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202209 Fresh Quarterly Issue 18 19 Jacques Du Preez
Issue EighteenSeptember 2022

Phytosanitary impacts on markets

South African growers need to practice effective pest and disease control if they want to continue exporting their fruit. By Engela Duvenage.

Phytosanitary requirements, along with non-technical and preferential trade barriers, can make or break South African performance in the global fresh-produce export sector.

“Trade agreements are formed through deeply-rooted historical relationships, and political interference often also comes into play,” said Jacques du Preez, general manager of trade and markets at Hortgro.

He noted how heavily dependent the South African deciduous fruit industry still is on Europe, the United Kingdom, Russia, and the Middle East. “We have minimal to no trade agreements in emerging markets, especially Asia.”

Between 2010 and 2021, the pome sector grew from approximately 35 million to 52 million equivalent export cartons. Markets shifted considerably over this period. Where previously 57% of apples and pears went to the United Kingdom, Europe, and Russia, the figure is now 38%. In 2010, 38% of pome fruit exports went to Africa, the Middle East, and the Far East — the figure is now 59%.

According to Du Preez, growth in demand for stone fruit has been minimal in Africa, but there has been some growth in the Middle East. However, market share in Asia has declined, despite significantly increased volumes.

In 2009–2010, 77% of stone-fruit exports went to Europe, Russia, and the United Kingdom compared to 73% in 2021–22. Exports to Africa, the Middle East, and the Far East accounted for 21% in 2009–2010 compared to 23% in 2021–22.

“The stone-fruit industry must keep up their production, but there’s no sense in producing the best plums if you have nowhere to sell them,” said Du Preez. “Over the past two years, the world has dramatically changed. Our markets have evolved, and so have our consumers. The rate of change is exponential.”

Pests, diseases, and market access

Du Preez explained that pests and diseases are the factors according to which market access is negotiated from a technical perspective. “Regulations protect countries from importing foreign pests and diseases, and stop these from spreading and causing damage to local agricultural industries and economies.”

He cautioned that commercial or private trade barriers can change on a whim. Examples include ethical and environmental requirements, very low chemical residue levels, inspections, and cold treatments. “It’s debatable whether these are all legal, but they remain commercial trade barriers that must be managed.”

Du Preez believes that the rise of protectionism since the Trump era has seen countries increasingly close their borders in favour of their own products and economies.

“The conflict between Russia and Ukraine has added another layer,” said Du Preez. “Over the past two years, we’ve basically been in a perfect storm and experienced a couple of black swans.” He is also worried that increased tension between China and Taiwan will have a knock-on effect on South Africa.

Du Preez thinks that phytosanitary requirements are often incorrectly used as a smokescreen for protectionism. “Fighting it isn’t an easy option. Objecting in terms of World Trade Organization processes can take years. Issues are very seldom resolved before an industry comes to its knees.

“We have no other choice than to comply with the different requirements that different markets have.”

Du Preez said that the risk management systems used by the deciduous fruit industry for certain markets are based on research, and are industry-funded through levies.

Compliance costs versus market benefits

Du Preez acknowledged the challenges in terms of production, marketing and logistics that must be met to ensure that exported produce complies with the requirements of foreign countries and that unwanted pests are not intercepted. Each step comes with additional administration and paperwork.

“We however must measure the cost of compliance against the cost of losing a market,” said Du Preez.

He explained that it took 12 years of hard work for South African apples to gain access to China — the first were exported in 2015. Du Preez hopes that the first South African pears will reach Chinese shores later this year.

“Since gaining access to China for pears in June, they have however instigated a new requirement that each little hole on each carton has to be covered by gauze,” said Du Preez. “This is yet another barrier which needs to be complied with to ensure a share of the market for South Africa.”

Holding on to markets we have

“It takes time and effort to access a new market, and to regain it once you lose a market,” said Du Preez. The GRO — gain, retain, optimise — strategy is aimed at accessing new and holding on to existing markets.

“If we lose a market there is simply no growth. It has massive financial implications,” stressed Du Preez. “The knock-on effect of potentially having to move all of our plums to the Middle East, for instance, would be disastrous.

“A few years back we lost apple access to Taiwan because of one codling moth larva on one apple. We lost a huge amount of income because of that one larva.”

Compared to the citrus industry there have been minimal interceptions of false codling moth and fruit flies over the years on stone fruit to the European Union, but Du Preez warned against complacency. “We cannot take our foot off the petrol on this.”

From 2020–2021 to 2021–2022, Perishable Products Export Control Board interceptions of stone-fruit consignments have increased by 12% for fruit flies and 46% for false codling moth.

“We simply cannot overestimate how crucial risk management is to the stone-fruit industry,” emphasised Du Preez. “We have the scientific foundation and capacity. Growers, technical consultants, and exporters need to get serious about managing pests and diseases, especially in terms of the valuable EU market.

“The days are long gone of taking chances here and there. We only need one or two larvae to sink the whole industry.”

Image: Jacques du Preez, general manager of trade and markets at Hortgro. Supplied by Echo Media.

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