South African Table Grape Traders Are Rising above Challenges Amidst Logistical Issues

Fresh Grape

United Kingdom

Published Feb 14, 2024

Accounting for 8% of global grape exports, the South African table grape sector is facing logistical issues, notably in terms of transportation infrastructure. The business primarily relies on the road and less on rail transportation, which proved unreliable. Still, it has experienced challenges such as poor road conditions, insufficient rail capacity, and frequent disruptions caused by strikes or protests. South African grape production for the 2023/24 season is expected to be 73 million boxes, or around 329,000 mt, up 12% from the 2022/23 season. Logistical expenses, such as fuel, vehicle maintenance, and labor, have risen over time, reducing profit margins for producers and traders. South African table grape traders have demonstrated persistence and adaptation despite the hurdles. South Africa's most significant export customers for fresh grapes in the past five years have been the Netherlands, the UK, and Canada. The 2023 season saw an 11% decline in SA grape export volume YoY, mainly owing to producer challenges and growers selecting quality over quantity. However, SATI predicts a 12% YoY rise in export volume this season, particularly in Vietnam, where South African grapes are more readily available.

South African Table Grape Production and Export Forecast for 2023/24

The table grape industry in South Africa (SA) is significant in the global market, contributing a substantial portion of the world's table grape exports. South Africa accounted for 8% of world grape exports in 2022, ranking 4th globally. However, the industry has been facing a myriad of challenges, particularly in logistics, that threatened to hamper its growth and profitability. South African grape production for the 2023/24 season is estimated to be 73 million boxes, or around 329,000 metric tons (mt), up roughly 12% year-on-year (YoY) from the 2022/23 season.

All five key table grape production regions are currently in the packaging process, with the Northern Provinces and Orange River regions scheduled to finish in three to four weeks. The Olifants River region has begun packing, with early cultivars lighter than anticipated. The Berg River region has mainly been warm and dry, with several late cultivars ripening later than the previous season.

Challenges in Transport Infrastructure for South African Table Grape Traders

One of the primary logistical issues that South African table grape producers and traders grapple with is the country's transport infrastructure. The industry relies heavily on road transport to move grapes from farms to packing houses and ports for export. However, the country's transport infrastructure has been plagued by problems such as poor road conditions, inadequate rail capacity and maintenance of infrastructure, and frequent disruptions due to strikes or protests.

The South African Table Grape Industry (SATI) saw a 6% increase in export inspections, totaling 20.92 million cartons until W52 of 2023. Prime Seedless, Early Sweet, and Tawny Seedless emerged as the top three exported varieties. However, despite this inspection rise, total exports declined by 29% to 9.87 million cartons. The surge in output and export volume has exacerbated existing challenges in the export infrastructure, with issues such as strong wind gusts and equipment problems disrupting operations at the Cape Town Container Terminal.

Another significant challenge is the high cost of logistics. Transporting grapes from farms to markets involves several costs, including fuel, vehicle maintenance, and labor. These costs have been rising steadily over the years, squeezing the profit margins of table grape producers, which took the lavish part of transportation costs, and traders. The situation is further exacerbated by the South African rand's fluctuating exchange rate, making it difficult for industry stakeholders to predict and manage their logistic costs.

Figure 1: SA Fresh Grape Export Volume 2018-2023*

*2023 data are for the first nine months

Source: Tridge

Market Dynamics in South African Table Grape Trade

Despite these challenges, South African table grape traders have shown remarkable resilience and adaptability. Tridge closely followed happenings in the global fresh grape market with On-the-Ground Updates and reported in W3 of Dec-23 that South African white seedless grapes arrived early in Vietnam's Ho Chi Minh City market, with prices standing at USD 5.7 per kilogram (kg). SATI expects a 12% YoY increase in export volume this season. This is especially notable given Peruvian grapes' struggles this season, which saw low output and poor quality. The early availability and higher export volume of South African grapes will likely benefit the Vietnamese market, preventing a potential scarcity during peak consumption season.

The Netherlands, the United Kingdom (UK), and Canada were the main export markets for SA's fresh grapes in the past five years. The Dutch market dominates SA's exports, with 204,587 mt delivered in 2022, an increase of 12.62% YoY. The UK also recorded growth in exports with almost 11% YoY uptake, while Canada and Germany marked 31 and 32% YoY increases for 2022 respectively.

The situation changed in the 2023 season, with the export volume of SA grapes decreasing by 11% YoY. Grapes were exported in 63,514,205 cartons weighing 4.5 kg each during the 2022/23 campaign. The fall in exports is primarily due to producers' hurdles, including severe weather, logistical challenges, and power disruptions. Furthermore, farmers prioritized quality over quantity/volumes in 2023, delivering higher-quality fruit to markets.

While SA's table grape industry faces considerable challenges, including logistical issues and rising costs, it demonstrates resilience and adaptability. Despite disruptions in transport infrastructure and fluctuating costs, the industry has maintained its global presence and even anticipated growth in export volumes. With ongoing efforts to address logistical constraints and enhance efficiency, Tridge expects South Africa's table grape industry to further solidify its position as a crucial player in the international market, ensuring a steady supply of quality grapes to consumers worldwide.