MONTHLY MARKET INFORMATION REPORT: VEGETABLES

Transcription

1 MONTHLY MARKET INFORMATION REPORT: VEGETABLES Review period: February 2017 to February 2018 Issue: 2018/03 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 Butternut Squash 1.9 English Cucumber 1.2 Tomatoes 1.6 Peppers 1.10 Lettuce 1.3 Onions 1.7 Pumpkin 1.11 Gem Squash 1.4 Carrots 1.8 Cabbage 1.12 Sweet Potatoes 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 RELATING TO THE NATIONAL FRESH PRODUCE MARKET A total of 51,722 hectares was planted during the 2017 production season, which subsequently yielded a total harvest of 244, 5 million bags (Potatoes SA, 2018). The total harvest during last year amounted to a 19% y-o-y or 18, 6 million-bag increase in relation to the previous marketing season (Potatoes SA, 2018). This led to an increase in average market prices of 26% y-o-y in relation to the previous year (Potatoes SA, 2018). The industry association indicated that consumers are buying more potatoes on an annual basis based on the same real price (adjusted for inflation purposes), and subsequently this led to a R1,6 billion spend on the purchasing of potatoes by consumers in relation to 10 years ago (Potatoes SA, 2018). Various factors such as stronger demand which can be attributed to an increasing population size as well as an expansion in income categories. The 2018 plantings is expected to move sideways, it is however concerning to observe that plantings has been on a declining trend as from 2015 (Potatoes SA, 2018). This could negatively implicate on the crop anticipated for 2018, as the drought in the Western Cape as well as other climatic shocks such as the heatwave in January 2018 and the cold damage in November 2017 experienced in the Eastern Free State (Potatoes SA, 2018). This could potentially result in a decrease in production output in relation to the previous season in which more conducive vegetation conditions were experienced in the Limpopo and Eastern Free State (Potatoes SA, 2018). Average market prices on the national fresh produce markets (in real terms, adjusted for inflation) were much lower during January and February 2018, compared to the corresponding period within the previous year (Potatoes SA, 2018). DEVELOPMENTS RELATING TO THE CAPE TOWN FRESH PRODUCE MARKET The total amount of potatoes sold during February 2018, decreased by 12% m-o-m or 1,020 tons which amounts to 102,000 bags lesser in comparison to the previous month. On the contrary, the average price per ton also decreased by 17% m-om or R734 in relation to the previous month in which a ton of potatoes was sold for R3,760 per ton. On an annual basis, volumes slightly increased by 2% m-o-m or 167 tons in relation to the same period in the previous year. Whilst average market prices have also slightly decreased by 1% y-o-y in relation to the corresponding period last year. Note: 1 bag of potatoes equals 10 kilogram Source: Potatoes SA & Techno Fresh,

4 1.2 Tomatoes Figure 2: Tomatoes sales on the Cape Town Fresh Produce Market Tomatoes sales reached 2,095 tons during February 2018, which represents a 19% m-o-m or 490-ton decrease in relation to the sales recorded in the previous month. As a result of the lesser volumes available on the market, average market prices responded through a 21% m-o-m or R1,173 increase per ton of tomatoes sold during February If assessed on an annual basis, volumes are slightly lower by 1% y-o-y in relation to the sales recorded during the same period in the previous year. Whilst the average market price traded higher by 9% y-o-y or R556 per ton at R6,833 per ton of tomatoes within the same period. 1.3 Onions Figure 3: Onion sales on the Cape Town Fresh Produce Market Annual onion production has significantly decreased by 20% y-o-y or 513 tons, which could be attributed to the prevailing drought within the Western Cape which has resulted in a decrease in the area under onion production. Volumes amounting to 2,008 tons were sold during February 2018 in relation to the same period in the previous year in which a total of 2,521 tons were sold. Subsequently, the average market price has surged by 96% y-o-y or R2,615 per ton as it traded at R5,326 per ton. On a monthly basis, onion sales declined by 21% m-o-m or 541 tons in relation to the previous month. Whilst the average market prices traded higher by 2% m-o-m or R95 per ton in relation to the R5,230 obtained per ton of onions within the previous month. 2

5 1.4 Carrots Figure 4: Carrots sales on the Cape Town Fresh Produce Market Carrots volumes sold during the month of February 2018, amounted to 683 tons which is 15% m-o-m or 116 tons lesser than the volumes sold within the previous year. As a result of the significant change in supply, the average market prices responsiveness resulted in a 15% m-o-m or R384 per ton in relation to the previous month in which a ton traded at R2,540. On an annual basis, volumes traded increased by 5% y-o-y or 30 tons in relation to the same period in the previous year. Whilst the average market price traded 6% y-o-y or R167 pe rton higher in relation to the corresponding period within the previous year. 1.5 Butternut Squash Figure 5: Butternut Squash sales on the Cape Town Fresh Produce Market Butternut squash volumes reached 673 tons during February 2018, which translates to a 7% m-o-m or 51-ton decrease in relation to the sales recorded in the previous month. Regardless of the decrease in supply on the market, the average market price decreased by 4% m-o-m or R126 per ton in relation to the previous month. If compared to the corresponding period within the previous year, volumes sold decreased by 4% y-o-y or 31 tons and average market prices traded higher by almost 1% y-o-y in relation to the R2,729 obtained per ton of butternut squash. 3

6 1.6 Peppers Figure 6: Peppers sales on the Cape Town Fresh Produce Market An amount of 621 tons of peppers was sold during February 2018, which translates into a 24% m-o-m or 194-ton decrease in relation to the previous month s sales. As a result, the average market price increased by 13% m-om or R854 per ton as it traded at R7,395 per ton in relation to the previous month. On an annual basis, volumes sold were increased by 9% y-o-y or 53 tons in relation to the sales recorded for the corresponding period in the previous year. Whilst the average market price traded more or less unchanged at R7,383 per ton in relation to the same period in the previous year. 1.7 Pumpkin Figure 7: Pumpkin sales on the Cape Town Fresh Product Market A total of 393 tons of pumpkin was sold during February 2018, which represents a 2% m-o-m decrease in the volumes traded in relation to the previous month. On the contrary, the average market price traded at R1,679 per ton which is 5% m-o-m or R95 per ton lesser than the average price obtained within the previous month. On an annual basis, 13% y-o-y or 59 tons lesser volumes were sold on the market in relation to the same period within the previous year. Whilst, the average market price traded 8% y-o-y or R122 per ton higher than the corresponding period within the previous year. 4

7 1.8 Cabbage Figure 8: Cabbage sales on the Cape Town Fresh Produce Market Cabbage volumes sold during February 2018, amounted to 345 tons, which translates into an 18% m-o-m or 74- ton decrease in relation to the sales recorded within the previous month. Surprisingly, the average market price did not increase significantly as it merely increased by 4% m-o-m or R66 per ton in relation to the previous month in which more volumes were sold. On an annual basis, volumes sold increased by 2% y-o-y in relation to the same period within the previous year. Whilst the average market price declined by 7% y-o-y or R131 per ton, if comparing the same period within the previous month. 1.9 English Cucumber Figure 9: English Cucumber sales on the Cape Town Fresh Produce Market English cucumbers sales amounted to 250 tons which is 37% m-o-m or 146 tons lesser than the volumes sold during the previous month. As a result of the shortage in supply to the market, the average market price increased by 67% m-o-m or R5,749 per ton in relation to the previous month in which a ton of English cucumber traded at R8,603 compared to the R14,351 per ton during the month of February On an annual basis, a total of 10% y-o-y or 146 tons lesser was sold compared to the same period within the previous year. Whilst the average market price traded 39% m-o-m or R4,011 per ton higher at R14,351 per ton compared to the R10,341 obtained per ton during the corresponding period in the previous year. 5

8 1.10 Lettuce Figure 10: Lettuce sales on the Cape Town Fresh Produce Market Lettuce volumes sold amounted to 233 tons, representing a 17% m-o-m or 47-ton decrease in relation to the previous month. Whilst the average market price per ton, traded higher by 57% m-o-m or R2,667 per ton in relation to the previous month. On an annual basis, volumes sold decreased by 16% y-o-y or 44-ton compared to the same period in the previous year. It is thus not surprising that the average market price per ton traded 57% y-o-y or R2,054 per ton higher than the same period within the previous year Gem Squash Figure 11: Gem Squash sales on the Cape Town Fresh Produce Market A total of 222 tons of gem squash was sold during February 2018, which translates into a 14% m-o-m or 36-ton decrease in relation to the sales recorded within the previous month. Subsequently, the average market price traded 46% m-o-m or R1,1950 per ton higher than the previous month in which a ton of gem squash was sold at R2,620. On an annual basis, volumes sold decreased by 39% y-o-y or 140 tons in relation to the sales volumes recorded within the same period in the previous year. Whilst the average market price traded 54% y-o-y or R1,333 per ton higher if compared to the corresponding period in the previous period. 6

9 1.12 Sweet Potatoes Figure 12: Sweet Potatoes sales on the Cape Town Fresh Produce Market Sweet potatoes volumes sold reached 182 tons in relation to the 213 tons sold during the previous period. This translates into a 15% m-o-m or 31-ton decrease in relation to the previous month. As a result, average market prices for sweet potatoes experienced upward pressure as it increased by 34% m-o-m or R1,649 per ton in relation to the previous month. On an annual basis, volumes were lesser by 18% y-o-y or 39 tons compared to the sale volumes recorded within the same period in the previous year. Whilst, the average market prices slightly increased by 0.6% y-o-y translating to a R40 increase in each ton of sweet potatoes traded during February 2018, in relation to the same period in the previous year. 7

10 TABLE 1: TREND ANALYSIS OF NICHE VEGETABLES TRADED ON THE CAPE TOWN FRESH PRODUCE MARKET FOR FEBRUARY 2018 PRODUCT NAME: ( in order for the highest to lowest volumes sold during this month) AVERAGE TONS TRADED FOR FEBRUARY 2018: (tons) (A-Z) CHANGE IN THE AVERAGE TONS TRADED FOR FEBRUARY 2018: (m/m) AVERAGE PRICE OBTAINED FOR FEBRUARY 2018: (Rand per ton) CHANGE IN THE AVERAGE PRICE MARKETED FOR FEBRUARY 2018: (m/m) 13. Sweetcorn 99-41% R % 14. Green beans 87-12% R % 15. Beetroot 85-6% R % 16. Baby Marrow 79-19% R % 17. Brinjals /Eggplant 75 3% R % 18. Cauliflower 70-34% R % 19. Broccoli 59-18% R % 20. Spinach 29 14% R % 21. Spring Onion 17-25% R % 22. Leeks 15 14% R % 23. Hubbard Squash 15 5% R % 24. Mushroom 9 40% R % 25. Marrow % R % 26. Patty Pans % R % 27. Radish % R % 8

11 2. WEATHER ADVISORY ON THE 2018 SUMMER SEASON, MARCH 2018 In January 2018, low vegetation activity was experienced in large parts of the Free State, North West and Limpopo provinces (DAFF, 2018). Whilst, isolated areas within the Northern Cape, Eastern Cape and Gauteng provinces suffered under severely dry conditions (DAFF, 2018). Towards February 2018, the vegetation activity remained below-normal over Limpopo, parts of the Northern Cape, Western Cape and Eastern Cape provinces (DAFF, 2018). Whilst, the vegetation activity improved over the central interior of the country (DAFF, 2018). Figure 13: Vegetation Conditions Index, January & February 2018 Within the Western Cape Province, livestock production continues to be under stress in almost all districts (DAFF, 2018). A recent drought assessment throughout the province indicated that Matzikamma and Central Karoo are the most drought-affected municipal districts (DAFF, 2018). On an optimistic front, better rainfall within the Overberg region resulted in a slight improvement in crops whilst the northern Swartland and eastern side of the Southern Cape resulted in below-normal crops (DAFF, 2018). It is, however, worrying that fruit production remains under drought stress as a result of water scarcity for irrigation purposes (DAFF, 2018). On 12 March 2018, the overall the average level of major dams within the Western Cape further decreased to 19.6% y/y from 28.8% within the corresponding period within the previous year of 2017 and 20.4% w/w compared to the same period during the 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 10.6% and 6.8% during 12 March 2018, compared to 24.8% and 19.7% during the corresponding period last year (DWS as cited by Elsenburg, 2018). Alternatively, visit the Elsenburg Website at to obtain the most recent update on dam levels within the Western Cape (Elsenburg, 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 Agri-Outlook (Elsenburg, 2018). 9

12 3. NEWS: ACTIVITIES PERTAINING TO THE DOMESTIC & INTERNATIONAL FRESH PRODUCE AND RELATED MARKETS 3.1 Explaining the role of Agricultural Produce Agents Council (APAC) The Agricultural Produce Agents Council is a regulatory body established in terms of section 2 of the Agricultural Produce Agents Act, Act 12 of 1992, as amended under the Agricultural Produce Agents Amendment Act, Act 47 of 2003 (APAC, 2018). The main purpose of the Act is to provide for the establishment of an Agricultural Produce Agents Council and the fidelity funds in respect of agricultural produce agents for the control of certain activities of agricultural agents and other related matters (SA Government as cited in APAC, 2018). Important to note is the APAC Rules relating to fresh produce agents as issued in Government Gazette nr on 19 August In essence, the rules described the manner in which the below issues are addressed. Code of Conduct: the manner in which agents should conduct themselves in respect of integrity, objectiveness, independence, the minimum level of skills and knowledge, remuneration as well as financial obligations. Fidelity fund certificate: application process applicable to apply for to APAC by agents, the annual maintenance of the fidelity fund as well as the prescribed contribution payable to APAC. Security: through the provision of investment products, as well as the specific amount determined as security to be paid over to APAC. Receipt and sale of produce: Records should be kept by agents of each consignment, in which the date of receipt, name & address of principal, nr of the delivery note, class or grade of the produce received and quantity is captured. It is important to note, that this information should occur no later than the following day, after the receipt of a consignment. Principles (i.e. farmers or seller) should also note, that marking requirements are a requirement on packed fresh produce. Failing to meet this requirement, could result in an agent performing the necessary action to mark such produce which could lead to the subtracting of such cost from the principal due cost incurred in ensuring that a marked contained is provided to the final purchaser. the issuing of sale notes to the purchaser, in which the following details should be indicated before the removal of produce from the agents custody: serial number, name or code mark of agent, date of sale, name of principal (i.e. farmer or seller), in the event of a credit sale also indicate the address of the purchaser, class or grade of produce, price at which quantity was sold, designation of market or premises. Payment of sale. Reporting of unsold fresh produce. Accounting principles: issuing of statement to principle within 5 days after sale or disposal of fresh produce, pertaining the following details such as the serial number, name of the fresh 10

13 produce agent, date of receipt of consignment, nr of delivery note applicable to the consignment, class and/or grade, quantity sold and at what selling price, the amount and the nature of each deduction agreed upon relating to the sale, amount and rate at which the remuneration of fresh produce agent has been claimed, specific details of fresh produce which have been found unsuitable for sale or withdrawn from a tentative sale transaction. Disciplinary proceedings: compliant procedure for agents to APAC. Miscellaneous provisions: reporting of convictions, payment of unclaimed monies by principles. Click here to view all registered fresh produce agents with APAC (Agricultural Produce Agents Council). 11

14 4. SOUTH AFRICAN ECONOMIC PERFORMANCE Source: SARB, March 2018 During the month of February 2018, the ZAR exchange rate strengthened against the major global currencies such as the US dollar (USD), Great Britain Pound (GBP) and Euro (SARB, 2018). For the period between 02 February and 01 February 2018: the USD/ZAR strengthen by 3.7% m-om or R 0.46 and traded at R11.87, the GBP/ZAR depreciated by 1.3% m-o-m or R 0.22 and the EUR/ ZAR traded 0.6% m-o-m or R0.10 lower at R14.76 (SARB, 2018). A range of international and domestic factors influenced the performance of the Rand against major global currencies. A summary (although not limited) of the international and domestic macro environment, conditions are briefly discussed below: A 3.1 % growth rate has been reported for the economy in quarter 4 of 2017, compared to 2.3% reported for the previous quarter 3 of 2017; 2.9% for quarter 2 of 2017 and - 0.5% for quarter 1 of 2017 ( Stats SA, 2018). The largest industry contributors toward the positive growth reported in quarter 4 of 2017, can be attributed to the fact that the agriculture, forestry and fisheries (AFF) sector grew by 37.5% during the corresponding period and subsequently contributed to 0.8% of the positive GDP growth reported within the economy (Stats SA, 2018). This was the 4 th consecutive quarter in which the AFF sector expanded, and the latter growth is attributed to higher production in animal products (Stats SA, 2018). The trade, catering and accommodation sector followed with a 0.6% contribution, and the manufacturing and finance sector respectively by 0.5% each during the same reporting period (Stats SA, 2018). It was, however, concerning, in that the construction and mining sectors both contracted within the 4 th quarter of 2017 (Stats SA, 2018). Overall, the South African economy expanded by 1.7% in 2017, which is 0.7% above the National Treasury estimation of 1.0% (Stats SA, 2018). Exports grew by 12.3% during quarter 4 of 2017 and stood at R80,51 billion, whilst imports grew at a much larger portion at 26.5% and stood at R108,17 billion (SARS, 2018). After 11 consecutive months of a trade surplus, a trade deficit of R27.66 billion ( includes BNLS countries) was reported at the end of January 2018, which is significantly higher compared to the corresponding period in the previous year when a trade deficit of R11.28 billion was reported (SARS, 2018). The high growth of 18.3% y-o-y in imports which outset the relatively small increase of 0.5% y-o-y in exports from South Africa (SARS, 2018). On a monthly basis, imports grew by 21.9% m-o-m, whilst imports grew by 22.6% m-o-m in relation to the trade figures reported within the previous month (SARS, 2018). 12

15 A decrease of 1.0% has been reported in the unemployment rate in quarter 4 of 2017, and subsequently the rate of 26.7% (Stats SA, 2018). On the political front, an array of episodes played off during the first quarter of Former President Jacob Zuma had resigned from office on Valentine s evening after the ruling s party, ANC National Executive Committee has indicated that they also instigated a motion of no confidence against the President and were about to table it in parliament ( Mail& Guardian, 13 February 2018). The aforementioned was followed by the swearing in of President Cyril Ramaphosa, the next day, 15 February 2018 (SA Government, 2018). Subsequently, the State of the Nation Adress (SONA) proceeded on 16 February 2018, in which the newly inaugurated President Ramaphosa overshadowed by a commitment pertaining to policy direction and certainty in this regard (SA Government, 2018). Key interventions at SOE s (state owned enterprises) and institutions such as the National Prosecuting Authority (NPA), SA Revenue Services (SARS) and others were emphasised (SA Government, 2018). In addition to fiscal consolidation, the containment of public finances through the review and downscaling of cabinet and subsequently state departments was also announced (SA Government, 2018). Important to note is the fact that land expropriation without compensation has been reconfirmed in the 2018 SONA, as per the resolution of the ANC s 54 th policy conference held in December It has however been indicated that this would involve a consultative process before implementation and that the view is that it would be designed in a way that increases agricultural production, improves food security and not be to the detriment of other sectors within the economy (SA Government, 2018). Click here for SONA. 13

16 5. ENERGY Fuel price adjustments The average international product prices of Petrol, Diesel and Illuminating Paraffin decreased during the period under review (DoE, 2018). As indicated in the below figure, the OPEC reference basket price decreased by 1.58% m-o-m and traded on USD62.48 per barrel in relation to the previous month (OPEC, Source: OPEC, March ). The South African rand appreciated against the USD dollar during the period under review, which is applicable from 02 February to 01 March, from USD/ZAR12.20 to USD/ZAR11.81 (DoE, 2018). Subsequently the appreciation in ZAR exchange rate, in addition to a decline in the international oil price, led to a lower contribution to the basic fuel price on petrol, diesel and illuminating paraffin (DoE, 2018). Table 2: Fuel price adjustment effective as from Wednesday, 07 March 2018 Product Description Numeric adjustment applicable to the Coastal parts in South Africa Price adjustment description The average price applicable to the Coastal parts of South Africa (cents per litre) (cents per litre) Petrol 93 ULP 36.00c cents per litre decrease in the retail price Petrol 95 ULP & LRP 36.00c cents per litre decrease in the retail price Diesel 0.05% Sulphur 47.00c cents per litre decrease in the wholesale price Illuminating Paraffin (Wholesale) 23.00c cents per litre decrease in the wholesale price LPGAS (maximum retail price) 69.00c cents per litre decrease in the maximum retail price Source: Department of Energy, 02 March

17 ACKNOWLEDGMENTS The below-listed sources are acknowledged, as cited in this publication: Agricultural Produce Agents Council (APAC): Agricultural Research Council (ARC): Department of Agriculture, Forestry and Fisheries (DAFF): Department of Energy (DoE): Department of Water & Sanitation (DWS): Elsenburg (Western Cape Department of Agriculture): Organization of the Petroleum Exporting Countries (OPEC): Potatoes South Africa: South African Government: South African Reserve Bank (SARB): South African Revenue Services (SARS): Statistics South Africa (Stats 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. 15