Saturated apple markets mean difficult year for South African exports

Apple supplies on world markets are high and South African exporters encounter full markets almost everywhere. “It’s difficult everywhere, especially in Africa, but in other places as well. There was an expectation that by this time the market would be better in the Middle East but there’s still a lot of European product available there,” says Thomas Mouton of Corefruit.

Even the historic upswing in apple demand before Ramadan, starting on 26 May, isn’t as marked this year because there is so much available supply. The United States had a large harvest and are supplying export markets from their CA stock. Royal Gala provides a hopeful glimmer, since the Northern Hemisphere is finished with that variety.

“Dubai is saturated with Italian and French apples, therefore demand is still low, even for pears,” says Elona van der Merwe of Cape Five Exports. “We’ve expanded more into Oman, Qatar and Saudi Arabia this year, which was a necessary branching out for us.”

Two years ago the first South African apples were sent to China, a consignment of Royal Beauts, to high expectations but for the moment very few South African apples go to that market. “There are two reasons for that: fruit size and colour,” explains Mouton.

South African apples aren’t a large as those from Chile nor as coloured as those from New Zealand, especially this season when high temperatures retarded colour development. Therefore, China finds what it wants from other apple producing countries.

Colour is also putting the brakes on the other Far Eastern markets as far as Pink Lady is concerned, where 60% colour on Pink Lady is required from this year, so little South African Pink Lady will go there. Other markets, like the UK and EU retail sector, still accept 40% block colour on Pink Lady.

Malaysia is South Africa's biggest market for Grannies since the market accepts small sizes and South Africa has such high volumes of small sizes in Grannies that it is putting the market under pressure.

Cape Five Exports send about 80% of its Granny Smith to the Far East, but Elona van der Merwe says they can see that that market, too, is quite saturated. For them, Bangladesh is a strong market, absorbing Goldens, Cripps Pinks, Galas and Fujis of low colour and small size.

Most of South Africa’s Cripps Pink go to East Africa and neighbouring countries, with some to Russia, as it’s not pink enough for Western and Far Eastern consumers. “If a pink apple is what you want, then you go for a Pink Lady,” says Mouton. A small amount of South Africa’s Pink Lady go to the UK fresh cut processing sector.

The African market is still a dreary picture with the same problems: lack of foreign currency due to a depressed oil price and less disposable income among consumers. Much of the South African Golden Delicious harvest goes to West Africa, but prices and volumes are drastically down.

“At week 15 our total volumes for Africa were 10% down but for Nigeria specifically it was 32% down on last year – and Nigeria takes a third of the Golden volumes that we ship. Prices are close to 30 or 35% down and it doesn’t help that the South African Rand is stronger than last year,” says Tino Ferreira of Freshgold. ”Angola’s up a bit, but that’s from a low base. Their foreign currency problems started before Nigeria’s. There is an expectation that prices in West Africa will improve as the pressure for packing Golden is over. The bulk of the RA fruit has been packed so volumes are more controlled.”

Freshgold specialises in fruit marketing in Africa, with 80 to 90% of its apple produce going there. East Africa prefers bi-coloured and more acidic apples like Grannies, Pink Lady, Royal Gala and Sundowners at the end of the season. The economic growth rate of East Africa, specifically Kenya, is better than West Africa’s, but the latter has such a high population that even with the drastic drop in volumes, more apples still go to West than East Africa, Ferreira tells FreshPlaza.

Autumn has started in South Africa and that means – or should mean – the start of the Western Cape’s rainfall season. No rain is predicted for the immediate future. “Even if we get good rainfall this winter, the trees have already suffered water stress and damage as growers have to economise their water resources and trees can’t be adequately irrigated after the harvest, so there’ll still be some damage. However, if we don’t get good rain this winter, it will be catastrophic,” warns Mouton.

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Elona van der Merwe