Farmers in the Western Cape, blueberry farms in Rawsonville and Lamberts Bay are commencing the harvest while prices are slightly improving, after a poor season in which growers have been marketing their blueberries at much below cost price just to keep their programmes going.
Europe, South East Asia and South Africa were “smothered” by Peru this season, according to Tiaan Rossouw, COO at Rainbow Superfoods.
Rossouw said in South East Asia buyers seem to be predominantly price-driven and prefer lower-priced blueberries from Peru to South African berries.
On the positive side; Peru is finishing and according to reports, Chile might not be sending blueberries as much to Europe.
Blueberry prices fell drastically.
Rossouw commented; “I have been shocked by the prices at which some producers were selling their blueberries. Just a few years ago, farmers were getting four or five times this. Most South African blueberry producers supplied into the main marketing window that is now nearing its end. We hope to keep going a bit longer, into January.”
Western Cape quality problems?
There are quality problems on Western Cape blueberries, like soft arrivals from previously sound quality blueberry blocks that puzzle the blueberry industry.
“From what I hear, pack-outs were very poor, even here in the Western Cape which I cannot understand since we had good growing conditions, we didn’t experience a heat wave like the farmers in the north during September,” Rossouw said.
Deliveries for the frozen sector were stopped recently when Euroberry announced they had received 3,000 tonnes of blueberries and would accept no more.
According to Rossouw they have been fortunate, as they had really good quality thus far, but the price (at the time) is just not there. The price is about 1.50 Euro a carton lower than last year, which was already a low price. On air freight, the price is US$3 lower than the lowest it has ever been.
He says that airfreight to the East and also to the Middle East killed them this season. “It’s probably around 20% up on last year. And it feels like container rates are again higher. Container rates are around US$10,000 at the moment.”
Zimbabwe campaign
The season already derailed early on this year when Zimbabwean blueberry growers decided to extend their season after disappointing early returns. Rainbow Superfood supplies blueberries sourced in Zimbabwe around week 15 but this year, by weeks 38 to 40 buyers indicated their preference for South African berries.
“Zimbabwe still has a window but they have started realising there’s not going to be something like a good window. Usually Zimbabwean farms pick 60 to 70% of their berries early in the season and it works out well, because the first 60 to 70% usually have great quality. Then they stop and they start pruning, then their returns have been sufficient. Their overhead costs are much lower in Zimbabwe than in SA, and most of them are geared to pack on-farm.”
This year early returns were disappointing and they extended their blueberry campaign, to the detriment of the early South African season.
“The price will probably never be lower than it is now” – Rossouw.
In hindsight the intense expansion into blueberries in South Africa, still continuing apace last year, was probably not the wisest decision, he observes.
“In two years there will be even more blueberries on the market, and I have to say I don’t know how blueberry farmers are going to survive. When I make the sums it’s just not viable. The price will probably never go lower than it is now,” Rossouw remarked.
Growers are selling just to cover the cost of sales, and they’re barely covering the costs of production. On a carton, sales prices are R50 (2.8 euros) below breakeven point.
The price will eventually recover, he thinks, but next year will be a repeat of this one.
Rossouw maintains that fundamental change will have to come from logistics providers and consumers, and across all crops, not only blueberries, “otherwise there aren’t good times ahead”.
Purely price-driven buyers and consumers are speeding the demise of the growers. As it is, farms will probably start laying off workers.
He estimates a fair price back in the packhouse to be R70 (3.9 euros) per kilogram, before transport costs, for punnets (it would be a bit less for bulk) for a farmer not paying back a loan. Loan repayments would factor in another R10 to his suggestion for a fair price. RS