South Africa - U.S.losing lustre

If it so tough to sell to the U.S. market, why does everyone want to do it? That's conundrum is worth considering in view of the fact that intelligence from South Africa indicates exporters there think the exchange rate and phytosanitary requirements make the U.S. market less than lucrative. The latest South African deciduous fruit report and outlook from the USDA's Foreign Agricultural Service is available here.

From the report:

The South African Ministry of Agriculture continues to support farmers with policies and to establish trade agreements with other governments to enable growers access to new markets. Statutory measures were updated to improve technical support through compulsory levies from growers. The recent statutory measure requiring all growers, exporters and traders to supply information on the quantity and price for deciduous fruit will enable the industry and all stakeholders to have concise information about the local supply chain. After deregulation of the state controlled markets through the Agricultural Product Marketing Act of 1996, it took some years to acquire close to accurate information because of fragmentation within the industry. By December this year, Chinese Fuji apples may be available in the local retailers and fruit markets because of a signed agreement between China and South Africa early this year. South Africa’s statistics for area planted are improving for apples, pears and table grapes, and updates are reflected at the PS&D tables appearing in this report below. The improvement is mainly because of newly established specific commodity forums that employs technical staff for annual tree census. The new statutory measure implemented this year that regulate records and returns relating to trees and production and marketing for both pomefruit and stonefruit through the Marketing Act of 1996, will also ensure accuracy for future statistics. The South African table grape industry (SATI) is now in its third year of operation as an independent industry after its separation from the Deciduous Fruit Producers Trust (DFPT). The industry, which is funded by its members, are setting up structures and programs to handle knowledge management, generic promotion, and market access for table grapes. The industry aims to develop into a competitive brand similar to the California tablegrapes Industry. The 2006/07 harvest for both apples and pears started on time, during the first week of December, and should end around November 30th. By week ending November 11, 2007 the apples and pear industry was in week 45 of both harvesting and exporting. The South African Pomefruit (apples and pears) Association expects the area planted to increase in 2008 because more wine grape farmers experienced losses and therefore may uproot the vines again to replant the fruit trees. Since 2004, the area planted for these fruit trees were uprooted and replaced with the vines for wine. South African farmers are doubtful that the United States is a lucrative market because of the costs involved in selling to that market such as: exchange rates, transportation costs, as well as the export sanitary and phytosanitary protocol that are considered difficult to comply with.

On trade.....

Total apple, pear, and tablegrape exports in MY 2006/07 are expected to increase by 3.9 percent to 697,600 MT, due to improved total production. Post forecasts MY 2008 apple and pear exports to remain the same as a year earlier at 280,000 MT and 132,000. Post forecast MY 2008 forecasts for tablegrape exports are at 287,500 MT, a 0.7 percent increase from MY 2007 because of expected increased demand. Post estimates MY 2007 apple exports at 280,000 MT, a 4.5-percent increase from the previous year. In 2005/06, apple exports totaled 267,863 MT. Major export destinations were the U.K. (38.8 percent), Malaysia (9.7 percent), and the Netherlands (6.1 percent). Post estimates MY 2007 pear exports at 132,000 MT, a 11.8-percent increase from the previous year. In MY 2006, pear exports totaled 118,107 MT. Major export destinations were the U.K. (20.3 percent), the Netherlands (20.1 percent), and Belgium (12.4 percent). Post estimates MY 2007 tablegrape exports at 285,600 MT, a 0.2-percent increase from the previous year. In MY 2006, tablegrape exports totaled 284,903 MT. Major export destinations were the Netherlands (27 percent), Canada (24 percent), and the U.K.(16.6 percent).