During 2012, South Africa's potato exports rose by 122%, which can be attributed to a 2.5% increase in domestic production output. In 2013, South Africa exported 79.6% less volume of potatoes compared to 2012 potato exports, which can be attributed to a 3% drop in domestic potato production in the same year. In the same year, potato exports to West Africa (Ghana, Togo, Senegal, Cote devoir and Nigeria) increased significantly compared to the previous year's exports.
SADC countries (Mozambique, Angola and Zambia) followed by SACU countries (Namibia, Botswana, Lesotho and Swaziland) were the main recipients of South Africa's potato exports in 2015.
Provincial and district export values of South African potatoes
At the same time, the export value of Mpumalanga potatoes increased, which can be attributed to a notable increase in potato exports to neighboring Mozambique. In 2010 there was a significant drop in export value for the city of Cape Town. In 2016, the city of Cape Town was still the main point of departure for the Western Cape province, but the export value has decreased by 5% compared to the export value of 2015.
In the same year, West Coast export value decreased markedly, while Eden significantly increased its potato export value. Ekurhuleni and City of Tshwane significantly increased their export value during the same year. The City of Johannesburg was still by far the primary player in Gauteng's potato export value, but the export value decreased by 10%.
In 2015, the Ethekwini district continued to lead in KwaZulu Natal's potato exports and the export value has notably increased by 16%. At the same time, Waterberg's export value increased and Vhembe contributed significantly to the export value of Limpopo potatoes. At the same time, Cacadu's export value has improved significantly, while Chris Hani and Joe Gqabi's export values were trivial.
Share analysis
In 2012, the city of Johannesburg had the largest share in Gauteng, while the city of Tshwane increased its export share to 12.47%. In 2015, Capricorn achieved the largest share of 86.29% of Limpopo's potato exports, while Waterberg District's share of exports dropped from 34.23% to 11.26%. In 2014, Xhariep's export share fell by 28.26%, with Thabo Mofutsanyane recording the largest share of Free State potato exports at 48.39%.
In 2013 and 2014, Ehlanzeni continued to dominate Mpumalanga's export share, commanding over 66% of Mpumalanga province's potato exports. Ehlanzeni continues to be Mpumalanga's potato export leader, reaching 73.80% in 2015, while Nkangala's export share dropped to 14.65%. In 2017, Ehlanzeni's export share increased to 97.42% of Mpumalanga's potato export share, with Nkangala recording 2.265 shares.
In 2016, Buffalo City commanded the largest share of 57.72% of the Eastern Cape's potato export share, with Alfred Nzo and Nelson Mandela's export shares dropping to 25.67% and 14.54% respectively. Alfred Nzo District commanded the largest share of 97.14% of Eastern Cape potato exports, while the share of exports to Buffalo City dropped to 2.45%. As of 2018, Alfred Nzo District was still the leader in the share of potato exports in the Eastern Cape, commanding 99.95% of exports, while Nelson Mandela District recorded a negligible share of exports.
South Africa’s potato imports
South Africa's seed potato imports are generally low because South Africa is self-sufficient in producing its own seed potatoes. The Netherlands supplied 54.5% and the US supplied 45.5% of South Africa's potato seed imports in 2013. As of 2015, South Africa's potato has increased to 76% and imports were cheaper compared to 2014 imports.
The Netherlands with a share of 77.1% is the leading supplier of South Africa's potato nuts, followed by China with 14.3%. As of 2018, South Africa's potato kernel imports were incomparably lower compared to 2017 and high value was recorded for the imported kernels. As of 2018, South Africa's potato seed imports represent 0% of world seed imports and it was ranked 146.
As of 2018, the Western Cape was the main entry point for potato imports into South Africa, followed by KwaZulu Natal. During 2017, Gauteng province was the main entry point for seed potato imports into South Africa and the Western Cape's import value was less significant. As of 2018, the Western Cape and Gauteng were entry points for the import of seed potatoes into South Africa.
Competitiveness of South African potato exports
39 As shown in Figure 28 above, South African potato seed exports are growing more slowly than world imports in the markets of Botswana, Angola, Zimbabwe, the United States of America, Namibia, the Netherlands and Botswana. Exports of South African seed potatoes are falling faster than world imports in Eswatini and Zambia. South African potato seed exports are growing, while world imports are declining in Mozambique, Lesotho and the Democratic Republic of Congo.
While eight countries dominate world fresh potato imports, it is interesting to note that countries such as Zimbabwe have a higher annual growth rate among them. Potato imports from the world in Angola, Kuwait and the United Arab Emirates have decreased between them and therefore these countries have recorded a negative growth rate of 3%, 8% and 7% respectively. In terms of market size, Egypt, Algeria, Belgium, Germany, Netherlands, Italy, Spain and Morocco are the main markets/importers of potato seed.
While eight countries dominate world potato imports, it is interesting to note that between 2014 and 2018, countries like Tanzania experienced higher annual value growth. World potato imports to the United Kingdom, Mozambique, Lesotho and Egypt decreased from 2014 to 2018 and as a result those countries recorded a negative growth rate of 5%. While many of the non-tariff measures can be justified under the auspices of things like health and standards, tariff measures are increasingly overseen by the World Trade Organization (WTO) and as such are being phased out.
Tariff, quotas and the price entry system
45 South Africa has a preferential trade agreement (PTA) with the EU and they apply zero tariffs to potatoes originating in South Africa. In addition, South Africa has access to the US market under AGOA, which significantly lowers tariff barriers for South African potatoes. In reality, rates are likely to be much lower for South Africa when preferential agreements are taken into account, but at the same time, most rate structures are particularly complex, with quotas, seasonal rates and specific charges (a unit amount rather than a percentage of value) all of which contribute to many different fee lines and often higher fees payable than might have been originally anticipated.
China is the largest potato producer and it still applies a 13% tariff to potatoes that come from South Africa. India is the second largest potato producer and it still applies a high tariff of 30% to potatoes originating from South Africa. Rates applied by various markets to potato nuts from South Africa during 2017 and 2018 are presented in Table 14.
South Africa has a preferential trade agreement (PTA) with the EU and no tariff applies to seed potatoes from South Africa. Additionally, South Africa has access to the US market under AGOA, which significantly lowers tariff barriers for South African seed potatoes. Mozambique has reduced the tariff from 2.50% to 0.00% on seed potatoes originating in South Africa.
LOGISTICS
Mode of transport
One can also be a member of a private or cooperative export organization that finds agents or importers and collectively markets the products. They will also market the goods under their own name or on behalf of the member, including taking care of labelling, barcodes, etc. Usually, export organizations make collective agreements with forwarders and negotiate better prices and services (more regular transport, lower prices in high season, etc.).
Some countries have institutions that handle all the products (membership mandatory) and sell only to a limited number of selected importers. Agents establish contacts between producers/export organizations and buyers in the importing country and will usually take between 2% and 3% commission. They will also be responsible for clearing the products through customs, packaging and ensuring label/quality compliance and distribution of the products.
The contract importers of fruit harvesters market and distribute the products of the harvesters, clear them through customs and in some cases treat and package them. Only few exporters have long-term contracts with wholesale grocers who deliver directly to retail stores, but with the increasing importance of standards (EurepGap, Global Gap, etc.) and the annual availability of fruit, the planning of long-term contractual relationships is expected to increase. Cold chain management is crucial when handling perishable products, from the initial warehouses to the refrigerated trucks that transport the products to the shipping terminals, through to the storage facilities at these terminals, to actual shipping vessels and containers, and finally to the importers and distributors who deliver the products. have to clean and transport it to the markets/retailers.
Packaging
Quality control
TRANSFORMATION
- Business opportunities
- Challenges
- Informal sector
- Formal sector
- The following industries are acknowledged
- Potato South Africa Private Bag X 135
- National Department of Agriculture, Forestry and Fisheries Directorate: Statistics and Economic Analysis
- National Agricultural Marketing Council (NAMC) Private Bag X 935
- The main mixed vegetable manufacturers
- The main French fries (fresh) manufacturers
- The main French fries (frozen) manufacturers
- Lamberts Bay Canning Co
- The main canned food manufacturers
- The main crisps manufacturers
Two major shifts in the production and processing of potatoes are expected to have a significant impact on the South African potato industry in the future. The first is the continuation of the shift from dryland production to irrigated production. The main challenge faced by the industry is to maintain the quality of the products for export so that quantities reach destinations in a desired form.
Protection of the local potato industry against dumping and protection against imports from subsidized countries. South Africa is in the semi-arid part of the world with an average rainfall of 450 mm per year – well below the world average of approximately 860 mm per year. This is of particular importance for the potato sector, which is highly dependent on water for irrigation, as 70% to 80% of all potatoes are produced under irrigation.
The following discussion will focus on the main segments of the potato value chain (see Figure 31) which are the informal sector and the formal sector. The formal sector mainly consists of the large retailers in South Africa, such as Fruit and Veg City;. Some of the formal traders undertake their own packaging, branding, advertising and sometimes even semi-processing of fresh potatoes through direct purchases from producers, through dedicated wholesalers and from fresh produce markets.
