SATI says the industry’s sustainability is under threat, due to a combination of different factors

South African table grape industry body SATI has warned against perceptions that previous reports of a record harvest this season may have created.

SATI said that the timely marketing of quality grapes in preferred export markets at certain price levels, as opposed to volumes, determined the success of the industry.

During the past months reports of a record table grape harvest in South Africa have dominated the headlines in South Africa’s media.

This has created the impression that the country’s table grape industry was having an exceptional season – but SATI wanted to put the record straight.

Not the correct measure

While acknowledging a very good harvest, SATI indicated that it was not the measure for success back on the farm.

“The industry’s sustainability is at risk, due to the combination of numerous factors at play within the broader environment,” said SATI chief executive AJ Griesel in an industry update.

“As the season draws to a close, we echo our producers’ sentiment and concern,” he said. “The industry’s reliance on world-class infrastructure including dependable electricity supply, functioning and effective ports as well as good road infrastructure represent the building blocks of our logistical chain and are critical for our sustainability.”

The logistics matter was urgent, he said, with SATI remaining in constant contact with Transnet, responsible for South African ports, to ensure that the Cape Town port remained on the agenda.

“Waiting periods experienced this season simply cannot be repeated, as these have a direct impact on the quality of our grapes,” Griesel continued.

Fruitnet previously highlighted the problems exporters have had this year in getting their grapes within protocol periods into markets, with some grapes arriving in Europe after eight weeks instead of within 24 days.

Griesel said that obtaining the necessary input from industry leaders, especially regarding logistics, remained a priority.

“International disruption of shipping remains a concern, however we have little control over the matter,” he confirmed.

Cost pressure

In echoing sentiments across other industries, he said that the cost pressures of the industry were not unique to South Africa and had garnered the attention of international industry organisations such as Shaffe.

“The Russia-Ukraine conflict is exacerbating an already inflationary environment, especially in terms of inputs such as fertilisers, chemicals, and fuel,” Griesel noted.

“Labour rates, which form a significant part of the cost structure, continue to rise and are not sustainable. Large-scale investment to ensure that our vineyards are renewed and that we remain internationally competitive places further pressure on the industry.”

Furthermore, he said, competition in traditional markets, specifically from South America, has led to larger volumes of grapes being available and therefore placed downward pressure on market prices.

“Increased global inflation, specifically the high figures prevalent in Europe and America, exacerbate this economic situation and support what we already know – grape prices at certain levels are simply not sustainable,” he explained.

New markets a strategic priority

Griesel also referred to recent Covid-19 related restrictions in China, and said they had highlighted the fact that the Chinese market was simply not conducive at certain times. “Market development of new markets remains a strategic priority, however structural challenges exist which urgently need to be addressed.

“The above synopsis provides perspective into the challenges our industry faces, and although we have not touched on all aspects in depth, our objective is to provide a balanced viewpoint considering a large harvest in volume is not necessarily the measure of sustainability,” he said.

SATI could influence some of the matters and challenges highlighted above more than others, Griesel confirmed.

“We will continue to advance these issues whilst working actively with all role-players to raise the level of urgency in finding solutions and communicating the impact it has on our industry,” he added.

The industry body also recorded that to date some 77.366m cartons of table grapes had been packed, representing an increase of 4.4 per cent in comparison to week 15 in 2021.

Growers in the Hex River region, which is the latest region in South Africa, are currently packing their last grapes of the season.

It is anticipated that they will exceed 25m cartons in a season for the first time.