An overview of what the various farming sectors can expect in 2009
Economy should lift its head – Ernst Janovsky
Head of Absa’s agribusiness division Ernst Janovsky is cautiously optimistic about the local agricultural economic outlook for 2009 and expects a slight increase in the demand for agricultural products in the new year. He said the decline in fuel prices and the potential lowering of interest rates could increase consumer spending.
“I expect red meat, pork and poultry prices to rise somewhat because of the greater availability of cash to consumers,” he said. “This is good news for primary producers. Red meat prices, for example, remained constant during the past two years and consumers paid the same prices at the end of 2008 as at the end of 2007.”
Local commodity prices will probably remain on export parity but high grain volumes, particularly for maize, are expected.
However, international markets, except in the Eastern Bloc, Asia and India, are weak causing a decline in the international food demand and constraining the international import market.
For example, chicken exports from South America to Russia have dropped dramatically and exporters are looking for new markets, posing a possible threat to the South African poultry industry. International grain prices are also dwindling.
Janovsky foresees a 2009 maize price of between R1 400 and R1 700. “The good news is that most farmers hedged at R1 700/t, and many hedged at R2 000/t. Unfortunately the current plantings had to be done at high input prices, which has definitely impacted on profitability. Although the price is weak, the expected high volumes will make up for it.”
“I expect poultry and pork imports to increase from March 2009, with the potential increase in consumer spending. I’m reasonably positive about red meat prices,” Janovsky concluded. – Annelie Coleman
Politicking will get worse before it gets better
With a split in the ANC and an alarming decline in agricultural production, ANC president Jacob Zuma and Mosiuoa Lekota, leader of the newly formed Congress of the People (COPE), wasted no time traversing the platteland wooing commercial farmers. Zuma tried to counter the damage done by the government’s Expropriation Bill, while Lekota lobbied for support in the upcoming elections.
But the country’s roughly 40 000 commercial farmers won’t make a difference at the polling stations, and while placating the producers of food and fibre may be good politics, analysts and agricultural leaders agree that this year politicians will pay lip service to the desires of the masses, especially in the area of land reform.
Agri SA deputy president Theo de Jager fears that politicians may dangle the “land carrot” to lure voters, thus further damaging investor confidence in agriculture.
TAU SA general manager Bennie van Zyl predicts a checkmate situation as politicians will stir up emotions and make promises they can’t keep, while officials will be overly cautious not to do anything that might harm their jobs under a new or different Cabinet.
He believes that in the jostling for position in the build-up to elections, little action will come from threats such as taxing unproductive land and the progress on the enactment of the Land and Assistance Amendment Bill may grind to a halt.
Meanwhile, the Expropriation Bill is still lurking on the post-election horizon. De Jager and Van Zyl agree it will be resuscitated. While both have emphasised South Africa’s existing expropriation legislation is dated and a new Act is needed, they hope this time the proposed Act will serve the needs of the country and not the ideological ambitions of one party, as did the Bill tabled in parliament last year.
Both are optimistic that whoever wins will struggle to reach a two-thirds majority in this year’s election, making it difficult to steamroll legislation through parliament as the ANC has been doing in recent years.
But opposition power is worthless without opposition lobbyists, and herein lies another future challenge. Organised agriculture is concerned that experienced politicians such as Dr Kraai van Niekerk and Maans Nel are on the verge of retirement. In the loose scrums of parliament – portfolio committee meetings – these two were often the only lobbyists fighting for commercial farmers.
With more potential for stronger opposition coalitions in post-2009 election politics, lobbyists such as Van Niekerk and Nel may well be more successful, but will they be there?
The DA’s Helen Zille said agriculture is too important for the DA not to have considered continuity in this portfolio. “I can confirm that someone has indeed been earmarked to take over from Van Niekerk when he retires,” she assured Farmer’s Weekly. Meanwhile politicians and observers agree that coalitions will be in the order of the day after the elections. IFP spokesperson on agriculture, Henry Combrinck said the strength of cooperation became evident with the Expropriation Bill.
“Political opposition presented a united front in the face of government’s plans to expropriate land through radical legislation,” he explained.
And this year, agriculture will be expecting a lot from political leaders, before and after the elections. “Opposition politicians must immediately start lobbying for the implementation of the sector plan for agriculture,” said Grain SA’s Neels Ferreira.
“We need people who understand the dynamics of the plan and push for its execution. Opposition parties must keep abreast of what’s happening, as there are people on the portfolio committee who are clueless about commercial agriculture.” – Annelie Coleman & Jasper Raats
Above-average rainfall expected
In 2006/07, South Africa experienced El Niño conditions and suffered terrible droughts. Then, in 2007/08 the opposing La Niña cycle developed, bringing with it above-normal rainfall over the larger part of South Africa. Isolated areas of the eastern half of the country were the exception.
So what’s in store for the rest of the summer season?
Prof Willem Landman, chief scientist of seasonal forecasting at the South African Weather Service, said there are two matters of interest to farmers – whether or not another El Niño is lurking on the horizon, and what can be expected in terms of rainfall.
“After considering a large number of models, it seems we’re most likely to continue in the neutral phase we are in through to mid-2009, which means that either an El Niño or La Niña event is happening,” he said. “However, there are some indications that a weak La Niña event may occur.
“La Niña events are occasionally associated with favourable rainfall conditions over the larger part of the summer rainfall region,” Prof Landman summarised.
He added that there’s strong consensus among state-of-the-art ocean-atmosphere models that a favourable rainfall season over the summer months ahead is likely.
“This means that seasonal rainfall totals can be expected to be above-average,” he clarifies. “In turn, seasonal temperatures could be below-average.” – Robyn Joubert
Tough year ahead for grain farmers
Grain SA’s CEO Dr Kobus Laubscher
warned that grain producers are in for a tough time in 2009. The situation has deteriorated to such an extent that he cautioned producers who are currently planting maize to seriously consider whether they should continue.
“Prices are dramatically lower than hoped for because of the declining local and international demand due to the global recession,” he said. “This will impact strongly on profit margins and I urge farmers to produce grain, maize in particular, more efficiently and to do more with less, should they decide to continue planting.”
He added that while inputs could come down because of the lower Brent crude oil prices, the smaller profit margins will continue to put extreme pressure on grain production.
The current crisis was caused by declining international prices, the importation of poor-quality cheap wheat, the reluctance of input suppliers to adjust prices downwards and abnormal rainfall patterns. “We’re extremely worried about the fact that the input suppliers are very lax in lowering prices and we urgently call on them to take a long-term view of the survival of grain production in South Africa and to accommodate producers price-wise. They could even consider applying a percentage of past profits in order to set inputs on the market at lower prices.”
Laubscher is also anxious about the rumours that the quality of locally produced wheat is questionable. “The already-struggling wheat industry is harmed even more by having to compete with poor-quality Argentinian wheat, while our local product is of much better quality. This distortion is evident in prices. The Safex price for wheat was R500/t lower at the end of 2008 than the US price for wheat of the same standard.
Laubscher says the changes in the demand structures for grain are also concerning. “There’s a clear indication the more profitable protein demand for grain will continue to decline, while the demand for grain as a staple food will increase. The return to grain as a staple because of the global recession is a worldwide phenomena, which will impact negatively on profit margins.
“The demand for biofuel, and ethanol in particular, is decreasing rapidly because of low fossil fuel prices, which also impact negatively on prices. I hesitate to say it, but the outlook for the next season is bleak and producers should prepare themselves,” Laubscher explains.
He admitted that it’s difficult to formulate any projections based on the number of hectares planted to summer grains so far. Some 2,56 million hectares were planted earlier in the season – down 8% on the previous season.
The South African demand for maize amounts to 9 million tons a year. “Nevertheless,” says Laubscher, ”we have enough carry-over maize for export and a small surplus. However, we remain very concerned about the Safex maize price hovering between R1 400/t and R1 700/t for 2009.” – Annelie Coleman
Red meat to remain under pressure
Gerhard Schutte, CEO of the Red Meat Producers’ Organisation (RPO), said the pressure on red meat production profitability is expected to continue in 2009.
One of the RPO’s most important tasks will be to empower members with enough support for sustainable production in the light of the current global recession. Augmenting production is an absolute necessity for their economic survival.
“The debate on the tariff for imported red meat will continue,” Schutte said. “Recent studies indicate the 40% tariff doesn’t provide any protection for local red meat production and only levels the playing field. That the benefits of the so-called low-cost or tariff-free meat seldom, if ever, reach the consumer will also be addressed in 2009.”
The possible impact of the Namibian Small Stock Marketing Scheme on the local industry remains a major issue for the RPO. Schutte said the South African small stock industry can’t afford any unfair competition. High input costs are expected to continue in 2009. “The decrease of the producers’ share of the consumer rand is of great concern,” said Schutte. “Our challenge is to streamline the value chain and make it more effective to benefit both the consumer and the producer.
“Agriculture worldwide has been elevated significantly on the political agenda because of the food crisis. We see it as crucial that our government does the same. State investment is needed now for the expansion and development of both the commercial and emerging aspects of the red met industry.” – Annelie Coleman
Dairy leader predicts a better 2009
2008 was a difficult year for milk producers, said MilK Producers’ Organisation (MPO) head Etienne Terre’Blanche. “While producer prices increased at the end of 2007 and during the first quarter of 2008, this didn’t fully cover the increase in production costs,” he explained. “As consumers battled to service high debt, they cut back on other expenses. Food expenditure decreased and diets were downgraded towards more starch and fewer protein-based products. Higher production and lower demand resulted in a build-up of stocks, also driven by high import levels in 2007.
“But for 2009, we expect lower production, fewer imports and export growth to lower the total milk supply on the South African market. As interest rates are lowered during the following months, food prices stabilise and fuel prices decrease, the consumer will have more spending money available. Higher social grants in an election year will also increase consumer cash, especially in the lower income groups.”
He believes the supply/demand situation will probably improve during the first half of 2009. “Producers can expect a moderate increase in prices during the next summer. In time, lower grain prices will also lower feed prices. Farmers can thus look forward to moderately better conditions in 2009.”
Terre’Blanche said that internationally the dairy industry is going through a bad patch, but indications are that the crisis may be over by mid-2009 to end 2009. ”Those who can survive through increased efficiency and strict cost control will be able to enjoy better days in the coming years. Vasbyt!” – Lloyd Phillips
Bad economy bodes well for veggies
Vegetable farmers can look forward TO A GOOD year in terms of demand and price as long as they focus on quality produce. Sakata Seed Southern African said there’s no demand for inferior-quality products, and in 2009 economic strain is likely to cause a move back to basic foods. People will eat out less and do more home cooking. This means an increase in the use of most vegetables. At the same time, the trend towards healthier food should increase the demand for salad products and fruit.
Gerrie Reitsma, sales and marketing manager for vegetable seed company Seminis, does not foresee many new trends in vegetables other than the ongoing growth in fresh product usage as part of the health and beauty drive. “Consumers, especially the next generation and the burgeoning black middle class, are much more aware of what they are eating and this will definitely influence the way fresh produce is produced as well as its consumption,” he said.
Reitsma said demand for semi-processed, prepared and ready-to-cook food, including frozen and canned vegetables, will continue to grow, probably on the back of the growth in black diamonds and double-income households, where time is more treasured. Lastly, up-coming sports tours like the Lions Tour in 2009 and the 2010 Soccer World Cup are expected to bring hundreds of thousands of extra mouths to feed to South Africa.
“Further opportunities will present themselves and growers need to be prepared and use 2009 to secure relations with the entire value chain, but also to make sure that they do their homework so they’ll be in business for many years to come,” advised Reitsma. – Robyn Joubert
Citrus glut a challenge
Citrus growers will have to carefully manage volumes to prevent flooding the market next year. Justin Chadwick, CEO of the Citrus Growers’ Association of South Africa, pointed out that the global recession has meant many northern hemisphere countries have difficulty selling their fruit.
For example, Spanish farmers are threatening to strike in an attempt to get their government to intervene against poor farmgate prices. These market conditions might soon affect southern hemisphere farmers, and Chadwick cautioned the industry to monitor the situation closely to prevent flooding the international market and running into a situation where production costs are higher than income generated.
How to divert fruit is another challenge. Chadwick explained that the South African and African market is rather limited – diverting as little as 5% of our export fruit to the local market could swamp it. He said farmers might have to destroy some of their fruit to prevent unprofitable market conditions.
On the production side, volumes are expected to remain relatively stable or slightly higher than they were in 2008, when the industry produced around 94 million cartons of which around 89 million were exported. – Glenneis Erasmus
Legislation will continue to frustrate game industry
Jokl le Roux, CEO of the East Cape Game Management Association, thinks 2009 will be another torrid year for the game industry, specifically with regard to legislative issues. “While the weaker rand should help hunting outfitters, many clients have already indicated that because red tape prevents them receiving their trophies in good time, and irritating firearm restrictions, they’ll look for hunting opportunities in other countries,” he said.
Also, the temporarily shelved and controversial translocation policy has raised its ugly head again, this time as part of the so-called alien and invasive species document.
“Over the past four years, the threat of this proposed policy has dramatically decreased live game prices of species such as the lechwe, which fell from R14 000 in 2004 to about R6 000 in 2008,” said Le Roux. “The energy, time and expense industry roleplayers have spent trying to drum logic into the so-called experts’ heads at the Department of Environmental Affairs and Tourism (DEAT) seems to have been wasted. DEAT has apparently appointed the South African National Biodiversity Institute to drive this ideology from scratch by trying to control so-called alien and invasive species with maps based on municipal boundaries, instead of with adequate fencing.”
Le Roux noted that the Threatened or Protected Species Regulations, officially implemented in 2008, have caused utter chaos in most provinces. “Game ranchers have tried to comply with the regulations by applying for their ranches to be registered as game farms. However, since February 2008, most are still waiting for their applications to be processed.
“This disrupted the past season’s hunting and game capturing activities of species such as black wildebeest, bontebok, common reedbuck, and blue duiker. Some farmers are so fed-up they’ve started eradicating species, notably the black wildebees, which should never have appeared on the list of Threatened or Protected Species as they aren’t threatened on private land. This is a poor effort from the authorities to protect species.”
Rhino poaching is increasing, mainly driven by organised syndicates. “Despite a stack of environmental laws, it is the game rancher who has invested big money in rhinos and who is going to get hurt by the moratorium on the trade in rhino products,” Le Roux warned. “No wonder organised game ranching, which is really just another branch of farming, would prefer to fall under the Department of Agriculture.” – Roelof Bezuidenhout
Good times will continue for ostrich farmers
This has been a very good year for the ostrich industry, the first since 2004. In 2008 South Africa could export continuously to the EU without any disruptions or threats of disruptions, said Anton Kruger, CEO of the South African Ostrich Business Chamber.
Kruger attributed the smooth trading conditions to cooperation and communication between the chamber and the departments of agriculture in the main producing provinces of the Western and Eastern Cape.
Ostrich meat currently retails for €32/kg (R432) in Spain, while demand in the EU is outpacing supply, Kruger said. “We expect buoyant market conditions in Europe to continue in 2009, as more people switch to healthier meat options,” he said. “We expect consumption to grow in especially Eastern and Central Europe.”
Ostrich leather sales have grown by 10% since 2007 and there are good prospects for luxury ostrich leather products in Central and Eastern Europe. Ostrich feather sales were also very good in the past year. The carnival in Rio de Janeiro alone uses 15t of South African ostrich feathers annually, said Kruger.
Local producers saw a 39% increase in income for the past year and although the two major inputs – feed and transport – increased by 70%, ostrich farmers still have reason to smile about 2008 and look forward to 2009, Kruger said. – Wouter Kriel
African stone fruit should be explored
Stone fruit exporters experienced an excellent year, said Stefan Conradie, product manager of SA Pome and Stone Fruit. “Chile experienced a 5% crop decrease, contributing to the overall shortage on international markets. The rand was weak and South Africa had a bumper crop that lead to 12 661 490 cartons of stone fruit being exported. It was the combined effect of these factors that made 2008 such a memorable season.”
But Conradie warned that the 2009 export season will be affected by the global credit crunch. Retailers have already indicated they want smaller packed units, while convenience packaging is losing popularity to loose fruit bought by the kilogram. Conradie predicts there will be more competition next year.
“In 2009, it would be unwise to put all your eggs in one basket. The local market and unexplored avenues on the African continent should be developed. On a positive note, the rand is expected to remain weak and fruit is still very good value for money.” – Wouter Kriel
Price crunch expected for table grapes
The 2008 table grape season was very late, both locally and in South America.
The South African harvest was normal in terms of volume, with good quality in the early part of the season. Unfortunately the later season was disrupted by untimely rain, which compromised overall quality. The Hex River region lost over 1 million cartons to the recent floods.
Preliminary South African estimates for 2009 are between 47 million and 51 million 4,5kg cartons said Graham Retief, chairperson for the South African Table Grape Industry (SATI). He added the global financial crisis will affect all markets, including South Africa, but the UK probably most of all. South America is anticipating higher volumes than last season. – Wouter Kriel
Avo exports to decline slightly
2008 proved to be a good year
for avocados – 12,7 million 4kg cartons exported. “Estimates for the 2009 season seem to be similar to 2007 where 9,5 million cartons were exported,” said Derik Donkin, CEO of the South African Avocado Growers’ Association (SAAGA). “Good rains so far in most avocado-producing regions bode well for the development of next year’s crop.”
However, he added that good disease-control measures will be required to keep black spot and other fungal diseases at bay. Wet years usually result in lower export pack-outs than in dry years.
South Africa’s major competitor on the European Union (EU) market, Peru, will have access to the US market for the first time in 2009. Yet only small volumes of Peruvian avocados are expected to go into the US in 2009.
In 2010, it’s expected Peru will export larger volumes to the US, potentially relieving pressure on the EU market during the South African season. – Rudi Massyn
Mango production
to fall sharply
In 2007/2008, South Africa had a large mango crop of 80 204t, but Theo Bekker of the Sub-Tropical Growers’ Association said crop forecasts for the 2008/2009 season are looking bleak. Some cultivars are estimated to produce 50% to 70% less fruit than last season.
“The Tommy Atkins fruit set has been particularly poor and fruit volumes sent to the local market are expected to peak later due to the lack of early seasonal varieties,” Bekker said.
He predicted fruit volumes would be 30% to 40% lower than last season. “But Peru, our biggest competitor in the EU market, also predicts a crop reduction of 30%.”
South African exporters are planning to export 850 000 4kg cartons (3 400t) this coming season, 23% more than the 2007/2008 season. – Rudi Massyn
Macadamia production set for growth
In 2006/2007, South Africa produced 18 712t of Dry In Shell (DIS) macadamias. This is 10,45% more than the previous season. Theo Bekker of the Sub-Tropical Growers’ Association said although there was a dry spell during flowering in August to September 2008, predictions are that a good crop is currently on the trees.
He added that the industry can look forward to a better kernel quality as more farmers implement responsible scout techniques. Macadamia production is set to rise and is projected at almost 7 000t for this coming season. – Rudi Massyn
Litchi production to drop by 50%
During the 2007/2008, litchi season, South Africa’s total production reached 8 585t, which was the biggest crop in the past eight years. But production won’t continue this way, according to Theo Bekker of the Sub-Tropical Growers’ Association.
“The 2008/2009 litchi season is already underway and most regions predict a large drop in production,” said Bekker.
Irregular rainfall patterns and high temperatures during the flowering period will also impact production, with a crop forecast of around 50% of last year’s crop, bringing the total to roughly 4 000t. – Rudi Massyn
Will China let wool growers down?
Taking all the negative factors
into account, one can only expect the wool market to face a few difficult months as the new year starts up, said Ona Viljoen of Cape Wools.
On the other hand, concerns about possible supply shortages in the near future may support the market. Australia’s production is expected to fall another 6% this season to its lowest level in 60 years.
At 79,2 million head, the national flock is at its lowest since 1920, said Viljoen. “Although there are indications the market has hit rock bottom, it’s difficult to predict where it will head in the next few months, since several factors influence prices. One is the value of the rand against foreign currencies, another is wool’s price relative to other fibres. ”Prices of competing fibres, particularly synthetic fibres, have decreased more sharply than wool prices,” she said.
“This may compel manufacturers to switch to cheaper fibres or even to downgrade pure wool products to wool/synthetic blends.”
“The most important factor that will influence wool demand is the economic health of the major consuming markets for wool, such as the Euro zone, the US and Japan. However, when times are tough, consumers look for quality and value and wool is particularly well-positioned in this regard.”
Also of concern is the slowdown in China’s economy as export demand drops. “China is the world’s largest buyer and processor of wool and last season imported R489 million worth of wool from South Africa. It also buys about 60% of the Australian clip. China’s state think-tank recently predicted that annual growth would slow to 8% in the fourth quarter of 2009 from 9% in the third quarter.
“This is close to the minimum 7% Chinese officials see as safe for maintaining social stability,” Viljoen concluded. – Roelof Bezuidenhout
Mohair still side-stepping global slump
While the 2008 winter season which has just ended was a good one for growers, the mohair industry can’t expect to side-step the global economic turmoil indefinitely and will eventually see pressure on demand levels, said Deon Saayman, Mohair South Africa’s general manager. “Fortunately, we’re in the speciality fibre segment of textile fabrics and will most probably be less affected than other natural fibres.
“Kid mohair is currently experiencing a good demand. If this trend continues into 2009 it will bring sustainability to price levels, so the mohair industry is looking forward to a relatively better year than commodities could experience during 2009,” he said. – Roelof Bezuidenhout
Global slump may boost booze sales
There will be dire consequences if farmgate prices for bulk wine don’t at least double over the next few months, according to Henk Bruwer, chairperson of Wine Cellars South Africa. He said this would only translate into a R4,75/bottle increase in consumer prices, adding that the price of wine has remained about the same over the past few years. As a result, wine is now the cheapest it has ever been in real terms in the history of South Africa.
Local wine supplies are also low because many farmers are producing less wine due to the poor market conditions that dominated the industry for the past five years, as well as rising wine export volumes primarily due to the weakening of the rand.
Bruwer concludes that it’s difficult to say what effect the global recession would have on wine export sales – in the past it has been found that wine sales increase when countries go through an economic slump. Consumers, however, might be more selective and rather buy cheaper wine products, which means that sales might not necessarily result in better farm earnings. – Glenneis Erasmus
Cotton will feel the pinch
The International Cotton Advisory Committee (ICAC) expects a 6% decline in world cotton production to 24,6 million tons for 2008/09, mainly due to increased competition from grains and oilseeds and the unfavourable fluctuations in the exchange rates of many cotton-producing countries during 2007/08.
The ICAC has significantly reduced forecasts of 2008/09 global cotton mill use as well as global exports, due to the lower expected global economic growth in 2009. They now project that global mill use for 2008/09 will decline by 6%, and expect global imports to decline by about 12% to the lowest level in six years. – Rudi Massyn
Poultry industry needs to be plucky to weather 2009
The South African poultry industry, incorporating egg and broiler production,
is going to be treading carefully in the coming year, based on the current national and international financial crisis that is putting heavy pressure on business profitability.
Deputy chairperson of the KwaZulu-Natal Poultry Institute Kevin Barnsley expects the industry to face a tough first quarter next year. There will be severe financial pressure on consumers’ disposable income following Christmas and New Year celebrations, together with the costs of school fees, holidays and other important family expenses.
“Eggs are still good value for consumers, so we’re only expecting a slight dip in sales. However, cash-strapped consumers are now thinking twice before spending on meat, so there might be a significant dip in broiler product sales early in 2009,” Barnsley explained.
He added that in the short term, recent and projected decreases in fuel and grain prices were providing some relief in poultry farmers’ production costs.
However, he was concerned about what these costs were going to do further into 2009 and whether many local poultry producers would survive unexpected or dramatic hikes in input costs.
“We’re already seeing a number of smaller-scale egg and broiler producers bowing out of the industry because they can’t remain profitable. At this stage, the larger poultry businesses are staying afloat due to the benefits of economies of scale, but even they are going to be managing their finances very carefully in the year ahead,“ Barnsley concluded. – Lloyd Phillips
Tough year ahead for apples
The outlook for apples is not too bright in 2009, said Stefan Conradie, product manager for SA Pome and Stone Fruit. “But the previous season was fantastic,” he said. “Unfavourable climatic conditions in the US and South America caused an apple shortage, while the weakening rand gave South Africa a competitive edge over other apple-producing countries.”
Production, however, is estimated to be up in Europe and the US, while Chile is expecting a bumper crop. Since the US is also expecting a high yield, Chile might divert some of its fruit to Europe and the UK, which could further increase competition with South African fruit.
The situation could turn out as it did in 2005, when many farmers in New Zealand and France went broke because of an oversupply in the global market due to bumper crops in the northern hemisphere. The New Zealanders pulled out 25% of their area under production, while the French flattened more than 3 500ha under apples.
Conradie said the industry would have to unite to ensure a balance between supply and demand. “The Voortrekker days when each farmer had his own laertjie are over. We can still have many exporters, but they have to communicate with each other and share information to prevent an oversupply in the markets.” One strategy to reduce risk next year would be to sell more apples locally or even in Africa. “Prices might not be as favourable as on the overseas market, but farmers would save on export costs and they would be certain their fruit is sold,” Conradie said.
Another concern in the apple industry is the low number of new trees for “old faithful” cultivars such as Golden Delicious and Granny Smiths. At the moment more than 83% of the Granny Smiths and more than 73% of the Golden Delicious trees in SA orchards are older than 15. “This is terrible, as apple quality significantly drops as trees become older,” Conradie said.
On the other hand, so many bi-coloured cultivars have been planted that 96% of the Crisp Pink and Fuji apples are under three years old.
Conradie said farmers must remember that because they provide the market with such a good package of apples, they have the competitive edge. He warns that New Zealand’s downfall was rooted in the fact that they only supplied the market with two varieties – Braeburn and Royal Gala.
The outlook for pears is more favourable, as production is expected to be lower than usual in northern hemisphere countries. Volumes for Conference pears for example, are estimated to be 20% lower than this year. Conradie predicts South Africa will have free rein during the start of the pear season, but warned market demand might shrink later due to the high apple supply. – Glenneis Erasmus
