Fruitful Supply Chain
Ultimately, growth of our industry in the form of exports contributes to the development of South Africa in the much-needed form of job creation, rural development and earning foreign exchanges.
Willem Bestbier, Vice Chair, Fruit South Africa
Not long after the festive season has
ushered in 2017 in South Africa, merrymaking will be in full swing in China. This year the Chinese New Year celebrations begin at the end of January and continue into early February. The protracted period of heightened consumer spending has exporters rubbing their hands with glee in anticipation of bumper business opportunities. During this extended period of festivities China will see a spike in the consumption of fruit, with apples, grapes and pears forming part of celebratory meals as well as gift hampers.
Fruit farmers in South Africa are hoping to be an important part of this supply chain with a recent agreement expected to make the export process much smoother. At the same time, negotiations are continuing to add more South African fruit varieties to the export list.
Mutually beneficial alliance
Willem Bestbier, Vice Chair of Fruit South Africa, a Pretoria-based non-profit organization comprising five major fruit growers and exporters’ associations, was in Beijing in October to sign a memorandum of understanding (MoU) with Wang Junbing, Secretary General of China Entry-Exit Inspection Authority and Quarantine Association (CIQA), to address the challenges in expanding and broadening access to the Chinese market.
Currently, South Africa exports only apples, citrus fruits and table grapes to the Chinese mainland. However, the process is excruciatingly slow, which affects the quality of the fruit and loses substantial revenue of fruit exporters in South Africa. With the MoU, the two associations will have partners on the ground and stay informed about quarantine issues and policy changes. They will also share information on pest risk analysis, inspection regulations, technology exchanges and market developments.
Fruit South Africa and CIQA will also provide their respective governments with the technical information and expertise needed to speed up the negotiations for the export of new items from South Africa. Pears will be the next export item from South Africa, followed by avocados.
Bestbier, who is also CEO of the South African Table Grape Industry, says progress has been made since the MoU was signed. “A much friendlier shipment protocol for South African table grapes has been implemented shortly after the signing of the MoU,” he told ChinAfrica.
China is one of the biggest grape markets with its 1.3 billion population. Its grape demand has been growing by 30 percent annually from 2010, and buyers are ready to pay a premium for imported grapes. Still, in 2015, South Africa exported only about 10,600 tons of table grapes to China, a mere 600-ton increase on the volume in 2014, according to statistics from global fruit industry information provider Fruit.net.
XINHUAFruit growers in South Africa are looking to sink their teeth into China’s huge market A big challenge
Shipments from South Africa to the Chinese mainland take almost three weeks and the language barrier adds to the delay. “The journey is quite long and shipment protocols are challenging,” said Bestbier. “Currently, South Africa is in a disadvantaged position compared to our southern hemisphere competitors. We are relatively new in China and [raising] awareness of South African fruit across China is a big challenge.”
The fruit industry is an important component of South Africa’s agriculture sector. Nearly 50 percent of the produce - about 2.7 million tons annually - is exported to 87 countries, according to Fruit South Africa.
“Our farmers will now have a wider choice of exciting markets and we will see more kinds of fruit reaching the Chinese market,” said Bestbier. “Ultimately, the growth of our industry in the form of exports contributes to the development of South Africa in the much-needed form of job creation, rural development and earning foreign exchanges.”
From the current 110,000 tons it annually sells to China, the South African fruit industry aims to increase exports to about 350,000 tons in the next five years, according to Fruit South Africa. It will be a boom for the agriculture economy and contribute to the National Development Plan 2030, said Bestbier.
“South Africa’s market share [in China] is still modest and we are committed to service the market well and achieve growth,” said Bestbier. “We are also keen to see more fruit-favorable bilateral trade agreements between our governments.”
The export of South African fruits to China started in 2006, with the signing of the citrus protocol. Today, China’s mainland and Hong Kong are the biggest buyers of South African citruses in Asia. According to South African Citrus Growers Association, Hong Kong’s share amounts to 26 percent while the China’s mainland absorbs 13 percent.
Table grapes followed in 2010 and apples gained access in 2013. Apple growers hailed the breakthrough, which took nearly eight years of negotiations.
“The Chinese market not only rewards producers well for good quality, but will also help diversify our markets. Chinese market has the potential to grow significantly over the next few years and serve as a springboard to other eastern countries,” said Thomas Mouton, Manager of Apple and Pear Marketing at South African fresh fruit supplier Core Fruit.
Seeking new markets
The South African pear industry is now next in line to enter the Chinese market. South Africa was one of the top 10 pear-growing countries in 2015, according to HORTGRO, the association of South African deciduous fruit growers. The bulk of its pear exports go to the European Union - about 42 percent, followed by the Middle East (17 percent) and Far East (16 percent). In 2013, Chinese Hong Kong imported over 5,000 tons of South African pears. In 2015, it increased to over 7,000 tons. Once the exports start going to the Chinese mainland, South Africa hopes for a substantial increase. In 2017, the yield is estimated to increase 2 percent to 440,000 tons and a new market is something to be acutely desired.
“The Chinese quarantine authorities are currently working on access for South African pears,” Bonnie Buthelezi, Market Development Manager at South Africa Avocado Growers’ Association, told ChinAfrica. “Once this process is completed and South African pears have access to China, work will begin on access for South African avocados. It would generate growth for the South African avocado industry and would increase supply of quality avocados to the growing Chinese market.”
The main challenge now to exporting avocados to the Chinese mainland, Buthelezi said, is waiting for the completion of the necessary government-to-government processes.
Europe is currently the main market for South African avocados. Besides, small volumes are exported to other African countries, the Middle East and Chinese Hong Kong.
“The South African avocado industry looks forward to gaining access to the Chinese mainland as this market is very important in the future growth of the South African avocado industry,” said Buthelezi. CA
(Reporting from South Africa)