Rand strength could force exporters to go domestic

RAY SMUTS
THERE IS a very real need for South African fresh produce export producers to better understand the domestic market because that is where their produce may well land up if the rand keeps hovering close to the R6/dollar level or even below, says former Fresh Produce Terminals MD Ronnie Kingwill. “As the road gets tougher, the returns to the international export producer start diminishing, and if they are not getting US$7 for their export product they are likely to shift it to the local market and in the process reduce a lot of overhead costs and risk. “The local market could well be flooded but you are coming in with a premium product and an increasing demand,” says Kingwill, who believes it is incumbent on the export producer to maintain a very close alliance with developments in local fresh produce markets. Although there has been a decline in their volumes at the produce markets, overall domestic markets have grown. “What is also happening is that the true price of fresh produce is no longer established at these markets due to changing trends and that has a significant impact on the producer’s capability to know what the real price of his commodity is.” Still very much involved with fresh produce in his role as a consultant to various organisations, Kingwill strongly believes that a very well focused, consolidated, logistics entity in the fruit industry has huge potential. “I am quietly and gently working with some key players to bring this to fruition.” After leaving FPT in April 2005, Kingwill set up his own company, On Demand Investments, and has principally been consulting to the Cape Town Fresh Produce Market at Epping, owned by a fully-empowered organisation, Cape Fresh International. Kingwill now also finds himself fully empowered, having joined forces with a black, Johannesburg-based, consultant.