Fredo’s Fresh Produce News – First week of March 2022

After so much disruption over the past two years because of Covid-19, a new, perhaps much more formidable challenge has emerged. Fredo reported on these matters in stories on the on-line website and in articles which will appear in the world’s leading fresh produce publications, Eurofruit and Asiafruit.

To read the full articles, and more articles affecting the international fresh produce world from a South African point of view, visit google Eurofruit or Asiafruit.

Fresh Produce World turned up-side down by Russian invasion of Ukraine

Thursday 3rd March 2022, 11:56 London – Fredo Meintjes wrote this:

Tough decisions ahead for South Africa

More South African pears could end up in processing this season as industry focuses on plans to counter Russian problems

While there is growing concern in the South African fruit sector about this season’s citrus and pear exports to Russia, there is also growing criticism of the South African government’s stance on the Russian invasion of Ukraine.

Pear exporters said that it was not just a matter of switching the fruit intended for Russia to other markets. “Russia normally receives a specification of fruit which we cannot offer to other markets,” said Gysbert du Toit, marketing director at Dutoit Agri at Ceres. The South African table grape sector is less exposed in the current situation, according to AJ Griesel, chief executive of SATI.

Shock at South Africa’s abstention in United Nations vote to condemn Russia

South Africa abstained yesterday during the special vote at the United Nations aimed at condemning the Russian action.

The government is in a difficult position because it is a member of the BRICS block (Brazil, Russia, India, China, and South Africa) and the ANC-led government also has very strong direct links with Russia dating back to the Apartheid days. Observers pointed out that the South African fruit industry was in need of the favour of other countries, such as the US, the EU and the UK, to dispose of its fruit successfully.

They fear that South Africa’s position could have a negative effect on fresh produce trade agreements with these countries as it seeks better trade conditions.

Suspension of Shipping service and payment systems

The suspension of shipping services and payment transfer systems relating to Russia represent major new hurdles for the country’s fruit exporters.

Gysbert du Toit said that while his company had put shipments to Russia on hold, critical decisions would have to be taken regarding strategies for harvesting the rest of the pear crop.

“We ship mostly Class II fruit to Russia, and we will probably have to put a larger portion of the crop into processing and only bring the best quality into our packing facilities to pack for other markets.”

He said that a suspension of payment transfer systems dramatically increased the risk for exporters, and they would have to take tough decisions to counter those risks.

South African Citrus Industry ponders the prospects for coming season

The South African citrus industry has by far the largest shipping programme of all the fruit export categories from the country and long-term disruption could have a major effect on the industry.

The past two weeks the citrus industry met with growers to prepare its seasonal plans with the first crop estimate expected next week.

In terms of the Russian market, the South Africans to a large extent make use of conventional shipments, presented through a partnership between Seatrade and the Baltic Shipping Company.

It is understood that around 75 per cent of South African citrus shipments of between 200,000 and 250,000 pallets are handled by the partnership annually.

The partnership normally undertakes weekly sailings from the middle of April from South African ports, finally ending up at St Petersburg.

Anlin Shipping is the South African coordinating agent for these conventional shipments and the company said that at present it was planning for normal shipments.

“We hope all will be resolved and we are planning on the basis of normal shipments,” said Charles Gantz of Anlin Shipping.

Wednesday 2nd March 2022, 15:52 London, Michael Knowles wrote:

South African pear exports to Russia in doubt

Suspension of shipping services and payment transfer system represent major new hurdles for country’s fruit exporters

South African deciduous fruit industry body Hortgro says a significant slice of the country’s pear export deal is now under serious threat after Russia’s invasion of Ukraine prompted a number of shipping lines to suspend services to Russia. In a statement, Hortgro executive director Anton Rabe revealed the organisation was “keeping a close eye” on the situation in eastern Europe.

“Given the global increases in production input costs, logistic costs and international pressure on shipping, the availability of cargo containers and the impact of Covid-19, the war in Ukraine could not have come at a worse time,” he commented. “The industry hopes that diplomacy will prevail.”

Monday 28th February 2022, 11:49 London, Maura Maxwell wrote:

SHAFFE warns of fallout from Ukraine conflict

Fruit destined for Russia and Ukraine could be destined for other markets, leading to oversupply

The Southern Hemisphere Association of Fresh Fruit Exporters (SHAFFE) has warned Russia’s invasion of Ukraine could lead to an oversupply of citrus, apples and pears from its members in other destinations such as the EU and USA as exporters are forced to redirect shipments to other markets. SHAFFE said the resultant financial losses for exporters could further compound the negative impact of the current rise of production and logistical costs facing the Southern Hemisphere exporters and growers. “Sanctions by some Western countries against Russian banks as well as SWIFT payments will lead to add to the risks faced by exporters,” SHAFFE said.

Fruit exports from SHAFFE member countries to Russia have been on upward trend, growing by 29 per cent in volume between 2017 and 2020.

Fredo’s Comments

The latest developments in Russia and the Ukraine, coming at the tail-end of the disruption of the Covid-19, will change the shape of the Southern Hemisphere fresh produce export business. Although the situation in Eastern Europe is extremely serious with concern growing by the hour, the effects of Covid-19 will have a massive influence on the Southern Hemisphere fruit producers. Fredo’s Fresh Produce Bulletin will look at these consequences in a future edition.