MONTHLY MARKET INFORMATION REPORT: VEGETABLES

Review period: May 2015 to May 2016

Issue: 2016/06

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 Peppers

1.9 Gem Squash

1.2 Tomatoes

1.6 Pumpkin

1.10 Sweet Potatoes

1.3 Onions 1.7 Carrots 1.11 Lettuce

1.4 Butternut Squash 1.8 Cabbage

1.12 English Cucumber

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

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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. Cell phone user can send an sms to *120*4040#

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

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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: MAY 2016

Potatoes stock levels declined by 6, 7 million bags between January and May 2016, compared to the same

period last year for all municipal fresh produce markets. This relates to a 16% y/y decline in volumes, of which

5 million bags was sold lesser between January and March 2016 only. The shortage in stock levels amounted

to an 85% y/y increase in the average market price on municipal fresh produce markets.

The early months (reference as from the last week in December to the first week in April 2016) in the 2016

production season has delivered record low stock levels, as previously indicated. Whilst stock levels has

started to improve as from April/May 2016, and thus systematically reduced pressure on weekly average

market prices. It should however be noted, that there is a significant variation in average market prices

amongst different municipal fresh produce markets as well as the size and class grouping within a particular

market ( refer to the Potatoes SA Market Comment Report for May 2016 ). The majority (45% to 50%) of

potatoes sold on the fresh produce markets were class 1 medium.

Plantings for 2016 have been reported at 50,000 hectares, which is relatively consistent with last year’s

plantings. Both in 2014 and 2015, more than 4,000 hectares has been planted compared to the 2013

plantings. Furthermore, it should be considered that the size of the harvest has increased significantly in the

past production seasons due to efficiencies in the average yield per hectare, which increased by 5.95% y/y

between 2014 and 2015 from 4370 bags to 4630 bags per hectare. As a result, the 2015 production season

delivered a record harvest of more than 220 million bags. On the other hand, the effect of the drought till end

of May 2016 has resulted in a loss of approximately 31 million lesser bags of potatoes (including fresh,

processed and seed potatoes). The loss in production amounted to 12.5% of the 2015 harvest of which the

bulk of shortages in stock levels was experienced as from November 2015 to April 2016.

It is however anticipated that the 2016 harvest will deliver a smaller crop, due to abnormal higher

temperatures and drought conditions experienced in production regions as from September 2015. The effect

thereof on the market has been evident as from October 2015, is unlimitedly anticipated to push average

market prices upward in relation to prices obtained last year.

DEVELOPMENTS ON THE CAPE TOWN FRESH PRODUCE MARKET: MAY 2016

Marketed stock levels amounted to 6812 tons which is a 5% m/m or by 352 tons decrease in relation to the

previous month. Monthly market prices decreased by 1% or R 55 per ton to amount to R4697 per ton.

Whereas, stock levels declined by 17% y/y or by 1347 tons, whilst the average market price soared by 73% y/y

or R1981 per ton compared to the same period in the previous year. 1 bag of potatoes equals 10 kilogram Source: Potatoes SA & Technofresh, 2016

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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 marketed during May 2016, increased by 31% m/m or 549 tons compared to the previous

month when 2336 tons were sold. The increased supply to the fresh produce market resulted in downward

pressure on average monthly average of 4% m/m or R211 per ton which amounted to a ton of onions to realise

R5326 per ton.

If compared to the same period within the previous year, volumes marketed improved by 7% y/y or 157 tons.

On the other hand, the average market price escalated upwards by 66% or R2108 per ton compared to the

R3218 per ton obtained in the same period last year.

Tomatoes volumes sold on the market have increased by 15% m/m or 337 tons to an amount of 2648 tons,

whereas the monthly average market price has decreased by 21% m/m or R1247 per ton to an amount of R

4822 per ton.

On an annual basis, the volumes have increased by 22% y/y or 471 tons to an amount of 4822 tons, whilst the

average market price has decreased by 9% y/y or R1247 per ton.

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1.4 Butternut Squash

Figure 4: Butternut sales on the Cape Town Fresh Produce Market

1.5 Peppers

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

The marketed volumes during May 2016, increased by 39% m/m or 170 tons to an amount of 605 tons in total,

whilst the average market price decreased by 7% m/m or R752 per ton.

Volumes sold during May 2016, improved by 13% y/y or 68 tons compared to the same period last year, whilst

average market prices was pushed upwards by 40% y/y or R2733 per ton to a total amount of R9634 per ton.

Butternut squash volumes marketed during May 2016, declined by 19% m/m or 157 tons compared to the

previous month. The average market price per ton obtained amounted to R3211 per ton, which is a 30% m/m

or R742 per ton increase released compared to the previous month.

If compared on an annual basis, the volumes sold amounted to 648 tons which was lesser by 34% y/y or 330

tons, whereas the average price per ton realised increased by 70% y/y or R1327 per ton during May 2016.

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1.6 Pumpkin

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

1.7 Carrots

Figure 7: Carrots sales on the Cape Town Fresh Product Market

Pumpkin sales during May 2016 increased by 31% m/m or140 tons, compared to the previous month. The

increased supply of pumpkin produce however resulted in a further monthly decrease of 9% m/m or R171 per

ton in the average monthly price obtained amounted to R1723 per ton during May 2016.

On an annual basis, the volumes sold during May 2016 were lesser by 27% y/y or 126 tons compared to the

same period in the previous year, whilst the average market price realised R1723 per ton which is a 20% y/y or

R291 per ton more than the price obtained in May last year.

Overall an amount of 589 tons of carrots were sold on the fresh produce market during May 2016, which

demonstrates an 8% m/m or 46 ton increase compared to the previous month. The average market price

obtained declined by 1% m/m or R53 per ton to an amounted of 5762 per ton.

On an annual basis, the volumes sold during May 2016 were lesser by 3% y/y or 17 tons compared to the same

period in the previous month. Average market prices obtained were however 91% y/y or R2748 per ton higher

than May 2015 when a ton of carrots obtained R 3014 per ton.

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1.8 Cabbage

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

1.9 Gem Squash

Figure 9: Gem squash sales on the Cape Town Fresh Produce Market

A total of 417 tons of cabbage was sold during May 2016, indicating a 26% m/m or 87 tons increase

compared to the previous month. The increased supply however contributed towards a further decrease in

the monthly price obtained which amounted to a decline of 22% m/m or R931 per ton compared to the

previous month.

If compared on an annual basis, volumes supplied to the market decreased by 18% y/y or 90 tons whilst the

average price per ton realised was pushed upwards by 65% y/y or R1325 per ton to amount to R 3393 per ton.

Monthly volumes marketed declined by 6% m/m or 24 tons to an amount of 388 tons being sold, compared

to the previous month’s sales of 411 tons. The average market price obtained amounted to R 2844 per ton,

which is an 18% m/m or R425 per ton increase compared to the previous month.

Gem squash volumes were lesser by 16% y/y or 76 tons compared to the monthly sales achieved in the same

period in the previous year. The average price obtained during May 2016 amounted to R2844 per ton, which

is a 99%y/y or R1412 per ton increase compared to the R1433 per ton realised in May 2015.

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1.10 Sweet Potatoes

Figure 10: Sweet potatoes sales on the Cape Town Fresh Produce Market

1.11 Lettuce

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

Sweet potatoes volumes sold during continued on an upward trend, as an additional 22% m/m or 56 tons

were sold compared to the previous month. Average monthly prices however responded through

continued downward pressure which resulted in a 13% m/m or R679 per ton decrease to R4696 per ton.

On an annual basis, volumes increased by 22% y/y or 57 tons compared to the sales (in terms of volumes)

achieved for the same period in the previous year when 256 tons was sold. Regardless of the increased

supply to the market, average prices obtained during May 2016 was 58% y/y or R1721 per ton higher than

May 2015.

Lettuce sales volumes amounted to 289 tons during May 2016, translating into an 8% m/m or 21 ton

increase in relation to the previous month. Monthly average prices amounted to R3287 per ton, which

translates in a 26%m/m or R1180 per ton decrease if compared to the average market price obtained in

the previous month which amounted to R4467 per ton.

On an annual basis, the volumes marketed increased by 11% m/m or 28 tons compared to the same

period whilst the average market price obtained during May 2016 increased by 15% y/y or R421 per ton.

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1.12 English Cucumber

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

English cucumber volumes sold during May 2016 amounted to 207 tons, compared to the 187 tons sold during

the previous month which translates to an 11% m/m or 20 ton increase. On the other hand, the average

market price obtained per ton decreased by 3% y/y or R311 per ton to an amount R12472 per ton.

On an annual basis, the volumes sold to the market decreased by -5% y/y or 10 tons compared to the same

period in the previous year, whereas the average market price for a ton of lettuce also increased by 77% y/y

or R5408 per ton to amount to R12472 per ton.

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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

MAY2016:

(tons)

(A-Z)

CHANGE IN THE

AVERAGE TONS

TRADED FOR

MAY2016:

(m/m)

AVERAGE PRICE

OBTAINED FOR

MAY2016:

(Rand per ton)

CHANGE IN THE

AVERAGE PRICE

MARKETED FOR

MAY2016:

(m/m)

13. Cauliflower 220 54% R5 315 -16%

14. Green beans 130 29% R7 144 -10%

15. Baby Marrow 120 -5% R8 793 34%

16. Sweetcorn 87 54% R10 040 -10%

17. Beetroot 76 45% R6 988 -12% 18. Brinjals

/Eggplant 73 17% R5 944 -4%

19. Broccoli 68 1% R11 424 4%

20. Spinach 33 40% R8 673 -16%

21. Leeks 30 13% R3 889 -12%

22. Spring Onion 23 36% R7 275 5% 23. Hubbard

Squash 20 > 100 % R2 799 > 100 %

24. Mushrooms 7.2 -6% R55 498 5%

25. Patty Pans 4 -59% R8 303 -9%

26. Marrow 3.6 -58% R1 470 -15%

27. Radish 1.8 70% R8 099 -5%

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NEWS CLIPS: COMMODITY MOVEMENTS IN THE INTERNATIONAL & DOMESTIC MARKET

2.1 International Atomic Energy Agency (IAEA) assists Mauritius against eradication of fruit flies

The IAEA is assisting Mauritius to escalate the fight against eradicating fruit flies, as it threatens valuable

agricultural crops which could this ultimately hamper food security. Hence, the IAEA has partially funded

the €283 000 new irradiator through the use of nuclear techniques to accomplish the purpose of

eradication fruit fly species. In addition, it was reported that it will also become “an African training hub

against fruit pests” which will ultimately support African countries in controlling the pest as it causes major

economic losses in addition to the food security threat it poses.

In essence, the use of the Sterile Insect Technique (SIT), a process in which sterile males are produced

through birth control for such pest and nurtured up until a specific maturity level, where after the sterile

male fruit flies are released into affected areas where it suppresses the female fruit flies which causes

harm to crops. The release capacity in Mauritius can be escalated from 400,000 sterile flies per week to

approximately 1 million sterile flies per week. Eight different species of fruit flies are reported to be present

in Mauritius, of which four species mainly attack and hamper vegetable crops whereas the other species

mainly attack fleshly fruit types. At present the Ministry of Agro-Industry and Food Security estimates crop

loss in Mauritius over €4 million per annum.

The installation of the new irradiator is expected to not only benefit the country, but also other African

countries as Mauritius will act as a training centre for the introduction of SIT within the African region

where it is currently absent. In addition, the new technology is also expected to assist with the fight

against melon flies (Bactocera cucurbitae) and peach flies (B.zonata). The implementation of SIT in an

annual academic programme has also been launched which will compose of a four month post-

graduate certificate programme which will be extended throughout the wider African continent.

Countermeasures put in place in the South African agriculture industry to fight fruit fly species

Also visit Fruit Fly Africa, and South Africa industry initiative in collaboration with the Department of

Agriculture, Forestry and Fisheries based on the best practices of the International Atomic Energy Agency

(IAEA) and the Agricultural Research Council (ARC), based on the Sterile Insect Technique (SIT)

integrated approach.

Source: Reuters as cited in Engineering News, 2016.

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2.2 Western Cape potatoes processor acquired

by Famous Brands

The South African potatoes industry is growing at

a rapid rate; however the increased supply is

met with an increased demand which is fuelled

by a rapidly growing food service industry and

convenience consumer market. As part of the

company’s competitive strategy, Famous Brands

has acquired the Lamberts Bay Foods (LBF) business, a subsidiary of the Oceana Group which is 1/3

French Fries processing plants in South Africa. It is reported that about 30% to 50% of South African meals

are consumed outside the residence, due to consumer convenience which is coupled with increasing

fast-moving lifestyles. Thus as part of the strategic interventions to tap into the growing convince and

food service industry market share, expanding the productivity capacity in this regard was part of the

medium to long term objectives for continued supply to the South African market ( which includes

wholesalers, retailers and restaurant chains), after supplying Famous Brands for more than 20 years. The

processing plant has the capacity to process 24,000 tons of potatoes produce per annum and mainly

source produce from Mpumalanga, Limpopo, the Free State and the Sandveld region within the Western

Cape Province.

It is however a concern, that the entering of export markets for the potatoes chips remains a challenge

as some markets have additional export tariff imposed on chips as well as antidumping tariffs to

protection against the local potatoes processing industry.

Source: Engineering News, 2016

2.3 Opening of R100 million tomatoes processing

plant in Tzaneen

Eastern Trading Company, trading as Dürsot Food

Corporation whom is the controlling shareholder of

AH-Vest which produced All Joy products, has

launched a R100 million tomatoes processing plant

in Madjadjiskloof in Tzaneen during May 2016. This is

in response to the increased demand for tomato paste by South Africans. The country is currently a net

importer of tomato paste, whilst the import-bound tariff for tomato paste has been increased by the

World Trade Organisation (WTO) to 37%. The International Trade Administration Commission (ITAC) of

South Africa has however currently administer a rebate facility to allow for the import of bulk produce of

tomato based products at a duty free rate to meet the domestic demand shortages. Approximately 36

million tonnes of tomatoes per year globally of which Africa are one of the largest consumers, thus Dürsot

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Food Corporation will mainly supply to African countries whilst 25% of produce processed at the

processing plant will be destined for exports to the Middle East and China.

Source: Engineering News, 2016

2.4 Largest fertiliser production plant established in Africa

The Tanzanian government in partnership with a consortium from Germany, Denmark and Pakistan will

embark on the building of a fertiliser plant estimated at USB3 billion during 2016. The plant is will use

natural gas to produce fertiliser, and is estimated to produce 3,800 tonnes of fertiliser per day. The plant is

reported to be the largest within the African continent, and is projected to be operational as from 2021.

The produce will mainly be used to supply in the demand of fertiliser for industrial crops cultivated within

Tanzania such as coffee, maize and sugar, whereas surplus fertiliser stock levels will be exported to other

trading partners.

Source: Engineering News, 2016

2.5 WEATHER UPDATE: DAFF NAC ADVISORY ON THE 2015/16 SUMMER SEASON FOR MAY 2016

For the season from July 2015 to April 2016, below-normal rainfall was received with patches of above-

normal rainfall mainly in the Northern Cape, Eastern Cape and Western Cape Provinces.

Rainfall received was near-normal to below-normal within the Western Cape during May 2016. The

Overberg and coastal areas of the Eden district appeared to be receiving good rains over months and

the agricultural conditions are normal. The normal winter rainfall which normally commences in April was

absent this season. In the Karoo there were no grazing material and there was poor water supply to

livestock. The average level of dams has decreased to 31% during May 2016 compared to 42% obtained

during the same period in 2015.

Source: DAFF NAC, 2016

A comprehensive list of strategies can be found in the monthly NAC Advisory. 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 ZaibuA@elsenburg.com or alternatively call (021) 808 5368.

Click here to view the most recent update (latest update on 30 May 2016) on the dam levels within the

Western Cape Province or alternatively visit the Elsenburg Website at www.elsenburg.com . Source: DAFF

National Agro-meteorological Committee (NAC) Advisory & Provincial Department of Agriculture, 2016

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2.6 MONTHLY FUEL PRICE ADJUSTMENT HAVE BEEN EFFECTIVE AS FROM WEDNESDAY, 27 MAY 2016

Economic Factors affecting the unit over/under recoveries for the period between 29 April 2016 and 26

May 2016:

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

period under review.

The exchange rate against the US dollar depreciated for the period under review (29 April to 26 May

2016) as it amounted to R15.20/USD, compared to the previous period under review when it reached

R14.65/USD.

The depreciating exchange rate increased the contribution to the Basic Fuels Price on petrol, diesel and

illuminating paraffin 22.1 cents per litre, 20.65 cents per litre and 20.39 cents per litre respectively (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 52.00c cents per litre increase in retail price 1258.00

Petrol 95 ULP & LRP 52.00c cents per litre increase in retail price 1 278.00

Diesel 0.05% Sulphur 76.00c cents per litre increase in wholesale price 1128.87

Diesel 0.005% Sulphur 76.00c cents per litre increase in wholesale price 1133.27

Illuminating Paraffin (Wholesale) 62.00c cents per litre increase in wholesale price 663.03

Illuminating Paraffin (SMNRP) 83.00c cents per litre increase in the Single Maximum

National Retail price (SMNRP)

922.00

Maximum Retail Price for LPGAS 98.00c cents per kilogram increase in the maximum retail

price

R7699.15 or

R427.30 per

kilogram

( refinery gate)

LPG for

residential

customers is

derived as per

the control sheet

per kilometre.

Source: Department of Energy, 27 May 2016

International Spot Price Chart for Brent Crude Oil (2012 to 2016) Source: Ycharts.com

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Based on unaudited mid-month data released by the Central Energy Fund, the Automobile Association

(AA) reported that the cost of petrol is expected to increase by 27cents per litre at the inception of July

2016, whilst diesel is estimated to increase by 61 cents per litre with illuminating paraffin also expected to

raise by at least 60 cents per litre (Times Live, June 2016). The estimated increases are mainly due to

appreciating international oil prices and the unfavourable domestic exchange rate against the US dollar

(Times Live, June 2016).

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ACKNOWLEDGMENTS

The following institutions and organisations are hereby acknowledged:

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

Department of Energy: www.energy.gov.za

Engineering News: www.engineeringnews.co.za

Fruit Fly Africa: www.fruitfly.co.za

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

Reuters (as cited): www.reuters.com

Techno Fresh CRM: www.technofresh.co.za

Times Media Group (cited as Times Live): www.timeslive.co.za

Ycharts: www.ycharts.com

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: michellesw@elsenburg.com

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.