Browsing by Author "Van der Merwe, Jana-Mart"

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    The competitiveness of South African table grape exports in the European markets : threats from Peru and Chile
    (Stellenbosch : Stellenbosch University, 2023-03) Van der Merwe, Jana-Mart; Vink, N.; Van der Merwe, Melissa; Cloete, Kandas; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Agricultural Economics.
    ENGLISH SUMMARY: International trade in table grapes has expanded remarkably over the last decade. In the Southern Hemisphere, rapid increases in supply from Peruvian producers have been observed, with Peru overtaking South Africa as the second-largest exporter in the Southern Hemisphere behind Chile. Chile and Peru’s main table market is the United States, but the increase in production in Peru has also resulted in higher export volumes to markets in Europe, potentially threatening South Africa’s position in the European Union (EU) and the United Kingdom (UK). This study measures and analyses South Africa’s competitive position of table grape exports relative to that of Peru and Chile in these markets. The primary objective of the study was to the determine whether South Africa, with 75% of its exports destined for Europe, will be negatively affected by these exogenous changes in Peru and Chile’s export-oriented table grape industries. The competitiveness of the table grape industry is directly and indirectly influenced by policy. This study first estimates the distortions faced by South African, Peruvian and Chilian export-oriented table grape producers in the period 2010 to 2019. This was done by applying Anderson et al.’s (2006) empirical framework to the tradable table grape exports of each country, as Kirsten et al. (2009) and Day (2018) have done previously for the South African agricultural sector. Second, the internationally recognised competitiveness measurement indices, relative trade advantage (RTA) and logarithmic relative export advantage (InRXA), were applied to measure the competitive advantage of table grapes for each country. Third, the indirect measurements were used to measure the distance and cost from South Africa, Peru and Chile to their main trading partners, including considering each country’s cost of insurance and freight (CIF) and free on board (FOB) unit values to analyse the impact of freight costs on exports to the EU and UK. Last, the trade barriers for each country to these markets were analysed to holistically consider the sustainability of the competitiveness of each country’s table grape industry. The findings from the study firstly highlight the importance of exchange rates in incentives for exports, with all three countries’ export-oriented table grape industries incentivised to produce and export table grapes. Secondly, this study showed that the policy environment in which South Africa’s table grape industry operates remains supportive, albeit at a decreasing rate, whereas the table grape industries of both Peru and Chile have moved from taxing to a supportive environment. Thirdly, South Africa’s table grape exports remained marginally competitive, while the competitiveness of Peru’s table grape exports grew exponentially. Consequently, this additional supply is placing downward pressure on market prices in the EU and UK. This challenges the competitiveness of South Africa’s export-oriented table grape industry, especially in the EU, but also in the UK, since transport costs are rising while prices received are constrained. Whilst South Africa’s table grape exporters has the potential to grow its global competitiveness, given the advantages of a depreciating rand, broader and more favourable market access outside the EU and UK is paramount. The availability of efficient infrastructure – electricity supply, roads, ports, vessels and reefer containers – is necessary to capitalise on this potential.