Sta­ble lo­cal de­mand for veg­eta­bles, but ex­port mar­kets beckon

Farmer's Weekly (South Africa) - - Commodity Outlook 2019 -

Rain­fall and the avail­abil­ity of wa­ter were ex­pected to have the big­gest im­pact on veg­etable pro­duc­tion in the com­ing year. Other chal­lenges in­cluded in­put cost in­creases and lim­ited con­sumer spend­ing power, which, in turn, were ex­pected to put pres­sure on pro­ducer prices and farm­ers’ profitabil­ity.

Lindie Stroebel, gen­eral man­ager of the Pro­duce Mar­ket­ing As­so­ci­a­tion (PMA), told Farmer’s Weekly that lessons learned from re­cent droughts would start to be­come ev­i­dent in veg­etable pro­duc­tion trends in South Africa.

“Some re­gions will sim­ply stop pro­duc­ing prod­ucts not ideal to that cli­mate, or prac­tices will change to in­ten­sive crop­ping to mit­i­gate the risks,” she said.

Ac­cord­ing to Dr Johnny van der Merwe, a se­nior lec­turer at the School of Eco­nomics at North-West Uni­ver­sity, in­ten­sive veg­etable pro­duc­tion was de­pen­dent on re­li­able and suf­fi­cient wa­ter sources.

Van der Merwe ex­pected pro­ducer profitabil­ity to come un­der pres­sure and said he be­lieved that con­strained con­sumer spend­ing would limit the price in­creases nec­es­sary to off­set in­creased in­put costs.

An onion and seed potato farmer, Willem Mulke, who farms near Dou­glas in the North­ern Cape, ex­pressed sim­i­lar sen­ti­ments. He said he would be go­ing ahead with all his pro­duc­tion plans, but needed suf­fi­cient rain to mit­i­gate in­put costs, adding that ir­ri­ga­tion wa­ter was also lim­ited by quo­tas.

Stroebel said lo­cal and global de­mand for veg­eta­bles was ex­pected to re­main sta­ble, but pro­duc­ers who tar­geted the high-end veg­etable mar­ket in the shrink­ing LSM 8 to 10 seg­ment would be un­der pres­sure, as the de­mand was for more af­ford­able prod­ucts.

Due to the per­ish­able na­ture of veg­eta­bles, the bulk of the mar­ket was do­mes­tic, with most ex­ports un­der­taken to neigh­bour­ing coun­tries such as Zim­babwe and Botswana. Stroebel said cross-bor­der trade was, how­ever, ex­pected to in­crease. Al­though there was strong com­pe­ti­tion on the EU and UK ex­port mar­kets, there was “sig­nif­i­cant po­ten­tial” to ex­port cer­tain veg­etable types to the Mid­dle East.

While the gen­eral sen­ti­ment for veg­etable pro­duc­tion ap­peared to be pes­simistic, the re­al­ity was that lead­ing veg­etable farm­ers were op­ti­mistic, com­mit­ted and ready to in­no­vate and adapt, she said. – Sab­rina Dean


RIGHT: The avail­abil­ity of wa­ter is ex­pected to be one of the ma­jor con­straints to veg­etable pro­duc­tion in the year ahead.

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