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Willem Bestbier - CEO of SATI
“China is a huge market, and we are hardly scratching the surface now.”
Joseph Lombardt, Clayton Swart and Willem Bestbier from SATI
Second consecutive year of drought
Joseph Lombardt, Information & Knowledge Manager of the organisation, explains: “The Northern Provinces seem fine. They do not have a massive amount of water, but the reservoirs are only gradually emptying. We therefore have confidence that they will be able to bring in the crop.” The Western Cape is also an important region for South African grape production, and this region should, in the long term, be unaffected by the drought if there is a good winter. “Generally, there is great concern about the drought in South Africa, it is the worst drought in decades for the second consecutive year, so naturally, we hear people talking about it being a desperate situation. As a country, it is getting to an almost critical level, but as an agricultural commodity, I think we are better off than most commodities. However, the bigger picture is definitely a worrying picture,” says Bestbier.
“Water is a great concern for us, however the problem could also easily resolve itself overnight, if we have summer rain. Production cost is probably a bigger problem for South African growers as it is hard to combat ever-increasing cost pressure.”
Older generation grapes are now being replaced by new generation grapes. “These new generation varieties can carry more yield than the older ones,” says Lombardt. However, the surface area has not increased significantly, cultivators have concentrated on replacing older vineyeards, but they have not so much planted additional vineyards. “It would not be responsible to increase the amount of hectares, because of the water situation. We should better utilise existing hectares, which is obviously a challenge.”
“We have a 4.5 per cent increase in volume compared to last year. We attribute this return to normality to berry size and bunch development. Colour development is also good, thanks to the colder nights we have been having,” Bestbier continues.
“The UK market seems less attractive than last year, but it will never not be an important market. It all depends on how growers and exporters respond to it,” Bestbier continues. The South African rand against the dollar is more favourable than against the British pound. Thailand and China are both dollar markets, making these more interesting for South African grape cultivators. “Both Thailand and China are expected to enjoy more attention from South African table grape exporters. This is possible thanks to the growing volumes, we now have more to export,” Bestbier says. The European sanctions against Russia can also be felt by SATI. “We have seen the decline in exports to Russia, just as everyone else has,” Lombardt explains.
“Thailand was actually a new market last year, but it is a market that growers have to register for. Many producers were unable to register last year, so this is the first full season during which that market is available to the growers,” Bestbier continues. “China has been open for a while already, but the shipment protocol was too difficult for our cultivators.” That protocol, however, has now been relieved. “We might not be able to take full advantage of that relief just yet, as it came quite late.” Bestbier expects the Chinese market will become a more important market for South African growers from next year. “China is a huge market, and we are hardly scratching the surface now.”
South Africa does not have favourable trade agreements with markets such as the US, Thailand and China, like Peru and Chile have. “That is a challenge. However, although we do not have those agreements, we are competing. We have a reputation that we can compete, and the tenacity to do so,” Bestbier explains.
There is a lot of pressure on the South African government to work on getting trade agreements. “However, we, as a country, already have the reputation that we are a reliable supplier.”
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