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South Africa: Market short on white grapes

The Hex River harvest is seven to ten days late and is expected to end early, but traders caution that it is too soon for definitive statements about the water situation. “It’s very difficult to predict whether the water will hold. Our clients are also asking me but it’s too early to tell. We’ll have a better idea in about two weeks,” explained a trader.

The market is short on white grapes, with Orange River white grapes also down. White seedless acreage, making up only 8% of the total in the Hex River, has increasingly been replaced by red seedless in this region.

Lower berry weight and smaller berry diameter characterise the harvest from Namibia downwards this season, resulting in packout percentages 10 to 20% down and volumes reckoned to be between 15% and 20% down. Hex River volumes remain unchanged in the latest industry estimate at between 17.2 million to 18.5 million x 4.5kg cartons. 

Water is as tight as can be and there’s no extra supply to try to buffer the effect of temperatures over 40°C. Under the circumstances, the harvest from the Hex is considered promising, with good sugars and holding ability.

Some producers have started with Crimson, far and away the dominant variety of the Hex River; also being packed are Sugraone (the harvest is light here as in the Orange River), Sweet Celebration (IFG Three), Melody (Blagratwo), Arra15 and the new South African variety Joy Bells. 

Increased competition with India on white grapes
“It’s a difficult, uneven year, and at times it's been difficult to comply with supermarket specifications,” remarks a trader. “Some importers [in the EU and UK] are already making plans to introduce Indian grapes earlier to cover the shortfall in white grapes. This will hopefully stabilise prices,” an exporter says. “Producers would dearly love to obtain higher prices, we’re anxious for upward price adjustment, so we’re keenly watching the volumes due to come in from India.”

He continues: “We can expect competition from India from the first two weeks of February. Competition with India is increasing every year and starting earlier. Even three years ago they only started coming in at the end of February. They are well-placed, shipping time for them is only 16 to 18 days to Europe and with increased plantings of early cultivars, we’re seeing growing competition on white grapes in February from India.”

More efficient programming & better trading levels
The South African industry is relieved at the price stability this past festive season in Europe but the positive effect is, to a degree, cancelled out by an unfavourable exchange rate (a stronger Rand) and lower volumes. Higher prices just can’t make up for lower volumes.

“Year-on-year we’re seeing better trading levels. Where last year we obtained between €11 and €12 per punnet, compared to €12 or even €13 this year. It’s absolutely a function of shipping delays, due to wind, at Cape Town harbour. We’re still having the same delays, but it has a bright side: it gives the fruit a few extra days to sell out before the next arrival. It has prevented the build-up of fruit we’ve seen other years, which is fortuitous, because sellers tell us that the sales tempo is slow. In Durban harbour there is still a backlog but at Port Elizabeth Harbour things are moving.”

Another trader comments that he believes that more and efficient supermarket programming has played a role, along with lower volumes, in creating the price stability this season. “More fruit is being packed and sent to committed supermarket programmes and less fruit to non-committed programmes or the open market.”

Significantly fewer grapes to China
Fewer grapes are being sent to China this season, as much as 60% down, according to some estimates. Marketing to China is affected by the lower grape calibres. “Due to a shortage of bunches with even, extra large berries, a lot of fruit that would otherwise have earned very good money in China, will have to be marketed elsewhere.”

One exporter states that the closing of grey channels in China is also playing a role in lower South African volumes to China. “The Chinese market requires a cold steri treatment but not all cultivars can take steri treatment, like Midnight Beauty and Starlight, so those cultivars would previously have been sent to China via grey channels,” he explains. “However, our company is packing strongly for China, we expect it to be a very strong market for us this season.”

Indian grapes are already placing pressure on markets in the rest of South East Asia, he adds.

The Hex River Valley has a long packing window which complicates water management. A number of exporters mentioned the possibility that, in extreme cases, the harvesting of some late cultivars could be abandoned, either because there might not be enough water to bring the grapes to a satisfactory level of maturity or because colour development might have been uneven or very late. “This will be an extreme decision. Our farms did our water budget meticulously, we’ll bring everything home. Some other growers might run into trouble later on,” says a producer-exporter. “But most farmers will go out of their way to take something off, even if it’s just to sell on the local market or to send to raisin-drying facilities.”

“We’re entering uncharted waters,” he concludes. 

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