SA table grape farmers achieved one of their best export seasons yet, in terms of volumes and value. However, the industry expects the problems at the container terminal operated by Transnet Port Terminals (TPT) at the Port of Cape Town, which have caused billions of rand in losses for fruit exporters, to persist for about two more years until the necessary equipment has been replaced.
The volume of table grapes (grapes to be eaten fresh as opposed to wine grapes that are used to make wine) exported increased about 16% compared to the previous season, rising to 74.1-million cartons (4.5kg cartons) in 2023/24.
“Volumes were good,” said the CEO of table grape industry association Sati, AJ Griesel.
Market conditions favoured SA exporters who benefited from the relative weakness of the rand against major currencies as well as from lower supplies out of competing countries such as Peru.
“We were fortunate the market conditions helped to alleviate the pressure we felt from a logistics perspective,” he said.
Farm-level income from exports is expected to rise to between R12bn and R13bn this season, which sees the industry moving back towards sustainable margins compared with about R10bn earned at farm level in the 2022/23 season.
But, said Griesel, exports out of Cape Town were disrupted by inefficiencies at the port, weather delays and equipment breakdowns.
He said that anecdotal evidence from grape producers suggested farmers lost about €1 (about R20) per every carton of grapes exported due to losses associated with the delays caused by port inefficiencies.
The losses relate, among other things, to the effects shipping delays had on the quality of the grapes, repacking costs in destination markets as well as additional expenditure incurred by producers and exporters if they have to divert fruit to alternative ports. At 74.1-million cartons exported this could add up to losses in the region of R1.5bn.
The Fresh Produce Exporters’ Forum (FPEF) previously told Business Day losses incurred by the table grape and stone fruit industries combined were estimated at about R2.5bn for the 2023/24 season. This is almost equal to losses suffered due to port inefficiencies in the previous season.
“We expect equipment challenges at the Cape Town container terminal to persist for about two more years as Transnet waits for new equipment to be ordered and installed at the port,” said Jacques Ferreira, commercial industry affairs manager at Sati.
The most important pieces of equipment are the ship-to-shore cranes and the rubber-tired gantry cranes. For the port to function efficiently it needs to add more of this equipment over the next few years, and according to Ferreira, while some new equipment has already been installed, more needs to be ordered and they don’t expect improvements at the port to materialise overnight.
There were some early signs of improvement at the port. The average time vessels spent at anchorage had improved from 250 hours in November 2023 to 177 hours at the end of February.
“Where we have seen real improvement is in the new Transnet management’s transparency and willingness to work with the industry — both at an executive level and at the port,” said Ferreira.
The industry’s confidence that planned changes and improvements at the Cape Town port will materialise has improved as a result of this.
“We are much more confident now, compared to a year ago, that the necessary investment in new equipment for the Cape Town port will happen as planned, said Griesel.
However, in anticipation of two more export seasons that might be affected while the necessary improvements are made at the port, the industry has invested in a predictive logistics model that is being built by Transnova Africa.
The model will use predictive analysis to take historical data into account and to create potential scenarios that can serve as solutions to mitigate the build-up of stockpiles.
The model, said Griesel, will help the industry to come up with better plans to facilitate grapes reaching markets within a favourable time frame.
The industry can also supply this information to Transnet and to shipping lines who could consider adjusting their shipping schedules to avoid possible delays at the Cape Town port.
Earlier in May, the MEC for finance and economic opportunities in the Western Cape, Mireille Wenger, warned that persistent problems at the Port of Cape Town could cause shipping delays for citrus exports this season. Most citrus is exported through the Port of Durban, but significant volumes from farmers in the Western Cape and Eastern Cape are exported via Cape Town and Gqeberha.
According to its latest estimate, the Citrus Growers’ Association expects citrus exports to increase to 180-million cartons (15kg cartons), up from about 165-million in 2023, but the industry did express concern earlier in the season over how shipments might be affected by possible delays at SA’s ports.
Wenger said performance at the Cape Town container terminal in April showed t targets were not being met. The average total vessel turnaround time for April was 8.9 days against a target of four days, the average time at berth during April was 4.3 days against a target of three, and the average waiting time to berth was 4.6 days against a target of one day.
“Fundamentally, these indicators show the current terminal performance will not be sufficient to accommodate cargo volumes during the upcoming peak citrus season. It is therefore imperative that there be an urgent review of the targets in the improvement plan so that they are functional, credible, reliable and achievable — and so that our exporters can trust in the commitments made to enable making alternative arrangements well in advance, if needed, to mitigate the negative effects this crisis would have on their businesses,” Wenger said.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.