Export fruit basket turns lacklustre

Three glorious marketing years have come and gone, with South Africa’s sun-drenched export fruit basket turning somewhat lacklustre this year. True, signs are emerging that the world may slowly but surely be awakening from almost a year of economic hibernation. China is a case in point with better-thanexpected GDP growth of more than 7% for the three months to July, but 2009 will be remembered by South African growers and exporters as pretty much an indifferent year. So many factors enter the equation when seeking answers but a few readily come to mind. There was the strong rand that bedevilled price as payment is usually in international currency such as euros or dollars, lack of product demand in certain markets, inclement weather and the need to ‘refurbish’ tired farmland. Luvuyo Mabombo, CEO of the Perishable Products Export Control Board (PPECB), says signs began emerging as early as last October (2008) that trading conditions were not going to be as rosy this year. “Our own analysis is that going forward this is not purely a function of trading conditions (access to credit, protectionism etc) but that production also pertains to global warming. “We are now seeing a recurrence of lateness in harvesting seasons which impacts on competition between product regions domestically and closes up trading windows internationally.” Dealing with some commodity specifics, Mabombo says the PPECB has witnessed organic growth in citrus at an average 4-5% per annum but a probable decline of 7% and 9% in volumes this year. There’s been stability in the deciduous programme and stabilised volumes of between 10 and 11 million cartons in the subtropical sector, with mangos and litchis showing a “drastic” decline PPECB data for the first six months of the year reflect that all fruit shipped in containers was down to 937 246 from 966 730 in the corresponding period in 2008. Competitiveness As to FTW’s poser: How the industry can do things better in the year ahead, Mabombo says the key to sustaining the country’s competitiveness is maintaining focus on quality (including quality of fruit to the local market), improving efficiencies in the logistics chain through the efficient use of all ports, and hopefully reducing logistics costs by utilising rail and government. Citrus, which accounts for some 65% of all fruit exported, has shown organic growth of between 4-5% per annum but volumes are expected to be between 7% and 9% down this year on last. “We have the fruit available for export but the markets have not taken the product – so to predict what will happen next year is very difficult,” says Justin Chadwick, CEO of the Citrus Growers’ Association. The prediction for all citrus exported this year is likely to be 84 million cartons, even though 4 million-odd extra cartons were packed but not shipped. Valencias, the major citrus variety exported, will be down around 3 million cartons this year, to around 40.5 million cartons, navels down about 2.5 million cartons to 19 million cartons, grapefruit likely to be slightly up, from 11.3 million (17kg) cartons last year to 11.9 million, soft citrus down to 7.1 million cartons from 7.34 million last year. Stefan Conradie, pome and stone fruit product manager at the Deciduous Fruit Producers’ Trust, says hail in the Ceres areas and spraying problems related to Golden Delicious apples accounted for this variety being 14% down in volume. Apple and pear exports meanwhile are expected to decline 7% this year from 26.48 million cartons (12.5kg) to 24.57 million. The combined 2008/09 estimate for stone fruit (apricots, nectarines, peaches plums/prunes) is 12 826 086 cartons, slightly up on 2006/07. Deciduous Back at the PPECB, Mabombo says increases in deciduous export volumes remain flat year on year, mainly due to increases in volumes being offset by orchard replacement programmes and continued consolidation within the sector. On grapes, it is too early in the year to predict the performance. The industry, in concert with the PPECB and the DTI, is working hard to come up with electronic export certification (including phyto-sanitary certification), a pilot project likely to be phased in gradually next year over a four-year period. This will eliminate any future risk of fruit being loaded before all the documentation is completed to the satisfaction of all parties. Charles Hughes, CEO of Tru-Cape, the major apple and pear exporter, says overseas demand has not been all that bad this year. “There is only so much fruit available but I must say it’s obviously a pricing issue, what the grower gets.” Mabombo says the PPECB has “never been as rejuvenated and focused in years”, having defined the vision, mission and strategic objective of the business. “At the PPECB we continue to emphasise our view that when it comes to agriculture, the horticulture industry “is the goose that lays the golden egg”. The country needs to harness and support the industry because of its potential to bring more forex into the country, create more jobs per hectare, more income for the farmer, untapped opportunities for BEE and unlock our dead assets in the hands of the rural poor.”