Several different factors combined to make January a miserable month for the South African grape industry. The most significant was the decision to ship too much fruit to the UK and Europe, which saw prices dropping to levels where no-one could make a profit. The market lost further confidence after arrivals of some doubtful-quality grapes.
The season started 10-14 days earlier than last year, with the late-season Hex River region entering the production cycle well before Christmas. With excellent conditions and warm weather, all varieties seemed to ripen together. Consequently, it is now generally expected that the South African season will end much earlier than last year.
In the early season, close to 90 per cent of all grapes were shipped to the UK and Europe, where they were expected to find clear markets following a strong finish to the Brazilian season. But by the time the fruit arrived, these markets were saturated, resulting in a very tough January for shippers.
At the season start SATI chief executive Willem Bestbier had warned growers of the dangers of relying too much on the so-called traditional Western markets, urging them instead to seek opportunities in the East. But his words fell on deaf ears and had little effect on early-season shipping decisions.
Neither did anyone fully appreciate the dramatic effect the Russian ban on European fruit would have on global produce markets. Nor did they anticipate that the euro would lose value against the South African currency, making US dollar deals more attractive.
In situations like these, grower-shippers tend to react dramatically. So, from the second week of January shipments to the Far East and Middle East began increasing substantially. How this will affect market stability remains to be seen.
Speaking in mid-January, Hex growers said they are now harvesting excellent Crimson Seedless, a large portion of which is being shipped to the Far East. Leading grower Anton Viljoen said the Hex season will end early, with the bulk of the grapes shipped before the end of March.
“This will potentially lead to some short supply towards the end of the season which will be good for the late growers,” he said. “However, here in the Valley most growers are only hoping to survive this season. It is a tough one!”
