DoA Trade Awareness Workshop

Bundu Country Lodge, Nelspruit

17 July 2008

Derek Donkin

CEO, Subtrop

Mangoes, Macadamias, Avos & Litchis

Technical services Market support servicesIndustry Affairs

Researchcoordination

Advisory services

Overseas tech- nical services

Market information

Market development

Communication Admin / Finance

Services provided to member associations

Each association can choose services as required

Common to all

Some facts & figures…

Annual value (FOB Cape Town & Local Market)

Avocado Mango LitchiMacadamia

R450 mil R150 mil R50 mil R300 milOn-farm employment

Avocado Mango LitchiMacadamia

4400 3000 1300 4400

Avocado Industry

• 12 000 ha

• Season from March to October

• Total production: 85000 to 100000 ton p.a.

• Export orientated: Europe – 45%

• Local fresh – 40%

• Processing - Oil and Guacamole – 15%

• Average production growth: ±2% pa

• Major competitors: Spain, Peru, Kenya, Israel, Chile

Mango Industry

• 7500 ha

• Season: December to March/April

• Total production: 85000 to 100000 ton p.a.

• Less export orientated than avocado industry, and exports are decreasing sharply every year due to low prices in Europe and a lack of accessible alternatives

• 65% (90) of exports to EU, 20% (9) ME, 15% (1) other markets

• Processing: Juice, dried, achar

• Little to no growth in production

• Competitors: Peru (main), Brazil, Ecuador, Puerto Rico

Litchi Industry

• 3357 ha

• Season: December to February

• Export orientated (Europe)

• Total Production: 4000 – 6000 t p.a., of which ±60% exported

• Processing: Juice

• Local market easily over supplied mid season

• Major competitor: Madagascar

Macadamia Nut Industry

• Fastest growing subtropical industry – approx 50% of trees planted 2001 to 2006

• 13300 ha

• RSA currently world’s 2nd largest macadamia producer

• Current production: 5000 t kernel p.a. Expected to increase to 6500 t kernel p.a. by 2010 as new plantings come into production

• Export 96% of total production

• SA currently accounts for 15% of world macadamia supply

• Major competitors: Australia, Hawaii

Major challenges…

1. Land claims and change of ownership

2. Increasing competition in export markets

3. Increasing cost of production and cost of export

Land claims and change of ownership

Limpopo Province &Mpumalanga:

Estimated that over 80% of commercial agricultural land is under claim, or has already been transferred.

It is imperative that levels of production of quality product are maintained when ownership changes. Commercial agriculture plays a very important role in the economies of Limpopo and Mpumalanga, and directly influences poverty alleviation.

Increasing competition in export markets

To deal with increasing competition, a three-pronged strategy is currently being employed:

a. Produce a top quality product at least cost

b. Access new markets

c. Grow existing markets

a. Produce a top quality product at least cost

• Production research

• Postharvest research

b. Access new markets

Priorities:

Avocado: USA

Mango: China

Litchi: USA

DoA is currently under-resourced to efficiently administer the current demand for access to new markets

c. Grow existing markets

Generic campaigns both locally and in export market to increase consumer demand. These campaigns are designed to “grow the pie” so that all have a bigger slice.

Increasing cost of production and cost of export

Research and best practice required to produce high yields of quality product

Costs of the logistics chain from farm to export market are over three times higher than production costs. Efficient logistics in an environment of healthy competition are necessary if our industries are to remain competitive

 

 

 

  

 

Thank you