MARKET ANALYSIS REPORT NO 1 OF 2015: APPLE
INTRODUCTION
The following text is a review of the apple marketing environment. This analysis is updated on a quarterly 1
basis. The interval covered in the current issue is from quarter 4 of 2013 to quarter 4 of 2014. This period is
subdivided into five, three-month long quarters. The key issues discussed in the review are the trends in
producer prices, production volumes and gross values, sales in the National Fresh Produce Markets
(NFPMs), and volumes and gross values of both exports and imports. During the period under review the
average producer price increased by 2.63%, production decreased by 13.28%, sales at the National Fresh
Produce Market decreased by 11.34%, exports decreased by 15.5% and imports decreased by 100%.
1. AVERAGE PRODUCER PRICES OF APPLES
Average producer price of apples for period under review are presented in figure 1. Apples reached an
average producer price of R 7 250.95 per ton during the fourth quarter of 2014. This was a 5.75% increase
as compared to the last quarter (quarter 3, 2014) average price and 2.63 % more as compared to last year
(quarter 4, 2013) at the same time. Given the current unsettled world economy, weaker economies in
western countries and fluctuating fuel prices it makes it more difficult to predict future price movement. One
can observe that apples total production is usually higher during the first quarter and second quarter and
average prices are usually at their lowest during this period. Prices are normally at their highest during
quarter 3 and quarter 4 and this may be attributed to minimal harvest that occurs during this period. Thus
one can expect prices to drop during the first quarter as production peaks up.
1
Quarter 1 (January to March), Quarter 2 (April to June), Quarter 3 (July to September), Quarter 4 (October to December)
1
Figure 1: Average producer price of apple
8 000.00
Average price (Rand/Ton)
7 000.00
6 000.00
5 000.00
4 000.00
3 000.00
2 000.00
1 000.00
0.00
Price (Rand/Ton)
Q4 2013
7 064.91
Q1 2014
4 985.95
Q2 2014
5 728.98
Q3 2014
6 856.39
Q4 2014
7 250.95
Quarters
Source: Statistics and Economic Analysis, DAFF
2. TOTAL DOMESTIC PRODUCTION OF APPLES
Figure 2 shows the quarterly apple production between quarter 4 of 2013 and quarter 4 of 2014 period.
Apples worth the value of R749 million were produced during the fourth quarter of 2014. This value is 26%
lower compared to the last quarter (quarter 3 2014) which was R1.01 billion and 11% lower compared to
last year at the same time (quarter 4 2013).
Apple production decreased from 147 476 tons in quarter 3 of 2014 to 103 314 tons in quarter 4 of 2014,
recording a quarterly average drop rate of 30.11 %. The apple production at the end of quarter 4 2014 was
30.11% lower than the previous quarter (quarter 4 2014) and 13.28% lower compared to previous season
at the same time (quarter 4 2013). As it can be seen on the graph, apple production normally starts
increasing in quarter 1 reaching its peak during quarter 2 of each year and start declining thereafter. Thus
one can expect production to increase in the next coming quarter.
2
Figure 2: Quartely production and gross value of apple
350000
1800.00
1400.00
Volume in Tons
250000
1200.00
200000
1000.00
150000
800.00
600.00
100000
400.00
50000
0
Volume in Tons
Gross Value (R million)
Gross value in Rands (millions)
1600.00
300000
200.00
Q4 2013
119137
841.69
Q1 2014
229465
1144.10
Q2 2014
297759
1705.85
Q3 2014
147816
1013.48
Q4 2014
103314
749.12
0.00
Quarters
Source: Statistics and Economic Analysis, DAFF
3. SALES AT THE NATIONAL FRESH PRODUCE MARKETS (NFPMs)
Figure 3 shows the total volume and average prices for apples sold at South African National Fresh
Produce Market (NFPMs). A total volume of 36 763 tons were sold at NFPM during the fourth quarter of
2014, meaning out of the totally produced apples in South Africa 36% were sold at NFPM. This is 12.56%
lower than the previous quarter (quarter 3, 2014) and 11.34% lower than the previous season at the same
quarter (quarter 4, 2013). On a broader scale, the variation in total volumes sold at the NFPM is too small
due to year round availability of apples which is favoured by cold storage facility.
All together, the apple average price at the NFPM was R6 718.45 per ton. The price was 15.62% higher
compared to last quarter average price and 15.58% higher compared to last year at the same quarter. The
average price trends of apples at NFPM within the period under analysis is consistent with very good
prospects of it not fluctuation above or below normal in the next coming quarter.
3
45000
8 000.00
40000
7 000.00
35000
6 000.00
30000
5 000.00
25000
4 000.00
20000
3 000.00
15000
10000
2 000.00
5000
1 000.00
0
Volume in Tons
Price in Rands/Tons
Q4 2013
41467
5 812.61
Q1 2014
32614
6 491.19
Q2 2014
42593
5 311.05
Q3 2014
42044
5 810.90
Q4 2014
36763
6 718.45
Average price (Rand/Ton)
Volume in Tons
Figure 3: Quartely sales and average prices of apples at NFPMs
0.00
Quarters
Source: Statistics and Economic Analysis, DAFF
4. EXPORTS AND IMPORTS
Figure 4 and Figure 5 below illustrate the quarterly export and import volumes and values for apples during
the period under review. During the fourth quarter of 2014, South Africa exported 52 448 tons worth R 591
million. This was a 43.12% decrease compared to last quarter and 8% decrease compared to last year at
the same quarter of last year. Of the total exported apples, Africa remained the largest export destination
for South Africa in terms of apples. Approximately 40 000 tons of apples worth R 448 million were exported
to Africa. Asia absorbed 18% (9 688 tons) followed by Europe and America at 3% (1 tons) and 1% (502
ton) respectively.
South Africa imports apples during third and fourth quarter of every season due to low production levels.
Therefore one can expect imports of apples to rise in the next quarter. No imported were recorded during
the quarter.
4
Volume in Tons
Figure 4: Quartely exports of apples
160000
1600.00
140000
1400.00
120000
1200.00
100000
1000.00
80000
800.00
60000
600.00
40000
400.00
20000
200.00
0
Q4 2013
62067
642.58
Volume in Tons
Value in Rands (million)
Q1 2014
59706
596.74
Q2 2014
142991
1408.21
Q3 2014
97821
1039.07
Q4 2014
52448
591.03
0.00
Years
Source: Quantec Easydata
Figure 5: Quartely imports of apples
45.0
500.00
40.0
450.00
35.0
400.00
350.00
Volume in Tons
30.0
300.00
25.0
250.00
20.0
200.00
15.0
150.00
10.0
100.00
5.0
50.00
0.0
Volume in Tons
Value in Rands (Thousands)
Q4 2013
41.1
452.11
Q1 2014
0.0
0.00
Q2 2014
0.0
0.00
Years
Source: Quantec Easydata
5
Q3 2014
20.5
251.41
Q4 2014
0.0
0.00
0.00
6. GROWTH, VOLATILITY & STABILITY ANALYSIS
Table 1 presents the results of growth and coefficient of variation estimations. They were calculated using
quarterly statistics and covered the same five-quarter period under review beginning in quarter 4 of 2013
and ending in quarter 4 of 2014. The coefficient of variation is a measure of volatility or stability. When the
coefficient of variation is less than one, the variable in question is said to be relatively stable, meaning that
there were minimal changes. When the coefficient of variation is more than one, it is said to be volatile,
meaning there were major changes during the period under review.
Table 1: Apple industry growth rates & variation coefficients (Quarter 4, 2013 – Quarter 4, 2014)
Category
Producer price
Production
Sales at NFPMs
Export
Import
Subcategory
Price
Gross Value (GV)
Volume
GV/Price
Volume
Gross Value
Volume
Gross Value
Volume
Growth Rate (%)
0.65
-2.87
-3.50
3.69
-2.97
-2.07
-4.12
-100
-100
Coefficient of Variation
0.15
0.34
0.45
0.09
0.11
2.18
2.20
0.49
0.53
Source: Calculated from data from Statistics and Economic Analysis and Quantec
As shown in the Table 1 above, the apple industry experienced a negative growth rate from quarter 4 of
2013 to quarter 4 of 2014 in terms of both volumes and values. All variables with exception of producer
price, and gross value of sales at NFPMs grew negatively during the fourth quarter of 2014.
The table also shows various levels of volatility at different levels of the apple industry’s quarterly figures
over the same period (quarter 4 of 2013 to quarter 4 of 2014). Low volatility was indicated by the
coefficients of variation that were less than one (<1). All variables, with the exception of exports, have
values less than 1, which means that on a weighted variance scale, they displayed minimal changes during
the five quarters under review.
6
6. ACKNOWLEDGEMENTS
Acknowledgement is given to the following information sources:
Directorate: Statistics and Economic Analysis
www.daff.gov.za
Quantec Easydata
www.easydata.co.za
For more information contact:
Director: Marketing
Department of Agriculture,
Forestry and Fisheries
Private Bag X 15
Arcadia
0007
Tel: (012) 319 8455
Fax: (012) 319 8131
E-mail: [email protected]
Deputy Director:
Commodity Marketing
Tel: (012) 319 8072
Fax: (012) 319 8077
E-mail: [email protected]
Senior Agricultural Economist
Tel: (012) 319 8081
Fax: (012) 319 8077
E-mail: [email protected]
Website: www.daff.gov.za
www.webapps.daff.gov.za/amis
Disclaimer: This document and its contents have been compiled by the Department of Agriculture, Forestry and Fisheries for the
purpose of detailing apple industry. Anyone who uses this information does so at his/her own risk. The views expressed in this
document are those of the Department of Agriculture, Forestry and Fisheries with regard to agricultural industry, unless
otherwise stated. The Department of Agriculture, Forestry and Fisheries therefore, accepts no liability that can be incurred
resulting from the use of this information.
7