FOOD & BEVERAGES: Questions Around The Table Grape Market
Recent Western Cape Business News
CONTRARY to the 2008 world-wide supply disruptions, the market for table grapes seems to be well-supplied this year. “But the real challenge this season will be favourable producer returns in the face of production costs that are almost 35% more than in 2008,” says Bellville-based Capespan product manager Erik Stroebel.
“On the demand side, it’s anyone’s guess. With the global financial crisis hanging over everyone’s head, will the market absorb the strong table grape supply at higher sales prices to make up for increased production costs? There’s uncertainty whether brisk sales at top prices would materialise and if so, whether the momentum would continue when substantial RSA volumes arrive in the market,” he says. He is concerned about the buoyant UK discount sector and the concomitant value lines offered by leading retailers to retain customers.
Stroebel reckons that with the UK and USA being worst hit with financial woes, the European market might be the saving grace. “But then again, the demand might be lower than we want it to be, putting downward pressure on market prices.” He believes that the weakness of the rand against major world currencies, especially the USD, makes trade to the dollar markets such as Russia, the Far and Middle East attractive. But he warns that these markets shouldn’t be oversupplied as they could come under pressure quickly. Indications are that Chile will intensify its presence, especially post-Easter and it’s believed that India might be in the market earlier this year. Both these countries are strong in white seedless grapes, which will mean added stress on South Africa’s ageing seeded crop. “The general move from seeded to seedless grapes has seen some large European retailers discontinuing white seeded varieties altogether,” says Stroebel.
Expressing confidence about the coming RSA season with its superb quality grapes, he says, “The market hopefully won’t crash this season. It’ll more likely be demand-driven, where realistic prices will keep sales rates up. Programmed business, rather than trading business, could be the deciding factor in ensuring strong grape sales at good prices.”
“Our focus on table grapes is just that: concentrating on blue chip customers, getting our communication lines to customers as short as possible, plus giving continuous feedback and feed-forward. In so doing, we’ll create a sense of ownership from farm to market per individual client’s needs. Capespan will continue being a market specific as opposed to a volume-driven exporter where clients’ requirements come first,” Stroebel says.
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