South Africa: Good demand in key grape markets, says SATI
As the South African table grape deal approaches its halfway mark, indications are for a strong season characterized by good volumes, stable markets, and a sharp uptick in exports to Canada.
In a conversation with Fresh Fruit Portal, South African Table Grape Industry (SATI) CEO Willem Bestbier said the industry was on track to hit its pre-season export estimate forecasting a 5-9% increase, and he also predicted the Orange River may overtake the Hex River as the biggest region.
"There are always swings and roundabouts, but at the moment that estimate has not changed in terms of the total crop. We are still looking to do between 61.1-63 million 4.5kg-equivalent cartons," he said.
Breaking down the regions, Bestbier said the earliest production area - the Northern Provinces - had nearly completed packing and was set to end on target. He explained some of the early varieties like Sugraone had been "a bit disappointing", but it picked up later in the season.
"There were some rains during the packing season which brought much-needed relief to the drought situation and we are quite pleased to say that as a result of technology there, like plastic covering, it didn’t affect the total crop much," he said.
Bestbier speculated the Orange River may surpass its forecast of 19.2 million export cartons this campaign and become the country's biggest region, largely due to new plantings in the area. The Hex River, which has traditionally exported the highest volumes, is in the early stages of its harvest but is expected to end up bang on earlier estimates of 19.7-20.2 million cartons.
"It looks like it's going to be neck-and-neck with the two regions." he said.
As with the Northern Provinces, Bestbier said the early part of the deal in the Orange River had seen smaller volumes than hoped for, but the latter part developed nicely.
"Sugraone again disappointed a little bit in terms of volumes, but again mid to late-varieties more than made up for that shortfall in the coming weeks," he said.
"We're quite happy there too, and we're expecting to get very close to 20 million [export cartons]."
As for the Olifants Region, the SATI representative said it was still "early days" and explained the true effects of last season's water restrictions may only become evident this campaign.
"This was the region that was last season hit by water restrictions. Although they have enough water available this year...it's almost as if the effects of previous years water restrictions have only come through now," he said.
"So they're a little bit behind compared to what we would expect from there."
Looking at the Hex River and Berg River, Bestbier said the season was still in its very early stages but added the "beautiful weather" there made for a "really promising" campaign.
Canada-bound exports soar
In terms of export markets, everything had been developing "quite well", according to the representative.
An interesting change in the exports for the 2016-17 deal has been strong growth in shipments to Canada, albeit from a low base. Weekly exports by the end of week 2 this year to the U.S. and Canada collectively stood at nearly 1.6 million cartons, compared to less than half that at the same time last year.
"This is the first time in quite a number of years that we had seen good interest in our product from Canada, which is very welcome. It's quite an exciting market," he said.
"This came as quite a surprise to us, but maybe it is a result of some disappointment in volumes available from Peru and Chile. Canada is a priority market for them, but they’ve had their troubles in areas of drought and floods. I think as a result of that Canadian market is more interested in South African grapes."
U.K.-bound shipments have fallen slightly this season, but have been offset by an uptick in exports to the European continent. Bestbier attributed this charge largely to the weaker pound sterling as a result of uncertainty over Brexit, but added the South Africa rand was also stronger against the euro.
A couple of weeks ago, Hortgro trade and markets manager Jacques du Preez said the rand was 27% stronger than the pound year-on-year and 16% stronger than the euro.
But despite the challenges of exchange rates, Bestbier said that in general South Africa's key markets had been "quite supportive".
"The market has not been oversaturated compared to previous years," he said.
"Certainly there was a good demand for the product, and that's been quite steady over the past number of weeks. We haven’t seen the steep ups and downs of previous seasons."
As for export markets further east, he said this would be the first full season that the Thai market was available, and expected to see a "big increase" in shipments to the Southeast Asia region as a result.
The South African industry also celebrated a major breakthrough in early November as China significantly relaxed its export protocols. Year-on-year this season there has been a moderate increase in exports to the Far East - 1,270.000 cartons compared to 980,000 - but Bestbier expected volumes to pick up much more in the coming years.
"The indication is that new protocol is welcomed by our exporters and growers and increasingly they are exploring opportunities in China," he said.
"It’s a long journey to China and protocol is brand new, so I think exporters and growers are testing the waters a bit and as they’re growing confidence I think we will see volumes increase more aggressively."
Strong expectations going forward
Looking ahead to the second half of the season, the SATI head said it seemed as though the deal would continue along its current path.
"We as growers we remain forever optimistic. The two regions that will come on stream quite well now are the regions where the climatic conditions should stay positive," he said.
"The markets are looking quite supportive. A lot depends on the early Indian grapes that are expected. So expectations are for a good market for our grapes in the next four to eight weeks. Every season has its challenges, but we expected this to be a good season.
"We see it as year where those who work hard and place their product sensibly and wisely should be able to do reasonably well."
He also explained the industry would likely grow further in the coming years, but more as a result of varietal reconversion than new plantings.
"We are not seeing significant increase in hectares, but definitely an increase in the replacement of old generation varieties with new generation varieties," he said.
"The yield of the latter is substantially better, hence the increase in our production volumes. This happens in all the grower regions, although the greatest expansion over the past few years has been in the Orange River Valley. Available and suitable land, and especially water, remain constraints in this regard."
He also noted there had been "very good interest and growth" in two home-grown varieties - Joybells and Tawny.