Ray Smuts
THREE MAJOR players in the fruit export business, Capespan, Dole and Katope, have joined forces on shipping arrangements to Japan for this year's citrus season.
A joint statement released to FTW last week says it is felt this action is in the best interest of the South African citrus industry in general, the respective Japanese trading partners specifically and the suppliers to the three parties in particular.
The Japanese market, described by Capespan's John Stanbury as one of the most dangerous in the world, is currently depressed for grapefruit and oranges arising from an oversupply of Florida grapefruit and Californian citrus. Grapefruit stocks are at particularly high levels currently when compared to historical trends.
What is more, due to climatic conditions, uncertainties surround the South African volumes to be shipped to Japan and following the success of the 1999 season, the volume of South African citrus being planned for this market is apparently appreciably above the market demand.
In view of this, the companies conclude, they are concerned about an oversupply of South African citrus to Japan and this new arrangement places them in a favourable situation to monitor and apply restraint if necessary.
Stanbury, m.d. of Capespan, points out that South Africa over-supplied the Japanese market in 1997, resulting in catastrophic results.
Last year, in contrast, was a walk in the park as California oranges were not in evidence, but this year the Japanese find themselves in difficulties because Florida grapefruit stocks are at an all-time high.
We know what it means to oversupply a market and decided that if the three of us co-loaded citrus we would know to our mutual benefit what the volumes were so as not to turn the Japanese market into a bloodbath.
Asked how much citrus would go to Japan, Stanbury replied: We will put as much in as the Japanese market will bear, remembering that Californian citrus is well up. The sales opportunity, year on year, is probably 700 000 cartons. (South Africa produces about 50 million cartons of citrus for export a year).
Capespan has contracted Universal Reefers while Dole and Katope will charter jointly, utilising Cool Carriers. Between 15 and 20 sailings are expected during the citrus season.
Capespan has about 60% of the South African export citrus market to Japan and Dole and Katope around 30% between them.
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