With the peak growing season dawning in the Southern Hemisphere, many growers and exporters are working through their second growing season dealing with the effects of COVID-19. What makes this growing season different from 2020 is that this time around, growers and exporters have a precedent to work off. In this week’s Virtual Town Hall Anouk Sijmonsma, Vice President, Global Membership Engagement, Produce Marketing Association was joined by Fhumulani Ratshitanga, CEO, Fruit South Africa and Juan Colombo, CEO, Subsole to look at how the pandemic has affected export markets in the Southern Hemisphere. Ratshitanga and Colombo provided updates on their markets and highlighted key strategic changes and challenges that are shaping global markets.
South Africa is among the top exporters of fruit around the world. Fruit South Africa is an overarching industry body that oversees 60% of total exports from South Africa to more than 90 countries worldwide. Among some of the top crops exported from South Africa are citrus, pomfruit, table grapes, mangos and avocadoes. Just as South Africa prepared to go into lockdown due to COVID-19 in 2020, many of these commodities were just starting or in the peak of their growing season. Despite challenges with labor, transportation logistics and safety risks, South Africa’s overall markets performed positively in 2020. As the market prepares to head into a second year of growing seasons amidst COVID-19 challenges, Ratshitanga predicts that production and exports of key crops will see an even better performance than in 2020 due to growers having a precedent to work against from last year.
Some of the actions taken and changes that have been made to adjust this growing season per the challenges presented by COVID-19 are:
- Weekly industry meetings with the port authority to proactively handle freight logistics issues.
- Daily communications to industry stakeholders on the position of the industry, including the status of ports.
- Proactive adjustments to the industry to account for higher consumer demand for fruit due to health benefits and a drop in consumers’ disposable income due to COVID-19 challenges.
- Providing up-to-date information, communications and guidelines about COVID-19 to help growers abide by government regulations.
- Working closely and communicating with government officials to handle issues as they are encountered.
With these changes and the precedent set by last year, Ratshitanga predicts that growers will adjust to this new way of doing things and will see a prosperous 2021 growing and exporting season.
In 2020 Chile exported 2.5 million tons of fruit across the globe, including to top exporting markets: U.S., Asia (particularly China) and Europe. This was a 7% drop in exports compared to the previous year and can likely be tied to challenges set forth by COVID-19. The 2021 crop output for Chile has been heavily impacted in recent weeks due to heavy rains carving paths through the growing regions. Colombo provided an update on the rains and their impact on predictions for the growing season, stating that while much of the area of fruit production was washed away, growers have the right techniques, teams and infrastructures in place to provide proper planning and solutions. While growers are optimistic that they will be able to rebound some of the lost numbers, these rains could mean a decrease in predicted exports for the year.
Colombo then walked participants through his predictions for trends surrounding areas such as packaging, logistics and the economics of the home office in 2021.
COVID-19 has seen consumers and regulators push for a renewed and accelerated amount of plastic packaging. Before the pandemic hit, the fresh produce industry was largely working it’s way away from single-use packaging, looking at alternative materials or using no packaging at all. Due to safety concerns the industry has regressed back to using single-use packaging to ensure that product is not exposed. While plastic is currently a necessary evil, Colombo predicts that once COVID-19 is under control consumers and industry members alike will once-again move away from single use packaging and plastics.
Since the early days of the pandemic there has been a huge imbalance in the availability of shipping containers and freight space. This imbalance has been exacerbated by the need for shipping containers to transport the newly formed vaccine around the world, a necessary and valuable use for those containers. While this imbalance has affected fresh produce exports and affected how the global ecosystem works, the need for transport for vaccines outweighs the need to export fresh produce and this is an imbalance that the industry will accept and work with while medical experts work to distribute a highly anticipated and important vaccine to the world.
Work from Home
With more people working from home in a more permanent capacity due to COVID-19 there has been a shift in the way that people manage and organize their time. With less time put into commuting and more time spent at home, consumers are eating more meals at home and are much more aware of food waste. This has created an opportunity for the industry to inform and interact with the consumer through social media and other campaigns to push the boundaries of how the fresh produce industry markets to and interacts with consumers.
Finally, Colombo addressed the changes that COVID-19 has brought about that the industry can benefit from keeping. Those changes included:
- Innovative thinking around labor issues.
- Less travel and more virtual business meetings and planning.
- More of a focus on quality assurance in our products.
- An increased focus on interacting with consumers through new mediums and channels.
As the Southern Hemisphere prepares for another year of COVID-19 related challenges during peak growing times, it is clear that the fresh produce industry is learning, growing and adapting as we go, to create a stronger food production system for consumers.