreement was between the European Union and South Africa, Botswana, Lesotho, Namibia, Eswatini, and Mozambique, this agreement provides for preferential access of goods to the EU market.
More precisely, the European Union (EU) has implemented new import rules for South African citrus fruits, which have had a significant impact on the country’s exporters.
The new phytosanitary requirements were meant to address False Codling Moth, a citrus pest that is native to South Africa and for which there is zero tolerance in the EU.
The sudden imposition of the standards caused more than 2,000 containers of South African oranges, worth an estimated USD 30 million, to be affected by blockages at European ports.
Consequently, South African citrus exporters incurred additional costs of approximately USD 10.6 million due to storage, transport, and opportunity costs.
Currently, from October until November 30th, a duty of 4.3% applies to South African oranges arriving in the European Union.
It is crucial that the shipping vessels arrive on time to meet the duty deadline.
“Due to the swells, we have had to reschedule the shipment of oranges to the Euto ensure that we arrive by October 14th, which means we will typically set sail on the 27th or 28th,” one shipper explained. “That gives you a week still to go, but due to the bad weather, there is significant congestion in ports,”
The exporter further observed that the European market is currently very lucrative adding that the duty is only imposed on oranges and not on soft citrus and lemons.
This indicates that the demand for oranges would be high during this time of the year.
“And the duty on South African oranges has come down, so many import agents have told us to keep loading, despite the duty,” he said.
The tariff on South African oranges will be gradually phased out and fully eliminated by 2026. Next year, the duty on South African oranges will be 2.88%, and in its final year, it will be 1.44% before being eliminated in 2026.
A 16% tariff will remain in place from the beginning of December until the end of March.
He concluded that the impact, if vessels don’t make it due to delays and congestion, will not be that significant because the market demand is high.
For all the latest fresh produce industry news updates from Africa, Middle East and the World, subscribe to our NEWSLETTER, follow us on Twitter and LinkedIn, like us on Facebook and subscribe to our YouTube channel.
