By Hortgro Services agricultural economics information manager Mariette Kotzé.

West Africa is fast becoming one of the major export destinations for South African pome fruit, specifically with apples.  During the 2011 production season Africa accounted for 24% of total apple exports from South Africa, which makes Africa the country's second-largest apple export destination.

South Africa has experienced a rapid market share expansion of apple exports in the African continent during the last five years, growing from 11% (26,258 metric tons) of total exports to 24% (71,897 metric tons) in 2011. This means exports to Africa more than doubled during the last five years and export volume in actual fact increased by 173%.

The other major market destinations during 2011 for South African apples were the U.K. with 29% of the volume, making it the biggest market destination, the Far East (21%), Europe and Russia (14%), and the Middle East (9%).

However, pear volumes exported to Africa remain limited and accounted for only 2% of total pear exports during 2011.  The major pear export destinations continue to be South Africa's traditional markets such as continental Europe, including Russia, with 60% of total export volume, Asia (14%), the U.K. (11%) and the Middle East (9%).

The majority of South African apple exports in Africa are destined for West Africa, with the exception of Kenya which is situated in East Africa. South African apple exports to other African countries are reflected in Figure 1 below. Golden Delicious accounts for 71% of the total volume shipped to other African countries, followed by Topred/Starking (11%) and Granny Smith (6%), while the remainder consist of Galas, Cripps Pink/Pink Lady and Cripps Red/Sundowner.

What drives the African demand for apples? 

South Africa in general is not a region for producing large fruit, due to many factors of which the location and climatic conditions (not enough cold units) are most probably the two factors which has the greatest influence on fruit size. Africa in general is a small fruit market which poses the ideal opportunity for South Africa to export small fruit.

Infrastructure

Although Africa recently started investing in new infrastructure, the current infrastructure available such as roads, cold storage, information systems and capacities, as well as banking systems to enact financial transactions, is still fairly primitive in some countries. This impacts directly on the fruit types that can be imported and deal with sub-optimal handling conditions.

Apples do have a longer shelf life than stonefruits and can "take" these conditions better. Some of the hardier stonefruits such as plums have also experienced increased exports to Africa, but these volumes remains insignificant compared to apples and market share to other destinations.  South African supermarkets investing and diversifying into Africa have no doubt also contributed to better market penetration and increased demand for fruit in general.

Competition and trade agreements

South Africa is ideally situated geographically to supply into Africa, compared to other pome fruit producing countries in Europe and elsewhere. The Free Trade Agreement within SACU (Southern Africa Customs Union) also contributes for easy access into Africa, especially with no import tariffs and duties applicable on imports from South Africa.

There is also limited competition, especially with pome fruit exports, from other Southern Hemisphere countries. Argentina is the only other Southern Hemisphere country which also exports pome fruit to Africa. On average Argentina’s apple exports to Africa account for 13% of their total export volume. However, if one considers the trend of apple exports from Argentina over the last three years, he volume seems to have been decreasing from 36,250 metric tons (MT) in 2009 to 18,750MT  in 2011.  The majority of Argentinean apple exports consist of Red Delicious and Galas.

Economic conditions remained positive despite the economic/sovereign crisis experienced by developed countries in the European Union and United States. If one considers the official figures published by the International Monetary Fund, it is evident that these African countries are experiencing positive economic growth which definitely leads to increased per capita income and a growing middle class whose demand for fresh produce including apples, which is regarded to be more of a luxury product than a necessity, has been increasing. Figure 2 clearly indicates that exports (demand) is closely linked to prevailing economic conditions.

Expectations for the future

The GDP of Sub-Saharan Africa is projected to grow from 5.2% to 5.8% in 2012, which will hopefully manifest in further growth of fresh produce including apple exports to Africa.  Africa on the other hand is becoming more diversified into other fruits such as grapes, plums, and pears,which could lead to increased competition due to substitution in the African market.

At this stage Africa is definitely a growing market for South African apples and we anticipate the market will still grow.  Increased investment into infrastructure and secure financial payment systems will further aid trade within Africa which will benefit the SA apple industry further.

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