The effect of the drought in the Western Cape could have a major impact on employment in the province’s fruit producing regions if conditions should not improve soon. This is according to Terry Gale, the chairperson of Exporters Club Western Cape.
Gale was responding to a statement from Hortgro, which said that the continued drought conditions experienced in the major pome fruit production areas had impacted negatively on pome fruit export volumes.
“The Western Cape is sitting on a precipice in view of the prolonged drought, which is now affecting the pome fruit export, anticipated to be an average of 19percent less for the apple and 10.5percent less for the pear market than forecast.
"This will have a major impact on employment in the fruit producing areas of Elgin/Grabouw and Ceres, where most of the fruit is grown and the farms provide employment for these communities. The current forecast for the next seasons also appears to be a negative growth factor, unless the drought is broken and the farms become sustainable again.” Europe, the major supply stream for South Africa’s exports, was in a political uncertain period due to Brexit and its unknown affect on trade.
He said, however, that this could become a positive factor as the UK might be obliged to buy larger volumes from South Africa, in case of any trade embargoes from EU countries. “We can only hope that the heavens open and fill our dams, so we can fulfil our orders and open the door to new markets.”
Agbiz agricultural economist, Wandile Sihlobo, said there were initial concerns around the impact of El Niño, but over the next three months or so South Africa could get good rainfall through the rest of the country. Sihlobo said the decline in the production mirrored the 2015 drought, but things could normalise. He said exports might not see a big decline, because the weaker rand improved the global competitiveness of South Africa’s exports.
Karabo Takadi, an agricultural economist at AgriBusiness and Absa Retail and business bank, said that the ongoing dry conditions in the Western Cape might have a negative impact on the fruit season as the unfavourable conditions were likely to lead to a below average quality crop and possibly lower yields.
“Should the quality of the crops be inferior, we may see fewer exports and it may be expected that fruit for local processing may increase as a result. The strengthening of the rand against major currencies over the past few months may also have added to the pressure on export prices.”
Takadi said farmers who produced a surplus in commodities for export markets normally benefited from a weaker rand.
“However, the rand has since depreciated against the currencies in the last few weeks.”
Jacques du Preez, a general manager for trade and markets at Hortgro the agency representing the fruit industry in the Western Cape, said despite challenging climatic conditions, the initial pome fruit crop estimate anticipated a 5percent growth in export volumes, mainly because of new orchards coming into production.
“However as the harvesting season progressed the industry realised that the anticipated volumes are not going to materialise as fruit size in general and pack-out of fruit on tree were affected by a combination of drought and heatwave conditions. Currently volumes in storage combined with exports to date led to the downward adjustment for pome fruit export cartons.”
Du Preez said newly calculated volumes indicates a decrease of between -6percent and -9percent compared to the previous season.He said a decrease in export volumes of Golden Delicious, Granny Smith, Pink Lady and Fuji can directly be attributed to weather conditions impacting on colour development, fruit size and pack-outs.
Du Preez said pear export volumes are also down on initial projections with the decrease of Williams Bon Chretin by -5percent because of smaller fruit size, good demand from the canning industry and a lack in demand from the Northern Hemisphere importing countries.
He said Packhams Triumph, Abate Fetel and Vermont Beauty were also down compared to last year. “On the contrary, export volumes of Forelle are in line with the previous season. A tough season in terms of grower returns and profitability levels is anticipated."