Drought could hit jobs in fruit regions

W Cape ‘sitting on a precipice’ as apple, pear exports drop

THE DROUGHT in the Western Cape could have a major impact on employment in the province’s fruit-producing regions if conditions do not improve soon, says Terry Gale, chairman of Exporters Club Western Cape.

Gale was responding to a statement from Hortgro, the agency representing the fruit industry in the Western Cape, which said that the continued drought in the major pome fruit (apples, pears) production areas had impacted negatively on pome fruit export volumes.

“The Western Cape is sitting on a precipice in view of the prolonged drought, which is now affecting the pome fruit export, anticipated to be an average of 19% less for the apple and 10.5% for the pear market than forecast. This will have a major impact on employment in the fruit producing areas of Elgin/Grabouw and Ceres where most of the fruit is grown and the farms provide employment for these communities.

“The forecast for the next seasons also appears to be a negative growth factor, unless the drought is broken and the farms become sustainable again.”

Gale said Europe, the major supply stream for South Africa’s exports, was in a politically uncertain period due to Brexit and its unknown affect on trade.

He said this could, however, become a positive factor, as the UK might be obliged to buy larger volumes from South Africa, in case of any trade embargoes from EU countries in view of Brexit.

“We can only hope that the heavens open and fill our dams, so we can fulfil our orders and open the door to new markets.”

Agbiz agricultural economist Wandile Sihlobo said there were initial concerns around the impact of El Niño, but over the next three months or so good rainfall was possible through the rest of South Africa.

Sihlobo said the decline in the production mirrored the 2015 drought, but things could normalise and the country could get good rainfall, with industry recovering over the coming years. He said exports might not see a big decline because the weaker rand improved the global competitiveness of South Africa’s exports.

Karabo Takadi, an agricultural economist at AgriBusiness and Absa Retail and business bank, said the ongoing dry conditions in the Western Cape might have a negative impact on the fruit season as they were likely to lead to an average to below-average quality crop and possibly lower yields.

“Should the quality of the crops be inferior, we may see fewer exports and it may be expected that fruit for local processing may increase as a result. The strengthening of the rand against major currencies over the past few months may also have added to the pressure on export prices.”

Takadi said farmers who produced a surplus in commodities for export markets normally benefited from a weaker rand. “However, the rand has depreciated against the currencies in the last few weeks.”

Jacques du Preez, a general manager for trade and markets at Hortgro, said despite challenging climatic conditions, the initial pome fruit crop estimate anticipated a 5% growth in export volumes, mainly because of new orchards coming into production. –