Access to new export markets such as China and India could arrest the decline in competitiveness in the local fruit canning industry.
Research by an insider of the Western Capes canned fruit industry shows a concerning decline in competitiveness in an industry that exports 85 of its products annually.
Industry and government should join forces for a recovery plan of the countrys valuable deciduous fruit canning industry, which has been in decline since 2016.
This is according to research by Dr Heinrich Jantjies, group risk, safety and security director at Tiger Brands, which owns one of two canneries serving the deciduous fruit industry.
The canned fruit industry exports about 85 of its products annually and employs more than 7500 people in the Western Cape.
Jantjies findings form part of his PhD studies at Stellenbosch University.
The other cannery in the Western Cape is owned by RFG.
In 2021, the export value of canned fruit was US112 million R2bn, with canned peaches leading at 47.6 million R870m, followed by pears, mixed fruit, and apricots. This is an increase from 94.7 million R1.7bn in 2002, though lower than the peak of 186.2 million R3.4bn in 2010.
However, the industry's competitiveness rating according to the relative trade advantage RTA formula dropped from 23.03 in 2016 to 17.02 in 2020. Pears, however, were an exception, improving from an RTA of 33.96 in 2016 to 40.40 in 2020. This explains the industrys strong and resilient character.
A well-developed industry infrastructure, the availability of storage and handling facilities, competition in international markets, bargaining power of canning firms, relationships with international retail markets and agents, and access to and availability of renewable energy are some of the factors that help the industry to remain competitive, says Jantjies.
On the other hand, things like a lack of innovation in canning technology, a lack of local sales and access of new competitors in the local market, the possibility of land expropriation without compensation, the impact of climate change on fruit yields, and negative perceptions associated between canned fruit and health constrain the industrys competitiveness.
It commands a leading position in South African agribusiness and supports growth in foreign exchange earnings, employment providing jobs to more than 7 500 people in the Western Cape and related rural development.
Jantjies explored the ways to measure and analyse the competitive performance of South Africa's deciduous fruit industry, with a particular focus on the canning and processing sector. The investigation covers the early 1960s to the early 2020s. Jantjies also compared canned deciduous fruit with other major local fruit/vegetable export-driven enterprises such as apples, plums, citrus, wine and avocados.
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