A new peer-reviewed study published in the Journal of Agribusiness and Rural Development has found that the Johannesburg Fresh Produce Market plays a dominant role in setting tomato prices across South Africa, with ripple effects felt as far as Durban, Cape Town, Bloemfontein, and Tshwane.
The study analysed monthly price data from 2019 to 2024 to understand how tomato prices move between the country’s five largest fresh produce markets. Its findings confirm what many farmers have long suspected: price movements in Johannesburg do not stay local; they shape the national market.
Researchers found that Johannesburg acts as a clear “price leader”, significantly influencing not only its own tomato prices but also those in all four other major markets.
Using impulse response analysis, the study showed that a price shock in Johannesburg can trigger a sharp increase in markets like Bloemfontein and Durban within a month. While these spikes tend to stabilise within five to six months, the short-term volatility creates real pressure for producers.
By contrast, smaller markets such as Bloemfontein were found to have more limited and localised influence, with weaker spillover effects nationally.
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According to trade agricultural economist Buhlebemvelo Dube of the National Agricultural Marketing Council (NAMC), the findings reveal a clear hierarchy within the fresh produce system.
“Johannesburg concentrates volumes, trader networks and information, so price signals formed there are rapidly transmitted along established trade corridors,” he explained.
Researchers say this reflects uneven market depth, shaped by logistics, storage infrastructure and information flows.
“For policymakers, the study suggests prioritising logistics and market information systems; for traders and market agents, it implies faster arbitrage; for farmers, it means more stable and predictable price signals across markets,” Dube said.
Farmers adjust strategies amid volatility
For many producers, this concentration of price power is not just theoretical; it directly shapes how and where they sell.
Gauteng-based crop farmer Nhlalwenhle Rapodile says his operation has already stepped back from supplying the Johannesburg market.
“We reduced our supply to the Johannesburg market some time ago because of these challenges. Instead, we now focus on local distribution and work closely with agricultural distributors,” he said.
Rapodile adds that price volatility extends beyond the market floor and affects the entire production cycle.
“Price fluctuations have caused damage far beyond the direct link between the Johannesburg market and suppliers. We are seeing input costs increase by unexplained margins, which makes production far more difficult. By the time we take our produce to market, we often find that our production costs exceed what we can reasonably sell for,” he explained.
This imbalance forces difficult pricing decisions.
“We sometimes have to raise prices to levels that household customers are unhappy with, although our business-to-business clients tend to understand the realities of running a farming operation. In practice, we don’t fully navigate the volatility; we manage it by limiting large-scale production and focusing on consistent, reliable customers.”
Pressure on margins and operations
In Limpopo, crop farmer Kgothale Manchete echoed similar concerns, particularly around the cost squeeze when market prices fall.
“Market prices are sometimes fair, but often they are not. When prices drop, you still have to cover packaging costs, boxes, sacks and pay your workers. Those expenses do not go down, so the impact on farmers is significant.”
Manchete noted that these fluctuations can quickly erode already tight margins, leaving farmers exposed to losses even when production is strong.
Meanwhile, the study reinforces concerns raised by the Competition Commission around market concentration and limited competition in the fresh produce sector.
With a small number of dominant market agents controlling a large share of trade, particularly in Johannesburg and Durban, smaller and emerging farmers often remain price takers in a system they cannot influence.
Limited access to formal retail supply chains further compounds the issue, leaving many producers reliant on municipal markets where price swings are most pronounced.
South Africa’s fresh produce market is valued at over R53 billion annually and plays a critical role in food security, employment, and rural livelihoods. Tomatoes account for nearly 15% of the vegetable market, making them one of the country’s most important crops.
Reforms needed for an uneven system
Yet the system remains uneven. Logistics bottlenecks, infrastructure gaps, and centralised pricing dynamics continue to shape outcomes across the value chain.
The study calls for reforms to build a more balanced and resilient system, including:
- Investment in logistics and cold chain infrastructure
- Improved market transparency and pricing mechanisms
- Greater inclusion of small and medium-scale farmers
- Decentralisation of price-setting power across regions
For farmers like Rapodile and Manchete, the priority is stability.
Without more predictable pricing and fairer market access, producers warn that managing risk rather than expanding production will remain the defining feature of tomato farming in South Africa.
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