A PROFILE OF THE SOUTH AFRICAN CUCUMBER MARKET VALUE CHAIN ...nda.agric.za/docs/AMCP/CUCUMBER2012.pdf · A PROFILE OF THE SOUTH AFRICAN CUCUMBER MARKET VALUE CHAIN 2012 Directorate

A PROFILE OF THE SOUTH AFRICAN CUCUMBER MARKET VALUE CHAIN

2012

Directorate Marketing Private Bag X 15

ARCADIA 0007

Tel: 012 319 8455/6 Fax: 012 319 8131

Email: [email protected] www.daff.gov.za

mailto:[email protected]

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TABLE OF CONTENT 1. DESCRIPTION OF THE INDUSTRY 3

1.1 Production areas 3

1.3 Production vs. Consumption of cucumber 4

2.1 Domestic markets and prices 5

2.2 South Africa’s Cucumber Exports 6

2.3 Share analysis 13

2.4 Cucumber imports by South Africa 15

2.5 Cucumber processing 17

3. MARKET INTELLIGENCE 20

3.1 Tariffs 20

3.2 Non tariff barriers 22

3.3 Asian Market Access 24

4. GENERAL DISTRIBUTION CHANNELS 24

5. LOGISTICAL ISSUES 24

5.1 Mode of transport 24

5.2 Cold chain management 25

5.3 Packaging 25

5.4 Storage and Conditioning for cucumber 25

6. COMPETITIVENESS OF SOUTH AFRICAN CUCUMBER EXPORTS 25

7. ACKNOWLEDGEMENTS 29

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1. DESCRIPTION OF THE INDUSTRY

The cucumber (Cucumis sativus) is a widely cultivated plant in the family Cucurbitaceae. Cucumbers originated in India between the Bay of Bengal and the Himalayas. They have been in cultivation for some 3,000 years, maybe being one of our oldest crops. China is world’s number one producer of cucumber. Though cucumber technically is a fruit, cucumbers are widely considered vegetables. Much like tomatoes and squash, however, their sour-bitter flavor contributes to cucumbers being perceived, prepared and eaten as vegetables and there is no conflict in classifying cucumber as both a fruit and a vegetable. Cucumbers are high in potassium and fiber with moderate amounts of Vitamins A and C, as well as folic acid, phosphorous, and magnesium. Although they can be cooked, cucumbers are most often eaten raw in salads, in cold soups and in cucumber based sauces. With so many health benefits, cucumber has become one of the most important parts of food as well as skin diets.

Source: Statistics and Economic Analysis, DAFF

Figure 1 above illustrates the contribution of the cucumber industry to the gross value of agricultural production over 10 years. The cucumber industry contribution has increased slightly in 2003 when compared to 2002. There was a 6.9% decrease in gross value in 2004 due to decline in prices received by the producers in the same year. From 2005, the gross value has increased steadily reaching the peak in 2010 production season. High gross value in 2010 can be attributed to high production volumes which occurred while the prices were still favorable for producers. During 2011, cucumber gross value decreased by 30% when compared 2010 production year.

1.1 Production areas

Cucumbers are produced in almost all the provinces of South Africa. However the cucumber production is more concentrated in Western Cape, Eastern Cape, Free State and Kwazulu Natal Provinces. Globally, China, Iran, Turkey, Russian Federation and Netherlands are top countries in cucumber production.

http://en.wikipedia.org/wiki/Cucurbitaceae

http://en.wikipedia.org/wiki/Fruit

http://en.wikipedia.org/wiki/Vegetable

http://en.wikipedia.org/wiki/Vegetable

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1.2 Production trends Figure 2 below illustrates the production volumes of cucumber over the past ten years.


The production has been fluctuating for the past ten years and the lowest volumes were recorded in 2003 production season. In 2005 the production volume has increased by 6% compared to the previous year. In 2006, the production volume decreased by 9% compared to 2005. The production increased steadily from 2007 reaching a peak in 2010. In 2010, the production increased by 6.8% compared to 2009 production season. Highest production volumes were recorded during 2011 production year and this can be attributed to increase consumer demand and favorable climatic conditions.

1.3 Production vs. Consumption of cucumber

Figure 3 below depicts local consumption of cucumber compared to the production over the period of 10 years. The figure indicates that the production of cucumber has been fairly higher compared to the consumption nationally over the decade. This indicates that in terms of cucumber production South Africa is self sufficient and the surplus is exported. South African average cucumber consumption is approximately 15 707 tons per annum. In 2011 the consumption increased by 6.6% compared to the previous year. This can be attributed to the increase in production volume in the same year.

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2. MARKET STRUCTURE There is no regulation or restriction in the marketing of cucumber. The prices of cucumber are determined by market forces of demand and supply. The industry uses fresh produce market, restaurants, processors, wholesalers and retailers as channels of marketing. Cucumbers are also exported to other countries through export agents and marketing companies. South Africa also imports cucumbers from other countries. Table 1 below indicates that 60% of cucumbers produced were marketed through fresh produce markets. The remaining 40% is for cucumbers that were exported and cucumber that were processed. In 2011, there was a 9.2% decrease in exports and cucumber that were processed increased by 4.9% when compared to 2010.

2.1 Domestic markets and prices

The various channels through which cucumbers are marketed are presented in Table 1. Table 1: Cucumber sold through different market channels

Years National Fresh Produce Markets (tons)

Exports (tons) Processing (tons)

2002 16 272 175 1 649

2003 12 355 69 2 072

2004 12 709 79 2 380

2005 12 651 124 3 307

2006 12 995 164 1 438

2007 13 797 166 2 216

2008 14 349 227 2 090

2009 13 996 215 1 096

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Years National Fresh Produce Markets (tons)

Exports (tons) Processing (tons)

2010 14 778 217 1449

2011 17 151 197 1 521 Source: Statistics and Economic Analysis, DAFF


Figure 4 above illustrates the sales of cucumbers in the fresh produce markets over a period of 10 years. In 2003, cucumber volumes sold at the fresh produce market dropped by 24% compared to 2002, and at the same time the market price rose by 17%. In 2004, cucumber supplied at the market increased by 2.8% as a result the price went down by 9.8%. From 2006 to 2008, production volumes increased steadily and in 2009 the volumes dropped slightly by 2.4%. The highest market price was recorded in 2010, despite 5.5% increase volume in across the markets. These can be attributed to the strong cucumber uptake in the same year. The highest volumes were supplied to markets during 2011, and the market price fell by 18% when compared to 2010 production year.

2.2 South Africa’s Cucumber Exports

In 2011, South Africa's cucumber exports represented 0.01% of world exports for this product and its ranking in world cucumber exports was 52. South Africa has lost its competitive in cucumber exports as in 2010, South Africa cucumber exports was ranked 51 in world cucumber exports. During 2011, only 3.1% of South African cucumber exports left in ship stores and bunker. This was significantly improvement as compared to 45.5% of South African cucumber left in ship stores and bunkers in 2010. South African cucumbers were exported mainly to Zimbabwe, Mozambique, Angola and Zambia. Globally Spain, Netherlands, Mexico, Canada, Jordan, Iran, Turkey and United States of America were major

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cucumber exporters in 2011. Figure 5 below illustrates South African cucumber export destinations in 2011.

Source ITC Trade Map

Table 2: South Africa cucumber exports in 2011

Importers

Exported value 2011 (USD thousand)

Share in South Africa's exports (%)

Exported quantity 2011 (tons)

Unit value (USD/unit)

Exported growth in value between 2007-2011 (%, p.a.)

Exported growth in quantity between 2007-2011 (%, p.a.)

Exported growth in value between 2010-2011 (%, p.a.)

World 225 100 196 1148 -1 3 -31

Zimbabwe 73 32.4 68 1074 161 236 49

Mozambique 69 30.7 65 1062 28 9 28

Angola 33 14.7 18 1833 11 5 -13

Zambia 14 6.2 27 519 98 81 0

DRC 11 4.9 4 2750 13 3 -21

Malawi 7 3.1 5 1400 16 19 133

Ship stores and bunkers 7 3.1 5 1400 -49 -48 -95

Saint Helena 6 2.7 1 6000 16 -16

Mauritius 2 0.9 1 2000 -17 -29

Nigeria 2 0.9 1 2000 -10

United Arab Emirates 1 0.4 0 Source ITC Trade Map

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Table 2 indicates that during 2011, 3.1% of South African cucumber exports were left in ship stores and bunkers. Zimbabwe commanded 32.4%, followed by Mozambique with 30.7% and Angola with 14.7% share of South Africa cucumber exports. South African cucumber exports left in ship stores and bunkers have decreased by 49% and 48% in value and quantity during the period under review. South African cucumber exports to Mauritius have decreased by 17% and 29% in terms of quantity and value respectively between 2007 - 2011.

Source: Quantec Easydata

Figure 6 above illustrates cucumber exports from South Africa over the past ten years. The volume of cucumber exports has been fluctuating over the years. In 2003, cucumber exports decreased by 61% when compared to 2002 export volumes. Low export volumes were also recorded in 2004 and 2005. Cucumber exports increased by 32.2% during 2006 and the highest export volumes were recorded in 2008. In 2009 there was a 5% decrease in cucumber exports despite high production volumes in the same year. In 2010, there was a 0.9% increase in cucumber exports. During 2011, cucumber exports dropped by 9.2% despite 15% increase in domestic production output. Generally it was less profitable to export cucumber since lower values were recorded for high volume exported.

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Figure 7 above illustrates the South Africa cucumber exports to the regions. South Africa exported high quantities of cucumber to African region and the highest volumes were recorded in 2011. From 2005 to 2010 high quantities of lettuce exports were not allocated to any region. In 2002, South Africa exported high quantities of cucumber to Asian region. High exports to African countries can be attributed to low export cost to the neighboring countries and high perishability nature of the product. Cucumber exports to Americas and European regions were very low. Cucumber exports to Oceania region were less significant. From 2010 to 2011, there were no cucumber exports to Americas and European regions.


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Figure 8 above illustrate value of cucumber exports earned from the regions. It is less profitable to export to African countries, since high volumes were exported for less value. In 2010, value of cucumber exports to African region has increased by 41% due to 48% increase in export volume when compared 2009. Unallocated cucumber exports have a high export values. During 2011, it was more profitable to export to Asia, while the unallocated exports had less export value. In 2011, it was also more profitable to export to African region when compared to 2010 production year.


Figure 9 above illustrates the cucumber exports by South African provinces for the past 10 years. The highlights of cucumber exports were that of Western Cape, Gauteng and KwaZulu-Natal. In 2009, Mpumalanga province contributed to a lesser extent. In 2010, Limpopo province recorded a cucumber export value for the first time in 10 year period. The high export values for Western Cape, Gauteng and Kwazulu Natal can be attributed to the export exit points and the registered exporters located in the provinces. The highest export value was recorded in 2009 from Western Cape Province. From 2008 to 2010, the exports values for Kwazulu Natal have decreased significantly while the export value for Gauteng has increased. During 2011, Free State and North West provinces have recorded exports values for the first time in ten year period. At the same period the export value for Kwazulu Natal, Mpumalanga and North West were insignificant. The following figures (Figure10 -13) show the value of cucumber exports from the various districts in all provinces of South Africa.

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Figure 10 above illustrates that cucumber exports from Western Cape Province were from City of Cape Town district municipality. Cape Town harbor serves as an export exit point. The highest cucumber export was recorded in 2009 and in 2010 there was a 48% decrease in export value for the City of Cape Town. In 2011, export value for City of Cape Town has decreased further by 62% when compared to 2010 exports values. Eden district municipality contributed to export for the first time in 2009, but the export value was insignificant and the export value increased significantly in 2010 and 2011. During 2011, Overberg has contributed notably to Western Cape cucumber exports.


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Figure 11 indicates that, cucumber exports from Gauteng province were mainly from the City of Johannesburg and Ekurhuleni district municipalities. Metsweding has recorded export value only in 2004 and Sedibeng has recorded export value in 2006. West Rand Municipality contributed to a lesser extent in 2009 to 2011. Considerable cucumber export values for the City of Tshwane were recorded in 2010 and 2011. During 2011, the exports values for the City of Johannesburg have increased significantly while export value for Ekurhuleni has decreased. OR Tambo International Airport serves as an export exit point for cucumber from these municipalities. The highest export value was recorded in 2011, from City of Johannesburg district municipality.


Figure 12 illustrate that cucumber exports from Kwazulu Natal province were mainly from Ethekwini district municipality. The highest export value for Ethekwini was recorded in 2009 and during 2010, the export value decreased significantly. Cucumber exports value for Uthungula district was insignificant. The high exports by Ethekwini can be attributed to Durban Harbour that serves as export exit point. The highest cucumber export value was recorded in 2009. During 2011, cucumber export value for Kwazulu Natal was insignificant when compared to other years.

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Figure 13 shows that cucumber exports by Mpumalanga province was recorded in 2006 from Ehlanzeni district and highest export value was recorded in 2009 from Nkangala district. In 2011, value for cucumber export from Mpumalanga was insignificant.


Figure 14 illustrates that in 2010, Limpopo province, exported cucumber for the first time in ten year period. Cucumber exports originated from Vhembe, Capricorn and Waterberg district municipalities. The value for cucumber exports for Vhembe and Waterberg districts have increased significantly when compared to exports value recorded in 2010.

2.3 Share analysis

Table 3 below is an illustration of provincial share towards national cucumber exports. Western Cape and Gauteng commanded the greatest share of South Africa’s cucumber exports. Kwazulu Natal commanded greatest share of cucumber exports from 2005 to 2007. In 2011, Western Cape commanded 39.41%, Gauteng 58.09% and KwaZulu- Natal 0.03% share of South Africa cucumber exports. During 2011, Free State Province has commanded 1.15% of South African cucumber exports. The high export shares in Western Cape and Gauteng can be attributed to registered exporters and available ports based in this province. Table 3: Share of provincial exports to the total of RSA cucumber exports (%) Year Provinces

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Western Cape 49.50 64.15 22.78 10.79 61.88 20.62 85.01 79.84 65.45 39.41

Kwazulu-Natal 0.42 5.53 1.43 61.88 24.94 66.02 3.38 5.88 1.80 0.03

Gauteng 50.08 30.32 75.79 27.33 13.13 13.36 11.61 13.08 32.30 58.09

Mpumalanga 0 0 0 0 0.05 0 0 1.20 0.08 0

Free State 0 0 0 0 0 0 0 0 0 1.15

Limpopo 0 0 0 0 0 0 0 0 0.37 1.32

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Year Provinces

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

RSA 100 100 100 100 100 100 100 100 100 100 Source: Calculated from Quantec Easydata

Table 4: Share of district exports to the total Western Cape provincial cucumber exports (%) Year District

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

City of Cape Town 100 100 100 100 100 100 100 99.97 98.88 87.62

Eden 0 0 0 0 0 0 0 0.03 1.12 5.73

Overberg 0 0 0 0 0 0 0 0 0 6.65

Western Cape 100 100 100 100 100 100 100 100 100 100 Source: Calculated from Quantec Easydata

Table 4 above indicates that from 2002 to 2008, City of Cape Town commanded all the share of cucumber exports from Western Cape Province. Eden district contributed in 2009 and 2010, but the export share was less significant. During 2011, Eden commended 5.73% share and Overberg commanded 6.65% of Western Cape Province. Cape Town Harbour renders exit point of cucumber exports. Table 5: Share of district exports to the total Gauteng provincial cucumber exports (%) Year District

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Sedibeng 0 0 0 0 0.62 0 0 0 0 0

Metsweding 0 0 5.12 0 0 0 0 0 0 0

West Rand 0.06 0 0 0 0 0 0 16.33 10.48 9.52

Ekurhuleni 1.16 2.25 0.95 1.39 18.36 2.13 35.44 44.87 38.40 22.04

City of Johannesburg 98.78 97.75 93.91 98.61 81.01 97.87 64.56 38.79 44.87 59.28

City of Tshwane 0 0 0.02 0 0 0 0 0 6.25 9.16

Gauteng 100 100 100 100 100 100 100 100 100 100 Source: Calculated from Quantec Easy data

Table 5 above, indicates that City of Johannesburg commanded most share of cucumber export by Gauteng Province. Ekurhuleni commanded most cucumber export shares from 2008 to 2010. In 2011, City of Johannesburg, commanded 59.28% share, Ekurhuleni has commanded 22.04% and West Rand commanded 9.52% share of cucumber exports by Gauteng Province. During 2011, City of Tshwane has increased its export share when compared to 2010 export share. OR Tambo International Airport renders exit point of cucumber exports from Gauteng Province Table 6: Share of district exports to the total KwaZulu-Natal provincial cucumber exports (%) Year District

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Uthungulu 86.44 0 96.41 0.03 0 0 0 0 0 0

Ethekwini 13.56 100 3.59 99.97 100 100 100 100 100 100

Kwazulu Natal 100 100 100 100 100 100 100 100 100 100 Source: Calculated from Quantec Easy data

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Table 6 shows that Ethekwini commanded 100% share of cucumber exports from Kwazulu Natal province in 2003, 2006 to 2011. Uthungula district has commanded the greatest share of cucumber exports in 2002 and 2004 and from 2006, this district has recorded 0% export share. The greatest share by Ethekwini can be attributed to Durban Harbour which renders export exit point. Table 7: Share of district exports to the total Mpumalanga provincial cucumber exports (%) Year Districts

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Ehlanzeni 0 0 0 0 100 0 0 100 0 0

Nkangala 0 0 0 0 0 0 0 0 100 100

Mpumalanga 0 0 0 0 100 0 0 100 100 100 Source: Calculated from Quantec Easydata

Table 7 shows that Ehlanzeni district commanded 100% share of cucumber exports from Mpumalanga province in 2006 and 2009. In 2010 and 2011, Nkangala district has commanded 100% share of cucumber exports from this province. Table 7: Share of district exports to the total Limpopo provincial cucumber exports (%) Year Districts

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Vhembe 0 0 0 0 0 0 0 0 69.11 78.91

Capricorn 0 0 0 0 0 0 0 0 11.69 0.0

Waterberg 0 0 0 0 0 0 0 0 19.20 21.09

Limpopo 0 0 0 0 0 0 0 0 100 100 Source: Calculated from Quantec Easydata

Table 8 above illustrates that Limpopo province exported cucumber in 2010 and 2011. During 2010, the greatest share was commanded by Vhembe district with 69.11%, followed by Waterberg district with 19.20% and Capricorn district with 11.69%. In 2011, Vhembe commanded 78.91% share and Waterberg commanded 21.09% share of Limpopo Provincial cucumber exports.

2.4 Cucumber imports by South Africa

In 2011, South African cucumber imports represented 0% of world imports. In 2009 and 2010, there was no cucumber imports recorded for South Africa. During 2011, South Africa cucumber imports were less significant. Globally, Germany, United States of America, Russian Federation, United Kingdom, Netherlands, France and Canada are top cucumber importers. In 2009 and 2010, there were no cucumber imports recorded for South Africa and during 2011 the imports volumes were low. These can be attributed increasing domestic cucumber production in the same years.

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Figure 15 above indicates that cucumber imports were relatively unstable for the past ten years. In 2004 and 2005 it was relatively expensive to import cucumber since less volume were imported at higher values. The highest import volumes were recorded in 2006 which can be attributed to the slight decline in production in the same year and it was also cheaper to import. In 2008, there was a significant decline in imports and in 2009 & 2010 there were no cucumber imports by South Africa..This is attributed to increase in production of cucumber volumes in the same years. During 2011, South African cucumber imports were less significant and this can be attributed to 15.5% increase in domestic production.


Figure 16 indicates that in 2002, 2009 and 2010, South Africa did not import cucumber from all the regions. From 2004 to 2007, South Africa imported high volumes of cucumber from African region

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(Zimbabwe and Zambia). In 2005 and 2008 considerable imports were from European region (Germany).During 2011, South Africa imported considerable volumes of cucumber from Asia (China and India). South Africa apply 0% tariff for cucumber imports from Zambia and Zimbabwe. In 2011, there were no cucumber imports from Americas and European regions.


Figure 17 above indicates the value of cucumber imports into South Africa from regions. From 2004 to 2007 South Africa imported cucumber from African countries and this is indicated by high import values recorded in the same years. From Asia the highest cucumber import value was recorded in 2004. From Europe, the highest import value was recorded in 2008. The import value for Americas was insignificant. During 2006, it was more expensive to import cucumber from European region. In 2011, it was cheaper to import cucumber from Asian region.

2.5 Cucumber processing

Cucumber can be cooked, but they are most often eaten raw in salads, in cold soups and cucumber based sauces. Cucumbers are also the vegetable of choice for pickles. Pickles are made by placing cucumber in a seasoned brine or vinegar solution. Cucumber juice is in great demand in various forms as a cooling and beautifying agent for the skin. Cucumber juice is also used in the preparation of cosmetics like soap, glycerin, creams and perfumes. Cucumber can be cooked, but they are most often eaten raw in salads, in cold soups and cucumber based sauces. Another benefit of cucumber is in helping to heal a range of illness, including lungs, stomach, chest problems, gout, and arthritis and tape worm. Figure 18 presents cucumber value chain tree explaining its uses.

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Figure 18: Cucumber value chain tree explaining its uses

Fresh Cucumber Canning

Cucumber Essential oil

Cucumber juice

Perfume Cream

Glycerin

Soap

Lotion

Cucumber salad

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Figure 19: Market value chain for cucumber

Figure 19 presents the market value chain for cucumber. The cucumber value chain can be broken down into the following levels: the producer of cucumber (farmers), pack house owner (who cleans, grade and quality control); cold storage and transport facilities (store and transport cucumber on behalf of the farmers); traders in cucumber (market and sell cucumber); processors (add value to cucumber and process cucumber to other usable forms) and end users (consumers).

Input Suppliers Farmers/Producers

Harvesting

Imports

Fresh produce Markets, Wholesalers, Supermarkets,

Retailers and Informal markets

Consumers

Quality grade standards and

packaging

Exports

Cleaning/Handling

Storage, transportation and distribution

Processors: Canning

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3. MARKET INTELLIGENCE

3.1 Tariffs

Tariffs applied by the various markets to cucumbers originating from South Africa during 2010 and 2011 are presented in Table 10. Table 10: Tariffs applied by various exports markets for cucumber originating from South Africa.

Country Product Description (H070700)

Trade Regime description Applied tariff

Estimated total ad valorem equivalent tariff

Applied tariff


2010 2011

Angola Cucumber and gherkins fresh or chilled

MFN duties Applied 15.00% 15.00% 15.00% 15.00%

Belgium Cucumber fresh or chilled Preferential tariff for South Africa

0.00% 0.00% 0.00% 0.00%

Canada Cucumber and gherkins fresh or chilled


China Cucumber and gherkins fresh or chilled


DRC Cucumber and gherkins fresh or chilled


Denmark Cucumber fresh or chilled Preferential tariff for South Africa

0.00% 0.00% 0.00% 0.00%

Finland Cucumber fresh or chilled Preferential tariff for South Africa

0.00% 0.00% 0.00% 0.00%

France Cucumber fresh or chilled Preferential tariff for South Africa

0.00% 0.00% 0.00% 0.00%

Germany Cucumber fresh or chilled Preferential tariff for South Africa

0.00% 0.00% 0.00% 0.00%

Mauritius Cucumber fresh or chilled MFN duties Applied 0.00% 0.00% 0.00% 0.00%

Malawi Cucumber and gherkins fresh or chilled

Preferential tariff for South Africa

10.00% 10.00% 10.00% 10.00%

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Country Product Description (H070700)

Trade Regime description Applied tariff


Applied tariff


Mozambique Cucumber and gherkins fresh or chilled


15.00% 15.00% 15.00% 15.00%

Netherlands Cucumber fresh or chilled Preferential tariff for South Africa

0.00% 0.00% 0.00% 0.00%

Nigeria Cucumber fresh or chilled MFN duties Applied 20.00% 20.00% 20.00% 20.00%

Poland Cucumber fresh or chilled Preferential tariff for South Africa

0.00% 0.00% 0.00% 0.00%

Russian Federation Cucumber and gherkins fresh or chilled

General tariff (MFN) 111.83 $/ton

23.52 105.60$/ton 15.00%

Switzerland Cucumber and gherkins fresh or chilled

Preferential tariff for SACU countries

57.44$/ton 3.86% 57.44$/ton

3.86%

United Kingdom Cucumber fresh or chilled Preferential tariff for South Africa

0.00% 0.00% 0.00% 0.00%

United States of America

Cucumber and gherkins fresh or chilled

Preferential tariff for GSP countries

0.00% 0.00% 0.00% 0.00%

Zambia Cucumber and gherkins fresh or chilled


0.00% 0.00% 0.00% 0.00%

Zimbabwe Cucumber and gherkins fresh or chilled


Source: Market Access Map

The lucrative exports markets for cucumber from South Africa are Belgium, Denmark, Finland, France, Germany, Netherlands, Poland and United Kingdom since these countries apply 0% a preferential tariff to cucumber exports originating from South Africa due to EU-SA Free Trade Agreement (FTA). African markets in Angola, Zimbabwe and Mozambique are protected by 15%, 40% and 15% tariffs respectively in spite of the existence of the SADC- FTA. Zambia apply 0% preferential tariff to cucumber exports originating from South Africa. China is the largest producer of cucumber and its domestic producers are protected by 13% tariff. Iran is the second largest cucumber producer and its domestic producers are highly protected with 90% tariff.

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3.2 Non tariff barriers

3.2.1 The European Union Non-tariff barriers can be divided into those that are mandatory and laid out in the EU Commission’s legislature, and those that are as a result of consumers, retailers, importers and other distributions’ preferences. 3.2.1(a) Product legislation: quality and marketing There are a number of pieces of EU legislation that govern the quality of produce that may be imported, marketed and sold within the EU. General Food Law covers matters in procedures of food safety and hygiene (micro-biological and chemical), including provisions on the traceability of food (for example, Hazard Analysis and Critical Control Points, of HACCP). EU Marketing Standards, which govern the quality and labeling of vegetables, are laid out in the CAP framework under regulation EC 2200/96. These regulations include diameter, weight and class specifications, and any produce that does not comply with these standards are not allowed to be sold on the EU markets (detailed lists of products and their standards can be found in the annexes to the directive). The legislation (under EU 1148/2001) also dictates that a Certificate of Conformity must be obtained by anyone wishing to export and sell vegetables in the EU, if that particular vegetable falls under the jurisdiction on the EU marketing standards, Vegetables to be used in further processing needs a Certificate of Industrial Use, whilst another legislative directive covers the Maximum Residue Limits (MRL) of various pesticides allowed. 3.2.2 Product legislation: phytosanitary regulations The international standard for phytosanitary measures was set up by the International Plant Protection Committee (IPPC) to protect against the spreading of diseases or insects through the importation of certain agricultural goods. The EU has its own particular rules formalized under EC 2002/89, which attempts to prevent contact of EU crops with harmful organisms from elsewhere in the world. The crux of the directive is that it authorizes the Plant Protection Services to inspect a large number of vegetable products upon arrival in the EU. This inspection consists of a physical examination of a consignment deemed to have a level of phytosanitary risk, identification of any harmful organisms and certification of the validity of any phytosanitary certificate covering the consignment. If the consignment does not comply with the requirements, it may not enter the EU, although certain organisms can be fumigated at the expense of the exporter. 3.2.3 Product legislation: packaging The EU commission lays downs rules for materials that come into contact with food and which may endanger people’s health or bring about an unacceptable change in the composition of the foodstuffs.

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The framework legislation for this EC 1935/2004. Recycling packaging materials are also emphasized under 94/62/EC, whereby member states are required to recycle between 50% and 65% of packaging waste. If exporters do not ship produce in packaging which is reusable, they may be liable for the costs incurred by the importing companies. Wood packaging is subject to phytosanitary controls (see Directive EC 2002/89) and may need to undergo heat treatment, fumigation, etc. 3.2.4 Non-legal market requirements: social and environmental accountability To access a market, importers must not only comply with the legal requirements set out above, but also with market requirement s and demands. For the most part, these revolve around quality and the perceptions of European consumers about the environmental, social, health and safety aspects of both the products and the production techniques. Whilst supplying vegetables that complies with these issues may not be mandatory in the legal sense, they are becoming increasingly important in Europe and cannot be ignored by existing or potential exporters. (i) Social responsibility is becoming important in the industry, not only amongst consumers, but also for retail outlets and wholesalers. The Social Accountability 8000 (SA8000) certification is a management system based on International Labour Organization (ILO) conventions, and deals with issues such as a child labour, health and safety, and freedom of association, and requires an on-site audit to be performed annually. The certificate is seen as necessary for accessing any European market successful. The major retailers in the EU also play an important role in tackling environmental issues, which means that exporters have to take these into account when negotiating exporting arrangements. (ii) Environmental issues are becoming increasingly important with European consumers. Consumer movements are lobbying against purchasing non-environmental friendly or non-sustainable produce. To this end, both governments and private partners have created standards (such as ISO 14001 and EUREPGAP) and labels to ensure produce adhere to particular specifications. Labels are an absolute must for exporters attempting to enter the rapidly expanding organic produce market. The EU Commission has recently adopted and EU label for identifying food produced according to EU organic standards in the directive EEC 209/91 3.1.5 Consumer health and safety requirements Increasing consumer conscience about health and safety issues has prompted a number of safety initiatives in Europe, such as EUREPGAP on good agricultural practices (GAP) by the main European retailers, the international management system of HACCP, which is independently certified and required by legislation for European producers as well as food imported into Europe (EC 852/2004), and the ISO 9000 management standards system (for procedures and working methods), which is certified by the International Standards Organization (ISO). 3.2 The United States The USDA has quality standards for vegetables that provide a basis for domestic and international trade and promote efficiency in marketing and procurement. At the same time the USDA issues quality certificates based on these standards and a comprehensive grading system. Graders are located around the country at terminal markets. These certification services, which facilitate the ordering and

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purchasing of products by large-volume buyers, assure these buyers that the product they purchase will meet the terms of the contract in terms of quality, processing, size, packaging and delivery.

3.3 Asian Market Access

Japan’s agricultural sector is heavily protected, with calculations from the Organization for Economic Co-operation and Development (OECD) estimating that almost 60% of the value of Japan’s farm production comes from trade barriers or domestic subsidies. Japan uses tariff rate quotas (TRQ) to protect its most sensitive products, and reserves the right for trading many of these products (within the quota) for one or two state trading enterprises. However, these extremely protective measures apply only to some products; others are able to compete more effectively with outside competition, often on the grounds of higher quality. Perhaps the biggest barrier to trade with Japan in vegetable markets is its strict phytosanitary requirements, which have often been challenged in the WTO as having little or no scientific justification. Other measures that are being challenged include Japan’s use of fumigation on agricultural products when cosmopolitan pests (already found in Japan) are detected. Japan is also increasing its labeling requirements

4. GENERAL DISTRIBUTION CHANNELS

There are roughly three distinct sales channels for exporting vegetables. One can sell directly to an importer with or without the assistance of an agent (usually larger, more established commercial farms/orchards). One can supply a vegetable combine, which will then contract out importers/marketers and try to take advantage of economies of scale and increased bargaining power. At the same time vegetable combines might also supply large retail chains. One can also be a member of a private or co-operate export organization (including marketing boards) which will find agents or importers and market the produce collectively. Similar to a vegetable combine, an export organization can either supply wholesale markets or retail chains depending on particular circumstances. Export organizations and marketing boards will wash, sort and package the produce.

5. LOGISTICAL ISSUES

5.1 Mode of transport

The transportation of vegetables falls within two categories – ocean cargo and air cargo – with ocean cargo taking much longer to reach the desired location but costing considerably less. Of course, the choice of transportation method depends, for the most part, on the fragility of the produce and how long it can remain relatively fresh. With the advent of technology and container improvements, the feasibility, cost and attractiveness of sea transportation have improved considerably. As more developing countries begin to export and supply major developed countries markets, so the number and regularity of maritime routes, and the container vessels travelling these routes, increase.

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Presently South American countries like Peru benefit from the asparagus trade, which has lead to some level of economies of scale with other vegetable products, and this has enabled cheaper transport prices for their other vegetable varieties. Such economic of scale could benefit SADC countries if more producers became exporters and took advantage of the various ports which have special capabilities in handling vegetable produce (for example, the proposed terminal in Maputo). For some products, in order to reach the destination market with an acceptable degree of freshness, air transport is the only option (asparagus, for example, is flown from Peru to the sufficient to cover the transport costs, and collective agreements between farmers of different commodities with different harvest periods can become particularly important.

5.2 Cold chain management is crucial when handling perishable products, from the initial packing houses to the refrigerated container trucks that transport the produce to the shipping terminals, through to the storage facilities at these terminals (and their pre-cooling capability), onto the actual shipping vessels and their containers, and finally on to the importers and distributors that must clear the produce and transport it to the markets/retail outlets, etc. For every 10oC increase above the recommended temperature, the rate of respiration and ripening of produce can increase twice or even thrice. Related to this are the increasingly important traceability standards, which requires an efficiently controlled supply chain and internationally accepted business standards. At home, store lettuce in a plastic bag in the refrigerator crisper. Iceberg lettuce should be cored, rinsed lightly and drained thoroughly before storing. Lettuce should keep in the refrigerator from two to five days or more.

5.3 Packaging also plays a vital role in ensuring safe and efficient transport of a product and conforming to handling requirements, uniformity, recyclable materials specifications, phytosanitary requirements, proper storage needs and even attractiveness (for marketing purposes). 5.4 Storage and Conditioning for cucumber -The recommended storage temperature is 10° to 13°C at a relative humidity of 95%. Even under these conditions, cucumbers cannot be expected to keep satisfactorily for more than 2 to 3 weeks. Chilling injury develops rapidly at temperatures below 10°C, and above 13°C ripening and yellowing occurs. Once pulled the cucumbers should be cooled as quickly as possible. Humidity should be kept high to prevent shriveling. Cucumbers for fresh market can be waxed or shrink-wrapped in polyethylene film to minimize water loss. Holding cucumbers at higher temperatures will cause a rapid loss of green color. Loss of color will also occur more rapidly if held in the same room with apples, tomatoes or other ethylene producing crops.

Pickling cucumbers are normally stored for long periods of time in brine solution. If, however, fresh pickles need to be stored or held for a short period of time before being processed or placed in brine tanks, the cucumbers should be cooled as rapidly as possible to 10°C. Hydro cooling has been used successfully to remove field heat.

6. COMPETITIVENESS OF SOUTH AFRICAN CUCUMBER EXPORTS

Figure 120 below shows that South Africa cucumber exports to Zambia are growing faster than the world cucumber imports into this country. This is regarded as a gain in dynamic market. South African cucumber exports are growing slower than the world cucumber imports into Zimbabwe, Mozambique, Saint Helena, Democratic Republic of Congo, Malawi and Angola. South Africa has lost market share in

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these markets. These markets are dynamic markets and South Africa’s performance is regarded as underachievement. South Africa cucumber exports to Mauritius are declining faster than the world imports into this country.

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Figure 20: Growth in demand for cucumbers exported by South Africa in 2011

Source: ITC Trade Map

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Figure 21: Prospects for market diversification for cucumbers exported by South Africa in 2011

Source: ITC Trade Map

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Figure 21 above illustrates that Zimbabwe and Mozambique hold the bigger share of South African cucumber exports. Prospective exports markets for cucumber from South Africa exist in Malawi, Angola, Iraq and Russian Federation. Other small exports market exists in Democratic Republic of the Congo. However if South Africa is to diversify its cucumber exports the most lucrative market exist in Zambia which has increased its cucumber imports from the world by 86% respectively between 2007 and 2011 period.

7. ACKNOWLEDGEMENTS

The following organizations are acknowledged National Department of Agriculture, Forestry and Fisheries Directorate: Statistics and Economic Analysis Private Bag X246 Pretoria 0001 Tel (012) 930 1134 Fax (012) 319 8031 www.daff.gov.za Trade and Industrial Policy Strategies (TIPS) P.O. Box 11214 Hatfield 0028 Tel (012) 431 7900 Fax (012) 431 7910 www.tips.org.za Quantec Easy Data www.easydata.co.za Market Access Map www.macmap.org Economic Research Service/USDA www.wikipedia.co.za Disclaimer: this document and its contents have been compiled by the Department of Agriculture, Forestry and Fisheries for the purpose of detailing the cucumber industry. Anyone who uses this information does so at his/her own risk. The views expresses in this document are those of the Department of Agriculture, Forestry and Fisheries with regard to agricultural industry, unless otherwise stated. The Department of Agriculture, Forestry and Fisheries, accepts no liability that can be incurred resulting from the use of this information

http://www.daff.gov.za/

http://www.tips.org.za/

http://www.easydata.co.za/

http://www.macmap.org/

http://www.wikipedia.co.za/

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