Cautious optimism reigns after a good Cape winter

Access to China offers high hopes for growth RAY SMUTS BEARS DO it, hares do it, so do apples and pears – a sound winter slumber that is, before awaking energised and ready for spring growth. It is early days to come up with a prognosis for the Western Cape’s deciduous outlook for the year ahead, save to say the success or otherwise of production will be largely dependent on the elements. Charles Hughes, CEO of Tru-Cape, responsible for 55% of the country’s apple and pear output, is not about to put his neck on the line. The past season has had its highs and lows, Tru-Cape alone down by more than 20 cartons on exports of close to nine million cartons, translating to a revenue loss of about R80 million. “On the positive side we have had a very good winter and the water situation is much improved. “The cold weather has allowed the trees to ‘sleep’, which will ensure a healthy crop. But we still have some months to go so it is dangerous to make predictions too early,” he told FTW. Hughes says the 2006 season has been “relatively positive” despite major volume losses due to wind damage which considerably reduced original estimates.” Early summer pear sales appear to have achieved improved prices over 2005 in own currency terms, but the net values suffered as a result of the strong rand early in the year, he added. “Prices in Europe and the UK could possibly have been stronger, but the cold and extended winter played a role in slowing down volumes as consumers tend not to buy fruit in cold conditions.” Turning to apples, he says the European apple crop was sold at a faster rate than the previous year, which created a far more stable season and gave all southern hemisphere countries an improved marketing platform from which to achieve much better prices. Stressing the positive aspects of a short market, Hughes makes the point that South America shipped lower volumes to Europe this year, preferring to use the US for “currency reasons”. South Africa therefore achieved real price increases not only over 2005 but ahead of the past three years in a number of instances. “Lately we have seen the rand weaken, which has added further value benefits to growers, but it must be understood that while this is an improvement our growers are still feeling the difficulties of a number of poor return years.” On trade with other continents, Hughes says: “Our African business has been very erratic because of difficulties with shipping lines changing their route delivery, resulting in huge lost opportunities.” Asia, too, has been rather disappointing this season due to too much fruit shipped from all southern hemisphere countries, stemming from a poor 2005 season. On the marketing front, Hughes says South Africa has been given access to citrus for China and all fruit to Iran, the latter potentially a lucrative market despite producing large volumes itself. Critical of stumbling blocks barring access to international markets, Hughes is positive the South African government is trying its utmost to obtain access to China for both grapes and deciduous, even though no definite time plan has been confirmed. He remains keenly aware of the huge potential market for grapes in China – “we are talking millions” - and makes it clear True-Cape would like to play a meaningful export role when the time is right. With an annual turnover of R500 million, Tru-Cape supplies almost 50% of its apples to international fruit marketer, Capespan.