The USDA (United States Department of Agriculture) GAIN service has published a report on the status and prospects of the blueberry sector in South Africa.
A picture emerges with great potential for development. In particular, South Africa enjoys a particular geographical proximity to the European market: the 15-day transit time between Cape Town and Rotterdam makes it the nearest southern hemisphere destination for European consumers. This may become even more important as Peru and Chile continue to focus on the North American and Asian markets.
Summary
INTRODUCTION
While the blueberry industry is still small compared to other fruit sectors in South Africa, such as citrus, apples, pears and table grapes, it has grown exponentially over the past five years. According to USDA forecasts, blueberries production will increase by 22% to 22,000 MT in 2020/21, based on increased planted area, new plants starting to bear fruit and improved yields.
As a result, exports are expected to increase by 20% to 18,000 tonnes in 2020/21. However, there are still concerns about the impact of COVID-19 on exports in 2020/21.
BACKGROUND
The South African industry of blueberry is a small relative compared to other local fruit industries.
The area under blueberries is expected to increase by 17% to 2,800 hectares (HA) in 2020/21, from 2,400 HA in 2019/20. Growth in the area under blueberries has averaged more than 30% per year over the past nine years. This growth has been driven largely by continued investment by local growers at blueberries and the entry of international growers, particularly from Europe.
The Industrial Development Corporation (IDC) has also been a driving force in the development of the berry sector by funding various projects across the country and encouraging the creation of an association, the South African Berry Producers Association (SABPA).
The Western Cape province is the main production area for blueberries in South Africa, with a share of at least 60 per cent of production, followed by Limpopo (15 per cent), North West (10 per cent), Gauteng (8 per cent), Eastern Cape (4 per cent), Free State (2 per cent) and Mpumalanga (1 per cent) as shown in Figure 1. The three largest producers are Berryworld, Haygrove and United Exports.
The harvesting season for South African blueberries traditionally begins in September and ends in mid-February.
There are three varieties of blueberries grown in South Africa: Northern Highbush, Southern Highbush and Rabbiteye. About 70 per cent of production is under nets, followed by open field (18 per cent) and under tunnels (12 per cent) as shown in Figure 2. The use of nets is driven by the demands of the retail and export markets, which require minimal pesticide use and also to protect the blueberries from rain, hail and heat damage.
Figure 3 shows the growth in the area under cultivation at blueberries since 2012/13. The significant growth in the area under cultivation at blueberries since 2015/16 is due to the expansion of local growers, new land in production and new investment from international growers. The area under blueberries is projected to increase by 17% in 2020/21, from 2,400 HA to 2,800 HA in 2019/20, based on industry data and continued investment in the sector.
PRODUCTION
The USDA forecasts that 2020/21 production of blueberries will increase by 22% to 22,000 MT, from 18,000 MT in 2019/20, based on increased planted area, new plants starting to bear fruit and improved yields as growers refine their production practices.
The impact of COVID-19 on production is expected to be minimal at this stage, as growers have taken measures such as social distancing, sanitisation and preventing staff exposed to the coronavirus from working. However, concerns remain in the industry if infections continue to increase, especially in the main production area of the Western Cape, which is the most affected by COVID-19 in South Africa. The growth in production over the past five years, as shown in Figure 4, is largely due to the use of new land.
for the production of blueberries.
Plants at blueberry take up to 2 or 3 years to start producing export quality fruit. About 50 per cent of the blueberries orchards in South Africa are 0 to 2 years old and 19 per cent are 3 years old, which confirms the level of new investment in the industry, new land in production and the fact that the industry is still in its 'infant' stage. This would also suggest that significant growth in production should be expected over the next 5 years.
FRESH DOMESTIC CONSUMPTION
USDA forecasts that domestic consumption of fresh blueberries will increase by 26% in 2020/21, from 2,300 MT in 2019/20 to 2,900 MT in 2020/21. This is due to increasing demand from health conscious consumers and the growing availability of blueberries in most retail supermarkets such as Woolworths, Checkers and Pick n Pay.
Domestic demand is expected to be partially offset by the impact of COVID-19 on consumer incomes, based on the increasing number of downsizing implemented by organisations in financial difficulties.
blueberries is an exotic fruit and is perceived as very expensive by most South African consumers. Table 1 shows the price of two blueberries products at Woolworths, an upper-middle income retail supermarket. As a result, in 2019/20 only about 13% of the total production of blueberries was consumed fresh on the domestic market. This is also influenced by the industry's strategy of prioritising export markets.
TRANSFORMATION
blueberries are also used for consumer-oriented processed products in South Africa, mainly confectionery, fruit juices and dairy products such as ice cream and yoghurt. Processing of blueberries is the main driver of imports, as most of the production is for export of fresh produce and domestic consumption. About 9 per cent of blueberries production is processed in South Africa. Due to the emerging domestic consumption, there is potential in the growth and supply of the wide range of processed blueberries products from the US that are not found in South Africa.
EXPORTS
South Africa exports between 70 and 90 per cent of its blueberriesproduction. The USDA forecasts that blueberries exports will increase by 20% to 18,000 tonnes in 2020/21 from 15,000 tonnes in 2019/20, based on production growth, improved quality, high demand for superfoods in international markets and minimal impact of COVID-19 on demand and supply chains.
However, concerns remain about theimpact of COVID-19, given that 2020/21 exports will only start in September 2020 and the future status of the pandemic is still uncertain.
2019/20 exports are estimated at 15,000 MT, based on the pace of exports to date, as shown in Table 2. The United Kingdom (UK) is the largest market for South African blueberries , accounting for 53% of total exports, followed by the Netherlands (22%), Germany (8%), Ireland (6%), Spain (4%), Malaysia (3%), Singapore (2%) and the United Arab Emirates (1%). This is largely due to the influence of UK-based growers and importers, who have played an important role in establishing the sector in South Africa. In particular, South Africa has a free trade agreement with the European Union (EU) and the UK. With regard to the global market at blueberry, South Africa's main competitors are South American countries such as Chile, Peru and Argentina.
IMPORTS
Imports of blueberries are currently minimal and below 500 MT as shown in Table 3. Imports are largely driven by processors and to meet off-season demand. Zimbabwe is South Africa's main supplier of blueberries .
PROCUREMENT AND DISTRIBUTION
