UK market disrupted as strikes, cost of living crisis takes toll

Global events continue to exert influence on grape exports and markets, with the UK market reporting severe disruptions due to industrial action and the increase in cost of living.

Downward sales trends on several commodities, including grapes, have been observed. “Customers are cash strapped and retailers have switched from packing fruit in 500g to 400g packaging,” said Damian Layton, technical manager of produce at Morrisons UK.

“From a Morrisons viewpoint, the key sales message is that we are not always looking for the best, but rather the most consistent, product. Overall, Morrisons has received fewer complaints and issued fewer refunds on grapes than last season. Crispy, crunchy berries remain a preference for UK consumers.”

In contrast to the UK the outlook in the North American market seems more positive, with recent political unrest in Peru opening opportunities for South African producers. The main road between Ica and Lima has been blocked since 19 January 2023. Partial operations have been reported, but some areas have stopped their harvest completely.

The Canadian market remains stable, and indications are that demand for South African table grapes is good. Shipping volumes remain like last season, which is a positive indication.

“The USA market is currently particularly good for South Africa due to the challenges being experienced in Peru,” said Riaan Swart, director deciduous at Dole South Africa.

During weeks 7-10 the USA market expects high volume arrivals from Chile and Peru, approximately 4 to 5 million 8.2 kg-equivalent cartons per week. This is close to market capacity and must be considered if a producer is planning to ship in this period.

“Considering market trends, the recommendation for the current season is to stick to retail programmes and established business channels in all markets,” Swart said.

Casting the gaze closer to home, the Cape Town port is seeing lower levels of occupancy and is currently operating three berths.

“Vessels are working dual cycles, which means stacks are loaded and reefers are discharged simultaneously to optimise operations,” said Antoinette van Heerden, logistical affairs manager at the Fresh Produce Exporters’ Forum.

National volumes and update:

• Week 4 national inspection volumes* are 10% lower than the previous season year to date.
• A total of 38.8 million 4.5 kg-equivalent cartons have been inspected for export.
• Exported volumes** are 8% lower than this time last year.
• A total of 29.9 million 4.5 kg-equivalent cartons have been exported
• The variance between volumes inspected and volumes exported is often due to ships packing for one week and departing in the next. For example, containers may be packed onto a vessel in week 1 but will only be counted as export volumes once the vessel departs the port in week 2.
• Peak volumes are expected over the next few weeks as various cultivars ripen and close cooperation with Cape Town port will remain a priority.
• Some regional representatives are currently visiting Europe to assess product quality on arrival.
• Loadshedding remains a challenge for the industry and country. The following actions are underway:
  • A ministerial task team has been appointed to investigate potential solutions.
  • To better understand the industry’s situation, two surveys have been circulated during the last week – an Agbiz & a Fruit SA survey. Thank you to all who have submitted responses.
  • SATI continues to partake in weekly industry forums which discusses various factors including loadshedding and will continue to provide updates as they become available.
  • Liaison with Eskom to explore load curtailment efforts are ongoing. Progress has been made in two table grape growing regions, with Hexkoel in the Hex River Valley granted the opportunity to introduce load curtailment during certain time frames and a one-month curtailment pilot project approved in the Berg River Region.

*Inspected volumes = Inspected and approved for export by the PPECB
*Exported volumes = Confirmed as departed from the port

– Media release (SATI)