MARKET ANALYSIS REPORT NO 2 OF 2013: SWEET POTATO

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1 MARKET ANALYSIS REPORT NO 2 OF 213: SWEET POTATO 1. INTRODUCTION The following text is a review of sweet potato marketing environment. This analysis is updated on a quarterly 1 basis. The interval covered in the current issue is from January 212 to March 213. This period is subdivided into five, 3 months long quarters. The issues discussed in the review are the trends in production, pricing, sales in the national fresh produce markets, exports, imports, growth and volatility. 2. PRODUCTION TRENDS Table 1 and Figure 1 below illustrate the quarterly production of sweet potatoes. Table 1: Quarterly production of sweet potatoes Quarters Quarter Quarter Quarter Quarter Quarter Production ( Tons) Gross Value ( Rand) R R R R R Quarterly production volume of sweet potatoes was tons in quarter 1 of 213 which was 136% above, when compared to the quarterly production volume in the previous quarter (quarter 4 of 212) and has increased by 15.9% compared to the quarterly production volume at the same time in the previous season (quarter 1, 212). Production volumes were highly unstable during the period under review. Quarterly production value of sweet potatoes was R in quarter 1 of 213 which was 29% above, when compared to the quarterly production value in the previous quarter (quarter 4 of 212) and the value has increased by 22.6% when compared to the production value at the same time in the previous season (quarter 1, 212). Gross value eased higher in quarter 1 of 213, due to a significant increase in sweet potato production output in the same quarter. 1 Quarter 1 (January to March), Quarter 2 (April to June), Quarter 3 (July to September), Quarter 4 (October to December) 1

2 Tons Rand Figure 1: Quarterly production of sweet potatoes Q1 212 Q2 212 Q3 212 Q4 212 Q1 213 Quarters Volume (tons) Gross Value (Rand) 3. PRICING TRENDS Table 2 and Figure 2 illustrate the quarterly producer price of sweet potatoes during the five quarters under review. Table 2: Quarterly producer price of sweet potatoes Quarters Quarter Quarter Quarter Quarter Quarter Price in Rand/Tons R R R R R Quarterly producer price for sweet potatoes was R /ton in quarter 1 of 213 which was 45% below when compared to the quarterly producer price in the previous quarter (quarter 4, 212) and the price has gone up by 5.7% compared to the price at the same time in the previous season (quarter 1, 212). Quarterly prices were highly unstable from quarter 1 of 212 to quarter 1 of 213 period. Sweet potato prices eased marginally lower in quarter 1 of 213 due to 136% increase in sweet potato output in the same quarter. 2

3 Rand/ton Figure 2: Quarterly producer prices of sweet potatoes R 6 R 5 R 4 R 3 R 2 R 1 R Q1 212 Q2 212 Q3 212 Q4 212 Q1 213 Quarters 4. SALES AT THE NATIONAL FRESH PRODUCE MARKETS Table 3 and Figure 3 below illustrate monthly volumes and prices of the sweet potatoes sold at national fresh produce markets. Table 3: Monthly sales of sweet potato at national fresh produce markets (NFPMs) Months Volume in Tons Price (Rand/ton) Jan R Feb R Mar R Apr R May R Jun R Jul R Aug R Sep R Oct R Nov R Dec R Jan R Feb R Mar R

4 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Tons Rand/ton Monthly price at national fresh produce market for sweet potatoes was R /ton in March 213 which was 14% below the monthly price of February 213 and the price has increased by 6% compared to the monthly price at same time in the previous season (March 212). In February 213, sweet potato prices eased lower due to increase in volumes supplied in the market at the same month. Monthly volume at national fresh produce markets for sweet potato was tons in March 213 which was 22% higher when compared to the monthly volume in February 213 and has increased by 15% compared to the monthly volume at the same time in the previous season (March 212). A trend observed is that low sweet potato volumes are supplied in January and at the same time high market prices are realized. In February and march sweet potatoes volumes increases while the prices decline. Figure 3: Monthly sales of sweet potatoes at the national fresh produce markets 35 R R 7 R 6 R 5 R 4 R 3 R 2 R 1 R Volume (Tons) Months Price (Rand/ton) 5. Exports Table 4 and Figure 4 below indicate quarterly export volumes and exports values of sweet potatoes. Table 4: Quarterly sweet potato exports Quarters Quarter Quarter Quarter Quarter Quarter Volume (tons) Value (Rand) R R R R21 79 R Source: Quantec Easy data 4

5 Volume (tons) Value (Rand) Quarterly export volume of sweet potatoes was tons in quarter 1 of 213 which was 796% above the quarterly export volume in the previous quarter (quarter 4, 212) and the volume has decreased by 53.8% when compared to the quarterly export volume at the same time in the previous season (quarter 1, 212). Export volumes were highly unstable during the period under review. Sweet potato export surged during quarter 1 of 213.This can be attributed to 136% increase in production output in the same quarter. Quarterly export value of sweet potatoes was R in quarter 1 of 213 which was 394% above the quarterly export value in the previous quarter (quarter 4, 212) and the value has decreased by 34% when compared to the quarterly export value at the same time in the previous season (quarter 1, 212). It was more profitable to export sweet potatoes in quarter 1 of 213, when compared to quarter 1 of 212, since high values were recorded for volumes exported Figure 4: Quarterly sweet potato exports Q1 212 Q2 212 Q3 212 Q4 212 Q1 213 Quarters Volume (tons) Value (Rand) Source: Quantec Easy data 6. Imports Table 5 and Figure 5 below indicate quarterly import volume and import values of sweet potatoes. Table 5: Quarterly sweet potato imports Quarters Quarter Quarter Quarter Quarter Quarter Volume (tons) Value (Rand) R R R R R Source: Quantec Easy data 5

6 Volume (tons) Value (Rand) Quarterly import volume of sweet potatoes was tons in quarter 1 of 213 which was 5% below the quarterly import volume in the previous quarter (quarter 4, 212) and the volume has increased by 17.6% when compared to the quarterly import volume at the same time in the previous season (quarter 1, 212). Import volumes were stable during the period under review. The decrease in sweet potato import in quarter 1 of 213 can be attributed to 136% increase in domestic production output in the same quarter. Quarterly import value of sweet potatoes was R in quarter 1 of 213 which was 46% lower when compared to the quarterly import value in the previous quarter (quarter 4, 212) and the value has increased by 73% when compared to the quarterly import value at the same time in the previous season (quarter 1, 212). It was more expensive to import sweet potatoes during quarter 1 of 213, when compared to quarter 1 of 213 since high values were recorded for volumes imported Figure 5: Quarterly sweet potato imports Q1 212 Q2 212 Q3 212 Q4 212 Q1 213 Quarters Volume (tons) Value (Rand) Source: Quantec Easy data 7. GROWTH, VOLATILITY & STABILITY ANALYSIS Sweet potato industry growth rate was calculated from regression analysis results. The volatility and stability measures were determined by calculating the coefficient of variation for the various sweet potato industry statistical series. The formula for the coefficient of variation is as follows: V x i N where: V = Coefficient of Variation = Standard deviation = mean = observation in quarter i x i N = Number of quarters 6

7 The outcomes of these growth and volatility calculations are presented in Table 5. They are calculated using quarterly statistics and covered the same five-quarter period under review beginning in January 212 and ending in March 213. Table 6: Sweet potato industry Growth Rates and Coefficients of Variation (January 212 March 213) Category Subcategory Growth Rate Coefficient of Variation Production Volume -7.1%.316 Gross Value of Production Value -..1%.317 Producer Prices Value 7%.192 Export Volume -56% Export Value -42.7% Import Volume 7.1%.149 Import Value 8.6%.744 Source: Calculated from Statistics and Economic Analysis Data As shown in Table 6, on average sweet potato production volume, gross value of production, producer price, import volume and import value were less volatile with variation coefficients of less than 1. The low volatility indicates that the industry has displayed minimum changes during the five quarter period. Export volume and export value were highly volatile with variation coefficients of 1.29 and 1.33 respectively. Export displayed significant changes during the five quarter period. Sweet potato industry has experienced positive growth in terms of import volume. The industry has experienced a negative growth in terms of production volume, gross value of production, export volume and export value 7

8 8. Acknowledgements Acknowledgement is given to the following information sources: 8.1 Directorate: Statistics and Economic Analysis Quantec Easy Data For more information contact: Director: Marketing Department of Agriculture, Forestry and Fisheries Private Bag X 15 Arcadia 7 Tel: (12) Fax: (12) MogalaM@daff.gov.za Website: http//. Acting Deputy Director: Commodity Marketing Tel: (12) Fax: (12) ElvisN@daff.gov.za Horticulture (Vegetables): Senior Agricultural Economist Tel: (12) Fax: (12) NdinannyiM@daff.gov.za Disclaimer: This document and its contents have been compiled by the Department of Agriculture, Forestry and Fisheries for the purposes of detailing the sweet potato industry. Anyone who uses this information does so at his/her own risk. The views expressed in this document are those of the Department of Agriculture, Forestry and Fisheries with regard to the industry, unless otherwise stated. The Department of Agriculture, Forestry and Fisheries therefore, accepts no liability for losses incurred resulting from the use of this information. 8