KARSTEN Farms, a South African agricultural company backed by the Industrial Development Corporation, has terminated relations with the Israeli co-operative Hadiklaim.

Boycott, Divestment and Sanctions in South Africa (BDS SA), a lobby group, said on Monday it had received a letter from law firm Werksmans, stating that Karsten Farms undertook "not to enter into any trade relations with Hadiklaim for the current harvest year of 2013" and not to have any business relations with the Israeli group in future.

BDS SA also said Karsten Farms undertook not to enter into relations with any Israeli entity complicit in the "illegal Israeli occupation of Palestine". "This is the first time that a South African company has adopted such an undertaking," it said.

Karsten Group owns or manages 12 farms spread across the Northern Cape and Western Cape. It produces about 50,000 tons of fruit, mainly table grapes, pears, plums, apples and citrus fruit. More than 80% is exported to the UK and other European countries. The company produces about 400 tons of dates that are mainly exported to Europe, with some sold in South Africa.

Early last year, the Palestine Solidarity Alliance and BDS SA launched a consumer campaign against Karsten Farms over its relations with Hadiklaim. They said Hadiklaim was operating "against international law" in the "illegal Israeli settlements".

Pro-Palestinian lobby groups have in the past called on the government to sever all diplomatic and trade ties with Israel.

BDS SA and fellow lobby group Open Shuhada Street last year called on Pretoria to "impose broad-based boycott, divestment and sanctions against Israel until the country ends its violence against the Palestinian people, abides to international law and respects human rights".

The groups scored a victory when Trade and Industry Minister Rob Davies issued a notice compelling traders in South Africa not to label products from the occupied territories as "made in Israel".

The Industrial Development Corporation (IDC) said it was a 37% stakeholder in Karsten Farms, but could not comment.

Karsten Group CEO Piet Karsten described the matter as a storm in a teacup as the company did not supply any fruit to Israel, especially dates, which would be "like selling coal to Newcastle".

He said the IDC had not brought any pressure to sever Israeli ties. "We discussed it at board level, but the IDC directors just treated it as a business issue. Dates are about 5% of our total business. We just wanted the issue to go away," he said.