MONTHLY MARKET INFORMATION REPORT: …webapps.daff.gov.za/AmisAdmin/upload/Monthly Market...Sweet potatoes volumes are on an upward trend as from April/May 2016. Volumes marketed have

MONTHLY MARKET INFORMATION REPORT: VEGETABLES

Review period: July 2015 to July 2016

Issue: 2016/08

IN THIS ISSUE

1. Price and volume trend analysis ( in accordance of the highest to lowest volumes sold during this month)

1.1 Potatoes

1.5 Butternut Squash

1.9 Sweet Potatoes

1.2 Tomatoes

1.6 Pumpkin

1.10 Gem Squash

1.3 Onions 1.7 Cabbage 1.11 Lettuce

1.4 Carrots 1.8 Peppers

1.12 English Cucumber

2. News: current activities pertaining to the domestic & international fresh produce market

2

INTRODUCTION

This report is a review of selected vegetable sales at the Cape Town Fresh Produce Market, the largest fresh

produce market in the Western Cape.

The review will be issued on a monthly basis and will cover trend analysis relating to prices (Rand per ton)

and volumes (tons) of the selected vegetables sold on the market, considered to be of importance due to

the area under production or marketed volumes, however the combination of selected vegetables might

change over time due to relevance.

OVERVIEW OF THE NATIONAL AGRICULTURAL MARKETING INFORMATION SYSTEM (AMIS), OFFERED BY THE

DEPARTMENT OF AGRICULTURE, FORESTRY AND FISHERIES (DAFF)

The Agricultural Marketing Information Systems (AMIS) is a database interface offered by the Department of

Agriculture, Forestry and Fisheries (DAFF).

The main purpose of the Agricultural Marketing Information System (AMIS) is to provide reliable & updated

information to farmers. In order to assist farmers to plan activities relating to production and marketing in a

much informed manner.

Agricultural market information is provided for horticulture, field crops, livestock and industrial products, and

includes the following categories:

marketing prices,

grading and standard information,

annual price trends, and

marketing news (pertaining to the application procedures for import and export permits).

Click on the following website link to access the DAFF AMIS web application, or alternatively go to the web

address: http: //webapps.daff.gov.za/amis (no subscription fee payable to access system). Cell phone user

can send an sms to *120*4040# (charged at standard sms rates)

Please note that prices are updated at 12h00 a.m on a daily basis.

3

1. PRICE AND VOLUME TREND ANALYSIS

1.1 Potatoes

Figure 1: Potatoes sales on the Cape Town Fresh Produce Market

REVIEW OF THE NATIONAL POTATOES MARKET: JULY 2016

The total area planted in the 2016 season has slightly reached more than 50,000 hectares, which is lower than the

53,900 hectares planted in 2015. Although 2015 produced a record harvest of approximately 2.5 million ton

potatoes, the current production season has been negatively impacted by the drought and above-normal

temperatures in most of the production regions. Hence production losses are estimated between 25 to 35 million

equivalent bags during the 2016 production season. As from September 2015 till the end of July 2016, production

losses already accounted to 12.5% or 31 million equivalent bags of the 2015 record harvest. Whereas production

losses incurred as from January 2016 to the end July 2016 already amounted to 10.2 million equivalent bags of the

total estimated production loss for this season. The current volumes marketed accounts to a 16% year-on-year

decline in volumes compared to the same period in the previous year. As a result, July 2016 market prices were

pushed upward by 82% year-on-year (Potatoes SA, 2016).

Overall, yields have improved compared to the beginning of the year when relative shortages in stock were evident

on market floors as a result of the adverse weather conditions experienced. As stock levels started to recover over

subsequent months, market prices peaked at record levels of more than R70 per bag after which it lowered to levels

between R34 and R48 per equivalent bag in subsequent months. Large price variations exist amongst all grades and

sizes of produce within a particular market as well as between different markets. The largest share of volumes

currently marketed is being supplied by the Western Free State and the Limpopo production areas (Potatoes SA,

2016).

DEVELOPMENTS ON THE CAPE TOWN FRESH PRODUCE MARKET: JULY 2016

Stock levels during July 2016marketed improved by 11% m/m or 849 tons, compared to the previous month. Whilst

the market price per ton slightly declined by 13% m/m or R634 per ton and reached R4275 per ton. The recent

average market price is however still 42% y/y or R1257 per ton higher than the R3018 obtained per ton during the

previous year. This is due to the loss in production which brought about a 15% y/y or 1547 ton decrease in stock levels

compared to the 10,231 tons marketed during the same period in the previous year.

1 bag of potatoes equals 10 kilogram Source: Potatoes SA & Technofresh, 2016

4

1.2 Tomatoes

Figure 2: Tomatoes sales on the Cape Town Fresh Produce Market

1.3 Onions

Figure 3: Onion sales on the Cape Town Fresh Produce Market

Onion volumes has increased by 15% m/m or 262 tons, whilst the stock supplied to the market have declined by

16% y/y or 402 tons compared to the 2441 tons marketed during the same period last year.

Average market prices has however increased by a further 17% m/m or R1068 per ton due to the lower stock

levels available on the market compared to the previous year, portraying the inverse relationship between

supply and demand. On an annual basis, market prices has increased by more than 100% y/y or R1068 per ton

and reached R7212 per ton compared to R3391 per ton obtained in the same period last year.

Tomatoes volumes supplied to the market decreased by 6% m/m or145 tons and reached 2,409 tons during

July 2016. Whereas, the average price per ton decreased by R229 per ton or 4% m/m to R4929 per ton.

On an annual basis, volumes marketed decreased by 15% y/y or 433 tons compared to the 2842 tons sold

during the same period in the previous year. Due to the shortage in supply compared to the previous year,

market prices increased by 5% y/y or R229 per ton compared to the R4688 realised per ton during the July last

year.

5

1.4 Carrots

Figure 4: Carrots sales on the Cape Town Fresh Product Market

1.5 Butternut Squash

Figure 5: Butternut sales on the Cape Town Fresh Produce Market

Carrot volumes supplied to the market increased by 14% m/m or 108 tons and reached 893 tons during July

2016. However due to increased supply, market prices declined by 27% m/m or R1282 per ton and reached

R3505 per ton compared to the previous month.

Volumes increased by 3% y/y or 27 tons on an annual basis, whereas the average price per ton obtained

increased by more than 43% y/y or R1050 per ton from R2456 obtained per ton in the same period in the

previous year.

Butternut squash volumes marketed during July 2016, decreased by 24% m/m or 237 tons and reached 766

tons. The recent shortage in produce resulted in upward market prices which escalated by a further 6% m/m

or149 tons to R2762 per ton in relation to the previous month.

Supplies marketed during the reported month were lesser by 5% y/y or 40 tons compared to the 806 tons

marketed during the same period in the previous year. Whilst the average price obtained per ton amounted

to R2762 which is 2% y/y higher than the same period in the previous year.

6

1.6 Pumpkin

Figure 6: Pumpkin sales on the Cape Town Fresh Produce Market

1.7 Cabbage

Figure 7: Cabbage sales on the Cape Town Fresh Produce Market

The amount of cabbage supplied to the market during July 2016 amounted to 495 tons, translating into a 5%

m/m or 25 ton increase compared to sales in the previous month. Whilst volumes had been on an increasing

trend, the average price per ton has significantly decreased since peaking at more than R4000 per ton during

March/April 2016. Recently the market price has further decreased by 23% m/m or R715 per ton, as it reached

R2423 per ton. On an annual basis, volumes have decreased by 21% y/y or 130 tons, whereas the average

market price has obtained 51% y/y or R816 per ton more than the same period in the previous year.

Pumpkin volumes sold during July 2016 further decreased by 17% m/m or 93 tons, reaching 464 tons.

Whereas, the average price per ton increased by a further 16% m/m or R302 per ton reaching R2180 per ton

compared to the previous month. Increased in the market price is evident since the inception of lower

monthly volumes supplied to the market as from June 2016.

Volumes have decreased by 13% y/y or 70 tons on an annual basis, whilst the average price per ton has

reached R2180 per ton compared to the same period in the previous year. This translates to a 23% y/y or

R406 per ton increase in the market price compared to the July last year.

7

1.8 Peppers

Figure 8: Pepper sales on the Cape Town Fresh Produce Market

1.9 Sweet Potatoes

Figure 9: Sweet potatoes sales on the Cape Town Fresh Produce Market

Pepper volumes decreased by 36%m/m or 222 tons during July 2016 compared to the 620 tons sold during the

previous month. Thus, the average market price obtained per ton of peppers increased by 60% m/m or R4546

per ton from R7582 per ton in the previous month to R12 128 per ton during July 2016.

On an annual basis volumes reached its lowest level during 2016, reaching 398 tons or 43% y/y in July 2016

compared to sales volumes sold in the same period in the previous year. As result average market prices were

pushed upward by 77%y/y or R5268 per ton to reach R 12 128 per ton compared to R6861 obtained in the

previous year for the same period.

Sweet potatoes volumes are on an upward trend as from April/May 2016. Volumes marketed have further

increased by 4% m/m and reached 339 tons during the month of July 2016. The average market price has

however reacted to the increased supply and has thus market prices was pressurised downward by 12%

m/m or R596 per ton. On an annual basis, volumes are lower by 6% y/y at 339 tons, whilst the average price

per ton has increased by 21% y/y or R748 per ton and thus reaching R4319 per ton compared the same

period last year.

8

1.10 Gem Squash

Figure 10: Gem squash sales on the Cape Town Fresh Produce Market

1.11 Lettuce

Figure 11: Lettuce sales on the Cape Town Fresh Produce Market

Gem Squash volumes continued to decrease as from March/April 2016, and declined by a further 26%

m/m or 98 tons reaching 277 tons during July 2016. On the other hand, the average market prices per ton

moved in the opposite direction and further increased by 17% m/m to an amount of R3222per ton.

Volumes were however 48% y/y or 258 tons lesser than the sales recorded in July 2015, whereas the

average price increased by 82% y/y or R1448 per ton. This movement can be ascribed to the persisting

shrinkage in stock levels available during 2016, compared to the sales volumes for the same period last

year.

Lettuce volumes amounted to 255 tons, translating into a 5% m/m decrease in available stock on the market

in relation to the previous month. Due to higher demand levels as from June/July 2016, average market

prices were pushed upward by 41% m/m or R1267 per ton in relation to the previous month.

On the other hand, volumes supplied were lesser by 9% y/y compared to the same period in the previous

year. Whilst, average market prices were lower by 11% y/y or R520 per ton in relation to the same period in

the previous year.

9

1.12 English Cucumber

Figure 12: English Cucumber sales on the Cape Town Fresh Produce Market

Volumes marketed during July 2016, decreased by 19% m/m or 45 tons and amounted to 194 tons. The

shortage in supply resulted in a 95% m/m or R6484 per ton increase compared to the previous month.

Average market prices have however been on a decreasing trend as from March 2016, although the

market prices are relatively higher compared to the same period in the previous year. This could mainly be

ascribed to the oversupply during months in which a decrease in demand was experienced.

On an annual basis, volumes were however 3% y/y lower than the same period in the previous year, whilst

average market prices are 2% y/y higher at R13 304 per ton compared to the market price obtained in

the same period in the previous year.

10

TABLE 1: TREND ANALYSIS OF NICHE VEGETABLES TRADED ON THE CAPE TOWN FRESH PRODUCE

MARKET:

PRODUCE NAME: ( in order of the highest to

lowest volumes sold during

this month)

AVERAGE TONS

TRADED FOR

JULY2016:

(tons)

(A-Z)

CHANGE IN THE

AVERAGE TONS

TRADED FOR

JULY2016:

(m/m)

AVERAGE PRICE

OBTAINED FOR

JULY2016:

(Rand per ton)

CHANGE IN THE

AVERAGE PRICE

MARKETED FOR

JULY2016:

(m/m)

13. Green beans 120 -18% R10 010 18%

14. Cauliflower 118 -18% R6 098 -24%

15. Baby Marrow 83 -22% R18 035 38%

16. Broccoli 75 -10% R10 745 -3%

17. Beetroot 71 - R3 798 -24%

18. Brinjals

/Eggplant 61 -13% R6 699 -2%

19. Leeks 36 -18% R3 799 -3%

20. Spinach 31 -26% R8 323 5%

21. Hubbard

Squash 21 12% R2 540 19%

22. Spring Onion 19 -24% R6 877 -7%

23. Sweetcorn 14 -75% R19 787 >100%

24. Mushrooms 9.0 13% R51 456 -8%

25. Marrow 3.7 -61% R612 -23%

26. Radish 1.8 40% R6 856 -7%

27. Patty Pans 0.6 -34% R34 960 68%

11

NEWS CLIPS: COMMODITY MOVEMENTS BOTH IN THE INTERNATIONAL AND DOMESTIC MARKET

2.1 WEATHER UPDATE: DAFF NAC ADVISORY ON THE 2015/16 SUMMER SEASON, JULY 2016

The Western Cape Province received near-normal to above-normal rainfall but areas such as Matzikama

( which includes towns such as Vredendal, Vanrhynsdorp, Klawer, Lutzville and other surrounding towns) ,

parts of Murraysburg located in the Central Karoo District, Overberg and parts of the Eden District

received below-normal rainfall (DAFF, 2016).

Temperatures in most areas matched well with historical rainfall patterns. However, the drought in the

Matzikama region and Central Karoo district continues. Conditions of winter crops and pastures in the

winter cereal production regions of the West Coast, Overberg and Southern Cape appear to be mixed

due to some areas either receiving sufficient or poor rainfall compared to others. Whereas some areas

indicated that crops are experiencing good conditions, whilst other areas indicated that crops are

prevailing under poor conditions. The average level of the major dams within the Western Cape Province

has decreased to 47% in July 2016 as compared to 50% achieved for the same period in the previous

year (DAFF, 2016).

Click here to view the most recent update (latest update on 01 August 2016) on the dam levels within the

Western Cape Province or alternatively visit the Elsenburg Website at www.elsenburg.com and revert to

Agri-tools Western Cape dam levels.

In addition, the Agri-outlook report provides a holistic overview of the provincial weather developments

within a specific month. The reports can be viewed on here, or alternatively visit the Elsenburg website at

www.elsenburg.com and revert to the Agri-tools Agri Outlook.

Source: DAFF National Agro-meteorological Committee (NAC) Advisory & Provincial Department of

Agriculture, 2016.

2.2 Zimbabwean import “ban”

Zimbabwe’s new import restrictions have sparked reactions from both importers

and traders over the “banning” or the restriction on the control through the

importation of the following products, as listed in the Statutory Instrument (SI) 64

of 2016 gazetted on 17 June 2016 (ZIMRA, 2016):-

Food stuff: coffee creams, baked beans, potatoes crisp, cereals,

bottled water, mayonnaise, salad cream, peanut butter, jams, mahout,

canned fruit and vegetables, pizza bases, yoghurt, flavoured milks, dairy

juice blends, ice creams, cultured milk and cheese.

A comprehensive list of strategies can be found in the monthly NAC Advisory report issued by DAFF:

Climate Change and Disaster Management. It can be accessed from the following websites:

www.daff.gov.za and www.agis.agric.za.

Request weather warning notifications from the Western Cape Department of Agriculture: Sustainable

Resource Management, Disaster Risk Management

Forward an email to Mrs. Zaibu Arai to [email protected] or alternatively call (021) 808 5368.

12

Camphor cream, furniture ( as per the listed items gazetted), woven fabrics of cotton, second-

hand tires, balers and binders of twine, fertiliser, builders products (as per the listed items

gazetted), plastic pipes and metal clad insulated panels (ZIMRA, 2016).

The largest share of Zimbabwean imports has mainly been derived from South Africa, Singapore, China,

Zambia, India, and Mozambique during 2015. South Africa obtained a market share of 38.4% of the USD

6,002 billion import market during 2015, followed by Singapore (22.3%), China (7.6%), Zambia (4.6%) and

Mozambique (2.8%). The two leading trading partners obtained a collective market share of 60.7%. (ITC,

2016).

Over the past few months, imports from South Africa, Zambia and Botswana has been on an increasing

trend due to the struggling and poorly capacitated local industry (Fin24, 2016). The top 10 products

imported from South Africa are depicted in table 2, from which the following can concluded:

South Africa’s annual import growth between 2011 and 2015 has contracted by 15% per annum.

The trend is however on-par with the negative performance of Zimbabwean imports from other

global trading partners (refer to column c and g), as a result of the country’s economic crisis

(Blive, 2016).

South Africa has obtained a relative high market share in 2015 of some the “controlled” products

listed as per the latest Statutory Instrument 64 of 2016. An example would be fertiliser in which

South Africa supplied almost 65% of such imports in 2015 (refer to column a and d).

Table 2: BILATERAL TRADE BETWEEN ZIMBABWE AND SOUTH AFRICA IN 2015

Pro

du

ct

Ra

nk

ing

Pro

du

ct

Co

de

Product Label (a)

Zimbabw

e's

imports

from

South

Africa-

Value in

2015, USD

thousand

(b)

Zimbab

we's

imports

from

South

Africa-

Annual

growth

in value

between

2011-

2015, %,

p.a.

(c)

Zimbab

we's

imports

from

South

Africa-

Share in

Zimbab

we's

imports,

%

(d)

Zimbab

we's

imports

from

South

Africa-

Equivale

nt ad

valorem

tariff

applied

by

Zimbab

we to

South

Africa

(e)

Zimbab

we's

imports

from

world-

Value in

2015,

USD

thousan

d

(f)

Zimbab

we's

imports

from

world-

Annual

growth

in value

between

2011-

2015, %,

p.a.

(g)

Zimbab

we's

imports

from

world-

Share in

world

imports,

%

(h)

TO

TAL All products 2304883 -15 38.4

600223

2 -8 0

1 84

Machinery, nuclear reactors,

boilers, etc 283099 -6 50.6 0.5 559398 -2 0

2 87

Vehicles other than railway,

tramway 138307 -17 30.1 14.3 459684 -21 0

3 85

Electrical, electronic

equipment 135572 -2 33.6 2.4 402971 -1 0

4 39 Plastics and articles thereof 133750 1 65.8 1.8 203353 2 0

5 15

Animal,vegetable fats and

oils, cleavage products, etc 130349 -17 95.1 2.6 137018 -16 0.2

6 27

Mineral fuels, oils, distillation

products, etc 119886 -15 7.6 0.9

158369

7 5 0.1

7 31 Fertilizers 110403 -46 65.3 0 169047 -40 0.2

8 72 Iron and steel 108425 1 88.3 0.5 122752 -1 0

9 10 Cereals 82598 18 20.2 0 409870 0 0.4

13

10 48

Paper and paperboard,

articles of pulp, paper and

board 81799 -4 83.9 2.8 97451 -3 0.1

During early August 2016, the South African Minister of Trade and Industry, Dr Rob Davies has met with his

Zimbabwean counterpart, Mike Bimha to discuss the trade restrictive measures imposed by Zimbabwe

since 2011 including the most recent June 2016 control measures. The meeting was pre-empted by

previous bilateral engagements, which aims at addressing concerns regarding Zimbabwe’s trade

obligations under the Southern African Development Community (SADC) Trade Protocol which is

potentially hampered by the trade restrictions imposed to date. Taking into account that the

Zimbabwean government is aiming to protect and harness its local industry and addressing balance of

payment (BoP) challenges as the country is remaining its status as a net importer. The South African

Department of Trade and Industry has indicated that the two countries have agreed that in instances

where there is no productive capacity of listed products exists in Zimbabwe; such products should not be

subjected to such trade restrictive measures. Products that comply with such conditions amounted to 112

out of the 1000 tariff line products traded. An exemption application for the relation of such products

listed in the initial Statutory Instrument will be lodged, where after clarity will be provided by the

Zimbabwean counterpart on the way forward.

Source: Business Day, Department of Trade and Industry& Fin24, 2016

2.3 The Chemical, Energy, Paper, Printing, Wood and Allied Workers Union (CEPPWAWU) strike

The South African Petroleum Industry Association (SAPIA) members have confirmed that refining,

transportation and storage activities will be continuing and that individual confidential contingency plans

have been put in place to mitigate any potential impact on its oil companies’ customers as a result of

the CEPPWAWU’s strike action as from Thursday, 28 July 2016 (DoE & Engineering News 2016).

Precautionary measures and attentiveness should prevail throughout the strike; to ensure that alternative

measures are put in place should shortages of fuel be experienced at fuel stations due to output being

affected at crude oil refineries and fuel depots. South Africa is a net importer of refined petroleum

products and thus petroleum is required to be refined, of which the largest refinery Shell and BP South

Africa Petroleum Refineries (SAPREF) produces 190,000 barrels per day (~ 24,000 tons). Other smaller

refines include Chevron, Sasol and PetroSA. In addition, workers employed at Eskom whom are members

of the National Union of Mineworkers (NUM) are also embarking on a strike action; the legality thereof has

however been under review (Engineering News, 2016).

Source: Department of Energy, Engineering News, Fin24 and SAPREF, 2016.

Source: Trademap, 2016

14

2.3 MONTHLY FUEL PRICE ADJUSTMENT HAVE BEEN EFFECTIVE AS FROM WEDNESDAY, 03 AUGUST 2016

The average international product price of petrol, diesel and illuminating paraffin increased during the

period under review.

During the period under review, the price of international Brent crude oil decreased on average from

USD49.32 to USD 40.76 per barrel, between 30 June 2016 and 31 July 2016.

The following are main reasons for the fuel price adjustments in July 2016:

The strengthening of the Rand against the US Dollar during the period under review from ZAR/USD

14.68 to USD 14.15 between 01 and 29 July 2016 which pressurised fuel prices downward by

about 25.00 cents per litre,

the decrease in the average prices of petroleum products in the international markets was

mainly due to an oversupply of refined petroleum products within the global markets (DoE, 2016).

Product description Numeric

adjustment

applicable to the

Coastal parts in

South Africa

(cents per litre)

Price adjustment description Average price

applicable to the

Coastal parts in South

Africa

(cents per litre)

Petrol 93 ULP 99.00c cents per litre decrease in retail price 1170.00

Petrol 95 ULP & LRP 99.00c cents per litre decrease in retail price 1 187.00

Diesel 0.05% Sulphur 74.00c cents per litre decrease in wholesale price 1096.87

Diesel 0.005% Sulphur 73.00c cents per litre decrease in wholesale price 1101.27

Illuminating Paraffin (Wholesale) 66.00c cents per litre decrease in wholesale price 640.03

Illuminating Paraffin (SMNRP) 88.00c cents per litre decrease in the Single Maximum

National Retail price (SMNRP)

891.00

Maximum Retail Price for LPGAS 160.00c cents per kilogram decrease in the maximum

retail price

R6569.01 per metric ton

or 364.58 per litre.

( refinery gate)

LPG for residential

customers is derived as

per the control sheet

per kilometre.

International Brent Crude Oil Prices (2000 to 2016) Source: Ycharts, 2016

Source: Department of Energy, 03 August 2016

15

ACKNOWLEDGMENTS

The following institutions and organisations are hereby acknowledged:

Business Day: www.bdlive.co.za

Department of Agriculture, Forestry and Fisheries: www.daff.gov.za

Department of Energy: www.energy.gov.za

Department of Trade and Industry (DTI): www.dti.gov.za

Elsenburg (Western Cape Department of Agriculture): www.elsenburg.com

Engineering News: www.engineeringnews.co.za

Fin24: www.fin24.com

International Trade Centre (Trade Map): www.intracen.org

Potatoes South Africa (SA): www.potatoes.co.za

Quantec: www.easydata.co.za

Techno Fresh CRM: www.technofresh.co.za

Ycharts: www.ycharts.com

Zimbabwe Revenue Authority (ZIMRA): www.zimra.co.zw

For more information, contact:

The Western Cape Department of Agriculture

Programme: Agricultural Economic Services

Division: Marketing and Agribusiness

Tel: 021 808 5193 or 5189

Fax: 021 808 5210

E-mail: [email protected]

DISCLAIMER:

This document and its contents have been compiled by the Western Cape Department of

Agriculture. The views expressed in this document are those of the Department of Agriculture with

regard to vegetable market information in the province, unless otherwise stated. Anyone who

uses this information does so at his/her own risk. The Department of Agriculture or the author(s)

therefore accepts no liability for losses incurred resulting from the use of this information.