SA’s table grape industry, a major source of export earnings, is concerned that the crisis at the ports could cost it dearly again this year.
As the harvest season ramps up, exporters continue to face huge backlogs caused by equipment breakdowns and adverse weather conditions, resulting in delays in loading and offloading cargo at the Cape Town and Durban ports managed by Transnet Port Terminals.
The sector brought in about R13bn in export earnings last year, though that would have been about R600m higher were it not for delays in shipping the highly perishable fruit, which affected roughly 14% of exports.
With shipments anticipated to increase by 12% to about 330,000 tonnes this season, the losses could be even higher.
The CEO of table grape industry association SATI, AJ Griesel, who spoke to Business Day from the International Table Grape Symposium in Cape Town this week, said members aren’t worried about lower export volumes at this stage, but they are very concerned about the impact of the delays on the quality of the product.
Perishable
Quality claims caused by shipment delays can result in a R60 reduction on the price earned per 4.5kg box of grapes. That amounts to a loss of about 40% of the average price of R145 to R155 a box.
Table grapes are highly perishable and the longer the product spends in transit, the bigger the impact on quality.
Feedback from one of the large exporters indicated the transit time has increased by about 14 days to roughly 38 days, Griesel said.
There are some small, premium markets to which grapes can be flown in limited volumes, but exporting by air is not a financially viable option for the bulk of exports, he said.
“We are very worried about Cape Town port. This year a lot of exporters are trying to make alternative arrangements such as making use of conventional reefer ships,” he said.
Unlike container ships, reefer ships do not have to be loaded at the container terminal, where delays are more likely to occur.
Costs
Exporters will also be making use of smaller ships docked at the privately owned FPT terminal in Cape Town, he said.
Production costs for table grapes have been increasing at a faster pace than general inflation, adding to the additional expenditure farmers incur to run generators during load-shedding to power cooling facilities.
Load-shedding also disrupts irrigation schedules.
The agriculture department announced earlier in 2023 that it has set up a task team to engage with Eskom on isolating the power supply to farming communities so as to adjust load-shedding schedules to limit the disruption to irrigation and food production.
Griesel said the industry and Eskom ran a pilot project in the Berg River region in the Western Cape — which produces about 25% of SA’s table grape export crop — to implement load-curtailment (reducing electricity usage) rather than load-shedding. Farmers in the region had to work together to reduce their power usage by a certain percentage at specific times instead of being load-shed.
“This did work well for the farmers, and it seems likely that the pilot will be repeated again this year,” he said.
The industry is also advocating for a similar arrangement at the Hexco facility in the Hex River region. The area produces nearly 30% of SA’s export table grapes and the facility handles roughly 60% of the cooling of grapes in the region.
The industry permanently employs between 15,000 and 20,000 people. However, during the harvest season from November to April and in the shorter pruning season in winter employment increases by approximately 100,000 jobs.
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