Early apple varieties, like Golden Delicious and Royal Gala, were smaller than usual in some production regions like the Langkloof and, together with large world volumes, this has put apple markets under pressure.
Golden Delicious is still the dominant variety produced in South Africa (making up 24% of apple production area, according to 2015 statistics) and an estimated 70 to 80% of the country’s Golden Delicious is exported into Africa. The crop estimate for Golden Delicious, from an original positive 2% of growth, has been amended to a possible 10% reduction on last year’s volumes, due to smaller sizes.
At this stage apple exports are lower than last year.
“It is always a struggle to move small Goldens and this year there are a lot of small Goldens. Bangladesh is an important market for us this year because of the large volumes of small apples, so we’re sending a lot of small Goldens there as well,” says Ntuthuzelo Ngonyama of The Fruit Farm Group. “The prices we're getting are relatively lower than those we received last season.”
Ngonyama points out that there was a lot of CA stock of Golden Delicious left that overlapped with the new harvest, an effect of sluggish African trade due to the weakening oil price and a shortage of currency. Elona van der Merwe of Cape Five Exports concurs. “The Golden market is difficult for everyone. There’s no demand for South African Goldens in the EU and the Far East, it’s mostly for the African market, Russian retail and Bangladesh. We saw a drastic fall in demand from Nigeria this year, due to the weakened oil price.”
Eric Conta of DKI Fruit, which specialises in alternative markets like Africa and Indian Ocean islands, says there is a lot of volatility in the African market this year. “There’s a bit of a price war going on between the large exporters in Africa. We send about 200 containers to West Africa and 40 containers to East Africa, but Mauritius and Réunion are strong markets for us: we send about 300 containers, a more mixed basket, there.”
“The Golden challenge already started last year,” says Leardt van der Burgh of Kromco. “We don’t see a big change in demand but there is a shortage of dollars. The South African Reserve Bank requires us to be paid in foreign currency, which makes sense from a balance of payment point of view. Two of the main players in the African market are Nigeria and Angola and their economies are both dependent on oil exports.”
“Our marketing window for Goldens in the EU is very small as France and Italy supply the market throughout the year. I think in the medium to long term, old Golden orchards will probably be replaced with other varieties,” Van der Burgh continues.
There is a marked difference in consumer preferences between East and West Africa, Conta explains. “West Africa doesn’t like acidic fruit, like Pink Lady or Grannies. They’re starting to take more of the Mahana Red and varieties like African Red and African Carmine. They take the bulk of our Goldens. As for pears, we send Packhams. East Africa takes no Goldens, they like bi-coloured and red fruit like Cripps Red, Cripps Pink and Royal Gala.”
Hortgro's apple estimate for Royal Gala is up with 3% this year.
“We’re sending our bigger sizes Royal Gala to Morrisons in the UK, some smaller Royal Gala to Aldi, and the rest of our smaller Gala to Bangladesh,” says Ngonyama. Other exporters are also marketing their small fruit to Bangladesh, where street vendors sell per unit and can therefore maximise profit on a carton filled with smaller fruit.
“Historically there’s a big demand for Royal Gala in the Middle East – countries like Dubai, the UAE, Oman, Kuwait and Saudi-Arabia – but this year the market is quiet because there are still apple volumes from Poland and (though not specifically Royal Gala) Italy and France,” says Van der Burgh. “The embargo on Russia is definitely having an effect on apples going to other markets. We’re also sending Royal Gala to Malaysia and Singapore and a smaller amount to Bangladesh.”
Chile is aggressively marketing its bumper apple harvest, so there are early Royal Gala apples from Chile on the Middle Eastern market, impacting on the prices South African apples receive, says Stefan Conradie, commercial director at Fruitways.
As for the Far East, Van der Burgh explains that South African apples, even if not as highly coloured as apples from chillier New Zealand, have a good reputation in the Far East regarding its taste.
He continues that Royal Beauts, fully red apples with slight stripes, are marketed to the Middle and Far East where a premium is paid, US$2 to $4 more than for Royal Gala.
In the Eastern markets, Red Royal Gala with 80%+ colour is sold as Royal Beaut, while apples marketed as Royal Gala have 40 to 80% colour, followed by Gala with 10 to 40% colour.
Van der Merwe of Cape Five Exports says that the market for Granny Smiths, popular in the Far East, which they have started shipping already, will also come under pressure with higher volumes shipped from this week.
Van der Burgh reports that the quality looks better on the first Granny Smiths, of which those of best quality, cosmetically speaking, go to the Far East. Fruitways has also started its Granny shipments.
As for other varieties, current high temperatures in the Western Cape are not conducive for colour development on varieties like Fuji and Braeburn, and sunburn on Granny Smiths is a risk.
“I doubt that the apple market will improve much,” Ngonyama says. “There is a lot of stock worldwide.”