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SA’s avocado industry should focus on tapping into the growing Chinese market to improve its growth prospects, the Agricultural Business Chamber (Agbiz) said.
SA’s avocado industry should focus on tapping into the growing Chinese market to improve its growth prospects, the Agricultural Business Chamber (Agbiz) said.

Avocado industry should focus on Chinese market, says Agbiz

ECONOMIC NEWS

By Bekezela Phakathi - May 13th, 09:57

The chamber said the increased exports are a major boost to the government's policy ambition of achieving export-led growth in agriculture.  

SA’s avocado industry should focus on tapping into the growing Chinese market to improve its growth prospects, the Agricultural Business Chamber (Agbiz) said.

Agbiz, which represents commercial farmers and agribusiness enterprises nationally, said the avocado industry has generally performed well in recent years, boosting the government’s policy ambition of achieving export-led growth in agriculture.

Between the 1994-95 and 2016-17 production seasons, SA’s avocado output grew by 72% to 77,508 tons. According to data from the department of agriculture, forestry & fisheries, SA exported, on average, about two-thirds of its avocado output between the 1994-95 and 2016-17.

China’s avocado imports grew from 4-tons in 2008 to 43,859 tons in 2018, according to data from the Trade Map.

According to the SA Avocado Growers’ Association, avocado production in SA has traditionally been concentrated in the warm subtropical areas of Limpopo and Mpumalanga provinces. But due to growing global demand and to produce year round, production is expanding in KwaZulu-Natal and the Eastern Cape and Western Cape.

The industry employs about 8,200 permanent and 7,300 seasonal workers.

In a market update on Monday, Wandile Sihlobo, head economist at Agbiz, said though not among the top 10 global avocado-producing countries, SA holds a prominent place in the global export market of the product. The country was the world’s eighth largest avocado exporter in value terms in 2018. Kenya also featured in the top 10 global avocado exporters, ranked seventh-largest exporter in 2018.

“But this has not always been the case, though Kenya has consistently been the continent’s leading producer of avocados, accounting for a nearly 30% share, which is twice the volume produced by SA. Kenya only became the continent’s leading exporter of avocados in 2017, and maintained that position in 2018,” said Sihlobo.

This was driven by a growing demand in the same countries that SA generally exports to, which are the United Arab Emirates, the Netherlands, France, Saudi Arabia, and the UK.

“But Kenya has added another key market to its list of potential export markets — China,” said Sihlobo. In April Kenya signed a memorandum of understanding on sanitary and phytosanitary measures to enable the export of avocados into China.

“China is an important and growing market in the global avocados sphere ranked as the ninth-largest importer in 2018,” said Sihlobo.

Sihlobo said if growth continues over the coming years, Kenya stands to benefit from it. The countries that supply a large share of avocados to China are Peru, Mexico, Chile, and New Zealand.

While SA’s traditional markets for avocados have served the country well over the past few years, Sihlobo said it would be useful for the country to also explore the Chinese market given its enormous growth in the recent past.

“Moreover, as plantings continue to increase across SA, with industry players suggesting that about 1,500ha will be added to the current area plantings of 17,500ha each year within the next five years, new markets will be needed for the added supply."

“All this dovetails with SA’s government policy ambition of achieving an export-led growth in agriculture, and should, therefore, receive attention in terms of working with the industry to open up new markets for agriculture, and avocados in this particular case,” said Sihlobo.Business Live  

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