MONTHLY MARKET INFORMATION REPORT: VEGETABLES

Transcription

1 MONTHLY MARKET INFORMATION REPORT: VEGETABLES Review period: December 2016 to December 2017 Issue: 2018/01 IN THIS ISSUE 1. Price and volume trend analysis ( in accordance with the highest to lowest volumes sold during this month) 1.1 Potatoes 1.5 Peppers 1.9 Lettuce 1.2 Onions 1.6 Carrots 1.10 Sweet Potatoes 1.3 Tomatoes 1.7 English Cucumber 1.11 Pumpkin 1.4 Butternut Squash 1.8 Cabbage 1.12 Gem Squash 2. News: activities pertaining to the domestic & international fresh produce and related markets

2 INTRODUCTION This report is a review of selected vegetable sales at the Cape Town Fresh Produce Market, the largest fresh produce market in the Western Cape. The review will be issued on a monthly basis and will cover trend analysis relating to prices (Rand per ton) and volumes (tons) of the selected vegetables sold on the market, considered to be of importance due to the area under production or marketed volumes, however the combination of selected vegetables might change over time due to relevance. OVERVIEW OF THE NATIONAL AGRICULTURAL MARKETING INFORMATION SYSTEM (AMIS), OFFERED BY THE DEPARTMENT OF AGRICULTURE, FORESTRY AND FISHERIES (DAFF) The Agricultural Marketing Information Systems (AMIS) is a database interface offered by the Department of Agriculture, Forestry and Fisheries (DAFF). The main purpose of the Agricultural Marketing Information System (AMIS) is to provide reliable & updated information to farmers. In order to assist farmers to plan activities relating to production and marketing in a much-informed manner. Agricultural market information is provided for horticulture, field crops, livestock and industrial products, and includes the following categories: marketing prices, grading and standard information, annual price trends, and marketing news (pertaining to the application procedures for import and export permits). Click on the following website link to access the DAFF AMIS web application, or alternatively go to the web address: http: //webapps.daff.gov.za/amis (no subscription fee payable to access system). Cell phone user can send an SMS to *120*4040# (charged at standard SMS rates) Please note that prices are updated at 12h00 a.m on a daily basis.

3 1. PRICE AND VOLUME TREND ANALYSIS 1.1 Potatoes Figure 1: Potatoes sales on the Cape Town Fresh Produce Market DEVELOPMENTS ON THE CAPE TOWN FRESH PRODUCE MARKET A total amount of 7,609 tons of potatoes were sold during the month of December This represents a 23% m/m or 2,205-ton decrease in relation to the sales captured within the previous month. This could be attributed to the reduction in potatoes plantings both in the Ceres and the Sandveld production areas within the Western Cape Province, as a result of the persisting drought (Fresh Plaza; January 2018). The Ceres area planted under potatoes is estimated to decline to 1 /3 of the 788 hectares generally planted on an average yearly (Fresh Plaza, January 2018; Potatoes SA, 2017). A 600-hectare decline has been reported in the Sandveld area, compared to the previous season in which 7,200 hectares were planted on average (Fresh Plaza, January 2017). If the Western Cape potatoes plantings are compared to the national output - the Western Cape Province has a relatively small contribution towards the national potatoes output (Potatoes SA, 2017). The Ceres and Sandveld regions respectively produces a 1,5% and 14% share of the overall production within South Africa ( Potatoes SA, 2017). Subsequently, the average price per ton of potatoes increased by 12% m/m or R415 per ton in relation to the previous month. Monthly market prices are however expected to increase further, as output in the larger production areas within the Province are expected to be significantly lesser. Indications are however that the shortage in volumes supplied to the Cape Town market would be covered by supplies from other production regions in the North (Fresh Plaza, January 2018). Quantities sold during December 2017 were 2% y/y or 123 tons higher, compared to the corresponding period in the previous year. Whilst the average price per ton of potatoes yielded 7% y/y or R247 per ton higher, compared to the R3,513 obtained per ton of potatoes within the same period in the previous year. Note: 1 bag of potatoes equals 10 kilogram Source: Potatoes SA & Techno Fresh,

4 1.2 Onions Figure 2: Onion sales on the Cape Town Fresh Produce Market Monthly quantities sold during December 2017, were lesser by 21% m/m or 633 tons in relation to the sales quantity obtained during the previous month. The average market price per ton of onions experienced upward pressure and traded 9% m/m or R358 higher per ton of onions in relation to the previous month. This is mainly due to the short supply of onions during December 2017, brought about by the drought in the Province (Fresh Plaza, January 2018). On an annual basis, quantities sold were lesser by 20% y/y or 588 tons in relation to the same period within the previous year in which a total of 2,975 tons were sold. In previous issues, it has been reported that the drought within the Western Cape contributed largely towards changes in the onion market, due to lesser planting and subsequent smaller yields being realised within the current onion marketing season. It is thus no surprise that average market price significantly increased by 67% y/y or R1,726 per ton in relation to the corresponding period last year when it reached R2,387 per ton as compared to the Dec2017 market price of R4,307 per ton. 1.3 Tomatoes Figure 3: Tomatoes sales on the Cape Town Fresh Produce Market Tomatoes quantities sold decreased by 17% m/m or 444 tons in relation to the previous month s sales which reached 2,586 tons. The slight decrease in supply of tomatoes, resulted in a 5% m/m or 398-ton increase in the average market price per ton of tomatoes during December 2017 in relation to the previous month. On an annual basis, sales in terms of the quantity of tomatoes sold decreased by 16% y/y or 400 tons in relation to the same period within the previous year. Whilst the average market price obtained 2% y/y or R170 per ton lesser compared to the R7,916 per 2 ton obtained within the same period in the previous year.

5 1.4 Butternut Squash Figure 4: Butternut Squash sales on the Cape Town Fresh Produce Market Butternut squash volumes sold during December 2017, increased by 29% m/m or 190 tons if compared to the previous month s sales of 664 tons. Accordingly, the average market price responded indifferently as it decreased by 29% m/m or R1,562 per ton in relation to the previous month as the Dec2017 average market price reached R3,781 per ton. On an annual basis, sales volumes declined by 23% y/y or 160 tons during December 2017 in relation to the corresponding period last year. On the other hand, average market prices declined by 6% y/y or R257 per ton if compared to the same period within the previous year. 1.5 Peppers Figure 5: Peppers sales on the Cape Town Fresh Produce Market Pepper volumes sold during December 2017, reached 744 tons which translates into a 14% m/m or 89-ton increase in sales if compared to the 655 tons sold during the previous month. The responsiveness of the average market price is depicted by the 23% m/m or R2,600 per ton decrease obtained during December 2017, which resulted in a ton of peppers to trade at R8,621 on average. On an annual basis, sales quantities decreased by less than 1% y/y if compared to the same period within the previous year. Whilst, the average market price per ton of peppers traded lower by 6% y/y or R513 per ton, compared to the R9,134 per ton obtained within the same period in the previous year. 3

6 1.6 Carrots Figure 6: Carrots sales on the Cape Town Fresh Produce Market A total of 725 tons of carrots was sold during December 2017, which is 17% m/m or 153 tons lesser in relation to the previous month s sales which peaked at 878 tons. The average market price responsiveness to the change in supply during December 2017 resulted in a slight increase of 2% m/m or R58 per ton, as it reached R2,509 per ton. On an annual basis, sales quantities increased by 6% y/y or 38 tons in relation to the corresponding period last year. Whilst the average market price per ton decreased by a further 4% y/y or R94 per ton in relation to the same period, which can be attributed to the increases in supply within the past few months. 1.7 English Cucumber Figure 7: English Cucumber sales on the Cape Town Fresh Product Market English cucumber sales amounted to 345 tons which is 10% m/m or 37 tons lesser than the sales recorded during the previous month. Due to increased demand associated within December and the shortage experienced during the corresponding period, average market prices was pushed upwards by 67% m/m or R4,000 per ton as it traded at R10,009 per ton in relation to the R6,008 per ton obtained within the previous month. On an annual basis, supply to the market was associated with a slight decrease in sales of about 1% y/y or 5 tons if compared to the same period in the previous year. Whilst, the average market price per ton remained more or less the same within the R10,000 per ton range if compared to the same period in the previous year. 4

7 1.8 Cabbage Figure 8: Cabbage sales on the Cape Town Fresh Produce Market Cabbage volumes sold during December 2017, amounted to 340 tons which is 36% m/m or 191 tons lesser than the sale volumes recorded within the previous month. Irrespective of the supply to the market during the mentioned period, the average market price also decreased by 18% m/m or R336 per ton and traded on R1,585 per ton. On an annual basis, volumes sold on the market decreased by 3% y/y or 10 tons if compared to the sales recorded for the corresponding month in the previous year. Whilst the average market price remained more or less unchanged at R1,584 per ton if compared to the same period within the previous year. 1.9 Lettuce Figure 9: Lettuce sales on the Cape Town Fresh Produce Market A total of 307 tons were sold during December 2017, which translates to a relatively small change compared to the previous month. However, the average market price per ton of lettuce shifted upwards by 64% m/m or R2,184 per ton as it traded on R5,604 per ton if compared to the R3,420 obtained per ton of lettuce within the previous month. On an annual basis, volumes sold during December 2017 decreased by 33% y/y or 151 tons if compared to the corresponding period in the previous year. Whilst the average market price per ton of lettuce traded higher by 38% y/y or R1,534 per to, compared to R4,070 obtained per ton in the same period last year. 5

8 1.10 Sweet Potatoes Figure 10: Sweet Potatoes sales on the Cape Town Fresh Produce Market Sweet potatoes volumes decreased by 43% m/m or 235 tons during December 2017, compared to the previous month when a total of 550 tons were sold. Subsequently, the average market price per ton increased by 25% m/m or 756 tons if compared to the R2,974 obtained per ton during the previous month. On an annual basis, sale volumes were 47% y/y or 101 tons higher than the sales volumes recorded for the corresponding period in the previous year. Subsequently, the average market price per ton traded 33% y/y or R1,869 per ton in relation to the same period in the previous year Pumpkin Figure 11: Pumpkin sales on the Cape Town Fresh Produce Market Pumpkin volumes traded reached 283 tons, translating to 25% m/m or 56-ton increase in relation to the sale volumes recorded in the previous month. The average market price per ton of pumpkin traded lower by 47% m/m or R2,121 per ton, as it traded at R2,426 per ton. On an annual basis, 21% y/y or 73 tons lesser was sold on the market during December 2017 compared to the previous year. Whilst the average market price per ton traded 34% y/y or R1,236 per ton lower than the same period in the previous year. 6

9 1.12 Gem Squash Figure 12: Gem Squash sales on the Cape Town Fresh Produce Market Gem squash volumes reached 260 tons, which translates to a 37% m/m or 70-ton increase in relation to the previous month. However, the substantial increase in volumes sold on the market resulted in further downward pressure on the average market price during December Subsequently, the monthly average price declined by 50% m/m or R2,538 per ton. On an annual basis, volumes sold on the market decreased by 11% y/y or 31 tons if compared to the sales recorded within the same period last year. Regardless if the lower volumes sold on the market, average market prices simultaneously also decreased by 10% y/y or R292 per ton. 7

10 TABLE 1: TREND ANALYSIS OF NICHE VEGETABLES TRADED ON THE CAPE TOWN FRESH PRODUCE MARKET: DECEMBER 2017 PRODUCT NAME: ( in order for the highest to lowest volumes sold during this month) AVERAGE TONS TRADED FOR DECEMBER 2017: (tons) (A-Z) CHANGE IN THE AVERAGE TONS TRADED FOR DECEMBER 2017: (m/m) AVERAGE PRICE OBTAINED FOR DECEMBER 2017: (Rand per ton) CHANGE IN THE AVERAGE PRICE MARKETED FOR DECEMBER 2017: (m/m) 13. Sweetcorn % R % 14. Baby Marrow 99-7% R % 15. Beetroot 95-8% R % 16. Cauliflower 87-46% R % 17. Green beans 85-27% R % 18. Brinjals /Eggplant 79 13% R % 19. Broccoli 62-26% R % 20. Spring Onion 22 8% R % 21. Spinach 19-34% R % 22. Leeks 15 3% R % 23. Hubbard Squash 13 11% R % 24. Mushroom % R % 25. Patty Pans % R % 26. Radish 2.5 7% R % 27. Marrow % R % 8

11 2. WEATHER ADVISORY ON THE 2017/2018 SUMMER SEASON, DECEMBER 2017 During the course of November 2017, belownormal vegetation activity was signalled in the Western Cape and Free State, whilst other areas such as the Eastern Cape, Limpopo, Mpumalanga and KwaZulu-Natal also pointed towards lower vegetation activity (DAFF, 2018). Figure 13: VCI Map for November 2017 (DAFF, 2017) Dry conditions are however still prevalent in the Western Cape Province. The persisting drought conditions continue although some rainfall has been received, whilst lesser water is available for agricultural activities (DAFF, 2018). Subsequently, cereal crop production did not perform well in the production areas such as the Overberg district due to slight changes in the overall production (DAFF, 2018). Areas such as the Swartland and Southern Cape, however, resulted in much distressing crop production being realised (DAFF, 2018). As opposed to crop production, livestock production continues to suffer from the prevailing drought and seems to worsen even more due to veld conditions deteriorate (DAFF, 2018). On 29 January 2018, the overall the average level of major dams within the Western Cape decreased to 24.5% y/y in 2017 from 38.1% within the corresponding period within the previous year of 2016 and 25.3% w/w compared to the same period last week (DWS as cited on Elsenburg, 2018). The two largest dams, namely the Theewaterskloof (479.3 million cubic meters) and the Brandvlei (286.1 million cubic meters) respectively stood at 13.1% and 16.6% full on 29 January 2018, compared 33.6% and 31.5% during the corresponding period last year (DWS as cited by Elsenburg, 2017). Alternatively, visit the Elsenburg Website at to obtain the most recent update on dam levels within the Western Cape (Elsenburg, 2017). The World Meteorological Organisation (WMO), has consolidated data from five leading international weather agencies for 2015, 2016 and 2017 and have been confirmed this three years as the warmest on record ( Business day, 2018). This is a result of the warming effect of El Nino, while 2017 was the reported as the warmest non-el Nino year beating 2015 by less than one-hundredth of a degree (Business Day, 2018). Strategies to mitigate climatic change and related disasters A comprehensive list of strategies can be retrieved from the monthly NAC Advisory report issued by DAFF: Climate Change and Disaster Management. Access the mentioned list from the following websites: and Request weather warning notifications from the Western Cape Department of Agriculture: Sustainable Resource Management, Disaster Risk Management, by forwarding an to Mrs. Zaibu Arai to ZaibuA@elsenburg.com or alternatively call (021) Source: DAFF National Agro-meteorological Committee (NAC) Advisory, Additional sources of information regarding climatic conditions, can be obtained in the monthly Agri-Outlook reports Click here to view the monthly Agri-outlook reports. The Agri-outlook report provides a summative overview of both climatic and agricultural conditions in the Western Cape, through reference to information regarding the rainfall, temperatures, dam levels, plant growth conditions as well as climatic forecast within a particular period. Alternatively visit the Elsenburg Website at and go to Agri-tools, followed by Outlook (Elsenburg, 2018). Agri- 9

12 3. NEWS: ACTIVITIES PERTAINING TO THE DOMESTIC & INTERNATIONAL FRESH PRODUCE AND RELATED MARKETS 3.1 Revised minimum wage for employees in the farm and forestry sector Sectoral determination 13, is the legislation which depicts the minimum wages, working hours, number of leave days and the termination rules of individuals employed within the agricultural sector including the forestry sector (DoL, 2018). The revised minimum wage is effective as from 01 March 2018, with the following changes depicted in the below table; monthly wage will change from R to R , weekly wage will change from R to R731.41, daily wage will change from R to R146.28, hourly wage will change from R16.25 to R15.39 (Department of Labour, 2018). Source: Department of Labour, Onion shortage anticipated to worsen in the coming months Lower production volumes are experienced, as a result of the drought within the Western Cape Province (Fresh Plaza, January 2018). The water shortages have resulted in lesser plantings and ultimately a smaller crop available on market floors (Fresh Plaza, January 2018). Even though market prices have already started to increase, market expectations are that conditions will worsen between March and June, and especially more so during the Easter period when demand is generally much higher compared to normalised conditions (Fresh Plaza, 2018). 3.3 Onion plantings: cultivation shift from seedling to seed About 98% of onion production is grown from seedlings, as a result of the vulnerability and the high degree of risk associated with young onion plants with respect to weeds and wind damage (Farmer s Weekly, 19 January 2018). Subsequent increases in production cost are compelling commercial farming enterprises such as the Du Toit farming group, to conduct trials such as growing onions from seed rather than seedlings (Farmer s Weekly, 19 January 2018). The trail is however confined to brown onions due to it being less sensitive to the mentioned risk factors and thus the trail excludes red onions, shallots and Cipollini onions (Farmer s Weekly, 19 January 2018). The recent article in the Farmer s weekly (19 January 2018), indicated that planting preparation for this two methods of cultivation is very similar. However, there are significant changes in the planting dates as the seed has to be planted in June whilst seedlings are only planted between August and October depending on the climatic conditions and the cultivar planted (Farmer s Weekly, 19 January 2018). Within the Western Cape Province, intermediate growers are generally suitable however it is stipulated that day length and temperature has a huge influence on the bulb formation of onions (Farmer s Weekly, 19 January 2018). Crop rotation takes place on a 4 season cycle between onion, potatoes, wheat or triticale followed by a resting period to prevent the build-up of soil pathogens and the reduction of weeds (Farmer s Weekly, 19 January 2018). A preventative spraying program is catered towards the climatic conditions as well as the stage of production (Farmer s Weekly, 19 January 2018). In addition, regular scouting occurs to pro-actively prevent the spread of disease and pests 10

13 whilst harvesting generally occurs from December and concludes in February (Farmer s Weekly, 19 January 2018). 3.4 Oversupply in the tomatoes domestic market Conducive growing conditions in the northern parts of South Africa has resulted in the oversupply of tomatoes (Fresh Plaza, 2018). The increased supply to the market has however been met by subdued consumer demand and hence production volumes are selling at a much slower pace through marketing channels than anticipated (Fresh Plaza, 2018). Due to the warmer weather experienced, the produce has a higher risk of rotting and subsequently, the produce has a much shorter shelf life which has implications on the marketability of the product ( Fresh Plaza, 2018). 3.5 Mauritius importation of vegetables to increase, due to severe rainfall Heavy rainfall in Mauritius has affected local vegetable production since the start of January 2018 (Fresh Plaza, 2018). It is estimated that about 75% of the local vegetable production is affected, and it is anticipated that it would take about 3 months to revive and normalise the industry (Fresh Plaza, 2018). Mauritius is thus importing vegetables from South Africa, India and Egypt to cover the shortage in supply (Fresh Plaza, 2018). Below is a depiction of South Africa s vegetable exports to Mauritius, in table 2 presented under HS07 Edible vegetables, certain roots and tubers. South Africa exported vegetables under HS07 to the value of USD2,14 million which represents 18% growth in exports per annum over the 5 year period ending in 2016( ITC, 2018). However, Mauritius can be characterised as a relatively small market player, as it only had a 1% share in the South African vegetable market ( ITC, 2018). Ranking Product Code Table 2: Trade between South Africa and Mauritius in 2016: South Africa's exports to Mauritius Product: 07 Edible vegetables and certain roots and tubers Annual growth Share in South Value in 2016, in value Product Label Africa's USD thousand between exports, % 2016, %, p.a. Equivalent ad valorem tariff faced by South Africa Fresh or chilled vegetables n.e.s Fresh or chilled carrots and turnips Fresh or chilled mushrooms of the genus "Agaricus" Fresh or chilled potatoes (excluding seed) Dried, shelled peas "Pisum sativum", whether or not skinned or split Dried onions, whole, cut, sliced, broken or in powder, but not further prepared Seed potatoes Tomatoes, fresh or chilled Potatoes, uncooked or cooked by steaming or by boiling in water, frozen Fresh or chilled fruits of the genus Capsicum or Pimenta Fresh or chilled onions and shallots Mixtures of vegetables, uncooked or cooked by steaming or by boiling in water, frozen Fresh or chilled cabbages, kohlrabi, kale and similar edible brassicas (excluding cauliflowers, Fresh or chilled salad beetroot, salsify, celeriac, radishes and similar edible roots (excluding Dried vegetables and mixtures of vegetables, whole, cut, sliced, broken or in powder, but not Source: ITC, 2018 The above table depicts the top 15 vegetables exported from South Africa to Mauritius during Fresh or chilled vegetables not elsewhere specified is the largest vegetable exported product in terms of export value 11

14 at USD749,000, followed by fresh or chilled carrots & turnips at USD436,000, Fresh or chilled mushrooms at USD279,00, fresh or chilled potatoes at USD210,00 and dried or shelled peas at USD100,000 (ITC, 2018). Significant growth in export value has been represented over the 5 past years ending 2016, in the following vegetable groups: fresh or chilled potatoes (399% per annum), frozen potatoes (142% per annum) and fresh or chilled carrots and turnips (118% per annum) (ITC, 2018). Whilst fresh or chilled peppers and frozen mixed vegetables respectively declined by 46% and 35% per annum respectively over the 5 year period ending 2016 (ITC, 2018). 12

15 4 ENERGY 4.1 Fuel Price Adjustments Figure 14: OPEC reference basket price OPEC Reference Basket Price, quoated in USD Source: SARB, 2017 Source: OPEC, 2018 The average international product price of petrol, diesel and illuminating paraffin increased during the period under review, which is from 01 till 27 December 2017 by 7.8% m/m from USD62.06 to USD66.89 (DoE & OPEC, 2018). The USD/ZAR exchange rate appreciated during the review period from R14.09 to R (DoE, 2018). The mentioned factors ultimately led to a lower contribution to the Basic Fuels price on the three mentioned petroleum products (DoE, 2018). Table 2: Fuel price adjustment effective as from Wednesday, 03 January Product Description Numeric adjustment applicable to the Coastal parts in South Africa Price adjustment description Average price applicable to the Coastal parts of South Africa (cents per litre) (cents per litre) Petrol 93 ULP Petrol 95 ULP & LRP Diesel 0.05% Sulphur Illuminating Paraffin (Wholesale) LPGAS (maximum retail price) cents per litre decrease in the retail price cents per litre decrease in the retail price cents per litre decrease in the wholesale price cents per litre decrease in the wholesale price cents per kilogram decrease in the maximum retail price Source: Department of Energy, 28 December

16 ACKNOWLEDGMENTS The below-listed sources are acknowledged, as cited in this publication: Business Day: Department of Agriculture, Forestry and Fisheries: Department of Energy: Department of Labour: Department of Water & Sanitation: Elsenburg (Western Cape Department of Agriculture): Farmers Weekly: Fresh Plaza: International Trade Centre: KORKOM (Potatoes and Onion Committee): Organization of the Petroleum Exporting Countries (OPEC): Potatoes South Africa (SA): Techno Fresh CRM: For more information, contact: The Western Cape Department of Agriculture Programme: Agricultural Economic Services Division: Marketing and Agribusiness Tel: or 5189 Fax: DISCLAIMER: The Western Cape Department of Agriculture has compiled this document and its contents. The views expressed in this document are those of the Department of Agriculture with regard to vegetable market information in the province unless otherwise stated. Anyone who uses this information does so at his/her own risk. The Department of Agriculture or the author(s) therefore accepts no liability for losses incurred resulting from the use of this information. 14