Emotions are running high in the South African grape industry. "Being a fruit marketer feels more like being a firefighter these days," remarks Francois Myburgh, executive marketing manager of Bet-el Fruit.
“Last year we had our hands full with shipping problems, this year it’s quality because of rain and hail as well as labour problems here and there,” he explains. “There are so many variables over which we have no control.”
Electricity cuts have become the bane of the South African fruit industry – for which, Francois notes, Europeans have discovered empathy since developing their own electricity problems.
“A grape grower from the Orange River was telling me about his electricity usage: he needs to pump water from the river – and you can imagine how hot it is there now, those vineyards need to be kept watered – and then he has his cold rooms and his packing sheds – it is enormously expensive with the rental of the generators.”
Bet-el Fruit, which specializes in table grapes and Western Cape citrus, started in week 46 with early grapes from the summer rainfall Limpopo Province which, alas, has had yet another grape campaign scuppered by rain.
Soon afterwards they would usually turn to the Orange River Valley’s grapes but this year Northern Cape volumes are short. The crop is down by as much as 30% in totality due to excessive heat during early springtime followed by rain and hail during harvesttime, including a second hail storm on later varieties.
“Meanwhile, Trawal gets almost no rain which makes it a good quality area but this year growers have already had two rain showers. The Hex has also started and the harvest has been earlier but the early grapes experienced a lot of damage,” he adds.
The first cartons from Trawal are usually packed for export, but because of the rain it stayed home.
Now, with all of the public holidays associated with Christmas and New Year over, exports of grapes from Trawal and the Hex can commence.
The costs of South Africa’s loadshedding are getting worse, coupled with price inflation across the board and rising levels of debt.
Even before the deleterious impact of rain and hail the picture of farm liquidity had already been sombre.
“Costs are just too high and margins are very slim. You just can’t take any chances – even though the shelves are empty and the prices are there, but if you don’t have the quality, it doesn’t matter how empty the market is.”
In case of quality issues, repacking of grapes and sending them to wholesale or less sensitive markets are in the order of the day but the costs of reworking problematic grapes in Europe have become astronomical.
Retailers taking note
“Even the very large grape producers are worried and they’re equally affected by quality problems. What’s happening now is that they’re running short on their supermarket programmes which they need to fill with supplies from other smaller exporters.”
On the bright side, European and UK supermarkets have started to take notice of the enormous cost pressure bearing down on grape growers, Francois says.
“European supermarkets are still very cautious although it’s looking better than previous years. Prices are slightly better, especially the discount stores have lifted their prices somewhat. They’re seeing what’s going on outside and they need to have grapes on their shelves.”