The entire South African fruit export sector is facing dramatic increases in container freight rates this season, which table grape exporters will have to grapple with from the start of their new season in early November.
Fruitnet has spoken to industry leaders from across the export sector and most of them have said they are deeply concerned about what is happening.
They were careful not to step on the toes of the shipping companies, who they believed were key to the success of the export operation, but said it appeared to have been trying to maximize profits after the disruption from Covid-19.
According to logistics service providers, exporters of table grapes would be confronted with an increase in container freight rates of 30 to 40 percent from the start of the season.
In media reports on Sunday (October 17th), the debate about the sharp rise in export freight costs was highlighted, along with other major challenges for the export industry.
Paul Hardman, acting CEO of the South African Citrus Growers’ Association, was quoted in the Sunday newspaper as saying that freight rates had increased 40 percent since 2020.
“The industry expects further increases of between 50 and 75 percent for 2022,” he is said to have said. “If the costs of marketing fruit exceed the income, the possibility of exporting to certain markets comes into question.”
Hardman said this has so far not had any impact on export volumes. It has a potential impact on the markets that are eligible for export.
Industry leaders said trading partners around the world need to be aware of this trend. “If they don’t come to the party during their price negotiations, we’re going to have serious problems.”
Brett Gosling, chairman of the Northern Transvaal Table Grape Association, told Fruitnet recently that growers were very concerned about the ever-increasing costs associated with producing and transporting a box of grapes.
“Labor, packaging, and logistics costs are increasing exponentially,” he said. “It is important for our customers to know the real cost of making a high quality wine box.
“Growers, exporters and end users need to come together as a unit to ensure that selling prices take account of these rising costs,” added Gosling. “It is vital to make sure we can do business well in the future.”
The northern region is the earliest South African table grape region and is expected to begin exporting in the first week of November.
While exports of citrus fruits, apples and pears, and avocados are now falling, exporters of stone fruits and blueberries will find themselves in a similar situation to table grape growers.
The inefficiency of South African ports is well documented, particularly in Cape Town, which is where most of the stone fruits, berries and table grapes are exported. December and January are also considered “wind months” when climatic conditions play a role.