Competitiveness of the South African Citrus Fruit Industry Relative to Its Southern Hemisphere Competitors

Abstract

This paper investigates the competitive performance of the South African citrus fruit industry relative to its southern hemisphere rivals, namely Argentina, Australia, Uruguay, Chile and Peru. Both local and international literature on the citrus fruit industries was used as part of the analysis. The method of analysis used included the Revealed Comparative Advantage (RCA#) index, the Net Export index (NXi) and the Relative Revealed Comparative Trade Advantage (RTA) index. Time series data from the International Trade Centre (ITC) on South African and southern hemisphere major producing countries’ citrus fruit imports and exports were used to calculate the competitiveness indexes. The results revealed that South Africa has competitive advantage in some citrus fruit products than its southern hemisphere counterparts. The RCA#, NXi and RTA indexes analysis clearly showed that the domestic industry has a stronger and relatively higher revealed competitive advantage in three citrus fruit product categories, namely oranges, grapefruit and grapefruit juice than its southern hemisphere competitors. However, its orange competitiveness decreases when moving from primary orange to orange juice. This means that value adding opportunities are still lacking in the orange sub-sector. One possible reason for this could be the high rates of return recorded for farm-level applications of technology for most primary orange commodities.