Travel restrictions amid the coronavirus pandemic are still playing havoc with South Africa’s agricultural exports and as much as R60 billion worth of citrus exports could be in jeopardy as a result of harbours working at little more than half capacity.
Although the entire agri sector was allowed to resume exports nine days ago, there are very few cargo flights available for the export of fresh produce with a limited shelf life. All exporters are also competing to get their products out to international markets through seaports that are only operating at 60% capacity.
This is frustrating the efforts of the South African agriculture industry to catch up with pent-up demand created by economic lockdowns in different market countries and is threatening our share of the extremely competitive premier league of international markets, say industry leaders.
Dr John Purchase, chief executive officer of the Agricultural Business Chamber (AgBiz) says railway structures and seaports have come to the fore to ensure that local produce is exported. These modes of transportation are extremely important in the midst of the covid-19 crisis, he says.
By far the most of the country’s exports are going out by sea vessel. A current cause for concern here is the export of the citrus harvest.
“It’s touch and go there, but the ports are operating more or less at about 60% and we have interacted with [the shipping industry] and they are ensuring that fruit exports are a number one priority.”
Dr Purchase says that there are over two million tonnes of citrus that have to be exported.
“The value of that is probably going to be close to about 65 billion rand given the depreciation of the value of the rand. It’s going to be tough on the ports for the next three to four months to get the citrus out, but we are hopeful,” he says.
Competing in the big leagues
Theo De Jager, president of the World Farmers Organisation, says the continued suspension of international and local air travel could pose a threat to the timely delivery of agricultural exports internationally.
“Remember we are exporting stuff with a limited shelf life,” a concerned De Jager says. South African exports are top tier and the ability to meet demand in time is crucial.
“When we talk about agricultural exports, we talk about competitiveness and the ability to put the preferred product on the shelves.”
Restrictions on the aviation industry are only set to be lifted under level two of the government’s current phased approach to lifting the covid-19 lockdown. This is very bad news for producers of products with a limited shelf life that was exported previously in the cargo holds of passenger planes.
Flower industry playing catch-up
The travel restrictions have had exasperating and costly effects on the business of flower farmer Freddie Kirsten, owner and founder of flower exporter Freshcap and the Eureka farm, a flower enterprise that sits on the mountain slopes near Paarl in the Western Cape. His business is highly dependent on air travel as he distributes fresh flowers globally.
With air transportation running at a limited capacity, and the nearest airport (Cape Town International) closed indefinitely, Kirsten is forced to truck his flowers to Johannesburg, where they are then shipped off on cargo planes to their destinations in Europe and elsewhere. This is a costly procedure, he says.
In the past they used direct flights out of Cape Town, with the flowers shipped on passenger planes, Kirsten explains. “There are not a lot of flights [now] because the demand is quite high and because of that the rate is quite high. And then we have got an additional cost for getting all the product from Cape Town into Johannesburg.”
He has now been forced to play a game of “catch-up” in the international flower markets. “All our clients were under lockdown so it’s a little bit difficult for us to start up again. What happens is, when the clients start up again, they are looking for product and we cannot supply at the moment. If we cannot get into the market with a reasonable price, we are going to lose a lot of market.”
De Jager believes that without the necessary infrastructure and logistics in place, the efforts of farmers have made thus far could be wasted.
“We need to build a financial bridge across the lockdown period and assist farmers to meet their financial obligations so that they can keep producing and exporting.
“Unfortunately, the farmers who have already produced have already spent money on production. They now owe the bank and cannot afford more loans for production in the next season. It is not only in South Africa where we are feeling the pinch, it is a global problem,” he adds.