The Food and Agricultural Policy Board (BFAP) has announced that the South African fruit production sector, the largest employer of agricultural workers in South Africa, will face a dual challenge of declining revenues and rising costs over the next decade (2022-2031). This follows decade when most of the domestically grown fruit varieties recorded good prices.

According to BFAP, for the decade 2012-2021 fruit cultivation has recorded excellent yields. This was a result of efficiency gains (leading to better yields) and the continued depreciation of the rand, as well as higher prices in the export market. This meant that fruit growers could absorb increased labor costs without shrinking their labor force. BFAP recently warned that, “Based on the current market outlook, we expect strong downward pressure on the prices of most fruit exports from South Africa due to headwinds facing the global economy and increased competition from countries such as Peru and Chile.

However, farm income is a function of price times quantity, which means that price declines can be offset by higher sales volumes. As time goes by, more fruit is expected to hit the market, but not enough to overcome the cumulative impact of falling prices and continued increases in operating costs.”

Follow us on LinkedIn, Twitter & Facebook.

Source: Engineering