Raisin Annual

An Expert's View about Horticulture and Support Services in South Africa

Last updated: 19 Aug 2011

Post forecasts South Africa’s raisin production for MY 2011/12 at 32,565 MT as South African raisin producers slowly recover from flood damage which occurred in early 2011.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 7/26/2011 GAIN Report Number: South Africa - Republic of Raisin Annual Approved By: Ross Kreamer Prepared By: Linda Siphugu Report Highlights: Post forecasts South Africa?s raisin production for MY 2011/12 at 32,565 MT as South African raisin producers slowly recover from flood damage which occurred in early 2011. As a result of flooding in December 2010 through February 2011, South African raisin production (excluding currants) is expected to fall 36 percent to 31,060 MT for MY 2010/11, beginning in January 2011. Post expects raisin exports to remain flat at 23,000MT for MY 2011/12 on strong domestic demand and the relative strength of the Rand. Post is currently reviewing historical industry data and plans to propose revisions to the PSD at a later date. Executive Summary: South Africa (SA) ranks as the world?s fifth largest producer of raisins and is regarded as a producer of high quality raisins for the export market. About 70 percent of grapes for drying are grown in the Northern Cape, along the Orange River (lower and upper). Other production areas include Namaqualand and some parts of the Western Cape. South Africa primarily produces three varieties of raisins: Sultanas raisins, Golden raisins, and Thompson Seedless raisins. Post forecasts South Africa?s raisin production for the Marketing Year (MY) 2011/12, beginning January 2012, at 32,565 MT (excluding currents) as South African raisin producers slowly recover from flood damage which occurred in early 2011. The floods were described as the worst in 23 years, when the Orange River broke its banks in January and left over 800 hectares of vineyards totally submerged including infrastructure. The Thompson seedless variety was hit hardest as the flooding occurred only days before harvest. The sultana variety was not as severely affected as they are harvested earlier than Thompson seedless. Post expects South Africa?s MY 2010/11, beginning in January 2011, raisin crop (excluding currants) to fall nearly 36 percent from flood damage that occurred in the Orange River production area, the largest production area for raisins in South Africa. A good season for MY 2009/10, beginning in January 2010 was reported for South African raisins on good weather conditions that prevailed in the production area. Commodities: Raisins Production: Post forecasts South Africa?s raisin production for the MY 2011/12 at 32,565 MT, as South African raisin producers slowly recover from flood damage which occurred in early 2011. Post forecast assumes a partial recovery to the flood affected area at an average yield of 5.4 MT/hectare. Reinvesting in new vines and infrastructure in the heavily flood damaged areas will be difficult as the cost of production for the MY 2011/12 crop is expected to increase, particularly for vine trellising. Additionally, many producers in the affected areas did not carry adequate crop insurance. Post expects South African (SA) raisin production (excluding currants) to fall by 36 percent to 31,060 MT in the MY 2010/11, beginning January 2011, due to floods that occurred in the Upington area along the Orange River in the Northern Cape. The floods, described as the worst in 23 years, came just before the December 2010 harvest and ran through February 2011 and left over 800 hectares of vineyards totally submerged, including infrastructure. The floods damaged vineyards, infrastructure and left much of the soil deprived of oxygen for an extended period of time. The Thompson Seedless variety was most affected as harvest typically begins at the end of December. Thompson Seedless is the most popular variety among South African producers with 31 percent of total area planted. Post revises SA raisin production (excluding currants) to 48,328 MT for MY 2009/10 beginning in January 2010 on favorable weather conditions. The 2010 SA raisin production season (excluding currants) was described as the largest ever and represented a 12 percent increase compared to 2009 production volumes. Table 1. SA Raisin Production excluding Currants Raisins 2009/10 2010/2011* 2011/12** MY: Jan 2010 MY: Jan 2011 MY: Jan 2012 Sultana?s 7,269 8,000 8,500 Golden 17,734 12,000 12,500 Thompson seedless 23,273 11,000 11,500 Raisin Muscat 52 60 65 Total 48,328 31,060 32,565 Source: DFTS *Estimate **Forecast Area planted: Post expects area planted to raisins at 7,500 hectares for MY 2011/12 as producers recover from the impact of floods which destroyed young vines and infrastructure in the Orange River production area. The cost of production has been a concern among producers as the cost of establishing a hectare in 2008 was R86,187, and has now jumped to R148,710 in 2010. Research and development: South Africa?s Agricultural Research Council, supported by South African Government, Deciduous Fruit Producers? Trust, Dried Fruit Technical Services (DFPT) and Winetech (the Wine Industry Network for Expertise and Technology) is involved in developing research programs aimed at improving the rootstock for raisin grape cultivars. The research programs include the following: ? Rootstock for Sultana and other raisin grape cultivars under different climatic and soil conditions; ? investigating the effectiveness of trellis systems and viticulture practices to optimize raisin grape production; ? Optimum plant spacing and trellising system for raisin grapes; ? Investigating the effectiveness of trellis systems and viticulture practices to optimize raisin grape production. The DFPT, which is an industry body for dried fruit, has expanded its services to provide consultative services to raisin producers to improve production techniques and encourage the replanting of old vines. Consumption: Post expects domestic consumption to fall nine percent to 10,065 MT in MY 2011/12 on tight available supplies and a reduction in carry-over stocks from the previous year. Raisins are graded as either industrial grade, which are sold locally through the secondary processors or directly to the retail, or as superior grade which are exported. Typically, a tonnage of about 10,000 ? 12,000 MT of raisins is availed to the domestic market. Post expects domestic consumption for raisins to remain relatively flat at 11,104 MT for MY 2010/11 despite the steep decline in production. The baking industry is the largest consumer of raisins in South Africa for products like biscuits, cakes, and buns that are consumed during the holiday period spanning Christmas, Easter and Ramadan. Sweet sultanas are ideal for baking while the golden-yellow sultana is sweet-sour and well suited for salads and cooking. Raisins are also widely consumed as a snack, and it is expected that domestic demand will remain strong as production returns to normal levels in three to four years. Trade: There are eight countries that dominate the global raisin export market namely: Australia, Chile, Greece, Iran, Mexico, South Africa, Turkey, and the United States. Countries in the Southern hemisphere, such as Argentina and Chile typically harvest in February ? March, with new crop product coming to market in late April or May. Greece, Turkey and the U.S. harvest occurs in late August and September, with availability in the early fall. Imports South Africa is not a major importer of raisins as local production typically satisfies domestic demand. Periodically, raisin imports do come in from the United States and Turkey to fill the gap. Post conservatively forecasts raisin imports to reach 1,500 MT for MY 2011/12 and MY 2010/11, as the industry recovers from flood damage. Raisin imports were quiet during the MY 2009/10 season as domestic production met local requirements. Table 2. South Africa: Raisins Import Statistics South Africa Import Statistics Commodity: 080620, Grapes, Dried Year Ending: December Partner country Unit Quantity 2008 2009 2010 US MT 0 1,059 500 Turkey MT 22 1,503 355 Other not listed MT 43 56 29 Grand total MT 65 2,618 884 Source: GTA Exports Post expects exports to remain flat at 24,000 MT for MY 2011/12 on tight supplies and a resulting draw-down in ending stocks. Raisin exports should fall to 24,000 MT for MY 2010/11 on shortfalls in production which resulted from floods. As of May 2011, South African raisin exports are down 37 percent from the previous year at 6,529 MT. The relative strength of the Rand and strong domestic demand should place downward pressure on South African raisin exports until replanted production areas come into full fruit bearing potential. Europe is the leading destination for South African raisins with a market share of nearly 50 percent. The Netherlands is the leading European importer with an individual share of approximately 10 percent. The United States and Canada are also major export destinations with more than 30 percent combined market share. Much of the remainder goes to the Middle East. South Africa has preferential trading agreements (PTAs) with the EU and EFTA and is a beneficiary under AGOA with the US for fresh table grapes and raisins. Table 3. South African: Raisins exports statistics South Africa Export Statistics Commodity: 080620, Grapes, Dried Year Ending: December Partner country Unit Quantity 2008 2009 2010 Canada MT 9,270 3,723 11,400 US MT 5,312 1,765 5,575 Algeria MT 1,761 2,440 3,811 Netherlands MT 3,923 3,012 2,879 Germany MT 4,285 1,190 2,708 Other not listed MT 14,196 11,052 13,868 Grand total MT 38,747 23,182 40,241 Source: GTA Post revises 2009/10 export volumes for raisins at 38,468 MT based on industry reports on available exportable supplies. This represents a 60 percent increase in exports compared to the previous year, consistent with an increase in production as the raisins are export oriented on better export prices to buyers. Industry figures for 2009/10 raisins exports are slightly different from the GTA numbers but both indicate an increase in exports on increased available supplies. Post recognizes this difference and has decided to use the industry figures in the PSD and in future reports. Table 4. Production, Supply and Demand Table: Raisins 2009/2010 2010/2011 2011/2012 South Africa Market Year Begin: Market Year Begin: Market Year Begin: Jan 2010 Jan 2011 Jan 2012 USDA New USDA New USDA New Official Post Official Post Official Post Area Planted 0 8,872 0 8,900 7,500 (HA) Area Harvested 0 8,872 0 5,785 6,030 (HA) Beginning 1,000 3,500 500 3,044 500 (MT) Stocks Production 43,000 48,328 45,000 31,060 32,565 (MT) Imports 2,300 884 1,000 1,500 1,500 (MT) Total Supply 46,300 52,712 46,500 35,604 34,565 (MT) Exports 40,200 38,468 40,000 24,000 24,000 (MT) Domestic 5,600 11,200 6,000 11,104 10,065 (MT) Consumption Ending Stocks 500 3,044 500 500 500 (MT) Total Distribution 46,300 52,712 46,500 35,604 34,565 (MT) TS=TD 0 0 0 Stocks: Post anticipates ending stocks to dwindle in MY 2011/12 and MY 2010/11 on production shortfalls and strong domestic and foreign demand. Stocks should remain low for the foreseeable future until replanted vines reach their full fruit bearing potential, typically in three to four years. Policy: Both local and export marketing of raisins is free from government support. Raisins are exported to the United States of America duty free under the AGOA. Table 5. Tariff Rates, Dried Grapes Item CD Description Unit General EU EFTA SADC 0806.20 6 Dried grapes kg 10% free 10% free Source: SCHEDULE 1 - Customs & Excise Tariff
Posted: 19 August 2011, last updated 19 August 2011

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