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Global juice prices "disastrously low", leading to oversupply on local market

South African plant stops pineapple concentrate production

A fruit juice processing plant in KwaZulu-Natal has ceased pineapple juice concentrate production (but is still continuing with citrus processing) since the beginning of March due to the collapse of global pineapple juice concentrate (PJC) prices. Pineapples that would’ve been sent for processing are now sent to the markets, leading to saturation and low prices.

Gysbert Potgieter, technical manager at Nkwaleni Processors (whose products are distributed by Klaus Böcker GmbH), says that current global PJC price levels are disastrously low. “There are two reasons for that. The first is the very high price of PJC during 2015 and 2016 due to lower volumes coming from Thailand, Vietnam and the Philippines. Their juice has high nitrate levels and because the maximum allowed level used to be 25 parts per million as set by the European Food Safety Authority, they couldn’t sell their juice in the EU. However, the legal limit was reviewed in November to 50 ppm, so now Thailand, Vietnam and the Philippines have started blending their stock and have dumped 30 000t to 50 000t of concentrate on the market.”

In the meantime, during the time of sky-high PJC prices (about $3 500 per tonne in 2016) supermarkets were removing pineapple juice from their stock and processors were reducing the amount of pineapple juice in their fruit juice mixes to a minimum. As a result demand has shrunk. 

Now, Potgieter says, the prices are lower than production costs and in the face of these low prices, the company has taken the decision to cease pineapple juice production until such time as PJC prices rise to make it a viable option again.

Last year Nkwaleni Processors handled about 7 000t of pineapples; it now focuses solely on citrus juices and oils, using between 25 000t and 30 000t of citrus annually.

Ironically, South African pineapple production is on the up after intermittent rains throughout the summer, enough to keep production going, coupled with more than 100mm of rain two weeks ago in the Hluhluwe region. “I’d say production is up by 20 to 30%,” says Johannes Meyer of the Hluhluwe Pynappelreklamevereniging. “The drought isn’t completely broken but our dams are now about 70% full, the fullest they have been in a long time.”

There is a huge supply of pineapples on South African markets as pineapples that would’ve previously been sent for processing, now end up on the markets. Unfortunately, there is sluggish demand on the markets and the price of pineapples is low, approximately R40 (€2.74) for an 8kg box. Supermarkets are offering special deals on pineapples, like three pineapples for R20 (€1.37).

Summerpride Foods in East London, Eastern Cape, is still accepting pineapples for concentrate production.

The European Union (primarily the Netherlands, followed by Spain and France) is the largest market of pineapple juice, importing more than half of world production.  

For more information:
Gysbert Potgieter
Nkwaleni Processors
Tel: +27 35 460 0779

Johannes Meyer
Hluhluwe Pynappelreklamevereniging
Tel: +27 82 945 7296

Publication date: 5/25/2017
Author: Carolize Jansen
Copyright: www.freshplaza.com


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