Trump tariffs squeeze SA citrus exporters

South African citrus producers are facing a challenging road ahead as they navigate the repercussions of the 30 per cent reciprocal tariffs imposed by President Donald Trump. The autumn edition of the Absa AgriTrends Report has shed light on the potential impact of these tariffs on the citrus export value chain, indicating that stakeholders may need to absorb a portion of the tariffs to avoid hefty price increases for American consumers. Dr. Marlene Louw, Senior Agricultural Economist at Absa AgriBusiness, joined CNBC Africa to discuss the implications of these tariffs and how industry players are preparing for the uncertainties that lie ahead. In the wake of these tariffs, South African citrus producers are bracing themselves for tough decisions regarding pricing strategies and market access. The 30 per cent tariff puts them at a disadvantage compared to competitors like Peru and Chile, who face lower tariffs when exporting to the US. This unequal playing field not only threatens market share but also jeopardizes rural jobs and foreign exchange earnings. Dr. Louw emphasized the importance of collaboration among value chain players in lobbying for fair access to the US market. While exploring alternative markets may offer some relief, the agility and flexibility of value chains will be critical in responding to the evolving trade landscape. One of the key challenges posed by the tariffs is the potential burden on US consumers. If they are unable to absorb the price increases resulting from the tariffs, industry players may have to consider absorbing some of the additional costs themselves. This could reshape the dynamics of the value chain and require strategic adjustments to mitigate the impact. Despite the immediate challenges, Dr. Louw also highlighted the opportunities that climate variability can bring to the industry. Recent fluctuations in supply from South America have created openings for South African citrus and avocado exports to capitalize on market demand. Adapting to climate variability and diversifying sourcing strategies will be pivotal in hedging against future risks. Looking ahead, the agricultural sector faces a complex landscape shaped by geopolitical tensions, climate variability, and economic uncertainties. The resilience and adaptability of industry players will be tested as they navigate this turbulent terrain. Dr. Louw's insights underscore the need for strategic foresight and collaborative action to safeguard the interests of South African citrus exporters amidst a rapidly changing global trade environment. As the industry continues to evolve in response to external pressures, staying abreast of market trends and embracing innovation will be key to unlocking new opportunities and building a sustainable path forward for South African citrus exporters.