Western Cape Business News

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FOOD: Government Creates Immense Problems


Recent Western Cape Business News

WHILE most everything seems to come up smelling rosy for local deciduous fruit exports, many opportunities worth hundreds of millions of rands are slipping through our fingers due largely to government’s focus being elsewhere.

Tru-Cape’s Charles Hughes says no fruit could be exported last season to Thailand because the South African government wasn’t able to negotiate an inter-governmental trade agreement with that country before the deadline.

This mostly hinged - and still does - around its new Phyto-Sanitary requirements, with the local agricultural ministry still not being able to get a handle on it.

The Thai export market for SA could be worth R70 million annually, according to Hughes, and should grapes be included, it could be as much as R150 million.

Exports to the mighty Chinese market are also in danger of being lost, as are those to India and Russia, all for the same reason - government’s eye is not on the ball.

He says hundreds of hectares are planted specifically for the export market and thousands of jobs on local farms are in jeopardy as farmers can’t expand activities unless exports are increased.

Worse, fruit intended for these new markets now have to be re-channelled to other, saturated, markets. This increases volumes, which have a dampening effect on prices.

We cannot allow this situation to continue. Once our fruit has been off the shelves in a country such as Thailand for a number of years, one has to start the expensive marketing effort virtually from scratch”.

More worrisome, which country will we lose next should this trend continue?,” Hughes asks.

Take China as an example. Negotiations for the export of apples and pears have been ready to be signed for a number of years.

Protocols for the export of grapes and citrus have already been signed, but for other deciduous fruit November last year has been designated as the date for signing off the agreement.

That hasn’t happened and it’s impossible to predict when the South African government will make it a priority.

Meanwhile other important deciduous exporting countries, such as Chile, are waiting with bated breath to pick up where South African efforts are floundering, Hughes says.

South African entry to the Chinese market can be worth as much as R35 million a year initially, with the potential of very strong growth in years to come.

Russia is the world’s largest importer of fruit and has asked the government of South Africa, Italy, Spain and the Netherlands for ministerial agreements for future exports.

The memorandum has been with the SA Agricultural Minister for months and the stakes are high - Russia’s fruit market is estimated to be worth R500 billion a year - but so far no government action has been forthcoming.

So, for now, it seems another season’s opportunities have been lost.

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