Table of Contents

1. Overview

  • Vegetables offer a unique market for the South African producer since they are a basic requirement of every person.
  • Vegetables play a central role in addressing food security and providing nutritional supplements and requirements to people.
  • Vegetable production is largely driven by the expansion of the domestic market and is important for job creation and food security.

 

2. International business environment

Find international news on vegetables at www.freshplaza.com. “Fresh produce trade growing quicker than total global trade” (2017, April 4), for example, looks at the export trade in vegetables and fruit in comparison to other commodities. 

 

3. Local business environment

South Africa is self-sufficient with regard to vegetable production.

  • In terms of their distribution, 46% of vegetables is sold through the fresh produce markets, 42% through direct sales and own consumption, 10% are processed, and 2% of vegetables are exported.
  • A significant proportion of the total workforce in the vegetable supply chain is composed of people who are low skilled and/or minimum wage labourers. These range from farm labourers or subsistence growers to the multipliers in the value chain i.e. transporting vegetables; working in processing plants, packaging factories, supermarkets or fast food outlets; or working as informal traders. Vegetables feature, along with fruit, in government’s Agricultural Policy Action Plan (APAP) – see heading 25.
Source: Agricultural Policy Action Plan 2015, page 38 

Find the graph on the Potatoes South Africa website which sets out the ratio between potatoes (the main vegetable crop), other vegetables and horticulture as a whole since 2001. 

What frozen vegetables have going for them is their user-friendliness, their reputation of being high-quality and healthy food, and their long storage time. There is the advantage too of convenience, especially relevant as people lead busier lives.

The catering and food sectors offer the highest growth potential, whereas the sales of frozen vegetables in the retail sector (for domestic use) is characterized by an increase in the own brands of the supermarket chains. The ability to preserve the food greatly increases the ability to market vegetables in other parts of the world.

Source: The DAFF-NAMC International TradeProbe Issue 48, November 2013, which looked at the international trade of frozen vegetables.

The Bureau for Food & Agricultural Policy (BFAP) Baseline Agricultural Outlook 2017-2026, in its "Fresh and healthy for wellbeing" (Box 7, page 94) shows how it is out of reach for many South Africans to be aiming for a daily intake of 2 fruits and 3 vegetables, emphasising the importance of “appropriate policy interventions to improve the affordability of healthy food, particularly for lower-income consumers in South Africa” (BFAP, 2017). Find the document at www.bfap.co.za.

 

4. African business environment

Vegetable exports into Africa are supported by the relatively higher GDP growth in the sub-Saharan region, coupled by the boldness of retail supermarkets that have expanded into Africa over the past two decades. These countries are still forecast to grow their GDP significantly faster than South Africa and the trends of urbanisation and the inevitable switch from informal to formal retail means that supermarkets not in South Africa should continue to deliver growth in excess of what can be achieved in South Africa.

The trade in vegetables such as carrots and onions with the rest of Africa will continue to develop and presents opportunities for producers.

Source: ABSA Agricultural Outlook 2017.