Business

Tomato prices normalising but still hitting hard on informal traders

Marabastad is an old bustling informal trading town situated in the heart of Pretoria CBD. Throngs of informal traders line up the streets selling everything digestible and tangible.

“Eight pack of tomatoes 24 rand” echoes Blessing Phiri (25), jumping from lane to another as local taxis jam the traffic belt.

‘Quite expensive’, I recounted to Blessing and his pal Floyd over their alarming prices. But it’s Blessing’s response that had me mesmerised about the informal trade street economics.

“Brother a single tomato is R3. Just last week, it was R5 rand, and we buy a 500-tomato box at the Fresh Produce Market every Friday. So do the maths, tomatoes are expensive but the prices have been slowly dropping and next week we will probably sell at an 8 pack for R15,” he says.

Paul Makube, Agricultural Economist at FNB, concurred that after months of sharp tomatoes increases due to shortages across markets, expectations were that prices will return to normal seasonal trends.

“Last week, 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,” he said.

The National Agricultural Marketing Council went further in examining the factors underpinning the current tomatoes price hikes and concluded that in the first three months of 2021, 55 325 tons in total of tomatoes were sold, which was 19 795 tons less than the same period of 2020 resulting in the lowest volumes in 5 years.

“This resulted in the rise of retail prices to R30 per kg in April 2021 when compared to R19.35 in 2020, representing an increase of 55% year-on-year,” augmented Thabile Nkunjana, agri-economist at the NAMC.

For Blessing and his colleagues, it made little sense why tomatoes prices hiked to such a degree as it almost became detrimental to their trade.

“We wake up at 4am to line up the market every Friday and normally we are not informed why the sudden price increase. Our people love tomatoes and their dishes have to contain this product. So, we must adjust our prices, we are on a daily basis confronted by people such as yourselves where we must now explain the sudden increase and sometimes, we are forced to decrease our prices just to attain that sale,” he says in a melancholy voice.

Nkunjana explained that the Fresh Produce Markets experienced low tomatoes supply volumes for 2021 which gave rise to tomato price hike.

“FPM sales normally open in January at a higher level and begin to fall towards February of each year, except for 2016. Normally, around these times one would expect prices to be lower as larger supplies are available thus keeping prices at lower levels.”

Added factors of tomato price hikes were export demands from neighbouring countries which in the first three months of 2021 was R9 000, 34% higher than the same period of 2020.

“In January 2021, South African tomato exports increased by 56% month-on-month (m/m). During the same period exports to Mozambique had increased by 199% while increasing by 105%, 70% and 39% for Botswana, Namibia and Eswatini, respectively,” added Nkunjana.

The recent cyclone Eloise had propelled export demand yet South Africa during this time did not import any tomatoes.

Given these circumstances, Blessings and his colleagues were positive that tomatoes prices will once again steady but suggested that the tomatoes industry needed more players. “It is hard to find other tomato players who can supply us directly. Relying on the Tshwane Market was becoming a liability for some of us and this had an impact on our customers as we now had to compete with big retail stores on prices,” he said.

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