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More mango exports needed to relieve local market of large supply pressure

South African litchis made hay in Europe this season

In what has generally been an off year for South African litchi producers, one farm considers themselves fortunate for a number of reasons. Not only did their litchi harvest exceed the already large crop of last year, but they had a relatively empty market in Europe for the start of their season with Madagascar coming in late and volumes from Mauritius and Réunion all but non-existent this year.

“We were lucky, we had a very big, very keen crop, a record crop in fact, totalling 590,000 cartons,” says Stuart Butcher, marketing director of Malelane-based Tomahawk Farming. “Last year, too, we had a good crop and we thought that perhaps it would be down this year, but no. Also, because of the cool, overcast conditions we had little incidence of sunburn. The quality and size were really good so the packout percentage was higher than normal and actual cartons that were packed ended up being more than last year.”

“This season we had a decent air freight window, where last year offered very poor air freight opportunities. We started air freight with very low volumes by the end of October, with the early varieties like Third Month Red and Early Delight before going over to the main crop of Mauritius litchis which continued through until mid-December with airfreight. When litchi volumes from Madagascar, Mauritius and Réunion are low, it makes a massive difference for us.”

However, a strengthened Rand since the election of a new ANC president to succeed controversial President Jacob Zuma has turned what could have been a year of exceptional returns for litchi growers into a good year. “However, the market has been positive, everything is going according to plan thus far, but the exchange rate has a large influence and it hasn’t helped us.”

Shipments to recently opened US market
The last seafreight shipments of Tomahawk’s litchis are arriving in Europe now; 95% of their export product is marketed in Europe and the balance to the Middle East and USA. However, there are high hopes for the US market that opened up for South Africa in December 2015. “A new market like the US will have a massive impact on the industry. We learned a lot during the first trial year when there were some delays and it took three weeks to get the fruit to market – that just doesn’t work with litchis. This year we streamlined the process, we did precooling and it has gone well thus far,” he says. “We haven’t sent a lot, probably a hundred or so pallets, but we’re hoping in two to three years volumes will pick up substantially.”

Does he think a good season like the past one might stimulate expansion in the litchi industry? “I don’t really think so. Litchis are a long term crop, it takes about seven years to break even. Additionally, it’s not an easy crop to get yields on. Growers are currently preferring crops like macadamias, where there’s less risk and a longer shelf life.”

“Unfortunately local consumption isn’t great. We definitely need to open up new markets and hence the importance of the USA market to the industry.”

He feels the same way about export opportunities for mangoes which currently are limited during the first weeks of the South African harvest.

Oversupply nearly collapsed mango market over Christmas
Tomahawk Farming in Malelane is already coming to the end of its mango season, in two to three weeks’ time, since Tommy Atkins is its main cultivar, with some Heidi following upon that.

It has been a tough start to the mango season from a marketing viewpoint, he feels. This year large volumes reached the local markets just before Christmas, as many producers attempted to get their fruit off and harvest completed before Christmas, creating a bottleneck and oversupply, traders told FreshPlaza at the time. The situation wasn’t helped by low drying and juicing prices.

“This year the mango market prices dropped to disappointingly low levels considering the industry crop was expected to be 20 to 30% down this year. We desperately need to get exports going,” he states. “From our side we sent two containers into the Middle East this season. The benefit of the Middle East market is that there’s a very short sailing time to the Middle East. In Europe we can’t compete with Brazil and Peru, it’s just not feasible for us to send there. There’s some interest from Russia but that means a month on the water. The Far East is also a possible market in future.”

For more information:
Stuart Butcher
Tomahawk Farming Operations
Tel: +27 13 792 4402

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