Worldwide glut and the elements conspire against fruit exports

19 May 2000 - By Staff reporter

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AS THINGS stand now, the agony of producing and exporting top-quality South African fruit by far outweighs the ecstasy, but for Capepan's John Stanbury it's a long way from capitulating and adopting a head-in-the-sand attitude.
Indeed, he vows that the R6 billion a year marketing organisation, like its opposition large and small, will bounce back - even though it might take a while.
Alluding to the worldwide glut - and consequent low prices - of fruit, Stanbury, managing director of Capespan, told FTW: There is no cause for euphoria right now and that includes us. I don't think anybody out there is walking on water.
We are in a cycle from which it will take two to three years to recover and it depends entirely on how the worldwide banana business goes.
It is the biggest single staple commodity so everything will be dictated by bananas.
Another adverse factor which probably accounts for a European drop-off of up to 30% in certain fruit varieties is that Russia, once a major market, has all but fallen away.
'Inclement' is probably too soft a word to describe the devastating weather which has dealt South Africa a blow from which it is still reeling.
The 'mortality' list seems to be never-ending: freezing weather accounting for a depleted stone fruit harvest, rain wiping out up to 40% of the expected grape crop in the Orange River Valley, extremely hot weather in the southern grape growing areas affecting berry size, a generally hot winter, hail wiping out a large proportion of the plum crop and causing severe damage to pear production in certain areas and unseasonal rains leading to a deluge of more than four meters in the northern regions.
And so it comes as no surprise to learn from Stanbury that South Africa's total deciduous export crop is down by 28% this year and that citrus exports will probably not increase.
He projects that total Capespan exports will drop from 76,7 million cartons, representing a turnover of around R3,5 billion last year, to 65,3 million cartons - a 16% decrease.
Statistics provided by Capespan group manager for corporate affairs, Fred Meintjies, reveal that most of the group's export fruit volumes are down.
For the completed stone fruit season, Capespan exported 3 million cartons, well below the seven million cartons the previous season.
The Orange River valley rain disaster, accounting for five million cases rather than the projected ten million, was largely responsible for only 16 million cartons of grapes being exported compared with 22 million last year.
The pear season is not yet over, nevertheless three million cartons have been exported compared with four million cartons last year.
Capespan will export around seven million cartons of apples this year in contrast to 8,5 million cases last year - again due to adverse weather - and the export expectation for citrus is approximately the same as last year - 32 million cartons, possibly increasing to 35 million cartons.
On sub-tropical fruit exports, lychees have suffered major crop failure and avocados are expected to increase by about 50% to 1,8 million cartons but mangoes will be down from 360 000 cartons last year to 230 000 cartons.
Talk, particularly of the idle variety, is cheap and Stanbury is quick to debunk rumours that Capespan could lose between 15 and 20% of market share this year. Indeed, he foresees a drop of no more than five to ten percent at most on last year's 60%. (He is also dismissive of outside talk about low morale within the group).
Export statistics from all sources are a major cause for concern right now, not only to us but also to the Exporter's Forum. This is an industry problem as the numbers are not split as to what is going where.
It is a bit of a mess because deregulation came before the introduction of capacity to make up for the shortfall, so the overall market share position only gets sorted out six months in arrears.
Asked to summarise the state of Capespan in a nutshell, Stanbury told me: Relative to market share, we are strong, we are learning quickly and I would say we are about where it could be expected.