African imports put pressure on fruit farmers

South Africa is one of the fastest growing fresh fruit markets in the world.

The quantity of fruit imports has increased at an annual average rate of 8%, while the value of these imports has risen 25% a year over the past 10 years. But this is putting a severe strain on local producers, say farmers and industry insiders.
Banana farmers, especially, are struggling to compete with imports from Mozambique, Zimbabwe and Swaziland.

The growth of South Africa’s fresh produce market at both the wholesale and retail level is mainly due the rapid increase in the number of middle-class consumers, said National Agricultural Marketing Council (NAMC) senior economist Sifiso Ntombela in the latest Tradeprobe, a newsletter produced jointly by the NAMC and the agriculture department’s Directorate of International Trade. 

“The improvement in consumers’ socio-economic status has resulted in more consumers becoming health-conscious, subsequently stimulating demand for healthy products such as fruit and vegetables,” said Ntombela.

In 2009, bananas and plantains contributed 42% to total South African fruit imports. Imports of exotic fruit – which offer antioxidant and energising benefits – are growing at an average annual rate of 10%, while subtropical fruit imports are growing at an average annual rate of 49%. Mozambique and Zimbabwe are the main suppliers of bananas, pineapples and other fruits, together representing 48% of fruit imports.

Francois Vorster, a Tzaneen banana grower and director of the Banana Growers’ Association (BGA), said, “recently, the banana market crashed totally and imports were a big contributor”.Vorster mentioned the Pretoria market as an example. It normally handled a maximum of about 75 000 cartons/day. “One morning there were 92 000 cartons on the market and we were told to stop production. We don’t want the price to go below the break-even point of R50/ 18kg- box, but the prediction for the week of 18 October is it could go as low as R30.”

According to Vorster, the BGA would like government to introduce import restrictions. “But we’ve been told there won’t be any trade restrictions between the Southern African Development Community (SADC) countries. However, we must definitely look into some kind of tax for fruit coming in,” he said. But while banana imports are up, the situation is very different for citrus imports. These have declined from 18 676t in 2000 to 3 463t in 2009, while local production rose from 1,711 million tons to 2,185 million tons.

Pointing out that agriculture accounted for almost 10% of the country’s formal sector employment in 2008, Ntombela said 19% of this was created by the fruit industry. “According to industry surveys, the deciduous, citrus and subtropical sub-sectors employed 101 561, 100 000 and 13 100 people respectively in 2009,” he added, noting that employment patterns had shifted from permanent to seasonal employment in the face of rising labour costs.

“The fruit industry has shifted toward an export-driven growth, with export volumes increasing significantly between 2000 and 2010,” he said. “The effect of a weaker exchange rate (rand) was seen in the 2002/03 and 2007/08 seasons, when both export volumes and export value increased by double digits on year-on-year comparisons. “Specific fruit types that have contributed significantly to export growth include table grapes, soft citrus, grapefruit, avocados, apples and pears.”

Ntombela said the sector should continue to expand in the near future, driven by growing consumer awareness of the health benefits of fruit and the relatively high rate of urbanisation in South Africa and the rest of the world. “However,” he cautioned, “the continuous increase of production and export costs will have a negative impact on farm profitability, which could result in a stagnating or declining industry.”