Namibian grape industry grabs market share - FreshFruitPortal.com

Namibian grape industry grabs market share

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Namibian grape industry grabs market share

Since the Namibian table grape industry was founded by fruit entrepreneur Dusan Vasiljevic in 1988, it appears to have grown in long strides. Taking advantage of the suitable climate, a gap in the market, and the 2006 elimination of export tariffs to Europe, growth has risen tremendously. uvas_81668905 _ small

Grape Alliance head of marketing Leon de Kock, who represents the Cape Orchard Company's Namibian crop, explains that production volumes have "more than quadrupled" since his company started growing grapes in the country in 1997.

Compared to apparent stagnation in the nearby South African industry, this is sizeable growth. De Kock reflects on a positive season this year.

"Everything went according to plan and we are very happy with the crop," he tells www.freshfruitportal.com.

Capespan Namibia managing director André Vermaak said the harvest was around 34% over estimate for his operations.

"Not a single drop a rain – a bit late - but the volumes were fantastic," says Vermaak.

The Namibian industry capitalizes on the fact that it can harvest before other dominant areas at the end of October. Vermaak said the area was very dry with between 16-20mm of rain annually and soaring temperatures in the summer.

"We take advantage of the climate and get about 50% of the pre- and post Christmas market.

"The cooler weather of September and October also contributed to the huge volume this season."

De Kock says Namibian grapes compete with the Upington area in South Africa whose harvest is at the same time, but the quality does not compare.

"Namibia has earned a reputation for producing very good quality grapes.

"[They are] the cornerstone of at least six weeks supply to UK supermarkets from Dec. 1 to Jan. 15."

He adds the strong exchange rate helped to get better prices for Namibian grapes this season.

A total of 4.5 million cartons, 99% of which was produced in the Aussenkehr Valley, were exported from Namibia this season, of which 30% went to the U.K., 60% to Europe and 10% to the Far East.

Although the crop was a little late this season, it made up for lost time in volume.

"We were late two years in a row and hope that next season our harvest will be on time," says Vermaak, who has bright expectations for the Namibian industry's future.

"There is a lot of development taking place here. I am hoping for at least 4.5 % growth in the industry in the upcoming year and 10- 15% for both 2014 and 2015," he says.

South African labor crisis affects

Vermaak believes that the labor crisis that was experienced in South Africa's Hex Valley translated into an advantage for the Namibian industry.

"The message [of the labor unrest] has been sent out globally, and as a result the price is very stable for our grapes due to the uncertainty of the South Africa supply," he says

According to the South African Table Grape Industry (SATI), statistics are not yet available for the harvest, but the impacts of the unrest will be revealed as the season unfolds. Currently, the most tangible impact is on prices and market perceptions.

SATI chairperson Johan van Niekerk says the unrest has further pushed up the already expensive costs of production.

"However, Chile is also experiencing a short crop in terms of volume - and they are our main competition during this period, and America has a strong market," he says.

"So far we are only 2 million boxes behind last year's volumes and at the same volume as the year before, so we're okay in terms of supply to the U.K. and Europe."

In terms of the overall picture, the Namibian grape industry is clearly expanding.

"The South African grape industry is currently stagnant – in the last nine years there has been no growth, compared to double growth in the seven years prior to that. Thus, the grape farming business is not very profitable," says van Niekerk.

"The inability to pay more in the short term has nothing to do with cash flow. Farmers may seem to be unwilling to talk about wages - but it is really about the inability to pay more.

"However, farmers and the industry do recognize that something needs to be done about living standards for workers and are keen to get government involved.

"Farmers in South Africa are perceived as supporting the opposition, and have thus lost subsidies and government support which they require so that labor, government and industry can work together to intervene and improve conditions."

Meanwhile, the Namibian industry continues to thrive, taking full advantage of the factors that lead to a profitable market and positive growth.

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