Covid-19 Watch

Promoting local consumption – a viable alternative for South African fruit exporters

South African fruit exporters have held their own in efforts to contend with the stringent requirements on the export market where the country is a globally respected actor. Fresh fruit accounts for approximately 50% of South Africa’s agricultural exports, and the country is rated the world’s second largest exporter of citrus fruit, and the largest in the southern hemisphere. The country’s annual exports have registered an impressive double-digit growth from 2020, and are currently above four million tons, and valued at more than US$1.7 billion. 

According to Fruit South Africa, 59% of locally produced fruit is exported; 28% is used for processing; and 12% is sold locally. This distribution of sales is aligned to and supportive of a foreign currency generation strategy, despite the numerous export barriers they face. 

For instance, amongst many other factors, South African fruit exports are impeded by the absence of appropriate phytosanitary protocols to enable local produce to enter lucrative export markets. Recently, South African citrus has been held in European ports because of brand-new phytosanitary regulations in the EU. Fruit exports are also affected by the limited number of cultivars of deciduous and citrus fruits that are approved for export. The high inspection costs in export markets also affect local producers. 

Attempts at addressing these export market requirements and factors increases costs, resulting in lowered profits and higher product losses for local exporters. This situation is further worsened by the logistical challenges on the domestic front, with the country’s rail and port facilities being major points of concern for the growing fruit export industry. The impact of shocks on logistics, such as the COVID-19 pandemic, and of late, the Russia-Ukraine conflict has also affected the sector.

Whilst the commercial appeal of the export market is undeniable, and the benefits to the economy visible, there is scope in pursuing a dual strategy that matches the efforts at export market development with the development of a local market. The development and growth of local fruit consumption will yield significant benefits for local producers. For instance, the industry stands to benefit from lower cost operations focused on serving local markets. The reduction of the export component as local consumption grows will reduce the hectic requirements and costs associated with exports. 

Apart from the direct commercial benefits accruing to the fruit producers, the country’s health stands to benefit from improved nutritional intake. According to the 2021 National Nutrition Week (NNW) which ran under the theme ‘Eat more vegetables and fruit every day’, South Africa’s fruit consumption per capita was ranked 151st out of 161 countries. The publication observed that South Africans aged 15 years and older consumed well below the recommended 400 grams of five portions of vegetables and fruit per day. Studies among adolescents and those younger than 15 years also showed that vegetable and fruit consumption was inadequate. 

Whilst this scenario screams ‘opportunity!’, commercial entities will likely discount the local market’s potential to absorb a considerable quantity of fruit that is currently being pushed to export markets on account of various factors, to include domestic economic fundamentals, dwindling disposable incomes, local consumption habits, and so forth. These and others constitute valid rationale and economic sense for discrediting the development of local fruit consumption as a viable alternative to stabilizing the South African fruit value chain. However, accompanied by a comprehensive strategy, it is possible to alter the local fruit consumption patterns, as recent experiences have shown us.

Prior to the advent of the COVID-19 pandemic, producers of vitamins and supplements can attest to how hard a sell it was to push their produce. A week into the ‘first wave’ of the pandemic, no pharmaceutical outlet had stocks of vitamins! Even then, without a change in disposable incomes, supplements and masks suddenly appeared on the domestic shopping list of every household, quickly annexing certain other products based on need. The pandemic had gripped the attention of the nation and created a heightened sense of urgency that guided behavior change. For most people, COVID-19 era behaviours will be maintained way past the pandemic.

Likewise, a comprehensive strategy can also achieve the same behaviour change and consumption habits for the South African fruit sector. With focused investment behind that strategy, the same way the sector’s actors continue to invest to unlock value from the export market, a growing local consumption base will provide the much-needed room for strategic shifts and consideration for the sector. 

In the medium to long term, it will be a viable alternative. 

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of Mzansi Agriculture Talk.

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