MARKET ANALYSIS REPORT NO 1 OF 215: 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 October 213 to December 2. 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 Figure 1 below illustrates the quarterly production volume and gross value of sweet potatoes. Quarterly production volume of sweet potatoes was 7 937 tons in quarter 4 of 2. The quarterly production volume has notably dropped by 45.5%, when compared to the quarterly production volume in the previous quarter (quarter 3 of 2) and has decreased by 23% compared to the quarterly production volume at the same time in the previous season (quarter 4, 213). Production volumes were highly unstable and the highest volumes of 26 794 tons were recorded in quarter 2 of 2 and lowest volume of 7 937 tons in quarter 4 of 2. The quarterly production value of sweet potatoes was R33 92 573 in quarter 4 of 2. The quarterly production value dropped by 32.7%, when compared to the quarterly production value in the previous quarter (quarter 3 of 2) and the value has decreased by 17.7%, in comparison to the production value at the same time in the previous season (quarter 4, 213). Gross value eased lower in quarter 4 of 2, due to decline 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
Rand/ton Tons Rand Figure 1: Quarterly production of sweet potatoes 3 25 2 15 1 5 Quarters Q4 213 Q1 2 Q2 2 Q3 2 Q4 2 Volume (tons) 1322 19426 26794 575 7937 Gross Value (Rand) 41227532 338671 58267298 542671 3392573 7 6 5 4 3 2 1 Source: Statistics and Economic Analysis, DAFF 3. PRICING TRENDS Figure 2 illustrates the quarterly producer price of sweet potatoes during the five quarters under review. Quarterly producer price for sweet potatoes was R4 273.73/ton in quarter 4 of 2, which was 23.5% above when compared to the quarterly producer price in the previous quarter (quarter 3, 2) and the price has surged by 45.5%, in comparison to the price at the same time in the previous season (quarter 4, 213). Quarterly prices were fairly unstable from quarter 4 of 213 to quarter 4 of 2 period. Sweet potato price eased notably higher in quarter 4 of 2 due to 45.5% decrease in sweet potato output in the same quarter. Figure 2: Quarterly producer prices of sweet potatoes R 4 5 R 4 R 3 5 R 3 R 2 5 R 2 R 1 5 R 1 R 5 Quarters R Q4 213 Q1 2 Q2 2 Q3 2 Q4 2 Price (Rand/ton) 2936.32 3886.31 2174.64 3459.81 4273.73 Source: Statistics and Economic Analysis, DAFF 2
Tons Rand/ton 4. SALES AT THE NATIONAL FRESH PRODUCE MARKETS Figure 3 below illustrates monthly volumes and prices of the sweet potatoes sold at national fresh produce markets. Monthly volume at national fresh produce markets for sweet potato was 1 164 tons in December 2, which was 8.6% below when compared to the monthly volume in November 2 and has decreased by 24.8% compared to the monthly volume at the same time in the previous season (December 213). Sweet potato volumes supplied in the market declined steadily in November and December for both 213 and 2. Monthly price at national fresh produce market for sweet potatoes was R5 72/ton in December 2, which was 1% below the monthly price of November 2 and the price has surged by 14%, when compared to the monthly price at the same time in the previous season (December 213). In November 213 and 2, sweet potato prices eased marginally higher due to a notable decline in volumes supplied in the market at the same months. Figure 3: Monthly sales of sweet potatoes at the national fresh produce markets Months 4 35 3 25 2 15 1 5 Oct 13 Nov 13 Dec 13 Jan Feb Mar Volume (Tons) 247 1684 1549 1952 1382 1985 3393 3342 3125 339 237 1598 8 1274 1164 Price (Rand/ton) 3385 47 2791 447 57 4261 2263 2615 2717 3549 4276 476 5921 636 572 Apr May Jun Jul Aug Sep Oct Nov Dec R 7 R 6 R 5 R 4 R 3 R 2 R 1 R Source: Statistics and Economic Analysis, DAFF 5. Exports Figure 4 below indicates quarterly export volumes and export values of sweet potatoes. Quarterly export volume of sweet potatoes was 2.15 tons in quarter 4 of 2. Quarterly export volume has significantly dropped by 19.2%, when compared to the quarterly export volume in the previous quarter (quarter 3, 2) and the volume has significantly increased by 337%, when compared to the quarterly export volume 3
Volume (tons) Value (Rand) at the same time in the previous season (quarter 4, 213). Export volumes were highly unstable during the period under review. Sweet potato export eased notably lower during quarter 4 of 2.This can be assigned to 45.5% drop in domestic production output in the same quarter. The quarterly export value of sweet potatoes was R9 396 in quarter 4 of 2, which was 19.6% below the quarterly export value in the previous quarter (quarter 3, 2) and the value has increased by 313%, when compared to the quarterly export value at the same time in the previous season (quarter 4, 213). It was more profitable to export sweet potatoes in quarter 4 of 213, when compared to quarter 4 of 2, since high values were recorded for volumes exported. 8 6 4 2 Quarters Figure 4: Quarterly sweet potato exports 12 1 Q4 213 Q1 2 Q2 2 Q3 2 Q4 2 Volume (tons) 32.49 279.81 121.35 176.4 2.15 Value (Rand) 22972 1697549 4454396 113856 9396 5 45 4 35 3 25 2 15 1 5 Source: Quantec Easy data 6. Imports Figure 5 below indicates the quarterly import volume and import values of sweet potatoes. Quarterly import volume of sweet potatoes was 25.2 tons in quarter 4 of 2, which was 186% higher when compared to the quarterly import volume in the previous quarter (quarter 3, 2) and the volume has dropped by 5.7%, in comparison to the quarterly import volume at the same time in the previous season (quarter 4, 213). Sweet potato imports surged in quarter 4 of 2, which can be ascribed to 45.5% decline in the domestic production output in the same quarter. The quarterly import value of sweet potatoes was R562 415 in quarter 4 of 2, which was 17% higher, when compared to the quarterly import value in the previous quarter (quarter 3, 2) and the value has increased by 75.9%, when compared to the quarterly import value at the same time in the previous season (quarter 4, 2). It was more expensive to import sweet potatoes during quarter 4 of 2, when compared to quarter 4 of 213 since higher values were recorded for volumes imported. 4
Volume (tons) Value (Rand) 3 25 Figure 5: Quarterly sweet potato imports 6 5 2 15 1 5 4 3 2 1 Quarters Q4 213 Q1 2 Q2 2 Q3 2 Q4 2 Volume (tons) 26.53 19.59 11.3 8.72 25.2 Value (Rand) 319694 77855 454684 271283 562415 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 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 October 213 and ending in December 2. Table 6: Sweet potato industry Growth Rates and Coefficients of Variation (October 213 December 2) Category Subcategory Growth Rate Coefficient of Variation Production Volume 3.9%.34 Gross Value of Production Value 1.6%.431 5
Category Subcategory Growth Rate Coefficient of Variation Producer Prices Value 6.6%.125 Export Volume 39.5% 1.29 Export Value 39.6% 1.12 Import Volume 2.7%.76 Import Value 61%.789 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. Export volume and export value were highly volatile with variation coefficients of more than 1. The high volatility indicates that the industry has displayed maximum changes during the five quarter period. The sweet potato industry has generally experienced positive growth. 6
8. Acknowledgements Acknowledgement is given to the following information sources: 8.1 Directorate: Statistics and Economic Analysis www.daff.gov.za 8.2 Quantec Easy Data www.easydata.co.za For more information contact: Director: Marketing Department of Agriculture, Forestry and Fisheries Private Bag X 15 Arcadia 7 Tel: (12) 319 8455 Fax: (12) 319 8131 E-mail: MogalaM@daff.gov.za Website: http//.www.agis.agric.za/mis Director: Commodity Marketing Tel: (12) 319 872 Fax: (12) 319 877 E-mail: ElvisNak@daff.gov.za Horticulture (Vegetables): Senior Agricultural Economist Tel: (12) 319 867 Fax: (12) 319 877 E-mail: 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. 7