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Latest CGA updates

By Justin Chadwick

Chinese inspections of packhouses and orchards have taken an interesting turn in 2021 and 2022. With COVID making travel difficult, the Chinese have turned to live stream inspections.

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So, this is how it works – the industry employs the services of a suitable qualified company (in this case Lucentlands) to assist in the process. While Chinese inspectors sit in Beijing, the Department of Agriculture, Land Reform and Rural Development (DALRRD) officials accompany representatives from the packhouse/farm as they walk through a virtual inspection.

Accompanying the film crew is a suitably qualified interpreter who assists in asking the questions and translating the responses back to the inspectors in China. This is not a simple task – in many parts of the country internet signals are poor, which can cause delays and sometimes the signal drops during inspection.

Fortunately, Lucentlands (thanks to Louise Brodie and Dewald Kirsten) have experience from the 2021 process, and they prepare thoroughly beforehand to make sure that the process is completed without issues. Although this is an expensive exercise, it has to be done – otherwise the list of DALRRD approved orchards will not be signed off by the Chinese.

The Citrus Growers Association (CGA) would like to thank Louise and Dewald – as well as the growers and packhouse managers that took part in the exercise; Newinvest29 near Brits, Molotele packhouse near Hoedspruit, Bergpak near Piketberg and Mowzer Agri orchard near Saron. In addition, thanks to the DALRRD officials, CRI and CGA for ensuring a positive outcome. The 2022 China list has now been approved and PUCs on the list can now ship to China.

Latest packed and shipped figures. Please note that due to the unreliability of Agrihub data, shipping figures are excluded.

Latest packed and shipped figures. Please note that due to the unreliability of Agrihub data, shipping figures are excluded.

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Review of the price of diesel (Mitchell Brooke)

The current price of diesel has been a matter under discussion by many, holding varying opinions on the factors that are causing the price of [diesel] fuel to escalate to such high levels. Hereunder we will set out the actual factors that are the driving components of the diesel price breakdown.

There are two main components that make up the diesel price composition:

  1. [International price influences] basic diesel price (BDP), this component is essentially what it costs to procure diesel from overseas refineries (in rand value), shipping, landing and storage costs. This also includes price determination for oil procurement for local manufacture, this governs and regulates the production price parameters.The BDP in June 2022 increased to R16,08c per litre (70% of total Diesel price) which was determined by the high international price of brent crude oil averaging USD114 per barrel, given the weaker rand trading at an average of ZAR14/USD saw the Rand value of brent crude reaching a peak in May 2022 of R1,715 per barrel. An increase in the BDP is likely as the price of brent crude is increasing in addition to the weakening of the ZAR/USD.
  2. [Domestic price influences] taxes and levies, this component of the price composition has been an area of much debate. The following factors are the main price components that influence the price of diesel (price per litre FY2022/23/10 year avg % of total).
    • Fuel tax (R3,79cpl / 23%) – The Minister of Finance determines the level of fuel tax levy included in the price of Diesel. The Minister approved a temporary reduction in the fuel tax by R1,49c to R2,30c per litre for the months of April and May 2022 extended to 3 August 2022. The fuel tax reduction will be suspended on 3 August 2022 with an increase by R0,75c on 6 July and a further increase of R0,75c on 3 August.
    • Road Accident Fund (R2,18cpl / 13%) – A road accident fund levy is applicable on petrol and diesel. The magnitude of this levy is determined by the Minister of Finance. The income generated from this levy is utilised to compensate third party victims of motor vehicle accidents.
    • Wholesale Margin (R0,80cpl / 5,4%) allocated to recuperate funds for marketing of petroleum activities.
    • Transport Cost (R0,68cpl / 3,5%) to recuperate costs to transport diesel fuel from port of manufacture to inland storage depots.
    • Slate Levy (R0,53cpl / 0,23%) is a static recovery mechanism for daily adjustments in the price of fuel.
    • Pipeline Levy (R0,33cpl / 0,3%) recuperated to fund the state Petroleum Pipeline Regulator.
    • Secondary Storage (R0,31cpl / 1,6%).
    • Distribution Costs (R0,18cpl / 0,8%) to transport fuel to retailers.

In summary the overall price of diesel is at present mostly influenced by international price factors such as the weaker rand value against the US dollar and the increased price of brent crude oil.

The domestic price factors such as the fuel tax levy and the road accident fund levy make up the higher proportion of costs; these have increased incrementally annually at an average rate of 6-7%. Since the retail price of diesel is not regulated, diesel can be purchased at fuel stations or from suppliers at varying prices above the wholesale price.

A reminder to producers to ensure that they are gaining from the diesel tax relief mechanisms offered to agricultural production.

Grower registration

The CGA is compiling a register of citrus growers in southern Africa, including South Africa, Zimbabwe, Eswatini and Botswana. Provided that you or your business is an active citrus grower, we would like you to submit your details. It is important to the citrus industry and the CGA to have a membership register as this will enable us to communicate directly with all members about matters of concern, and to ensure that all members in each citrus growing region are able to participate fully in the Association, in particular when electing regional representatives to the CGA board.

To register, please contact us or visit the CGA website. To complete the registration process you will need the following information:

  • Business registration number
  • Business VAT number (or tax number for countries other than South Africa)
  • Details of a key business contact (the main person to represent your business)
  • The details of every PUC (production unit code) linked to your business, including farm name, nearest town, district, CGA region, and hectares per citrus type (some of this information will be populated from existing databases, if available, but please verify its accuracy).
Image credit: Obodai26 | Pixabay

Image credit: Obodai26 | Pixabay

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