MASEGO MOOBI AND AMY CALDWELL
UNITED STATES DEPARTMENT OF AGRICULTURE
The production of apples and pears is estimated to decrease slightly in the 2022/23 marketing year, based largely on stagnated production area and a return to normal yields following record production for the commodities. Apple and pear-producing regions experienced hailstorms in November 2022 which damaged the crop, while the heat wave in January 2023 in the Northern Cape led to table grape losses.
South Africa is self-sufficient in the production of deciduous fruits and only imports small quantities to fulfill niche markets or to satisfy demand during the off-season when supply is limited. Lower exportable supply and challenges in port access are forecasted to reduce exports of apples, pears and table grapes in 2022/23.
APPLES
Area
The area under apple production has enlarged steadily over the past decade with an average growth rate of more than one percent per annum (Figure 1). This positive trend has been driven by ongoing investments into the deciduous fruit sector on relatively high earnings and improved profitability from export markets.
In addition, enhanced cultivars and better farming practices that included investment in netting resulted in higher yields. However, despite excellent production seasons, the area under apple production in South Africa is estimated to flatten in 2022/23 to 24 950 ha or almost 36 million apple trees, with negligible new planting.
Accelerating farming input costs, elevated costs of packaging materials and storage costs, high shipping rates and depressed markets are diminishing the profitability of apple and limiting continued investment in crop expansion. Ongoing shipping delays at the local ports are negatively impacting the quality of fruit to the export markets and ultimately lowering returns to growers. The industry appears to be in a consolidation phase, with growers focusing investments on increased yields, reliable sources of power and water, and vertical integration to offset high input costs.
The Western Cape is the largest apple-producing area in South Africa, and together with the Eastern Cape, accounts for more than 95% of the apple production (Figure 2). Small, but growing production areas were established further north mainly in the Free State, Mpumalanga and Limpopo. Harvest for South African apples typically begins at the end of January and runs through to June, with peak harvest times falling between February and April.
Controlled atmosphere (CA) storage allows the industry to provide products to both the domestic and international markets year-round. Class 1 fruits are usually stored in CA for about 9 months, then released into regular atmosphere (RA) storage for a shorter term (3 months). Pretoria (Post) contacts indicate that there is increased demand for cold storage and plans are underway to expand.
Six cultivars dominate apple production in South Africa and account for more than 80% of the area planted. The cultivars of choice are mainly determined by consumer preference and demand in South Africa’s export markets. However, plantings over the past five years have been driven by producers’ desires to increase yields.
Production
Post forecasts that apple production in South Africa will drop by four percent to 1,15 million metric tons (million tons) in 2022/23 (Figure 4). This forecast is based on a stagnated production area and a return to normal yield following record production in 2021/22.
In November 2022, hailstorms in some areas of the Western Cape damaged the crop. Growers in the region reported that their apples destined for processing increased from an average of 20-25% annually to 55-60% in 2022/23. Post contacts suggested that about 100 000 tons of apples that would usually be intended for fresh consumption have been diverted for processing in 2022/23. As a result, many juicing factories are at capacity for the season and closed doors to non-affiliated producers. Without a clear market for lower-quality products, post forecasts that unharvested areas will grow slightly in 2022/23, reducing production volumes.
In 2021/22, South Africa produced a record apple crop of 1,20 million tons. Favourable rains and adequate chill units during the winter of 2021, guaranteed that producers had enough water for irrigation and favourable fruit development. Conducive weather conditions continued throughout the season ensuring an excellent crop and fruit quality. In addition, more young orchards came into production, contributing to higher volumes.
Consumption
Apples are popular in South Africa and are widely consumed throughout the year. Hailstorms in 2022/23 increased the supply of non-export quality apples and apple juice in the local market. High costs of cold storage fuelled by loadshedding and pressure on cold store capacity also contributed to a significant volume of apples (largely goldens) appearing on the local market immediately following harvest.
The increased supply and lower prices are expected to drive many South African consumers to apples, an affordable fruit, as they seek options to maintain healthy diets despite high food inflation. As a result, post revises consumption upward to 615 025 million tons in 2022/23. Local consumption of apples is expected to increase by 7% in 2022/23 to 615 025 million tons up from 576 022 million tons in 2021/22 (Figure 5). Consumption figures include fresh market sales, as well as apples destined for processing.
In 2021/22, local apple consumption remained constant at 576 022 million tons. Stagnation in consumption was due to relatively higher production of exportable apples and declined supply and increased prices in the domestic market. Additionally, slow economic growth and inflationary pressure led to a decline in the disposable income of consumers and drove consumer purchases toward food staples as opposed to apples (see South Africa: Food and Fuel Feed Rising Inflation).
Exports
Post revises the export forecast downwards to 535 000 million tons in 2022/23 on lower production of export-quality apples due to hail in the major growing region. South Africa’s apple exports are forecasted to drop by 14% to 535 000 million tons in 2022/23 down from 625 103 million tons in 2021/22. In 2021/22, apple exports increased by 6% to 625 103 million tons on a record crop. The growth rate could have been larger, but South Africa’s exports of apples in 2021/22 were under pressure due to rising shipping costs, local port challenges, the impact of the Russia-Ukraine conflict on established trading patterns and inflationary pressure in the United Kingdom (UK).
Exports to Africa are largely driven by strong demand (especially for pink lady, gala, and golden delicious varieties), limited competition in these markets, and apples’ ability to endure suboptimal handling conditions. However, exporting to African countries is limited by the high cost of trade and logistical challenges. South Africa has free trade agreements with both the European Union (EU) and the UK, and benefits from duty-free exports in these markets.
Although African and European markets have been traditionally strong, growth is expected to be driven primarily by increasing exports to the East. South Africa’s apple exports to India grew by almost 67% in 2022, after the government of India approved in-transit cold treatment for South African apple and pear exports. Exports to India are forecast to grow even higher in 2022/23 as South African exporters seize opportunities created by increased tariffs on competitors.
Imports
South African production of apples has been increasing on average by 4% annually since 2017/18. Production gains and improvements in storage technologies have substantially dampened import demand. Post revises imports downwards to 25 million tons in 2022/23 based on an increase in non-exportable, lower-grade apples supplied in the local market. 2021/22 imports of apples are revised downwards to 25 million tons on record production.
United States apple exports are subject to a 4% customs duty. The United States currently has market access for apples from areas free of rhagoletis pomonella (apple maggot). The protocol stipulating the phytosanitary import requirements is available on the website of the Department of Agriculture, Land Reform and Rural Development.
PEARS
Area planted
Pears are the third largest deciduous fruit produced in South Africa, representing 17% of the total area under deciduous fruit production. The area under pear production has increased steadily over the past decade with an average growth rate of around one percent per annum to an estimated 12 700 ha or 18 million trees in 2022/23 (Figure 6). As with apple production, the expansion in pear production was driven by relatively high earnings from export markets and sound financial returns on investments. However, the area under pears is expected to flatten in the coming years. Accelerating farming input costs and high shipping rates are diminishing the profitability of pear producers which limits continued investments in the industry. Contacts have suggested that the industry is in a stage of caution due to macroeconomic factors, challenges in accessing export markets, and an uncertain future for the pear canners. As a result, post revises its forecast for South Africa’s production area of pears down slightly to 12 700 ha in 2022/23.
Pears grow well in areas with moderate temperatures. Like apples, pears are predominately grown in the Western Cape, which receives most of its rainfall during the winter months (May to July). Collectively, the top three cultivars represent almost 80% of pear plantings in South Africa (Figure 7).
Production
Post revises production upwards to 470 000 million tons in 2022/23 based on heavy rains received in November and December 2022 which provided sufficient irrigation water for the season. However, this is a decline of 7% in 2022/23, down from 506 200 million tons in 2021/22 based on hailstorm damage in a pear-producing region, a return to normal yields, and zero growth in production area. Pear production in 2021/22 was at a record 506 200 million tons. Pear orchards received good rain and sufficient chill units in 2021, resulting in an excellent fruit set and quality. According to Hortgro, South Africa produced 461 200 million tons of pears in 2020/21 (Figure 8).
Consumption
The industry is mainly export-orientated with more than 50% of pear production destined for foreign markets. Locally, less than 25% of total pear demand is consumed fresh, while the majority is destined for the processing industry. Post revises domestic consumption downwards to 195 200 million tons in 2022/23. The revision is based on an increase in exportable pears and a surge in apple supply in the domestic market at lower prices, which is expected to drive consumer preference toward apples. Local consumption of pears is revised upwards to 218 966 million tons in 2021/22, an increase of 2% from 214 259 million tons in 2020/21 on record production. Consumption figures include fresh market sales, as well as pears destined for processing.
Exports
Post revises exports upwards to 275 000 million tons in 2022/23 on increased opportunities in China due to new market access and improving trade logistics to Russia. In 2021/22, pear exports are revised upwards to 287 406 million tons on record production and increased by 16% from 247 122 million tons in 2020/21.
Pear exports to India grew by 35% between 2020/21 and 2021/22 based on approved in-transit cold treatment for South African apple and pear exports. South Africa’s pear exports to the United States are minimal at less than 1 000 million tons per annum.
With the signing of the food safety protocols in 2021, South Africa received final approval to export pears to China. As a result, South Africa’s inaugural pear shipment arrived in China on September 2022. The one-container trial shipment was 18 years in the making. In 2021/22 South Africa exported 558 million tons of pears to China and 826 million tons by March 2022/23. Post anticipates that China will be a growing market, with larger volumes exported in later 2022/23.
Imports
As the second largest pear producer in the Southern Hemisphere after Argentina, South Africa imports minimal quantities of pears (around 200 million tons) mainly from China and the United Arab Emirates. Post revises imports downwards to 172 million tons in 2021/22 based on increased production. The United States does not have market access for pear exports to South Africa. In July 2010, the United States requested market access for pears, however, progress on this request stalled and the process has not been finalised. If South Africa grants access, United States exports of pears would be subject to a 4% customs duty.