A relieve for consumers as tomato prices fall from the recent highs

Senior Agriculture Economist at FNB Paul Makube in his latest update on weekly prices on fresh produce markets, reports that tomato prices were falling from the recent highs.

Last week saw another weakness in the vegetable market as the recovery in supplies kept prices on the downside across most markets.

After weeks of sharp increases due to shortages across markets, tomato prices posted the biggest fall last week at R12.71/kg which is down by 34.9% week-on-week (w/w) but almost 101% higher year-on-year. Production volumes have started to normalise, and expectations are that prices will return to normal seasonal trends in the short to medium term which will provide the much needed relieve for consumers.

Meanwhile, said Makube, Statistics South Africa’s monthly consumer prices inflation (CPI) for March 2021 steadied month-on-month (m/m) at 07% but edged higher by 3.2% y/y.

“The food category accelerated by 0.8% m/m and 5.9% y/y. After slowing early in the year, the vegetable CPI jumped by 4.4% m/m and 3.4% y/y as shortages of tomatoes and other leafy vegetables that were negatively affected by the heavy rains caused a massive spike in prices across markets. The fruit CPI however came in on the downside with decreases of 2.3% m/m and 1% y/y as adequate seasonal supplies maintained downward pressure on prices,” he said.

Makube says prices were down across the vegetable complex with butternuts following tomatoes with a weekly decrease of 25% w/w and 10% y/y at R3.05/kg.

“The other losers were carrots, cabbages, lettuce, onions, and potatoes with weekly decreases in the range 5% to 12.8% w/w. At R4.72/kg, carrots were down by 12.8% w/w and 18% y/y. While potatoes fell by 5% w/w, the current prices are still sharply higher by 34% y/y.”

In the fruit complex, losses were recorded for most commodities except for grapes and mangoes which saw weekly gains of 1.8% and 13.6% respectively at R13.18/kg and R26.54/kg. The current grape and mango prices are however still down by 7.8% and 3.4% respectively y/y. The biggest losers were avocados which fell by 13.4% w/w and 8% y/y at R12.67/kg as higher volumes weighed heavily on the market. They were followed by bananas, pears, and apples with weekly declines of 5.4%, 3.1%, and 2.1% w/w at R9.64/kg, R33.21/kg, and R7.46/kg. Banana and apple prices are however still 14% and 6.7% higher y/y while pears are back 0.6% y/y.

On the export front, pear volumes for week 15 of the 2021 export season fell by 11% y/y to 657,274 cartons (15kg). This brought the cumulative year-to-date (YTD) to 7.45 million cartons, which is 5% below the same period in 2020. The EU accounted for the bulk of the shipments with a share of 38% but the total volumes to the region were 2% below last year.

With the export season at its infancy, grapefruit volumes for the YTD are 32% below the 2020 levels at 237,113 cartons with shipments for week 15 down by 57% y/y at 112,539 cartons. The EU and South East Asia accounted for the bulk of the exports with shares of 43% and 36% respectively but the volumes are so far down by 28% and 10% for the two destinations.

Makube said in the case of oranges, volumes for week 15 were down by 65% y/y at 593,010 cartons which brought the YTD exports to 3.36 million cartons but still 28% lower than the levels achieved in 2020.

Interestingly, he said, the EU accounted for only 1% of the total while Middle East and Russia were the major destinations with shares of 61% and 19% respectively.

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