Every day between 140 and 160 tonnes of bulk vegetables – potatoes, onions, butternut, tomatoes, peppers, sweet potatoes, beetroot, carrot, ginger, and garlic – are packed and re-packed at Allways Fresh in Germiston, Johannesburg.
Open 24 hours a day to receive the trucks coming in from the 266 farms across South Africa, the product then makes its way to all four of South Africa's major retail groups as well as, in the case of lower grade products, to the municipal market.
"We only want the cream of the crop," says Roelf Nagel, managing director of Allways Fresh. Vegetables that don't meet retail specifications move on to processors, in this way minimizing food waste.
"Ninety percent of our product we buy directly from farmers, the other ten percent we'll procure from the market in case of shortages."
"I'm worried about all vegetables"
Disruptive rainfall has had a marked effect on vegetable quality. "Brits vegetable farmers have suffered large-scale damage. Especially on your softer lines like tomatoes, peppers, carrots, beetroot. All of those lines are going to run short in the coming weeks and their prices are going to lift. [In the Northwest Province] Brits tomato farmers have already communicated to us that their crop is in trouble. We're expecting tomato prices to drastically rise within the next few days."
Nagel expects a supply gap in onions to develop in two months' time.
"I'm also worried about potatoes: areas like Vryburg [in the North West Province] and Petrusburg [in the Free State] aren't used to this much rain."
Input costs drive prices beyond buyers' reach
Consumers are quick to resist when prices move beyond a band that they, and their stressed pocketbooks, can follow. Nagel offers the example of potato sales which plummeted in July last year when a 10kg bag cost R120 (6.5 euros) or R130 (7 euros) and consumers turned to dry goods as a source of carbohydrates.
"You can see South Africans' spending power is down. We could clearly see it at the end of November and over the Christmas period, which is traditionally a strong sales period and many people receive bonuses."
Sweet potatoes waiting to be packed for one of South Africa's retailers
Chinese garlic sometimes enters South Africa through roundabout means to avoid the 35% dumping tariff which in effect, Nagel observes, deprives South African customs of revenue and drags down the garlic price on the market.
He's not convinced, though, of the necessity of the duty placed on Chinese garlic imports. The South African garlic season is very short and moreover, he points out, local garlic farmers cannot grow the type of garlic that is brought into the country and stocked by retailers: big cloves that are easy to peel.
Border closures cause price deflation
Nagel owned Wenpro market agency for 32 years before selling and setting up Allways Fresh in 2013.
Right: packing tomatoes at Allways Fresh
He observes that the recurrent border closures have been a feature of the cross-border fresh trade for many years. Announcements of re-opening of borders often only apply to a few selected product lines, maintaining the ban on others.
When Botswana and Namibia halt fresh imports from their Southern neighbour to give their own farmers a leg-up, it has a deflationary effect on the South African fresh produce market, Nagel maintains. "When vegetables are too cheap, it benefits no one. The housewife might think it's a good thing, but it's not good for the farmer at all."
He mentions the number of potato farmers in Limpopo who ceased production last year, buckling under the weight of input costs and low on-farm returns. Input costs are devouring profit margins on farms and the decision to plant cash crops like cabbage or tomatoes is not lightly taken anymore.
"The municipal market system remains, for good or for ill, depending on how you look at it, the price determinator. When borders close, the price drops because of an oversupply. When the borders re-open, the price lifts. We've been through this rigmarole many times."
He points to a discrepancy that in his view violates the spirit of free trade underpinning the Southern African Customs Union, a trading bloc to which all three above-mentioned countries belong. "They can import their vegetables to South Africa as they wish, but we can't do the same. It has always been my argument that the borders between SADC countries ought to be open for trade."
For more information:
Roelf Nagel
Allways Fresh
Tel: +27 11 825 0659
Email: info@allwaysfresh.co.za
https://allwaysfresh.co.za/