At the beginning of October, the total pome fruit volumes left in the industry reduced from 10.5 million cartons in 2022 to 7.3 million cartons in 2023, as a result of reduced production volumes in Ceres due to hail in the early season.
Lucrative export markets throughout the season and higher proceeds from the volatility of the Rand against the major currencies marked the year, says Louis Fourie, a commercial manager at Ideafruit.
“The effect of the reduced supply caused inflation on the price of apples and pears on the domestic market. The highest consumed domestic apple, Golden Delicious, reduced from 3.7 million cartons to 2.1 million cartons, leading to an average price inflation of 14% year-on-year. Top Reds, on the other hand, reduced from 1.7 million cartons to 1.3 million cartons leading to an average price inflation of 29% year-on-year.”
The new pome fruit season commences in the first week of January with the first summer pears.
South Africa’s pome fruit sector is characterized by a few big grower- exporters (far fewer than operate in the citrus sphere) who largely keep stability in supply and demand, Fourie remarks.
Cape floods could affect coming harvest
Ideafruit is an integrated grower-exporter whose shareholders farm in the Elgin, Grabouw, Vyeboom, Villiersdorp (EGVV) area with third party supply from Ceres, Piketberg and the Langkloof.
The company accounts for approximately 8% of the total pome production volumes with the ability to store 45% of its crop in Controlled Atmosphere (CA) over the duration of the season to effectively service its customers both domestically and abroad.
Fourie expects a normal crop for the coming season, although the effects of the floods in the EGVV region in September could still affect the quality and quantity of the harvest.
“What should be remembered is that we are competing on a global stage, and we are affected by the production levels of multiple countries and regions. Ideafruit is actively growing our footprint in China and in East Africa, whilst sustaining our market presence elsewhere.”
China brings more bargaining power
China is the newest addition to South Africa’s pear export portfolio.
“The value of China is that it drives inflation of the entire industry’s expected minimum price,” he observes. “This year the first blush pears that went to China earned extremely high prices. The traditional markets for blush pears are Vietnam and Indonesia and now with the market access to China, the expectation is that China can pay double. With China as a sales option, we have more bargaining power.”
However, timing is crucial when supplying blush pears onto the Chinese market, he notes, as it is sold on the wholesale markets with competition from other Southern Hemisphere countries including Chile and New Zealand.
Green pears (including Packham Triumph) are anticipated to struggle to gain momentum in China.
The demand for smaller sized Royal Gala and Fuji will remain high in China, as South African apples are cheaper relatively to New Zealand, who are struggling with higher production costs, resulting in higher selling prices. South Africa should have a competitive edge on apples in China for the next season.
Strategic importance of East Africa
“Within the COMESA [Common Market for Eastern and Southern Africa] Region the population is currently 560 million people. It is also the largest economic community in Africa. But it’s more than that: there is an overlap between the varieties that they buy, like Cripps’ Pink, Cripps’ Red and Pink Lady, and those in which our production volumes are growing.”
He continues: “What the opportunities will be, I cannot tell you at this stage – but that there will be opportunities, that’s a certainty. I’m not expecting price inflation per se. The world has enough product but it’s all about timing which determines the value you can create. That said, you have to play the hand you are dealt.”
For more information:
Ideafruit Export (Pty) Ltd
Tel: 27 21 851 0126
Email: info@ifruit.co.za
https://www.ideafruit.co.za/