‘Political intervention needed to resolve restrictive barriers’

Breaking down restrictive trade barriers calls for fortitude, negotiating prowess, patience and diplomacy, but it remains tough for the South African fruit industry to make a significant breakthrough into hugely lucrative potential markets without more proactive government participation and support. This is by no means isolated thinking but shared by major players in all sectors of the export fruit industry, as has become clear during interviews for this 2009 Perishables Supplement. What is more, the newly elected Zuma cabinet’s agenda of priorities does not appear to take cognisance of the industry’s concerns over obstacles that stand in the way of progress – and it remains to be seen how long it will take before government gets around to addressing such issues. It not only takes time for countries to reach consensus, but it should be borne in mind that that the two cabinet ministers really important to the fruit sector, trade and industry minister Dr Rob Davies and agriculture minister Tina Joemat-Pettersson, are only just settling into their portfolios and no doubt finding their feet. The Perishable Products Export Control Board (PPECB), which acts as an independent service provider for quality certification and cold chain management for producers and exporters of perishable food products, was first to respond to FTW’s poser: “Is there perhaps something more we should be doing in view of stiff international competition than we have been to date?” “Government must strengthen its focus on unlocking trade barriers (technical barriers to trade and sanitary and phyto-sanitary barriers) for South African fruit and vegetables to the US, India, Africa and China,” PPECB CEO Luvuyo Mabombo told FTW. Says Anton Rabe, CEO of the Deciduous Fruit Producers’ Trust: “With new markets, government capacity and expertise is stretched to say the least. It is clear that some officials are trying their best but political intervention is urgently required to resolve issues around protocols with China and re-opening markets such as Thailand. “This is just taking too long and is providing opportunities for competitors New Zealand/Australia and Chile to exploit and develop these markets in our absence.” Rabe says there are no technical barriers to trading with India but very high, protectionist-related duties of 50% or more that prevent economic returns and thus proper market access. A process leading to a preferential trade agreement between South Africa and India has begun and Rabe is hopeful this will be fast-tracked as far as possible. India is South Africa’s sixth largest trading partner in Asia, with two-way trade worth more than R2 billion a year. The two countries, along with Brazil, are co-signatories to the so-called ‘New Delhi Agenda for Cooperation’, aimed at dramatically increasing trade between the three countries. Stefan Conradie, product manager for South African pome and stone fruit (apples, pears, peaches and nectarines included) at the DFPT, suggests government’s tardiness means it is not driving the process. “We sometimes get the feeling that there is not capacity and focus because these activities very much involve lobbying in foreign countries, which is quite a long procedure, and if there is no energy (by government) in the process then it almost gets lost in the system.” Conradie believes India to be a potentially huge market – also that the country will not have sufficient product to satisfy global demand, given the presence by giant retailers such as Walmart. Charles Hughes, CEO of Tru-Cape, a major apple and pear exporter, has been quite vocal in the past about government’s “lack of commitment”, a view he has not changed, even though feeling the new agriculture minister should be “given a chance”. South Africa and China are ‘partners’ in a two-way protocol that allows this country to export pears, table grapes and leaf tobacco, though sadly not apples, to China and the Chinese apples and pears to South Africa, neither of which have ignited fireworks in terms of volumes. “The problems we are having are not due to the Chinese, who are ready to go ahead, but South Africa. “What the industry would like to see expedited is Thailand where the South African government did not fulfil certain requirements set by Thailand so we sort of fell off the bus.” South Africa has had a citrus protocol with China since the mid-1990s but here again it has been a woeful exercise in terms of meaningful volumes shipped either way, perhaps a few hundred containers a year, despite some 400 South African growers registered to export to China. Justin Chadwick, CEO of the Citrus Growers’ Association (CGA), says the protocol notwithstanding, the lion’s share, probably 80% of South African citrus, continues to find its way to the Chinese mainland via the so-called Grey Route through Hong Kong. Factors that have a bearing on low citrus volumes to mainland China direct is the Chinese government’s insistence that fruit be subjected to in-transit sterilisation for 28 days prior to landing. There’s also the belief by traders that the process has a negative effect on shelf life, hence their sourcing product in Hong Kong. This would account for the sharp contrast in volumes to mainland China and Hong Kong last year – 300 000 cartons and 3.4 million cartons, respectively. Chadwick, underscoring the importance of spending money to raise product awareness, says Australia and the US are spending huge sums for that purpose – South Africa none. ”We are expecting China to accept we have a brilliant product but are doing nothing to get the message across.” South Africa will have a presence for the first time at Asia Fruit Logistica in Hong Kong from September 2 to 4. The DTI is sponsoring a stand and the CGA planning a series of promotions to make its products known to the many Asian buyers attending.