This is the opinion of industry experts, Louw Pienaar (senior agricultural economist at the Bureau for Food and Agricultural Policy, BFAP) and Wandile Sihlobo (chief economist of the Agricultural Business Chamber of South Africa, Agbiz) in reaction to the governments proposed Agricultural and Agro-Processing Master Plan.
The aim of the plan is to aid in SA’s economic reconstruction and recovery path after the Covid-19 shock.
More about the SA kiwifruit industry
According to Pienaar and Sihlobo, the local kiwifruit industry is relatively small with an estimated 200 hectares under cultivation, although its production origins dates back more than 40 years.
The fruit is grown in Limpopo, Mpumalanga and KwaZulu-Natal and as of late there has been a resurgence in the Western Cape. While the local industry has operated in the shadows of major fruits for many years, interest is definitely growing. This newfound interest is driven in part by changing global consumer preferences and the focus on healthy diets.
In light of this, Pienaar and Sihlobo believe it is possible that the kiwifruit industry could experience impressive expansion — as was the case with blueberries, which were stagnant for a long time before expanding greatly as global demand spurred SA farmers to increase their production.
Several new varieties of kiwifruit have entered SA recently, with unique colours and flavours, and some are well suited to local growing conditions. Production hasn’t been reserved for local consumption, with exports amounting to about 564 tonnes in 2020.
Global market leaders
The world’s largest kiwifruit producers are China, New Zealand and Italy and together these countries produce about 75% of the global output. However, China remains a net importer of the product owing to significant domestic consumption. It imported about 116,000 tonnes besides the 2.2-million tonnes it produced in 2020.
New Zealand is the world’s leading exporter of kiwifruit, followed by Italy and Greece.
Globally, demand for Kiwifruit is clear from the strong rise in imports over the past two decades, which have grown from R6,2bn in 2001 to R58bn in 2020. In volume terms exports increased from 810,000 tonnes to 1,5-million tonnes in the same period.
Both Pienaar and Sihlobo are in agreement that the current global trend towards a healthier diet is sure to drive increased demand for this super fruit, which is full of nutrients and antioxidants with proven health benefits. “We believe kiwifruit is well-positioned as an industry with a potential for expansion in SA, since a large portion of the domestic production ripens earlier than in New Zealand, an advantage since it allows producers to access the global market earlier” explains Sihlobo.
In addition, SA has an established agricultural trade relationship with the EU and is closer to that market than New Zealand, which should translate into a price advantage. There is also an opportunity for exports into Africa and its oceanic islands, which are potentially valuable new markets.
On the domestic front
Domestic demand is also likely to grow in the coming years. SA is a net importer of kiwifruit, and Pienaar and Sihlobo view this as an immediate opportunity for farmers.
The knowledge of the fruit industry in scaling production of berries, cherries and other alternative crops also count in SA’s favour, with a supply chain geared to efficiency.
Given SA’s high rate of unemployment, it is worth noting that kiwifruit production is labour intensive, which strengthens a case for it to be explored from a policy perspective. While no formal research has been completed yet, Pienaar and Sihlobo’s observations suggest job creation in kiwifruit could be similar to that of table grapes at about two full-time job equivalents per hectare planted.
The major driver of the future growth of this industry will however hinge on the ability to drive yield improvement and quality. “We hope SA’s kiwifruit industry can follow in the steps of its blueberry counterpart to drive more growth in agriculture” says Sihlobo.