Impact of tariffs on SA citrus exporters will hinge on health of US consumer: Absa report

SOUTH African citrus producers and other participants in the citrus export value-chain may need to absorb a portion of the 30% recipient tariffs imposed by President Donald Trump if American consumers cannot absorb them, Absa said in its report on Tuesday.

- BANELE GININQZA

South Africa is a counter seasonal citrus supplier to the US – the primary exporting months to the US run from July to October, with oranges and mandarin being the main citrus products destined for export, Absa reports in the report on Tuesday.

“With other notable Southern Hem-isphere exporters like Chile already sending the bulk of their orange exports (75% or more) to the US during this period, there is limited capacity from other Southern Hemisphere producers to substitute South African volumes, which become uncompetitive based on a 30% import levy,” says Dr. Marlene Louw, senior economist at Absa AgriBusiness.

Louw said it was likely that exports from other geographies and competi-tion from other fruit types will trigger changes in consumption patterns, and that some portion of the duty impact would need to be absorbed by other participants in the citrus value chain.

“Given the limited capacity for alter-native sourcing, we expect the biggest portion of the duty increases to be passed on to the US consumer. However,