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South Africa’s blueberry production continues to expand

South Africa’s blueberry production continues to expand

While the South African blueberry industry is relatively small compared to other local fruits, it is a fast-growing sector. Indeed, the area planted with blueberries is projected to increase by 17% in the 2020/21 campaign and reach 2,800 hectares, according to SABPA data. The country’s production area has grown at over 30% per annum over the past nine years, largely driven by continued investment by local blueberry growers and the entry of international growers, especially from Europe. The Industrial Development Corporation (IDC) has also been a driving force in developing the berry sector by funding various projects across the country and encouraging the establishment of an association, the South African Berry Producers Association (SABPA).

The Western Cape Province is the leading blueberry producing area in South Africa, accounting for over 60% of production, followed by Limpopo (15%), North West (10%), Gauteng (8%), and Eastern Cape (4%). The three biggest producers are Berryworld, Haygrove and United Exports.

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South Africa’s grapefruit crop grows 4%

South Africa’s grapefruit crop grows 4%

 

South Africa’s 2019/20 grapefruit output is estimated to be up 4% to 387,000 tons, according to CGA data. The good crop is due to normal weather conditions, an increase in area planted and improved yields. Also, grapefruit production is cyclical, and 2018/19 MY was a down year. Grapefruit is normally harvested between March and September, and the impact of COVID-19 on production, harvest and labour has been minimal to date.

South Africa’s grapefruit exports are projected to grow by 5% to 270,000 tons this campaign, due to the larger crop, normal fruit sizes and suitable colouring for export market. Citrus has seen a surge in demand due to the assumed benefits of Vitamin C in boosting immunity against COVID-19.  However, the impact of COVID-19 on consumer incomes, constraints on shipping lines and containers, and port restrictions remains a concern for South African exports. Europe is the largest market for South African grapefruit exports, accounting for 48% of total exports in 2019, followed by Asia (35%). Although South Africa has a free trade agreement with the European Union (EU) which allows duty-free access for its citrus exports, South Africa continues to face challenges due to Citrus Black Spot (CBS) and False Coddling Moth (FCM) in the EU market. Industry estimates that it is costing South Africa almost R1.8 Billion (US$97 Million) to address and comply with the CBS requirements in the EU market. Meanwhile, grapefruit exports to the US have been growing sharply in the past 5 years at an average of 65% per annum, from 76 tons in 2012/13 to 5,347 tons in 2018/19. Around 29% of the country’s total grapefruit output is used for processing. The volume destined for processing in 2019/20 is expected to increase by 3% to 110,000 tons, in line with the larger crop. 

 

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South Africa’s orange exports set to rise 8%

South Africa’s 2019/20 orange crop is projected to grow by 1% to 1.6 million tons, according to CGA data. The increase is attributed to good rainfall in the main growing regions, the rise in area planted, better water management techniques by farmers, and new plantings of high yielding and late-maturing varieties. Exports are expected to be up 8% to 1.28 million tons this campaign, thanks to the larger crop, better fruit quality, and rise in demand for sources of Vitamin C to fight COVID-19.  The EU remains South Africa’s largest export market for oranges, accounting for 38% of total shipments. However, exports to Asia and the Middle East have grown steadily over the years due to the industry’s focus on growing these markets.

Exports to the US are expected to continue, albeit with a gradual shift from oranges to soft citrus exports, as South African farmers supplying the US market have been re-planting their orchards with soft citrus in response to market preferences and the higher premium received in the US. Indeed, South Africa’s orange exports to the US dropped in 2019 due to this shift in consumer preference.

Source: TDM
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South Africa’s apple exports fall despite larger crop

South Africa’s apple exports fall despite larger crop

South Africa’s 2019/20 apple crop is projected to climb 5% to 942,200 tons (source: USDA). This growth is due to the increase in planted are, yields and available irrigation water. The impact of COVID-19 on this year’s crop is expected to be minimal as South Africa has already harvested most of its fruit and full operations continued during the national lock-down.  

Despite the larger crop, exports are expected to decrease by 2% to 480,000 tons. This is mainly due to the impact of COVID-19, which has resulted in depressed demand in global markets, interruptions in the supply chain, with bottlenecks or closures at some ports, limited availability of containers, constrained shipping capacity and the slow pace of exports to date.

The United Kingdom is the largest single country market for South African apple exports accounting for 13% of the total in 2019, followed by Nigeria (9%), Malaysia (8%), Bangladesh (8%), Zambia (7%), Kenya (4%) and Senegal (4%). Africa is the largest regional market, accounting for 46% of total South African apple exports in 2018/19, followed by Asia (25%), and the EU (19%). 

South Africa has a free trade agreement with the EU. The impact of Brexit on South African apple exports is expected to be minimal as South Africa continues to undertake extensive marketing of its apples in the United Kingdom, and the two governments are in the process of finalising trade arrangements post-Brexit.

 

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Good South African citrus harvest, but challenging logistics

Good South African citrus harvest, but challenging logistics

 

April marks the start of the 2020 citrus season in South Africa, which will no doubt be disrupted by the COVID-19 pandemic. Ports are reported to be operating at low levels, but packing of all fresh produce out of the country has so far continued uninterrupted, with farms and packing houses endeavouring to safeguard the working environment of over 120,000 workers.

South Korea is a large importer of South African citrus at this time of year, but as inspectors cannot inspect citrus imports due to quarantine regulations, the prediction is that South Korean customers will extend purchases of Star Ruby from the US. There are similar concerns regarding exports to the EU, which will mean diverting volumes to China.

The season started with lemons and soft citrus, with overall quality reported to be excellent. While a bumper harvest is not forecast, the season is certainly going to be an improvement on last year’s, which ended with around 126.7 million cartons, according to data published by www.vanguardteam.com. This season’s crop is projected to reach 143.3 million cartons due to the favourable growing conditions and many new plantings.

This season’s lemon crop is expected to total around 26.4 million cartons, up from last year’s 22 million cartons. As the trees are relatively young, the output is expected to almost double in the next five years. The Middle East received 64% of South Africa’s lemons, followed by Russia (15%), and Southeast Asia (12%).

As for soft citrus, 93,000 cartons have so far been exported from South Africa, with the main variety being Satsuma. South Africa is expecting to export 22-24 million cartons of soft citrus this season, up from last year’s 18.2 million carton. Dramatic growth is projected in this segment too over the coming years. The country has 11,000 hectares of young and high-yielding Nadorcott, Orri, and Leandri, which have not reached their full potential yet.

Up to week 13, the UK received 44% of South Africa’s soft citrus volume, followed by Russia (30%), and the EU (24%).

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Citrus Estimate for the 2020 season

Citrus Estimate for the 2020 season

Southern Africa is expected to export a record 143.3 million cartons of citrus fruit to over 100 countries in 2020. This is a 13% increase when compared to 2019, which saw 126.7 million cartons being exported, generating R20 billion in export revenue and creating 120 000 jobs.

This increase should translate into more job opportunities, foreign exchange revenue and will contribute towards national government’s goal of increased agricultural exports over the next few years.

The growth is largely as a result of new orchards coming into production and good rains across some regions.

Valencia oranges make up the biggest portion of the citrus export market at 35%, followed by navel oranges (19%), lemons (18%), soft citrus (16%) and grapefruit (12%).

The soft citrus and lemon categories are expected to show the highest growth in 2020. Soft citrus will see an increase of 28%, with the Boland region contributing 12% more cartons than last year. Regions in the northern parts of the country, including the Burgersfort/Ohrigstad region, Senwes and Hoedspruit will also see exponential growth in their soft citrus outputs.

The Sunday’s River Valley, which exports almost half of the region’s lemons is expected to export 12 million cartons this year, an 18% increase from 2019.

While we are confident that the 2020 season will be a success, we are also aware that there are events beyond growers’ control that could impact final export numbers.

Most notably, the Coronavirus (Covid 2019) outbreak presents a new challenge to fresh produce exporters across the globe. It is encouraging that China’s logistics services are expected to be fully operational soon, with cargo volumes and ship calls having swiftly rebounded over the past two weeks.

However, the outbreak across the European Union, the largest export market for South Africa’s citrus, remains a concern and could still result in a decrease in demand and a shortfall of containers when the export season kicks off in May. It is therefore critical that exporters confirm that there are containers available before they start shipping,

Challenges at South Africa’s ports, including aging and out of service infrastructure as well as unresolved labour issues remain a threat to export volumes. However, the Citrus Growers’ Association is proactively engaging with Transnet and welcomes recent steps taken by the company to improve operations at a number of the ports. This includes the procurement of new equipment for both the Port Elizabeth and Durban ports, which is expected to arrive before the start of the export season.

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SPAR South Africa’s rural hubs show promise

SPAR South Africa’s rural hubs show promise

 

Sustainable local supply chains for produce grown in remote areas are at the project’s heart

SPAR South Africa sees small-scale rural farmers as the key to a sustainable future for the vast nation. It believes they can help improve food security, affordability and nutrition for its rural communities. With the Dutch-founded SPAR Group and support from the Dutch government, it has created a rural hub business model based on packhouses serving as mini distribution centres in outlying areas of South Africa. The idea is to develop local supply chains of fresh produce in a cost-efficient and environmentally responsible way. And while its initial two hubs have not been without challenges and are not yet profitable, SPAR South Africa believes “we have created a sustainable model that can be rolled out nationally.”

More rural farmers starting to thrive 

SPAR’s first rural hub was established in Mopani, in Limpopo, South Africa’s northernmost province, in June 2016. It is based on the concept of a central fresh assembly point (FAP), which acts as a collection point for a range of fresh produce sourced from smallholder farmers to supply local SPAR stores within a radius of up to 200 km. SPAR says that over July 2018 / June 2019, 10 farmers/groups supplied the Mopani hub, many of whom could finance a portion of their business themselves for the first time – a sign that they can now stand on their own feet. The hub bought produce worth R1.26 million (≈€80,300) from them, with crops including green beans, baby marrows, butternuts, baby corn, cabbage, watermelon and lettuce. The hub in turn supplied 41 customers, most of which were SPAR stores, and in the past year sold more produce to informal traders, something seen as a significant development. A second rural hub business was established in Ikhwezi, in the northeastern province of Mpumalanga, in October 2017, with a group of 36 smallholder farmers. Over the same period, the Ikhwezi hub purchased produce worth R1.16 million (≈€74,000) from 24 farmers. Crops included tomatoes, cabbage, butternut, green beans, bitter melon, lettuce and sweet potatoes. The packhouse supplied 27 customers, most of which were SPAR stores.

Overcoming challenges

SPAR chairman Mike Hankinson says the rural hub project shows early signs of being financially sustainable for a group of small emerging farmers, but there was a need to find new ways for the economics around delivery and packing to make sense. One challenge was that low-margin products, such as cabbage and spinach, continued to be sourced by local SPAR stores directly from smallholder farmers in close proximity to the stores. However, many of these small businesses were at risk as they lacked food safety accreditation to sell their produce directly to stores. Routing these products through the FAPs, on the other hand, incurred unnecessary transport and handling costs. To address such issues, SPAR has developed a model to transport certain produce directly from farmer to store, while other items are distributed through the central FAP. Also, the farmers have received food safety training in order to get local.g.a.p certification, and technology solutions were introduced to help farmers grow high value crops and extend their growing seasons, thereby improving their sustainability. “We remain committed to the concept of rural farmers supplying fresh produce to SPAR stores. It has the potential to provide employment, grow rural economies, ensure food security and improve nutrition, while reducing transport costs for SPAR, shorten lead times, and increase freshness and shelf life,” Hankinson said.

SPAR South Africa acts as a supermarket supplier

Established in 1963, SPAR South Africa grants licences to independent retailers to operate stores under one of four formats, with almost all of its current store portfolio independently owned. “The SPAR Group in Southern Africa acts as a wholesaler distributing the entire range of goods stocked by a typical supermarket, including fresh produce,” SPAR South Africa fresh food manager Peter Gohl told ED. “We supply a range of about 450 fresh produce products to about 850 independently owned and managed SPAR retail stores through 6 strategically located distribution centres. Excluding our SPAR Group Ltd European and UK/Irish holdings, the Southern Africa turnover in fresh produce amounted to about €320 million over the past 12 months. Of this, the fruit category contributed €130 million and imports in the fruit category amounted to €28 million,” he said.

Source: https://investor-relations.SPAR.co.za

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South African stone fruit sector battles through sustained drought

South African stone fruit sector battles through sustained drought

As South Africa’s farmers continue to battle the sustained drought the country has undergone in recent years, Hortgro, the organisation which represents South Africa’s stone and top fruit industries, has been supporting producers and agricultural workers to manage their product during the harvesting season. Hortgro Science provides research-based information to enhance the quality of South African stone and top fruit. Growers reportedly receive regular notes and technical updates from Hortgro Science, highlighting the primary fruit quality aspects to be adhered to during heat waves. The organisation works in collaboration with the Canning Fruit Producers’ Association, Agri Western Cape, Agri SA and Wine TU to help producers financially to through the rest of the production season and contain risks to crops. Hortgro delivered 1,000 food parcels to affected farmworkers in the Ladismith area and held a ‘resilience workshop’ to empower them mentally with coping strategies at the end of 2019.

The good news is that the drought has broken in some areas, like Stellenbosch and Franschhoek. This means that Hortgro is optimistic that volumes will continue to increase throughout the season. Jacques du Preez, general manager trade and markets at Hortgro, said: “We are projecting an increase of 21% for nectarines compared to last season’s volumes, an increase of 14% for peaches and a 10% increase for plums. The continued droughts in some areas have, of course, impacted on the 2019/20 season’s full potential, but volumes and quality have certainly improved compared to last year.”

 

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SRCC becomes more Mediterranean

SRCC becomes more Mediterranean, photo of Hannes de Waal, managing director of Sundays River Citrus Company
Hannes de Waal, managing director

 

 

 

Leading grower, packer and exporter of South African citrus SRCC (Sundays River Citrus Company) is seeking to consolidate itself in Europe and expand to new markets. Speaking at the firm’s stand at Fruit Attraction in Madrid, managing director, Hannes de Waal, said, “A few years ago, we established a ten-year plan to grow our customer base and we decided to become more Mediterranean. Spain has a great food culture and we have a lot to learn here. There are also a lot of opportunities as Spain’s excellent service providers allow us to work well.” Indeed, there is a window of between ten and twenty weeks during which Spain imports citrus from the Southern Hemisphere, and this provides SRCC with a great opportunity. “We have produced 9 million cartons this year and aim to raise this level to 12 million. With the stronger competition and our larger volumes, we need new markets, which is why we have now opened a new sales office in St Petersburg in Russia. Our many chemical-free products appeal especially to the northern European markets.” To cope with this increased production, the firm has recently opened a new storage facility with double the previous capacity.

Founded in 1924 in the renowned Sundays River Valley, SRCC has grown into the largest grower, packer and exporter of quality South African citrus and one of the biggest growers of clemenules in the world. Owned by its 100 citrus growers, the firm hires 300 permanent workers and 40,000 during the season. SRCC packs for its own growers and directly markets its products to customers under its brands: Sundays, Ada, Kirkwood.

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Record season for South African soft citrus exports

Record season for South African soft citrus exports, Source: CGA
Source: CGA

 

 

South Africa set a new export record in 2019 for volumes shipped of soft citrus, up 12%. Coming off the back of a good 2018 season, when 16.2 million cartons were exported, the 2019 season saw 18.2 million cartons shipped, according to data released by South Africa’s Citrus Growers Association. The main exporting region is Boland, followed by Western Cape, and Patensie, which is still suffering the effects of water shortages. The main destination market for South Africa’s soft citrus is the UK, although shipments there dropped from slightly to 61,200 tons. The second leading destination, the Netherlands, saw volumes rise by around 10% to 55,300 tons, while, in third place, Russia saw a drop 9% drop to 24,400 tons. In fourth position, the US recorded a rise in shipments of around 32% to 16,600 tons. Similar growth was recorded for exports to Bangladesh, up from 10,600 to 14,300 tons.