A PROFILE OF THE SOUTH AFRICAN CARROT MARKET VALUE CHAIN
2014
Directorate Marketing
Private Bag X 15
ARCADIA
0007
Tel: 012 319 8455/6
Fax: 012 319 8131
Email: [email protected]
www.daff.gov.za
TABLE OF CONTENT
1.DESCRIPTION OF THE INDUSTRY
3
1.1 Production areas
4
1.2 Production Trends
4
1.3 Production vs. Consumption of carrots
5
2. MARKET STRUCTURE
5
2.1 Domestic market and prices
5
2.2 South Africa’s Carrots Exports
7
2.3 Share Analysis
16
2.4 South Africa’s Carrot Imports
20
Processing
22
2.6 Market value chain for carrots
23
3. MARKET INTELLIGENCE
25
3.1 Tariffs
25
3.1 Non tariff barriers
27
4. GENERAL DISTRIBUTION CHANNELS
29
5. LOGISTICAL ISSUES
30
5.1 Mode of transport
30
5.2 Cold chain management
30
5.3 Packaging
30
6. COMPETITIVENESS OF SOUTH AFRICA CARROTS EXPORTS
31
7. OPPORTUNITIES AND CHALLENGES
34
7.1 Opportunities
34
7.2 Challenges
34
8. ACKNOWLEDGEMENTS
35
2
1. DESCRIPTION OF THE INDUSTRY
Carrot is a root vegetable usually orange, white or red, white blend in colour with a crisp texture
when fresh. These colours still exist, with orange-red colour being by far the most popular today.
The carrot has originated in Asia. The edible part of a carrot is the tap root. Carrots are considered
one of the major vegetables consumed in South Africa. It is among the top ten most economically
important vegetables crops in the world in terms of both area of production and market value.
Carrots can be eaten raw, whole, chopped, grated or added to salads, for colour or texture. Carrot
has a crisp texture when fresh. They are also often chopped and boiled, fried or steamed and
cooked in soups and stews, as well as fine baby foods and selected pet foods. Large quantities are
also processed either alone or in mixture with other vegetables, by canning, freezing or
dehydration.
Figure 1: Gross value of carrot production
600000000
500000000
Value (Rand)
400000000
300000000
200000000
100000000
0
Years
Source: Statistics and Economic Analysis, DAFF
Figure 1 above illustrates the contribution of the carrot industry to the gross value of agricultural
production over 10 years. There was a 16.2% increase in gross value in 2005, when compared to
the 2004 gross value and this can be attributed to an increase in price received by the producers in
the same year. From 2006 to 2008, the gross value has increased steadily and the increase in
2008 was 18% when compared to 2007 gross value. In 2009, the gross value eased marginally
higher by 36% when compared to 2008 gross value. This can be attributed to high production
volumes which occurred while the prices were still in favorable position for producers. The high
gross value was recorded in 2010, which was 11% higher when compared to 2009 gross value of
production. During 2011, the gross value dropped by 0.9% when compared to the previous year.
This can be attributed to a drop in producer prices in the same year. The higher gross value was
recorded during 2012 and the increase was 14.9%, when compared to the 2011 gross value. In
2013, gross value has gone up by 20.8% when compared to previous year gross value and this
can be attributed to 1.3% increase in production output in the same year.
3
1.1 Production areas
Although carrots can endure summer heat in many areas, they grow best when planted in cooler
climates. It is difficult to establish carrots in summer because heat, rain and early blights are major
causes of crop failure and quality reduction. Carrot production is concentrated in the Western
Cape, Gauteng, Free State, North West, Kwazulu Natal and Mpumalanga. Globally, China is the
largest producer of carrots, followed by Russian Federation, United States, Uzbekistan, Ukraine,
Poland and Turkey.
1.2 Production Trends
Figure 2 illustrates the production volume over the past ten years.
Figure 2: Total production of carrots
Tons
200000
180000
160000
140000
120000
100000
80000
60000
40000
20000
0
Years
Source: Statistics and Economic Analysis, DAFF
Production output dropped by 4% in 2005 and increased slightly again by 0.3% in 2006. In 2008,
the production increased by 13.5% when compared to 2007. During 2009, carrots production
increased by 3% compared to 2008 production year. In 2010, the production volumes decreased
by 4% when compared to 2009 production year. The high carrots production was recorded in 2011
and the production increased by 13.6% when compared to 2010 production year. In 2012,
production output increased by 14.9% when compared to the 2011 production season and the
production volume was the highest in a 10 year period. During 2013, production output has slightly
gone up by 1.3% when compared to the previous year output. Production output was stable above
120 000 tons during the 10 year period.
4
1.3 Production vs. Consumption of carrots
Figure 3 below depicts local consumption of carrots compared to the production over the 10 year
period. The figure indicates that the production of carrot is higher than the consumption. This
indicates that South Africa is self sufficient in terms of carrot production and the surplus is also
exported. South African carrots consumption was approximately 162 098 tons during 2013. This
represents a 1.6% increase in consumption compared to the 2012 consumption. This can be
attributed to an increase in production volumes in the same year.
Tons
Figure 3: Production vs Consumption
200000
180000
160000
140000
120000
100000
80000
60000
40000
20000
0
Years
Production (tons) Consumption (tons)
Source: Statistics and Economic Analysis, DAFF
2. MARKET STRUCTURE
There is no regulation or restriction in the marketing of carrots. The prices of carrots are
determined by the market forces of demand and supply. The industry uses local market, informal
market, processor and direct selling to wholesalers and retailers. Carrots are also exported to other
countries through export agents and marketing companies. South Africa also imports carrots from
other countries.
2.1 Domestic market and prices
Table 1 gives the various channels of distribution through which carrots are marketed in South
Africa.
5
Table 1: Carrots sold through different market channels
National fresh produce
markets (Tons)
91 409
89 355
88 244
86 725
95 035
91 369
85 062
96 405
111 526
113 355
Years
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Exports (tons)
1 844
2 014
2 207
3 472
4 073
3 894
4 103
5 246
7 853
7 992
Processing (Tons)
23 689
20 233
21 772
21 759
25 689
13 337
16 104
16 993
17 939
17 680
Source: Statistics and Economic Analysis, DAFF
Table 1 above shows that in 2013, there was a 1.8% increase in exports and 1.4% decline in
processed carrots compared to the previous year. National Fresh Produce Markets (NFPMs)
remain an important channel for sale of fresh carrots in South Africa. In 2013, 60.4% of all carrots
were distributed through fresh produce markets. The remaining 39.6% represents direct sales from
producers to wholesalers, exports, retailers, processors, informal traders and consumers.
Figure 4: Sales of carrots at fresh produce markets
120000
3 500
100000
3 000
Tons
2 000
60000
1 500
40000
1 000
20000
Rand/ton
2 500
80000
500
0
0
Years
Volume (Tons)
Value (Rand/ton)
Source: Statistics and Economic Analysis, DAFF
Figure 4 above illustrates the sales of carrots in the national fresh produce markets over the period
of 10 years. Carrot volumes and prices were moderately unstable. In 2004, high volumes were
supplied to the market and prices declined by 12%. Carrots prices increased steadily from 2005 to
2007 due to a slight decline in volume supplied across the markets. During 2008 the prices
dropped by 8.3% as volume increased by 9.5%. In 2010 carrots prices increased by 21% as
6
carrots volume dropped by 6.9% across the markets. During 2011, market prices dropped by
13.7% due to a 13.3% increase in volumes supplied across the markets. In 2012, carrot price
dropped further by 7.5% as a result of 15.6% increase in carrots supplied across the market.
During 2013, market price has gone up by 20.1%, despite a 1.6% increase in carrots at the market
and this can be attributed to strong demand of carrots in the same year.
2.2 South Africa’s Carrots Exports
South Africa is not a major carrot exporter. In 2013, it represented 0.59% of world exports and its
ranking in the world was number 23. South Africa’s ranking in world carrots exporters has improved
its competitiveness as in 2012, it was ranked number 38. Most of carrots produced were destined
for domestic markets. South Africa’s carrot exports were mostly destined for Angola, Namibia,
Mozambique, Botswana, United Kingdom, Swaziland and Lesotho. Globally, China, Netherlands,
United States of America, Belgium, Israel, Italy, Spain and France are the major carrot exporters.
High carrots export by China can be attributed to the fact that this country is also ranked number
one in carrot production in the world. Figure 5 below illustrates South African carrot export
destinations during 2013.
Figure 5: South Africa's carrot exports destinations in 2013
Other
Congo
Countries
Zambia
Mauritius
Lesotho
United Kingdom
Mozambique
Angola
0
5
10
15
20
Share in South Africa's exports (%)
25
30
Source: ITC Trade Map
Further details relating to the exports of carrots from South Africa in 2013 are presented in Table 2.
7
Table 2: South Africa carrot exports in 2013
Importers
World
Angola
Exported
value
2013
(USD
thousand)
7255
1939
Share
in
South
Africa's
exports
(%)
100
26.7
Exported
quantity
2013
(tons)
13737
3137
Unit
value
(USD/
unit)
528
618
Namibia
961
13.2
1692
568
Mozambique 881
12.1
2659
331
Botswana
United
Kingdom
Swaziland
Lesotho
Zimbabwe
Mauritius
Netherlands
Zambia
Seychelles
Congo
Switzerland
France
Gabon
746
10.3
1214
614
667
579
508
341
135
97
97
47
44
41
32
23
9.2
8
7
4.7
1.9
1.3
1.3
0.6
0.6
0.6
0.4
0.3
206
1951
889
1088
207
78
211
53
74
39
29
34
3238
297
571
313
652
1244
460
887
595
1051
1103
676
Exported
growth in
value
between
2009-2013
(%, p.a.)
31
65
Exported
growth in
quantity
between
2009-2013
(%, p.a.)
38
64
Exported
growth in
value
between
2012-2013
(%, p.a.)
72
8
-7
4
-4
37200
34
5
6
38
-1
6
112
24
7
-2
-19
7
64
8
4
82
37
14
4
-17
7
-17
1127
-13
98
327
63
-33
-43
667
Source: ITC Trade MAP
Table 2 indicates that during 2013, South Africa exported higher quantities of carrots to Angola,
Namibia, Mozambique, Botswana, United Kingdom and Swaziland. Angola commanded a 26.7%
share of South Africa’s carrots export, followed by Namibia which commanded 13.2% share and
Mozambique has commanded 12.1% share. South Africa’s carrot exports to Angola have dropped
significantly as in 2012, 42.5% of carrots was exported to this country. Carrots exports to
Mozambique have decreased by 7% in value between 2009 -2013 periods. South Africa’s carrot
exports to the United Kingdom have increased by 34% and 5% in value and quantity respectively
between 2009 and 2013 period.
8
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
50000000
45000000
40000000
35000000
30000000
25000000
20000000
15000000
10000000
5000000
0
Rand
Tons
Figure 6: South African carrots exports
Years
Volume (tons)
Source: Quantec Easydata
Figure 6 above illustrates carrots exports from South Africa over the past 10 years. From 2004 to
2006, South Africa exported low volumes of carrots and this can be attributed to low production
output in the same years. From 2004 to 2006, the figure shows that it was also more profitable to
export carrot since higher export values were recorded for smaller volumes exported. During 2007,
carrots exports increased significantly by 57%, when compared to 2006, despite a 0.8% drop in
production output in the same year. South Africa’s carrots exports increased by 17.3% when
compared to the previous year. In 2009 there was a 4.5% decrease in export volumes despite high
production volumes in the same year. In 2010, carrots exports increase by 5% despite 4% decline
in production output in the same year. The high export volume was recorded in 2011 and this can
be attributed to the highest production output during the same year. During 2012, carrots exports
increased significantly by 49.7% when compared to the previous year and this can be attributed to
a 14.9% increase in production. Export volumes increased by 1.8% during 2013 and this can be
attributed to a slight increase of 1.3% in domestic carrot output. In the same year it was more
profitable to export carrots when compared to 2012 export value.
9
Volume (Kg)
Figure 7: South African carrots exports to the regions
8000000
7000000
6000000
5000000
4000000
3000000
2000000
1000000
0
Years
2004
Africa
969872
Americas
45
Asia
4815
Europe
862946
Oceania
0
Not allocated 6510
2005
2006
2007
2008
2009
2010
2011
2012
2013
1059449 1393570 2461147 2759575 3292727 3708530 4747097 7328935 7555093
15
15600 64745 30936 5067
0
0
0
12135
19409
416
29079 42431 1296
888
31173 2115
9085
869203 726438 786237 1105769 456132 314058 460582 511146 383243
0
0
10455 4450
1000
1340
0
3850
300
66294 70761 120776 130194 138091 78415 6817
7245 31755
Source: Quantec Easydata
Figure 7 above illustrates South African carrots exports to the regions. As can be seen South Africa
exports high quantities of carrots to African region (Mozambique, Angola and Zimbabwe), then
followed by Europe countries (United Kingdom and France). The high quantities to Africa can be
contributed to the cheaper export cost to neighboring countries. From 2006 to 2008, considerable
carrots were exported to Americas region. From 2005 to 2010 a fraction of South Africa carrots
exports were not allocated and in 2013, unallocated export has substantially increased. From 2010
to 2012, there were no South African carrots exports destined to Americas region and during 2013
notable volume of carrot were exported to this region. In 2011, South Africa exported high
quantities of carrots to Africa and exports to Europe have increased when compared to the
previous year. During 2011, considerable volumes of exports were exported to the Asian region
while the unallocated exports have declined significantly. In 2012, African region continued to be
the biggest export markets for carrots originating from South Africa and more than 75% of carrots
were exported to this region. In the same year and in 2013, Europe was still a second preferred
export market for carrots from South Africa. Considerable volumes were exported to Oceania
region while export to Asian region has significantly dropped. During 2013, African region was still
the preferred export market for carrots from South Africa, however the carrots were also destined
to Namibia, Botswana, Swaziland and Lesotho.
Figure 8 below illustrates South Africa’s value of carrot exports to the regions. The figure shows,
that it was more profitable to export carrots to European countries since high values were recorded
for less volume exported. High export value was also recorded for African countries due to high
volumes exported to that region but, it was less profitable to export to this region. In 2011, it was
also more profitable to export to Asia and the value for unallocated exports was high. In the same
year, there were no export values recorded for America and Oceania as there were no carrots
exports to these regions. During 2012, it was still more profitable to export carrots to European
10
region and unallocated exports also fetched higher value. In the same year, it was still less
profitable to export carrots to African region when compared to other regions. In 2013, Europe was
still the most profitable export market, followed by Oceania and unallocated exports also had a
higher value. During the same time exports to African region were less profitable and the least
profitable exports were exported to Asian region.
Figure 8: Value of carrots export to the region
Value (Rand)
40000000
35000000
30000000
25000000
20000000
15000000
10000000
5000000
0
Years
Africa
2004
Europe
2007
2008
2009
2010
2011
2012
2013
82
140
44307
253857
75061
354728
0
0
0
57954
25052
73176
4965
129832
139759
13923
9540
200163
21141
25062
9975602 11355766 9593521 7990929 9850162 4250628 3153192 5265184 7387836 8320167
Oceania
Not allocated
2006
2472521 4102949 4531843 6992151 9239499 14069593 16996576 21500850 27024445 34433573
Americas
Asia
2005
0
0
0
22907
17750
2000
16257
0
13500
5700
23191
304970
315431
730770
804232
881129
644161
60968
73680
223275
Source: Quantec Easydata
Figure 9 below illustrates the value of carrot exports by provinces for the past ten years.
The highlights of carrot exports were that the Western Cape, Gauteng, Free State and Kwazulu
Natal to a lesser extent consistently registered exports during the past ten years. In 2004, Free
State province has recorded high values of carrots exports and from 2005 to 2011, the province
has recorded a zero trade. During 2012 and 2013, Free State province contributed considerably
again to South Africa’s carrots exports. The increase can be attributed to increase in carrots
exports to neighbouring Lesotho. From 2010 to 2012, Limpopo province has recorded carrots
export and during 2013, the export value has considerably increased. During 2011, North West
province recorded carrots exports for the first time and the value recorded for Mpumalanga
province has increased significantly. The highest carrot export value was recorded in 2012 and the
exports were exported through Western Cape province. In the same year, Limpopo export value
has increased while Gauteng and Kwazulu Natal export values have dropped. During 2013,
Western Cape, Gauteng and North West provinces export’s value have significantly increased. The
increase in North West can be attributed to increase in carrots exports to neigbouring Botswana.
The high export values for Western Cape and Gauteng can be attributed to the export exist points
and the registered exporters located in these provinces. The following figures (figure 10-16) shows
the value of carrot exports from the various districts in all provinces of South Africa.
11
Figure 9: Value of carrots exports by South African Provinces
25000000
Value (Rand)
20000000
15000000
10000000
5000000
0
Years
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Western Cape 3542775 5552023 4492174 4258839 8543018 12850091 11662937 9901788 17265640 21279692
Free State
1664448
0
0
0
0
0
0
0
1626808 2062684
Kwazulu-Natal 122169 525806 135115 476607 206323 243445 170213 1535750 484603 996680
Gauteng
7167035 9759171 9862141 11383277 11377123 6478465 8964711 15476347 13245530 16989800
Mpumalanga
20
0
638
1723
0
0
2220
11400 1688294 1280730
Limpopo
0
0
0
0
0
0
19646
71238
84998
North West
0
0
0
0
0
0
0
30643
124728 364670
91474
Source: Quantec Easydata
The values of carrot exports by the Western Cape province are presented in Figure 10.
Figure 10: Value of carrot exports by Western Cape Province
Value (Rand)
25000000
20000000
15000000
10000000
5000000
Years
0
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
City of Cape Town 3179580 5552023 4279509 4110852 7927333 1283137211387556 9021373 1697529020456586
West Coast
0
0
0
7260 573919
0
154
58994 99682
0
Cape Winelands
0
0
212665
0
0
0
95919 25000
0
55285
Overberg District 301644
0
0
114920
0
0
0
259815
0
0
Eden District
61551
0
0
25806 41766 18719 179308 536606 190664 767821
Source: Quantec Easydata
12
Figure 10 above indicates that carrot exports by Western Cape province were mainly from City of
Cape Town and Eden district municipalities have contributed to a lesser extent. Cape Winelands
has contributed significantly in 2006 and 2010. High carrots exports by the City of Cape Town can
be attributed to Cape Town harbour which renders export exit point. The highest export value was
in 2009 from the City of Cape Town municipality. In 2010, carrots export value for City of Cape
Town has decreased by 11% compared to export value in 2009. During 2011, the West Coast,
Overberg and Eden districts have increased their contribution to carrots exports from Western
Cape. In 2012 and 2013, the City of Cape Town continued to lead in terms of carrots exports from
Western Cape and the export value has significantly increased when compared to the previous
year’s export value. During 2012, West Coast export value has also increased while export value
for Eden has dropped. In 2013, Eden and Cape Winelands export values have substantially
increased when compared to the 2012 export values.
Figure 11: Value of carrot exports by Gauteng Province
Value (Rand)
14000000
12000000
10000000
8000000
6000000
4000000
2000000
0
Year
2004
0
2005
0
Metsweding
0
0
West Rand
32602
0
0
0
0
Ekurhuleni
44327
46263
83726
33841
50297
Sedibeng
2006
52
2007
0
2008
0
49008 356205 400040
2009
0
2010
0
2011
0
2012
0
2013
88430
0
0
0
0
225000
33554 223933 1465653 213429311861410
45345 1268677 1888740 255356 954169
City of Johannesburg 7090106 9712908 972935410919061102488356388050 694428311461923104206803589417
City of Tshwane
0
0
0
74171 677951 11515 527818 660030 435201 271373
Source: Quantec Easydata
Figure 11 above shows that carrot exports by Gauteng province were mainly from City of
Johannesburg. Metsweding, Ekurhuleni and City of Tshwane have contributed to a lesser extent.
The highest export value was recorded in 2011 for City of Johannesburg. From 2009 to 2011, there
was no exports value recorded in Metsweding district municipality. In 2011, there was a 65%
increase in export value from City of Johannesburg district municipality. During 2011, the export
value recorded for the City of Tshwane, Ekurhuleni and West Rand have also increased
significantly. In 2012, the City of Johannesburg was still the highest contributor to carrot exports
from Gauteng province, but the export value has dropped by 9% when compared to 2011 export
value. In the same year, Ekurhuleni export value has significantly dropped while the West Rand
export value has increased by 45.6% when compared to the 2011 value. During 2013, West Rand
was the main contributor to carrots exports from Gauteng. Export values for the City of
Johannesburg and City of Tshwane have notably dropped. In the same year Metsweding and
Sedibeng have notably increased their export values after recording some years of zero carrots
trade.
13
The values of carrot exports by the Kwazulu Natal province are presented in Figure 12.
Value (Rand)
Figure 12: Value of carrots exports by Kwazulu Natal Province
Years
1400000
1200000
1000000
800000
600000
400000
200000
0
2004
Umgungundlovu 109416
Ugu
0
Uthungulu
209
Ethekwini
12544
Uthukhela
0
2005
2006
2007
2008
2009
2010
0
0
0
0
0
0
0
0
0
0
0
0
1382
0
0
0
0
0
2011
2012
2013
0
0
0
299003 307865 291600
0
0
0
524425 135112 476607 206323 243445 170213 1236747 176738 128937
0
0
0
0
0
0
0
0
576143
Source: Quantec Easydata
Figure 12 indicates that carrot exports by Kwazulu Natal province were mainly from Ethekwini
municipality and Durban harbor renders an export exit point. In 2004, Umgungundlovu district
contributed considerably to carrots exports from Kwazulu Natal. The highest export value for
Ethekwini was recorded in 2011. During 2011, Ugu district municipality contributed to carrots
exports for Kwazulu Natal. In 2012, Kwazulu Natal carrot exports were exported through Ethekwini
and Ugu district. Export value for Ethekwini has dropped by 85.7% and Ugu export value has
increased by 2.9% when compared to the 2011 value. During 2013, Kwazulu Natal carrots were
mainly from Uthungulu while in the same year export value for Ethekwini and Ugu has decreased.
Value (Rand)
Figure 13: Value of carrots onion exports by North West province
Years
400000
350000
300000
250000
200000
150000
100000
50000
0
Southern District
2004
0
2005
0
2006
0
2007
0
2008
0
2009
0
2010
0
2011 2012 2013
30643 124728 364670
Source: Quantec Easydata
14
Figure 13 shows that carrot exports by North West province started from 2011 from the Southern
District municipality. From 2004 to 2010, there was no export values recorded from the North West
province. In 2013, export value has substantially increased and this can be attributed to increase in
carrots exports to neighbouring Botswana in the same year.
Figure 14 : Value of carrots exports by Free State Province
2500000
Value (Rand)
2000000
1500000
1000000
500000
Years
0
Motheo District
2004
2545
2005
0
2006
0
2007
0
2008
0
2009
0
2010
0
2011
0
2012
0
2013
0
0
0
0
0
0
0
0
16385
38084
0
0
0
0
0
0
0
Lejweleputswa 1661903
Xhariep
0
1610424 2024599
Source: Quantec Easydata
Figure 14 indicates that carrots exports by Free State province were mainly from Lejweleputswa
Municipality and the high export value was in 2004. From 2005 to 2011, there were no carrots
exports values recorded for Free State province. During 2012, Xhariep contributed for the first time
to Free State province carrots exports and Lejweleputswa district also contributed after seven year
of zero carrot trade. During 2013, Xhariep has significantly increased its export value and this can
be attributed to an increase in carrots exports to neighboring Lesotho.
Figure 15: Value of carrot exports by Mpumalanga Province
Value (Rand)
1800000
1600000
1400000
1200000
1000000
800000
600000
400000
200000
0
Years
2004
Nkangala
20
Ehlanzeni
0
2005
0
0
2006
638
0
2007
1723
0
2008
0
0
2009
0
0
2010
0
2220
2011 2012 2013
6152
0
0
5248 1688294 1280730
Source: Quantec Easydata
15
Figure 15 above indicates that carrots exports by Mpumalanga province were from Nkangala and
Ehlanzeni districts. During the period under review, Nkangala the export values were less
significant. During 2011, carrots exports were recorded for both Nkangala and Ehlanzeni district
municipalities. During 2012, Mpumalanga carrot exports were exported through Ehlanzeni district
and the export value has improved significantly. During 2013, Mpumalanga carrots exports were
from Ehlanzeni and the export value has notably dropped when compared to 2012 export value.
Values of carrots exports by the Limpopo province are presented in Figure 16.
Value (Rand)
Figure 16 : Value of carrots exports by Limpopo Province
Years
100000
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
Vhembe
Capricorn
Waterberg
2004
0
0
0
2005
0
0
0
2006
0
0
0
2007
0
0
0
2008
0
0
0
2009
0
0
0
2010 2011 2012 2013
17854 70726 84986 91474
1399
404
12
0
393
107
0
0
Source: Quantec Easydata
Figure 16 above illustrates that in 2010, Limpopo province recorded carrots export for the first time
in 10 year period and the exports originated from Vhembe, Capricorn and Waterberg district
municipalities. During 2011, the export value for Vhembe district increased significantly, while the
export values for Capricorn and Waterberg districts have dropped significantly. In 2012, Vhembe
district continued to lead in terms of carrots exports from Limpopo province. Export value for
Capricorn was insignificant. During 2013, export from Limpopo province originated only from
Vhembe district and the value has slightly gone up.
2.3 Share Analysis
Table 3 below indicates the regional share towards South Africa’s carrots exports. African countries
commanded greatest share of South African carrots exports followed by European countries.
Carrots exports to Americas and Asia were less significant. In 2010, African region has
commanded 90.38% which was a slight increase when comparing with 84.55% share recorded for
2009. European commanded 7.26% share of South Africa’s carrots exports and this was a
significant drop when comparing with 11.71% share in 2009. During 2011, African region
commanded 90.50% and European region has commanded 8.78% share of South African carrots
exports. In 2012, African region continued to be the preferred export market for carrots originating
16
from South Africa and the export share to this region has increased from 90.50% to 93.32%. In the
same year the export share to all other regions have dropped. 2013, Africa region has increased its
export share to 94.54% and at the same time export share for Europe has declined. Export shares
for Americas and Asia were insignificant.
Table 3: Share of regional carrots exports to the total South Africa carrot exports (%)
Years
2004
Region
Africa
52.59
Americas
0
Asia
0.26
Europe
46.79
Oceania
0
Not allocated 0.35
World
100
2005
2006
2007
2008
2009
2010
2011
52.59
0
0.96
43.15
0
3.29
100
63.15
0.71
0.02
32.92
0
3.21
100
70.88
1.86
0.84
22.64
0.30
3.48
100
67.75
0.76
1.04
27.15
0.11
3.20
100
84.55
0.13
0.03
11.71
0.03
3.55
100
90.38
0
0.02
7.26
0.03
1.91
100
90.50
0
0.59
8.78
0
0.13
100
2012
93.32
0
0.03
6.51
0.05
0.09
100
2013
94.54
0.15
0.11
4.80
0.0
0.40
100
Source: Calculated from Quantec Easydata
Table 4 below is an illustration of provincial shares towards national carrot exports. The Western
Cape and Gauteng provinces commanded the greatest share of carrots exports. Free State
province commanded notable carrots export shares in 2004. In 2010 Western Cape commanded
56.02% and Gauteng commanded 43.06% share of carrots exports. During 2011, Western Cape
has dropped its export share to 36.64%, while Gauteng has increased its export share to 57.26%.
Kwazulu Natal has commanded 5.68% share which, is a significant increase when compared to the
previous year. In 2012, Western Cape has increased its export share to 50.02%, while Gauteng
has dropped its export share to 38.37% when compared to the 2011 export share. In the same
year, export shares for Free State and Mpumalanga has improved. During 2013, Western Cape
and Gauteng continued to command a high export share of carrots exports from South Africa. The
high export shares in Western Cape and Gauteng can be attributed to registered exporters and
available ports based in these provinces. Free State and North West increased their export share
during 2013 and this can be attributed to an increase in carrots exports to neigbouring Lesotho and
Botswana.
Table 4: Share of provincial carrot exports to the total of RSA carrot exports (%)
Years
Province
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Western Cape
28.35
35.06
31.00
26.42
42.45
65.66
56.02
36.64
50.02
49.41
Free State
13.32
0
0
0
0
0
0
0
4.71
4.79
Kwazulu-Natal
0.98
3.32
0.93
2.96
1.03
1.24
0.82
5.68
1.40
2.31
Gauteng
57.35
61.62
68.06
70.61
56.53
33.10
43.06
57.26
38.37
39.45
Mpumalanga
0
0
0
0.01
0
0
0.01
0.04
4.89
2.97
Limpopo
0
0
0
0
0
0
0.09
0.26
0.25
0.21
North West
0
0
0
0
0
0
0
0.11
0.36
0.85
RSA
100
100
100
100
100
100
100
100
100
100
Source: Calculated from Quantec Easydata
17
Table 5 indicates that the City of Cape Town commanded the greatest share of carrot exports from
Western Cape province. In 2011, Eden commanded 5.42% share of carrots exports, this was an
improvement when compared to 1.54% share in 2010. Cape Town harbor renders exit point for
carrot exports from these districts. During 2011, City of Cape Town has slightly dropped its market
share while Overberg has commanded 2.62% share of Western Cape carrots exports. In 2012, the
City of Cape Town continued to lead in Western Cape carrots export and it has increased its export
share from 91.11% to 98.32%. In the same time the export share for Eden has dropped from
5.42% to 1.10%. In 2013, export share for the City of Cape Town has slightly dropped while Eden
has increased its carrot export share.
Table 5: Share of district carrots exports to total Western Cape provincial carrot exports (%)
Year
District
2004
2005 2006
2007
2008
2009
2010
2011
2012
2013
City of Cape Town 89.75 100
95.27 96.53 92.79 99.85 97.64 91.11
98.32
96.13
West Coast
0
0
0
0.17
6.72
0
0
0.60
0.58
0
Cape Winelands
0
0
4.73
0
0
0
0.82
0.25
0
0.26
Overberg
8.51
0
0
2.70
0
0
0
2.62
0
0
Eden
1.74
0
0
0.61
0.49
0.15
1.54
5.42
1.10
3.61
Western Cape
100
100
100
100
100
100
100
100
100
100
Source: Calculated from Quantec Easydata
Table 6 shows that City of Johannesburg commanded the greatest share of carrot exports from
Gauteng province. In 2010, Ekurhuleni increased its carrot exports share from 0.70% to 14.15%.
City of Tshwane has also increased its export share from 0.18% to 5.89%. During 2011, West
Rand municipality has commanded 9.47% export share, this was an improvement when compared
to 2.50% share in 2010. City of Johannesburg and Ekurhuleni are located near OR Tambo
International Airport which renders exit point for carrot exports. During 2012, City of Johannesburg
continued to lead in Gauteng carrot exports by commanding 78.67% share. In the same year West
Rand export has increased to 16.11% while the export share for Ekurhuleni has dropped to 1.93%
share. Carrot export share for the City of Johannesburg has dramatically dropped from 78.67% in
2012 to 21.13% in 2013. West Rand has commanded the highest share of 69.81% during 2013,
while Sedibeng and Metsweding export shares were insignificant.
Table 6: Share of district carrots exports to the total Gauteng provincial carrot exports (%)
Year
District
Sedibeng
Metsweding
West Rand
Ekurhuleni
City of
Johannesburg
City of
Tshwane
Gauteng
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
0
0
0.45
0.62
0
0
0
0.47
0.00
0.50
0.00
0.85
0
3.13
0
0.30
0
3.52
0
0.44
0
0
0.52
0.70
0
0
2.50
14.15
0
0
9.47
12.20
0
0
16.11
1.93
0.52
1.32
69.81
5.62
98.93
99.53
98.65
95.92
90.08
98.60
77.46
74.06
78.67
21.13
0
100
0
100
0.00
100
0.65
100
5.96
100
0.18
100
5.89
100
4.26
100
3.29
100
1.60
100
Source: Calculated from Quantec Easydata
18
Table 7 below indicates that Ethekwini has mainly commanded greatest share of carrot exports
from Kwazulu Natal province. From 2006 to 2010 Ethekwini has commanded 100% share for
carrots exports. The high export share in Ethekwini can be attributed to Durban harbor located in
this district municipality. UMgungundlovu has commanded the greatest share of carrots exports in
2004. In 2011, Uthukela has commanded 19.47% share of carrots exports from Kwazulu Natal.
During 2012, Uthukela carrot export share increased significantly to 63.53%, while Ethekwini
export share has dropped significantly to 36.47% share. During 2013, Uthukela has commanded a
57.81% share of carrots exports from Kwazulu Natal. In the same year, export shares for
Ethekwini and Ugu districts have dropped.
Table 7: Share of district carrots exports to the total Kwazulu Natal provincial carrot exports
(%)
Year
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
District
Umgungundlovu 89.56 0
0
0
0
0
0
0
0
0
Ugu
0
0
0
0
0
0
0
19.47 63.53 29.26
Uthungulu
0.17 0.26 0
0
0
0
0
0
0
0
Ethekwini
10.27 99.74 100 100 100
100 100 80.53 36.47 12.94
Uthukhela
0
0
0
0
0
0
0
0
0
57.81
Kwazulu Natal
100
100
100 100 100
100 100 100
100
100
Source: Calculated from Quantec Easydata
Table 8 below shows that Nkangala commanded a 100% share of carrots exports from
Mpumalanga province in 2004, 2006 and 2007. In 2010, Ehlanzeni has commanded 100% share of
carrots exports from this province. During 2011, Nkangala commanded a 53.96% share and
Ehlanzeni commanded a 46.04% share of Mpumalanga carrots exports. In 2012 and 2013,
Ehlanzeni commanded a 100% share of carrots exports from Mpumalanga province.
Table 8: Share of district carrots exports to the total Mpumalanga Provincial carrot exports
(%)
Year
District
2004
2005
2006
2007
2008
2009
2010 2011
2012 2013
Nkangala
100
0
100
100
0
0
0
53.96 0
0
Ehlanzeni
0
0
0
0
0
0
100
46.04 100
100
Mpumalanga
100
0
100
100
0
0
100
100
100
100
Source: Calculated from Quantec Easydata
Table 9 below indicates that Lejweleputswa district commanded the greatest share of carrots
exports from Free State province. From 2005 to 2011, the province has recorded a zero trade in
carrots. In 2012, Xhariep commanded a 98.99% share of carrot exports from the Free State
province. During 2013, Xhariep continued to record high export share by commanding 98.15%
share of carrots exports.
19
Table 9: Share of district carrots exports to the total Free State Provincial carrot exports (%)
Years
District
Motheo
Lejweleputswa
Xhariep
Free State
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
0.15
99.85
0
100
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1.01
98.99
100
0
1.85
98.15
100
Source: Calculated from Quantec Easydata
Table 10 below shows that Vhembe district commanded 90.88% share of carrots exports from
Limpopo province during 2010. Capricorn district has commanded 7.12% share of carrots exports.
From 2002 to 2009, the province has recorded a zero trade in carrots. In 2011, Vhembe has
commanded 99.28% carrot export share. During 2012, Vhembe continued to lead in the Limpopo
provincial export and it has commanded 99.99% export share in 2012 and 100% in 2013.
Table 10: Share of district carrots exports to the total Limpopo Provincial carrots exports
(%)
Years
District
Vhembe
Capricorn
Waterberg
Limpopo
2004
2005
2006
2007 2008
2009
2010
2011
2012
2013
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
90.88
7.12
2.00
100
99.28
0.57
0.15
100
99.99
0.01
0
100
100
0
0
100
0
0
0
0
Source: Calculated from Quantec Easydata
2.4 South Africa’s Carrot Imports
South Africa is not a major carrot importer. In 2013, it represented 0.01% of world carrot imports
and its ranking in world imports were 112. South Africa’s carrot import volumes have dropped by
from 0.03% during 2012. South Africa has improved its competitiveness as its ranking has gone
improved since in 2012, it was ranked number 90. In 2013, South Africa imported carrots mainly
from Kenya, Mozambique and Zimbabwe. Globally, Germany, Russian Federation, Canada, United
States of America, France and Belgium are the major carrots importers.
Figure 17 below illustrates South African carrot imports for the past ten years. In 2004, 2006, 2007
and 2010, South Africa imported low volumes of carrots. This can be attributed to sufficient
domestic production output in the same years. In 2009, South Africa imported high volumes of
carrots and the imports were incomparably higher when compared to the 2008 imports. During
2010, South Africa’s carrots imports dropped by 97% when compared to the previous year imports.
During 2010 and 2011, it was expensive to import carrots, since high values were recorded for
volume imported. In 2010, carrots imports dropped significantly despite a decline in domestic
production output, this can be attributed to high import costs. The highest imports were recorded in
2011, despite high production volumes in the same year. This can be attributed to cheaper carrots
in imports in the same years. During 2012, South Africa’s carrot imports have dropped by 39.9%
when compared to the 2011 imports. In the same year it was relatively expensive to import carrots
20
since higher value was recorded for volumes imported. In 2013, South Africa’s imports dropped by
40%, when compared to previous year imports and this can be attributed to 1.3% increase in
domestic production. It was also more expensive to import carrots when compared to the previous
years.
250
3000000
200
2500000
2000000
150
Rand
Volume (tons)
Figure 17: Carrot imports by South Africa
1500000
100
1000000
50
500000
0
0
Years
Volume (Kg)
Value (Rands)
Source: Quantec Easydata
Figure 18, illustrates South Africa’s imports from regions.
Figure 18 : South Africa's carrots imports from regions
Volume (Kg)
160000
140000
120000
100000
80000
60000
40000
20000
0
Years
Africa
Asia
Europe
2004
1473
0
0
2005
23099
126
0
2006
989
0
0
2007
1758
4
0
2008
2009
11231 125115
0
322
0
0
2010
3756
0
0
2011
2012
2013
63708 120915 72563
137000
0
0
855
29
0
Source: Quantec Easydata
21
Figure 18 above illustrates South Africa’s carrot imports from the various regions. Figure 18
indicates that African countries are the main supplier of carrots imported by South Africa.
Significant volumes of carrots imports were recorded in 2005, and 2008 to 2011. In 2010, South
Africa imported carrots from African region (Kenya) only. High import from African region can be
attributed to cheaper import cost from neighboring countries. During 2011, South Africa imported
high volumes of carrots from the Asian region (China) and the imports from Europe (Poland) were
less significant. In 2012, South Africa’s carrot imports were sourced from the African region and the
import volumes from Europe were insignificant. During 2013, African region was the sole supplier
of carrots imported by South Africa.
Figure 19 below show that South Africa imports carrots mainly from Eastern African countries
(Kenya) and SADC countries (Zimbabwe, and Zambia). During 2005, South Africa imported carrots
from the West African countries but the imports volumes were less significant. In 2010, there were
no carrots imports from SADC countries. In 2011, South Africa imported high volumes of carrots
from Eastern Africa countries. South Africa’s carrots imports from SADC countries were less
significant. In 2012, South Africa imported carrots from Eastern Africa (Kenya), SADC region
(Zambia and Zimbabwe) and for the first time in a ten year period South Africa also imported from
Northern Africa (Egypt). Carrots imports from SADC and Northern Africa regions were less
significant. During 2013, South Africa imported carrots from Eastern Africa (Kenya) and SADC
countries (Zimbabwe and Mozambique). Carrots imports from Northern Africa has significantly
increase from 202Kg to 4 579Kg during 2013.
Volume ( Kg)
Figure 19: Carrots imports from African region
140000
120000
100000
80000
60000
40000
20000
0
2004 2005 2006
Eastern Africa Rest
0
1003 924
Western Africa
0
270
0
SADC
1473 21826 65
Northern Africa
0
0
0
Years
2007 2008 2009 2010 2011 2012 2013
1758 11231 15999 3756 63568 120436 67984
0
0
0
0
0
0
0
0
0 109116 0
140
277 4579
0
0
0
0
0
202
0
Source: Quantec Easydata
2.5 Processing
Carrot processing includes canning, freezing and dehydration. Carrot can be eaten raw, whole,
chopped, grated or added to salads for colour or texture. They are also often chopped and boiled,
fried or steamed, and cooked in soups and stews, as well as fine baby foods and select pet foods
grated carrots are used in carrot cakes, as well as carrot pudding. The greens are edible as a leaf
22
vegetable, but are rarely eaten by humans. Baby carrots have been a popular ready to eat snack
food available in supermarkets. Carrot juice is also widely marketed, especially as a health drink,
either stand-alone or blended with other fruits and vegetables. Carrots seed oil is an essential oil
extract of the seed from the carrot plant. Carrot seed oil is used as massage oil, in creams and
lotions. Figure 20 below illustrates carrot value chain explaining its uses.
Figure 20: Carrot Value Chain Tree explaining its uses
Carrot salad
Cream and
lotions
Carrot oil seed
extraction
Massage oil
Health
drinks
Canned
carrots
Carrot juice
Fresh Carrot
Dehydrated
carrots
Frozen
carrots
Cooked
carrots
Baby
foods
Carrot powder
Vitamin
supplements
Soups
Pet foods
Figure 21 presents the market value chain for carrots. The carrot value chain can be broken down
into the following levels: the producers of carrots (farmers); pack house owners (cleans, grade and
quality control); cold storage and transport facilities (store and transport carrots on behalf of
farmers); traders in carrots (market and sell carrots); processors (add value to carrots and process
carrots to other usable forms); and end users (consumers).
23
Figure 21: Market value chain for carrots
Input Suppliers
Farmers/Producers
Harvesting
Cleaning /Handling
Imports
Quality grade standards
and packaging
Storage, transportation
and distribution
Fresh Produce Markets,
Wholesalers, Supermarkets,
Retailers and Informal
Market
Consumer
Export
s
Processors: Dehydration,
Freezing and Juice
extraction
3. MARKET INTELLIGENCE
3.1 Tariffs
Tariffs applied by the various markets to carrots originating from South Africa during 2012 and 2013 are presented in Table 12.
Table 12: Tariffs applied by various export markets to carrots originating from South Africa.
Country
Angola
Botswana
China
Spain
France
Swaziland
Italy
Japan
Kenya
Congo
Mozambique
Product description
(H0706100)
Carrots and turnips fresh
or chilled
Carrots and turnips fresh
or chilled
Carrots and turnips fresh
or chilled
Carrots and turnips fresh
or chilled
Carrots and turnips fresh
or chilled
Carrots and turnips fresh
or chilled
Carrots and turnips fresh
or chilled
Carrots and turnips fresh
or chilled
Carrots and turnips fresh
or chilled
Carrots and turnips fresh
or chilled
Carrots and turnips fresh
Trade regime
description
MNF duties (Applied)
Estimated total
ad volorem
Applied tariff equivalent tariff
2012
15.00%
15.00%
Applied tariff
Intra SACU rate
0.00%
0.00%
0.00%
0.00%
MNF duties (Applied)
13.00%
13.00%
13.00%
13.00%
Preferential tariff for
South Africa
Preferential tariff for
South Africa
Intra SACU rate
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
Preferential tariff for
South Africa
MNF duties (Applied)
0.00%
0.00%
0.00%
0.00%
3.00%
3.00%
3.00%
3.00%
MNF duties (Applied)
25%
25%
25%
25%
MNF duties (Applied)
30.00%
30.00%
30.00%
30.00%
Preferential tariff for
15.00%
15.00%
15.00%
15.00%
15.00%
Estimated total
ad volorem
equivalent tariff
2013
15.00%
25
Country
Netherlands
Namibia
Switzerland
Lesotho
United Kingdom
United States of
America
Zambia
Zimbabwe
Product description
(H0706100)
or chilled
Carrots and turnips fresh
or chilled
Carrots and turnips fresh
or chilled
Carrots and turnips fresh
or chilled
Carrots and turnips fresh
or chilled
Carrots and turnips fresh
or chilled
Carrots and turnips fresh
or chilled
Carrots and turnips fresh
or chilled
Carrots and turnips fresh
or chilled
Trade regime
description
South Africa
Preferential tariff for
South Africa
Intra SACU rate
Estimated total
ad volorem
Applied tariff equivalent tariff
2012
Applied tariff
Estimated total
ad volorem
equivalent tariff
2013
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
$34.92/
ton
0.00%
6.96%
6.96%
0.00%
$34.92/
ton
0.00%
Preferential tariff for
South Africa
MNF duties (Applied)
0.00%
0.00%
0.00%
0.00%
14.90%
14.90
14.90%
14.90
Preferential tariff for
South Africa
MNF duties (Applied)
0.00%
0.00%
0.00%
0.00%
40.00%
40.00%
40.00%
40.00%
MNF duties (Applied)
Intra SACU rate
0.00%
Source: Market Access Map
26
In 2013, Angola, Namibia, Mozambique, Botswana, United Kingdom and Swaziland were the main
export market for carrots originating from South Africa. Angola and Mozambique tariff have not
changed and both are still protected by high tariff of 15%, in spite of the existence of the SADCFTA. During 2013, South Africa has diversified its export market to Namibia, Botswana, Swaziland
and Lesotho. These countries apply 0% Intra SACU rate to carrot exports originating from South
Africa. The most lucrative export markets for carrots from South Africa are in European markets
(United Kingdom and France) since these countries apply zero tariff to exports of carrots
originating from South Africa due to an EU-SA Free Trade Agreement (FTA).The African market in
Zambia has reduced its 5% tariff to 0% preferential tariff to carrots originating from South Africa.
China is the largest carrot producer and its domestic market is still protected by a 13% tariff.
3.1 Non tariff barriers
3.1 The European Union
Non-tariff barriers can be divided into those that are mandatory and laid out in the EU
Commission’s legislature, and those that are as a result of consumers, retailers, importers and
other distributions’ preferences.
3.1.1 Product legislation: quality and marketing
There are a number of pieces of EU legislation that govern the quality of produce that may be
imported, marketed and sold within the EU.
General Food Law covers matters in procedures of food safety and hygiene (micro-biological and
chemical), including provisions on the traceability of food (for example, Hazard Analysis and
Critical Control Points, of HACCP).
EU Marketing Standards, which govern the quality and labeling of vegetables, are laid out in the
CAP framework under regulation EC 2200/96. These regulations include diameter, weight and
class specifications, and any produce that does not comply with these standards are not allowed to
be sold on the EU markets (detailed lists of products and their standards can be found in the
annexes to the directive). The legislation (under EU 1148/2001) also dictates that a Certificate of
Conformity must be obtained by anyone wishing to export and sell vegetables in the EU, if that
particular vegetable falls under the jurisdiction on the EU marketing standards, Vegetables to be
used in further processing needs a Certificate of Industrial Use, whilst another legislative directive
covers the Maximum Residue Limits (MRL) of various pesticides allowed.
3.1.2 Product legislation: phytosanitary regulations
The international standard for phytosanitary measures was set up by the International Plant
Protection Committee (IPPC) to protect against the spreading of diseases or insects through the
importation of certain agricultural goods. The EU has its own particular rules formalized under EC
2002/89, which attempts to prevent contact of EU crops with harmful organisms from elsewhere in
the world.
27
The crux of the directive is that it authorizes the Plant Protection Services to inspect a large
number of vegetable products upon arrival in the EU. This inspection consists of a physical
examination of a consignment deemed to have a level of phytosanitary risk, identification of any
harmful organisms and certification of the validity of any phytosanitary certificate covering the
consignment. If the consignment does not comply with the requirements, it may not enter the EU,
although certain organisms can be fumigated at the expense of the exporter.
3.1.3 Product legislation: packaging
The EU commission lays downs rules for materials that come into contact with food and which may
endanger people’s health or bring about an unacceptable change in the composition of the
foodstuffs. The framework legislation for this EC 1935/2004. Recycling packaging materials are
also emphasized under 94/62/EC, whereby member states are required to recycle between 50%
and 65% of packaging waste. If exporters do not ship produce in packaging which is reusable,
they may be liable for the costs incurred by the importing companies. Wood packaging is subject
to phytosanitary controls (see Directive EC 2002/89) and may need to undergo heat treatment,
fumigation, etc.
3.1.4 Non-legal market requirements: social and environmental accountability
To access a market, importers must not only comply with the legal requirements set out above, but
also with market requirement s and demands. For the most part, these revolve around quality and
the perceptions of European consumers about the environmental, social, health and safety aspects
of both the products and the production techniques. Whilst supplying vegetables that complies
with these issues may not be mandatory in the legal sense, they are becoming increasingly
important in Europe and cannot be ignored by existing or potential exporters.
(i) Social responsibility is becoming important in the industry, not only amongst consumers, but
also for retail outlets and wholesalers. The Social Accountability 8000 (SA8000) certification is a
management system based on International Labour Organization (ILO) conventions, and deals
with issues such as a child labour, health and safety, and freedom of association, and requires an
on-site audit to be performed annually. The certificate is seen as necessary for accessing any
European market successful. The major retailers in the EU also play an important role in tackling
environmental issues, which means that exporters have to take these into account when
negotiating exporting arrangements.
(ii) Environmental issues are becoming increasingly important with European consumers.
Consumer movements are lobbying against purchasing non-environmental friendly or nonsustainable produce. To this end, both governments and private partners have created standards
(such as ISO 14001 and EUREPGAP) and labels to ensure produce adhere to particular
specifications. Labels are an absolute must for exporters attempting to enter the rapidly expanding
organic produce market. The EU Commission has recently adopted and EU label for identifying
food produced according to EU organic standards in the directive EEC 209/91
28
3.1.5 Consumer health and safety requirements
Increasing consumer conscience about health and safety issues has prompted a number of safety
initiatives in Europe, such as EUREPGAP on good agricultural practices (GAP) by the main
European retailers, the international management system of HACCP, which is independently
certified and required by legislation for European producers as well as food imported into Europe
(EC 852/2004), and the ISO 9000 management standards system (for procedures and working
methods), which is certified by the International Standards Organization (ISO).
3.2 The United States
The USDA has quality standards for vegetables that provide a basis for domestic and international
trade and promote efficiency in marketing and procurement. At the same time the USDA issues
quality certificates based on these standards and a comprehensive grading system. Graders are
located around the country at terminal markets. These certification services, which facilitate the
ordering and purchasing of products by large-volume buyers, assure these buyers that the product
they purchase will meet the terms of the contract in terms of quality, processing, size, packaging
and delivery.
3.3 Asian Market Access
Japan’s agricultural sector is heavily protected, with calculations from the Organization for
Economic Co-operation and Development (OECD) estimating that almost 60% of the value of
Japan’s farm production comes from trade barriers or domestic subsidies. Japan uses tariff rate
quotas (TRQ) to protect its most sensitive products, and reserves the right for trading many of
these products (within the quota) for one or two state trading enterprises. However, these
extremely protective measures apply only to some products; others are able to compete more
effectively with outside competition, often on the grounds of higher quality.
Perhaps the biggest barrier to trade with Japan in vegetable markets is its strict phytosanitary
requirements, which have often been challenged in the WTO as having little or no scientific
justification. Other measures that are being challenged include Japan’s use of fumigation on
agricultural products when cosmopolitan pests (already found in Japan) are detected. Japan is also
increasing its labeling requirements
4. GENERAL DISTRIBUTION CHANNELS
There are roughly three distinct sales channels for exporting vegetables. One can sell directly to
an importer with or without the assistance of an agent (usually larger, more established commercial
farms/orchards). One can supply a vegetable combine, which will then contract out
importers/marketers and try to take advantage of economies of scale and increased bargaining
power. At the same time vegetable combines might also supply large retail chains. One can also
be a member of a private or co-operate export organization (including marketing boards) which will
find agents or importers and market the produce collectively. Similar to a vegetable combine, an
export organization can either supply wholesale markets or retail chains depending on particular
29
circumstances. Export organizations and marketing boards will wash, sort and package the
produce.
5. LOGISTICAL ISSUES
5.1 Mode of transport
The transportation of vegetables falls within two categories – ocean cargo and air cargo – with
ocean cargo taking much longer to reach the desired location but costing considerably less. Of
course, the choice of transportation method depends, for the most part, on the fragility of the
produce and how long it can remain relatively fresh. With the advent of technology and container
improvements, the feasibility, cost and attractiveness of sea transportation have improved
considerably. As more developing countries begin to export and supply major developed countries
markets, so the number and regularity of maritime routes, and the container vessels travelling
these routes, increase.
Presently South American countries like Peru benefit from the asparagus trade, which has lead to
some level of economies of scale with other vegetable products, and this has enabled cheaper
transport prices for their other vegetable varieties. Such economic of scale could benefit SADC
countries if more producers became exporters and took advantage of the various ports which have
special capabilities in handling vegetable produce (for example, the proposed terminal in Maputo).
For some products, in order to reach the destination market with an acceptable degree of
freshness, air transport is the only option (asparagus, for example, is flown from Peru to the
sufficient to cover the transport costs, and collective agreements between farmers of different
commodities with different harvest periods can become particularly important.
5.2 Cold chain management
Cold chain management is crucial when handling perishable products, from the initial packing
houses to the refrigerated container trucks that transport the produce to the shipping terminals,
through to the storage facilities at these terminals (and their pre-cooling capability), onto the actual
shipping vessels and their containers, and finally on to the importers and distributors that must
clear the produce and transport it to the markets/retail outlets, etc. For every 10oC increase above
the recommended temperature, the rate of respiration and ripening of produce can increase twice
or even thrice. Related to this are the increasingly important traceability standards, which require
an efficiently controlled supply chain and internationally accepted business standards.
5.3 Packaging
Packaging also plays a vital role in ensuring safe and efficient transport of a product and
conforming to handling requirements, uniformity, recyclable materials specifications, phytosanitary
requirements, proper storage needs and even attractiveness (for marketing purposes).
30
6. COMPETITIVENESS OF SOUTH AFRICAN CARROTS EXPORTS
Figure 22 below shows that South African carrot exports are growing faster than the world imports
into Angola, Zambia, Germany, Malawi and United Kingdom. South Africa’s performance in those
markets can be regarded as gains in dynamic markets. South Africa’s carrots exports are growing
slower than the world imports into Zimbabwe, Mozambique, Netherlands, Congo and Switzerland.
These are dynamic market and South Africa has lost market share.. South African carrots exports
are declining faster than the world imports into France. South African exports into Democratic
Republic of Congo, Seychelles, Gabon and Mauritius are growing while world imports are declining
into these countries. South Africa’s performance in these countries can be regarded as a gain in a
declining market.
Figure 23 below, shows that the prospective exports markets for carrots from South Africa. During
2013, Angola holds a bigger share of South African carrots exports. Prospective markets exist in
Equatorial Guinea and Saint Helena. In Africa, markets exist in Congo and Zambia. However, if
South Africa is to diversify its carrots exports the most lucrative markets exists in Zambia and
Zimbabwe, which have increased their carrots imports by 68% and 41% respectively from the
world between 2009-2013 period. Carrots imports from the world to Democratic Republic of Congo,
Namibia and Gabon have declined and these countries have recorded a negative growth rate
between 2009 and 2013 period.
31
Figure 22: Growth in demand for carrots exported by South Africa in 2013
Source: ITC calculations based on COMTRADE statistics.
32
Figure 23: Prospects for market diversification for carrots exported by South Africa in 2013
Source: ITC calculations based on COMTRADE statistics
33
7. OPPORTUNITIES AND CHALLENGES
7.1 Opportunities
Carrots have found increasing favour among consumers. Several health benefits have promoted
marketing this vegetable as a convenient and good tasting snack food or juice product. Carrots are
popular as snacks, side dishes, salads ingredients, juice mixtures and dessert mixtures (e.g. carrot
cake and carrot pudding). The rise of the fresh cut industry has meant some of the misshapen and
otherwise imperfect carrots have an alternative profitable outlet. Carrot that would not have made
the grade in a standard pack of fresh carrots do not have to be sent to freezers or canners to be
cut, diced or juiced. Today, the cutting and peeling process for various fresh-cut carrot products
allows a majority of the raw carrots destined for the fresh market to become fresh market products.
As a way of minimizing post harvest losses carrots are also utilized as animal fodder.
7.2 Challenges
The major concern is the production of a disease-free high quality clean carrot root. Other
essential part of carrot production and marketing is the need to define the quality standards
necessary for consumer acceptance. Product physical defects can be readily measured, but the
flavor and sweetness characteristics must be defined and the parameters affecting these important
factors understood. Numerous root diseases affect carrot but proper cultural practices can keep
them under control. Carrot growers also face strong market competition from the national and
international producers.
34
8. ACKNOWLEDGEMENTS
The following organizations are acknowledged
National Department of Agriculture, Forestry and Fisheries
Directorate: Statistics and Economic Analysis
Private Bag X246
Pretoria
0001
Tel (012) 930 1134
Fax (012) 319 8031
Trade and Industrial Policy Strategies (TIPS)
P.O. Box 11214
Hatfield
0028
Tel (012) 431 7900
Fax (012) 431 7910
Diretsogetse Pankop Processing (Pty) Ltd.
250 Hay Street
Pretoria, Brooklyn
0081
Tel: (012) 362 0201
Quantec Easy Data
www.easydata.co.za
Market Access Map
www.macmap.org
www.trademap.org
Economic Research Service/USDA
www.wikipedia.co.za
Disclaimer: this document and its contents have been compiled by the Department of Agriculture, Forestry and
Fisheries for the purpose of detailing the carrot industry. Anyone who uses this information does so at his/her own risk.
The views expresses 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, accepts no
liability that can be incurred resulting from the use of this information.
35