A PROFILE OF THE SOUTH AFRICAN CABBAGE MARKET VALUE CHAIN 2015

A PROFILE OF THE SOUTH AFRICAN CABBAGE MARKET VALUE CHAIN 215 Directorate Marketing Tel: 12 319 8455 Private Bag X 15 Fax: 12 319 8131 Arcadia E-mail:MogalaM@daff.gov.za 7 www.daff.gov.za 1

TABLE OF CONTENT 1. DESCRIPTION OF THE INDUSTRY 3 1.1 Production areas 4 1.2 Production trends 4 2. MARKET STRUCTURE 5 2.1 Domestic market and prices 5 2.2 South Africa Cabbage Exports 6 2.3 Share Analysis 15 2.4 South African Cabbage Imports 18 2.5 Processing 21 3. MARKET INTELLIGENCE 24 3.1 Tariffs 24 3.2 Non tariff barriers 26 3.3 The United States 28 3.4 Asian Market Access 28 4. GENERAL DISTRIBUTION CHANNELS 28 5. LOGISTICAL ISSUES 29 5.1 Mode of transport 29 5.2 Cold chain management 29 5.3 Packaging 29 6. COMPETITIVENESS OF SOUTH AFRICAN CABBAGE EXPORTS 3 7. CHALLENGES 33 8. ACKNOWLEDGEMENTS 33 2

Value (Rand) 1. DESCRIPTION OF THE INDUSTRY Cabbage is a leafy green biennial, grown as an annual vegetable for its dense-leaved heads. Cabbage belongs to a class of vegetables called Brassica, also known as cruciferous vegetables because their flowers are cross-shaped. Other crucifers are broccoli, kale, cauliflower and Brussels sprouts. Cabbage can be green, purple and white. Green cabbages are the most common, with smooth leafed red and crinkle-leafed savoy cabbage of both colours are rarely seen. As with most vegetable crops, cabbages are mostly produced for and marketed through the national fresh produce markets, the informal market and chain stores. Cabbage is used raw in salads, such as coleslaw, as a cooked vegetable, or preserved in pickles or sauerkraut. Cabbage is 9% water and an excellent source of minerals, Vitamin A and C and the B vitamins. Fresh cabbage juice has been shown to promote rapid healing of peptic ulcers. 35 3 25 2 15 1 5 Figure 1: Gross value of cabbage production Source: Statistics and Economic Analysis, DAFF Figure 1 above illustrates the contribution of the cabbage industry to the gross value of agricultural production over a 1 year period. In 25, the industry contribution was the lowest recorded in a 1 year period, which can be ascribed to the low producer price recorded in the same year. From 25 to 26, the gross value increased steadily and in 28, there was a 1% decline in contribution due to decline in producer price in the same year. In 29, the contribution increased significantly by 46% compared to 28, this can be attributed to higher producer prices. There was a 5.3% decrease in cabbage gross value in 21 when compared to the previous year. This can be attributed to a decline in prices in the same year. In 211 and 212, the industry gross value experienced a steady growth. These can be attributed to steady increase in production output, which occurred while the producer prices were also favorable. In 213, cabbage gross value increased by 22.9%, when compared to the previous year value and this can be ascribed to a slight increase in production output and good producer price. 3

Tons The highest industry contribution was recorded in 214 and this represents a growth of 15% in gross value in comparison to 213 value. The growth in gross value can be assigned to 1.5% increase in production output and 13.4% increase in producer price. 1.1 Production areas Cabbage grows best under cool conditions cabbage. Cabbages are produced in all provinces of South Africa, but the production is concentrated in Western Cape, Kwazulu Natal, Eastern Cape, Gauteng, Free State and North West provinces. Globally, China followed by India, Russia, South Korea, Japan, Ukraine and Indonesia are the top countries in cabbage production. Top five African countries producing cabbage are Egypt, Kenya, Ethiopia, Niger and South Africa. 1.2 Production trends Figure 2 below illustrates the production volumes for cabbages over the past ten years. 16 155 15 145 14 135 13 125 12 115 Figure 2: Total production of cabbage Source: Statistics and Economic Analysis, DAFF High production volumes were recorded in 25 and the production volume was approximately 155 tons. 26 production output declined by 9.2% when compared to the previous year. During 27, production volumes dropped further by 7.3% and this was the lowest production output recorded in a ten year period. There was a 6% increase in production volumes in 28, when compared to the 27 production volume. In 29 the production volumes fell by 1% compared to 28 production year. The decline in production can be attributed to increasing high production input costs and unfavorable climatic conditions. Total production of cabbage increased by 8.9% during 21. In 211, production output increased by 1.3%, when compared to the previous year output. During 212, production dropped by 8.4% when compared to the 211 production season. In 213, production volume slightly increased by 2.3% when compared to the previous year output. Production output grew further by 1.5% in 214 when compared to the previous year output. 4

Tons 18 16 14 12 1 8 6 4 2 Figure 3: Cabbage production vs consumption 25 26 27 28 29 21 211 212 213 214 Source: Statistics and Economic Analysis, DAFF Figure 3 above depicts local consumption of cabbages compared to the production over the 1 year period. South African average cabbage consumption was approximately 143 75 tons per annum. Consumption volumes have gone down by.25% compared to 213 consumption volumes. The figure illustrates that the production of cabbage is slightly higher than the consumption. Most of the cabbages are produced for domestic consumption. South Africa is self sufficient in terms of cabbage production and the surplus is also exported. 2. MARKET STRUCTURE Production (Tons) Consumption (Tons) The cabbage industry operates in the deregulated environment where the prices are determined by the forces of demand and supply. Fresh cabbages are sold through the fresh produce market, processors, restaurants, hawkers, retailers and chain stores. Cabbages are also exported to other countries through export agents and marketing companies. South Africa also imports from other countries. 2.1 Domestic market and prices National Fresh Produce Markets remain an important channel for the sale of fresh cabbage in South Africa. In 214, approximately 73% of cabbages were distributed through fresh produce markets. The remaining 27% represent a direct sale from producer to wholesalers, retailers, processors, informal traders, exports and consumers. 5

Tons Rand/ton Figure 4: Sales of cabbage at national fresh produce markets 14 12 1 8 6 4 2 R 2 5 R 2 R 1 5 R 1 R 5 R Source: Statistics and Economic Analysis, DAFF Volume (tons) Price (Rand/ton) Figure 4 above illustrates the sales of cabbage in the national fresh produce market over the period of 1 years. In 25, cabbages were sold at the lower prices due to high volumes of cabbage supplied in the same period. From 26 to 27, prices increased steadily as the volume supplied dropped across the markets. In 28, the volume grew by 6.5%, which impacted negatively to the market price by 16% when compared to 27. During 29, the prices eased marginally higher by 51% due to 11% decline in volume across the market. Market prices dropped by 13.5% in 21 due to 8.9% increase in cabbage volumes and in 211, the price increased by 5.9% as volumes supplied across the markets dropped by 2.2%. During 212, market price eased higher by 17% due to 6.3% drop in cabbage volume supplied at the markets. In 213, market price has gone up by 19.7% despite a 2.8% increase in cabbage volume supplied at the market and this can be attributed to strong cabbage uptake during the same year. In 214, the market price has gone up by 11.6% a despite a.8% increase in volume supplied at the markets and this can be ascribed to strong cabbage uptake. 2.2 South Africa Cabbage Exports South Africa is not a major cabbage exporter; more than 7% of cabbage produced is absorbed by the domestic fresh market. In 214, it represented.22% of world exports and it ranked number 31 in the world. South Africa has lost its export share in the world,and its competitiveness in the world, as it was ranked number 29 in world cabbage exports during 213. South African cabbage exports were mainly destined to Lesotho and Botswana. China, United States of America, Nehterland, Spain, Italy and Mexico are top countries exporting cabbage. Figure 5 below illustrates South Africa cabbage export destinations during 214. 6

Countries Others Zambia France Gabon Congo Mauritius Swaziland Mozambique Angola Namibia Botswana Lesotho Source: Trade Map Figure 5: South Africa's cabbage exports destinations in 214 1 2 3 4 5 6 7 Share in South Africa's exports (%) Further details relating to the exports of cabbage in 214 are presented in Table 2. Table 2: South Africa s major cabbage export destinations in 214 Importers Exported value 214 (USD thousand) Share in South Africa's exports (%) Exported quantity 214 (tons) Exported growth in value between 21-214 (%, p.a.) Exported growth in quantity between 21-214 (%, p.a.) World 2957 1 1747 18 27-2 Lesotho 1711 57.9 739 65 11 23 Botswana 737 24.9 2388 12-2 -22 Namibia 126 4.3 247-11 -5-16 Angola 19 3.7 119 7 2 5 Mozambique 97 3.3 422 14 16-4 Swaziland 85 2.9 152-13 13-56 Mauritius 21.7 19-14 -12-42 Congo 14.5 16 2-8 4 Gabon 12.4 17 97 13 1 France 11.4 16-21 -28 267 Zambia 9.3 6-8 -23 29 Malawi 6.2 5 43 29 2 Nigeria 4.1 4 23 41 Source: Trade Map Exported growth in value between 213-214 (%, p.a.) 7

Rand Tons Table 2 indicates that during 213, the export share to Lesotho was 46.3%. This was a significant diversity in exports as in 212, 42.6% of South Africa s exports were destined to the Seychelles. Botswana commanded 31.4% export share, Swaziland commanded 6.5% and Namibia has commanded 5% share of South African cabbage exports. In 214, exports to Lesotho increased to 57.9% and export to Botswana has dropped to 24.9%. South African cabbage exports to the world have increased by 27% and 18% in quantity and value between 21 and 214 period. South African exports to the Namibia have decreased by 11% in value and 2% in quantity between 21 and 214 period. South African cabbage exports to Angola have gone up by 7% in value and 2% quantity between 21 and 214 period. Figure 6 below illustrates cabbage exports from South Africa over the past 1 years. In 25 cabbage export volumes were over 6 tons per annum. From 26 and 28, exports increased steadily despite a drop in domestic production output in the same years..in 29, the cabbage export dropped by 34% compared to 28 exports. This can be attributed to the decline in production volume in the same year. In 21, the exports were incomparably higher when to 29 compared to the previous year. In 212, cabbage exports fell by 6.3% when compared to the 211 exports and this can be ascribed to 8.4% drop in domestic production. During 213, South Africa s cabbage export has significantly gone up by 42.4%, when compared to the previous year exports and this can be ascribed to 2.3% increase in domestic production output. South Africa grew by 11.3% during 214, incomparision to 213 exports. It was generally more profitable to export cabbage, from 25 to 29, since higher export value were recorded for volumes exported. In From 21 to 214, it was less profitable to export cabbage since low export value was recorded for volume exported. 12 1 8 6 4 2 Figure 6: South Africa's cabbage exports 1747.427 9658.319 35 3 25 2 15 1 5 Volume (Tons) Value (Rand) Source: Quantec Easydata * Quantec Easy data has revised its export data to reflect SACU export from 21 Figure 7 below illustrates the South Africa cabbage exports to the regions. South Africa exported cabbages mainly to Africa, Europe and from 25 to 21 a considerable amount of cabbage 8

Volume (Kg) exports were not allocated to any region. A small quantity of cabbage was exported to Asian, Americas and Oceania regions. From 21 to 214, there were no cabbage exports destined to the Americas region. From 25 to 28, 211 and 214, there were no cabbage exports to Oceania region. Small exports to these regions can be attributed to Asian and United States countries being among top cabbage producers in the world. In 211, unallocated cabbage exports have decreased significantly and during 212 the unallocated exports have increased. During 211 and 212, African region remained the major market for cabbage exports originating from South Africa. In 212, there was an increase in export volumes destined for Asian and Oceania regions. During 213, African region continued to be the main export market for cabbage exports from South Africa. In the same year, there was an increase in volumes exported to Asia and Oceania while the export to Europe has dropped by 51.3%. Cabbage exports increased by 1% and the export volume was the highest in a 1 year period. At the same time exports to Asia were insignificant and export to Europe notably dropped. Unallocated export has slightly dropped when compared to 213 export volume. Figure 7: Cabbage exports to the regions 12 1 8 6 4 2 25 26 27 28 29 21 211 212 213 214 Africa 2652 36972 499151 581724 288267 35575 71467 6699727 967822 1725256 Americas 35 819 281 99 39 Asia 3562 432 4288 1779 1914 472 742 143 7649 52 Europe 25417 22394 27932 24144 188752 98296 8636 74682 3793 1918 Oceania 2 1631 69 22 Antartica 48 99 226 132 86 5 Not allocated 14986 159453 218425 27223 198548 19781 1878 373 3555 311 Source: Quantec Easydata Figure 8 below illustrates the value of South African cabbage exports. The figure shows that it was generally more profitable to export cabbage to European region, this is illustrated by high export value. Export to African countries earned less value despite high volumes to the region. From 29 to 21, cabbage exports from Europe have been declining due to drop in volumes exported to that region. The highest export value was recorded in 25 for Europe and in 214 for the African region. During 211 and 212, it was more profitable to export cabbage to Asian and European regions and at the same time the value of unallocated cabbage exports have also dropped. In 213, Europe continued to be more a profitable market for exports from South Africa, and unallocated exported had recorded a higher value. Africa, Oceania and Asia regions were the least profitable export markets. During 214, Europe, followed by Asia were the most profitable export markets, while exports to Africa region remained the least profitable market. 9

Value(Rand) Value (Rand) 35 3 25 2 15 1 5 Figure 8: Value of cabbage export from the regions 25 26 27 28 29 21 211 212 213 214 Africa 882566 755136 1495865 184221 1479834 15917 12291867 21733798 28718588 31931484 Americas 69 284 25324 684 272 Asia 4792 1478 5547 65218 68751 4719 18622 1473 7847 393 Europe 4585614 2512364 2816549 286685 1914543 743989 896878 73593 394614 15125 Oceania 12 1424 12 22 Antarctica 1 355 864 1499 115 13 Not allocated 444938 568953 126761 83786 12979 589458 18614 27135 29941 586 Source: Quantec Easydata Figure 9 is the illustration of cabbage exports by South African provinces. 3 25 2 15 1 5 Year Figure 9 : Value of cabbage exports by South African provinces 25 26 27 28 29 21 211 212 213 214 Western Cape 446543 368295 736723 1329489 92869 8846 67122 718785 146268 4691 Eastern Cape 36 Free State 43993 8528 168973 Kwazulu-Natal 112772 55597 1626 2635 13929 68624 499242 1965983 819 52411 North West 388 144919 Gauteng 54164 3274293 4577839 423261 3473667 144833211959197461627394481174333 Mpumalanga 156172 1859 3797 127252 3751 Limpopo 1923 575 1712 4 711789 1

Value (Rand) Source: Quantec Easydata Figure 9; above illustrates the cabbage exports by the provinces of the past ten years., South African cabbages were mainly exported through Western Cape, Gauteng, Kwazulu Natal, and Mpumalanga to a lesser extent. There was a slight decline in value of cabbage exports compared to 21. In 211, Limpopo Province has recorded a cabbage export value for the first time in a ten year period. During 212, cabbage export recorded for Kwazulu Natal has considerably increased while the cabbage exports for North West, Gauteng, Mpumalanga and Limpopo have dropped. Free State has contributed to South Africa exports after seven years of zero cabbage exports trade. In 213, Western Cape and Gauteng continued to lead in cabbage exports originating from South Africa. In the same year Free State and Mpumalanga, have increased their export value while Kwazulu Natal export value has significantly dropped. Limpopo, North West and Free State provinces have significantly increased their export values during 214. At the same time Gauteng export has significantly dropped and Western Cape export has notably increased. The high export values for Western Cape, Gauteng, and KwaZulu Natal can be attributed to the export exit points, Cape Town harbour, OR Tambo International Airport and Durban harbour. The following figures (figure 1-14) show the value of cabbage exports from the various districts in all Provinces in South Africa. 5 45 4 35 3 25 2 15 1 5 Figure 1: Value of cabbage exports by Western Cape Province 25 26 27 28 29 21 211 212 213 214 City of Cape Town 44676 368295 736723 1329489 921553 877896 63944 71697 1458728 45669 West Coast 1965 44718 Eden 756 6164 2682 2464 Cape Winelands 467 1 1815 1375 142159 Source: Quantec Easydata Figure 1 above indicates that cabbage exports from Western Cape province were mainly from the City of Cape Town. Eden district municipality contributed notably in 211. Cape Winelands contributed considerably to Western Cape provincial cabbage export in 211 and 214. In 212, value of the City of Cape Town export has considerably increased while the value for Cape Winelands has significantly dropped. During 213, City of Cape Town continued to lead in cabbage export from the Western Cape Province and the value has substantially increased, when compared to 212 export value. In 214, City of Cape export value has surged and it was the highest export value in a 1 year period. During the same year, West Coast has also contributed notably to Western Cape cabbage exports. 11

Value (Rand) Value (Rand) 25 Figure 11: Value of cabbage exports by Kwazulu Natal Province 2 15 1 5 Source: Quantec Easydata 25 26 27 28 29 21 211 212 213 214 Uthungulu 9159 Ethekwini 13613 55597 1626 2635 13929 68624 499242 1944796 819 5811 Sisonke 21187 Zululand 16 Figure 11 above indicates that cabbage exports from Kwazulu Natal province were from Ethekwini district municipality. Uthungulu district contributed to provincial cabbage exports only in 25. In 28, the export value dropped significantly and from 29 to 21, the export value continued to increase. During 212, Ethekwini cabbage export value surged and the export value was a record high in a 1 year period. In the same year Sisonke, contributed for the first time to cabbage export from Kwazulu Natal province. During 213, Kwazulu Natal cabbage exports were from Ethekwini and the export value for this municipality has dropped by 95.8% when compared to 212 export value. In 214, Ethekwini export value dropped further by 36.5% and at the same year Zululand contributed for the first time to Kwazulu Natal cabbage exports. Figure 12: Value of cabbage export from Gauteng Province 3 25 2 15 1 5 25 26 27 28 29 21 211 212 213 214 Sedibeng 138 46 West Rand 3 121114 Ekurhuleni 46449 24353 27555 354753 1456 1685 12776 915 1321374 City of Johannesburg 5354615 3248116 4488727 38482 3469673 12646 11293419 1925784 2683852 375898 City of Tshwane 1686 61557 7688 3994 431134 6455 5276 496624 5555947 Source: Quantec Easydata 12

Value (Rand) As can be seen from Figure 12 above, cabbage exports from Gauteng province were mostly from the City of Johannesburg Ekurhuleni and City of Tshwane. The high export values were recorded in 25 for the City of Johannesburg. During 28, Ekurhuleni has recorded a notable export value and the following year it recorded a zero trade. In 28 and 219, exports value for the City of Johannesburg municipality has been declining and from 21 to 213, the export value for City of Johannesburg has been increasing. Sedibeng cabbage export values were recorded in 26 and 21 but the values were insignificant. In 213, West Rand has contributed to Gauteng cabbage exports, for the first time in a ten year period. In the same year, Ekurhuleni export value has notably increased and the City of Johannesburg recorded the highest export value in a 1 year period, while City of Tshwane export value has decreased. During 214, West Rand Ekurhuleni and the City of Tshwane cabbage export values have significantly improved while the values for City of Johannesburg have drastically dropped. 12 Figure 13: Value of cabbage exports from Free State Province 1 8 6 4 2 Source: Quantec Easydata 25 26 27 28 29 21 211 212 213 214 Xhariep 43993 7728 47266 Thabo Mofutsanyane 113276 Fezile Dabi 8 192 Mangaung 4999855 Figure 13 above shows that cabbage exports from Free State province during a 1 year period.. From 25 to 211, there were no cabbage exports from the Free State province. During 212, Free State province recorded cabbage exports from Xhariep district municipality after seven years of zero trade in cabbage. In 213, Free State exported cabbage through Fizele Dabi and Xhariep districts and the increase in cabbage exports can be attributed to cabbage export to neighbouring Lesotho. During 214, Free State exported cabbage through Thabo Mofutsanyane and Mangaung and the export values recorded for these municipalities were significantly high. 13

Value (Rand) Value (Rand) 35 3 25 2 15 1 5 Figure 14: Value of cabbage exports by Mpumalanga Province 25 26 27 28 29 21 211 212 213 214 Ehlanzeni 156172 1859 3797 127252 3751 Source: Quantec Easydata Figure 14 above, shows that the cabbage exports from Mpumalanga province was solely from Ehlanzeni) municipality. A notable cabbage export value was recorded in 26. During 25, 27 to 21, there were no cabbage exports from Mpumalanga province. In 212, the cabbage export value for Ehlanzeni has dropped significantly when compared to 211 export value. In 213, Mpumalanga cabbage export has double when compared to the previous year export. Ehlanzeni export value has surged during 214 in comparison to 213 export value. 16 14 12 1 8 6 4 2 Figure 15: Value of cabbage exports by North West province 25 26 27 28 29 21 211 212 213 214 Bojanala 388 9661 Ngaka Modiri Molema 135258 Source: Quantec Easydata 14

Value ( Rands) Figure 15 above illustrates that North West province recorded its first cabbage export value in 21 and the value was insignificant. During 214, North West cabbage was exported through Ngaka Modiri Molema district and the value was a record high during the period under review and this can be ascribed to an increase cabbage export to neigbouring Botswana. 6 Figure: Value of cabbage exports by Limpopo Province 5 4 3 2 1 25 26 27 28 29 21 211 212 213 214 Mopani 273 Vhembe 39 562 1712 Capricorn 1533 13 154439 Waterberg 4 536647 Source: Quantec Easydata Figure 16 above illustrates that cabbage export started in 21 and the province has recorded exports from Vhembe and Capricorn districts. In 211, notable export value was recorded for Vhembe district and during 212 the value has significantly dropped. In 213, Limpopo province exported cabbage from Waterberg district, but the value was less significant. Limpopo province exported cabbages through Waterberg, Capricorn and Mopani, which contributed for the first time in a 1 year period. 2.3 Share Analysis Table 3 illustrates the provincial share towards national cabbage exports.gauteng has commanded the greatest share of provincial cabbage export. %. In 26, Mpumalanga province commanded a 4.5% share. In 211, Gauteng province commanded 87.48% and Western Cape 5.7% share of South Africa cabbage exports. The KwaZulu Natal province has lost export share, compared to 21, which was 5.1%. During 212, Gauteng continued to lead in cabbage exports by recording 87.73% of exports and Kwazulu Natal has increased its share from 3.77% to 8.73%. At the same time, Western Cape export share has gone down further to 3.19%. Free State province commanded a 2.29% share during 212 and in 213 the share has gone up to 3.22%. During 213, Western Cape and Gauteng notably increased their cabbage export shares to 46.78% and 42.53% respectively. In the same year, Kwazulu Natal export share has dropped from 45.17% to 2.5%. Free State province has commanded the highest export share of 5.16% in 213 and Gauteng export share dropped from 93.97% to 31.42%. At the same time Western Cape provincial 15

export share has improved and Limpopo has also commanded 2.22% of South Africa s cabbage export share The high export share in the Western Cape and Gauteng can be attributed to registered exporters and exports exit points based in these provinces. Table 3: Share of provincial cabbage exports to the RSA cabbage exports (%) Year 25 26 27 28 29 21 211 212 213 214 Province Western Cape 7.49 9.56 13.59 23.94 2.61 7.4 5.7 3.19 5.2 14.63 Eastern Cape.1 Free State.2.29 5.16 Kwazulu-Natal 1.89 1.44 1.96.37 2.31 5.1 3.77 8.73.27.16 North West.45 Gauteng 9.62 84.95 84.45 75.69 77.9 87.48 9.35 87.73 93.97 31.42 Mpumalanga 4.5.76.14.44.96 Limpopo.2.4.1 2.22 South Africa 1 1 1 1 1 1 1 1 1 1 Source: Calculated from Quantec Easydata Table 4: Share of district cabbage exports to the total Western Cape provincial cabbage exports (%) Year 25 26 27 28 29 21 211 212 213 214 District City of Cape Town 99.9 1 1 1 99.24 99.3 95.42 99.75 99.77 95.96 West Coast.13.95 Eden.76.7 3.9.5 Cape Winelands.1 1.49.25.9 3.3 Western Cape 1 1 1 1 1 1 1 1 1 1 Source: Calculated from Quantec Easydata Table 4 above indicates that the City of Cape Town commanded the greatest share of cabbage exports from Western Cape province during the period under review. Other municipalities export shares were all insignificant. From 26 to 29, City of Cape Town has commanded 1% share of Western Cape provincial cabbage export. During 212, City of Cape Town continued to lead in Western Cape cabbage exports and it has commanded 99.61% share. In 213, City of Cape Town increased its export share from 99.61% to 99.78%, West Coast and Cape Winelands export shares were insignificant. In 214, Cape Winelands recorded 3.3% cabbage share and export share for City of Cape Town has slightly dropped to 95.96%. 16

Table 5: Share of district cabbage exports to Kwazulu Natal provincial cabbage exports (%) Year 25 26 27 28 29 21 211 212 213 214 District Uthungulu 8.12 Ethekwini 91.88 1 1 1 1 1 1 98.92 1 96.95 Sisonke 1.8 Zululand 3.5 Kwazulu Natal 1 1 1 1 1 1 1 1 1 1 Source: Calculated from Quantec Easydata Table 5 above, shows that, from 26 to 211, Ethekwini has commanded 1% share of cabbage exports from Kwazulu Natal the province. In 25, Uthungula commanded a 8.12% share of cabbage export from Kwazulu Natal. During 212, continued to lead in the Kwazulu Natal cabbage export and it has commanded 98.91% share of cabbage exports. In 213, Ethekwini commanded a 1% share of cabbage export from the Kwazulu Natal province. Ethekwini export share dropped slightly from 1% to 96.95% and 3.5% share was recorded for Zululand district. The greatest share by Ethekwini can be attributed to Durban harbour which renders exports exit point. Table 6: Share of district cabbage exports to the Gauteng provincial cabbage exports (%) 25 26 27 28 29 21 211 212 213 214 District Sedibeng West Rand.1 1.2 Ekurhuleni.86.74.6 8.44.14.13.65.33 13.12 City of Johannesburg 99.14 99.2 98.5 91.38 99.89 95.73 94.51 97.26 97.84 3.53 City of Tshwane.5 1.34.18.11 4.13 5.36 2.67 1.81 55.15 Gauteng 1 1 1 1 1 1 1 1 1 1 Source: Calculated from Quantec Easydata Table 6 above, illustrates that, the City of Johannesburg commanded the greatest share of cabbage exports by Gauteng province. In 28, City of Johannesburg cabbage export share has slightly declined; these can be attributed to increase in export share for Ekurhuleni. During 212, the export share of the City of Johannesburg has slightly increased to 97.26%. In 213, City of Johannesburg continued to be the preferred exit point for Gauteng exports and City of Tshwane export share dropped further from 2.67% to 1.18%. In 214, City of Tshwane was a lead municipality in cabbage exports from Gauteng and it has commanded 55.15% share. In the same year Ekurhuleni export share has increased to 13.12%, while the City of Johannesburg export share has dropped from 97.84% to 3.53%. OR Tambo International Airport renders the exit point of cabbages exports from Gauteng province. 17

Table 7: Share of district cabbage exports to the Free State provincial cabbage exports (%) Year 25 26 27 28 29 21 211 212 213 214 District Xhariep 1 9.62 Thabo Mofutsanyane 68.61 Fezile Dabi 9.38 Mangaung 31.9 Free State 1 1 1 Source: Calculated from Quantec Easydata Table 7 above, indicates that, from 25 to 211, Free State province has recorded a zero trade for cabbage. In 212, Xhariep commanded a 1% share of cabbage exports from Free State province. During 213, Xhariep commanded 9.62% and Thabo Mofutsanyane has commanded 9.38% share of cabbage exports from Free State province. In 214, Thabo Mofutsanyane has recorded 68.61% export share and Mangaung has commanded 31.9% export share. Table 8: Share of district cabbage exports to the Limpopo provincial cabbage exports (%) Year 25 26 27 28 29 21 211 212 213 214 District Mopani 2.91 Vhembe 2.28 97.74 1 Capricorn 79.72 2.26 21.7 Waterberg 1 75.39 Limpopo 1 1 1 1 1 Source: Calculated from Quantec Easy data Table 8 illustrates that, from 25 to 29, Limpopo province has recorded a zero trade for cabbage. In 21 Capricorn has recorded the greatest share of 79.72% and Vhembe has commanded 2.28% share of Limpopo cabbage export. In 211 and 212, Vhembe commanded the greatest share of cabbage exports. During 213, Waterberg has commanded 1% share of cabbage exports from Limpopo. In 214, Waterberg export share has dropped from 1% to 75.39% and Capricorn has improved its export share by recording 21.7% share. 2.4 South African Cabbage Imports South Africa is not a major cabbage importer and its cabbage imports represent approximately % of the world imports. During 214, South Africa s imports were ranked 113 in world imports. In 214, South Africa has decreased its cabbage imports as it was ranked 111 in 213. South Africa is self sufficient in terms of cabbage production, hence the low cabbage import except for a record high import in 21. Hong Kong (China), Canada, United States of America, Germany, Russian Federation, Japan and Malaysia were top countries importing cabbage during 214. 18

Volume (Tons) Value (Rand) Figure 17: Cabbage imports by South Africa 12 1 8 6 4 2 9 8 7 6 5 4 3 2 1 Volume (Tons) Value (Rand) Source: Quantec Easydata Figure 17 above shows that cabbage imports were relatively unstable for the past 1 years. There was a 63.59% decline in imports during 25 and this can be attested to the slight decrease in production of cabbage in the same year. From 27 to 29, South Africa imported low volumes of cabbage despite the drop in production output during 27. In 21 cabbage imports surged incomparably despite an 8.9% increase in domestic production volumes. In 211, cabbage exports decreased by 61.5%, which can be attributed to increase in domestic production output, it was also expensive to import cabbage. During 212, South Africa cabbage imports were incomparably higher when compared to the 211 imports. The increase in imports can be attributed to an 8.4% drop in domestic cabbage output in the same year. South Africa s cabbage imports increased steadily during 213 and 214. The increase in 214 was 4.7% despite 1.5% growth in domestic cabbage output. It was more expensive to import cabbage from 29 to 213, as high import values were recorded for volume imported. Figure 18 below illustrates the South Africa cabbage imports from the regions. In 25 to 26, South Africa imported high quantities of cabbage from African countries (Zimbabwe and Zambia). South Africa also imported considerable volumes of cabbage from Asia (Sri Lanka, China and Lebanon) during 27 and 28. South Africa s cabbage imports from European region were in 21 and 213, but the import volume was insignificant. In 21, South Africa imported highest import volume from African region (Botswana, Namibia and Swaziland). In 211, cabbage imports were sourced from Africa (Zimbabwe) and Asia (Lebanon).In 212, South Africa imported cabbages only from the African region (Kenya and Ghana). During 213, African region (Kenya and Swaziland) remained the main source of cabbage imports by South Africa, and imports from Asia (Lebanon) were less significant. South Africa s cabbage imports were sourced solely from African countries (Namibia, Swaziland, Ghana, Kenya and Lesotho). 19

Value (Rand) Volume (Kg) 1 9 8 7 6 5 4 3 2 1 25 26 27 28 29 21 211 212 213 214 Africa 32596 11877 9 998 9692 2133 4664 46773 55814 Asia 34 33 128 18 274 81 27 Europe 12 7 Not allocated 56 18 Source: Quantec Easydata Figure 18 : South Africa cabbage imports from the regions Figure 19 below shows the value of South Africa cabbage imports by the regions. It was expensive to import cabbage from Europe, as high value was recorded for low cabbage volumes. In 25, it was cheaper to import cabbage from African countries as low import value was recorded for high cabbage volumes. In 211, it was expensive to import cabbage from the Asian region. In 212, it was more expensive to import cabbage from the African region as more value was recorded for value imported. During 213, cabbage imports from Asia were more expensive than imports sourced from African region. In 214, it was cheaper to import cabbage from African region incomparision to 213 import value 8 7 6 5 4 3 2 1 Figure 19: Value of South Africa imports from the regions 25 26 27 28 29 21 211 212 213 214 Africa 884 21919 5 1466 744535 18321 749241 43299 14642 Asia 17 522 5964 815 333 1675 13779 Europe 2955 496 Not allocated 16243 16 Source: Quantec Easydata 2

Value (Rand) Figure 2 is the illustration of value of South Africa s provincial cabbage imports. Figure 2: Value of South Africa provincial cabbage imports 9 8 7 6 5 4 3 2 1 Source: Quantec Easydata Figure 2 above illustrate the entry points of South Africa s cabbage imports during a 1 year period. Gauteng province was mostly used as a point of entry for South Africa s cabbage imports In 26 and 214, Western Cape has recorded notable cabbage import values and Eastern Cape imports were recorded in 212 and 214. 2.5 Processing 25 26 27 28 29 21 211 212 213 214 Western Cape 1359 2955 12748 Eastern Cape 73799 3464 Gauteng 8947 849 527 743 815 76418 3526 675442 448865 1283 Fresh cut cabbage is used raw in salads such as coleslaw and as cooked vegetable (added to soups or stews). Cabbage is also dehydrated (dried, flaked or powder) for use as a flavoring agent in soups and as an ingredient in other dehydrated foods. Cabbage leaves are used to treat acute inflammation. A paste of raw cabbage may be placed in a cabbage leaf and wrapped around the affected area to reduce discomfort. Cabbage can also be canned, pickled, frozen and cabbage juice can be extracted to make ink. In 27 and 21 there has been a considerable increase in volumes that were canned. In 211, there was a 13% drop in cabbage canning activities. During 212, canning activities dropped further by 2.9%, when compared to the 211 canning activities. In 24, there was no cabbage freezing activities recorded. During 212, the volumes that were frozen were incomparably higher when compared to 211 volumes. There were no cabbage dehydration activities from 21 to 213 production year. In 212, there was a 9.2% increase in cabbage volumes that were processed when compared to 211 production year. In 213, canning activities has gone up by 32.5%, freezing activities has decreased by 91.93% and total processing volumes have gone up by 16.9%. Cabbage volumes for canning activities were 15% higher in comparison to 213 and volume for freezing activites was also higher than the previous year volumes. Volumes of cabbages processed during the past ten years are presented in Table 8. 21

Table 8: Processed cabbages Year Canning Freezing Dehydration Total processing Volume Value Volume Value Volume Value Volume Value (Tons) ( Rand) (Rand) (Rand) ( Tons) (Rand) ( Tons) ( Rand) 25 928.1 R 1,284,425 15.6 R 52,428 35 R 1,158 168.7 R 1,347,1 26 993.8 R 1,361,82 112.5 R 6,42 345.9 R 13,791 1452.2 R 1,525,294 27 1 333 R2,12,16 186 R117,952 839 R259 928 2 357 R2,497,896 28 1 116 R1,53,537 182 R14,688 269 R85,759 1 566 R1,729,984 29 879 R1,862,75 5 R76,4 5 R27,5 976 R1,966,244 21 1 29 R2,76,322 15 R28,47 1 44 R2,14,369 211 895 R2,17,826 14 R37,661 99 R2,28,487 212 869 R2,146,514 124 R199,528 993 R2,346,42 213 1 152 R2,771,343 1 R27,544 1 161 R2,798,887 214 2 361 R5,539,968 851 R2,781,848 3 212 R8,255,816 Source: Statistics and Economic Analysis, DAFF The cabbage value chain tree explaining its various uses is illustrated in Figure 21 while the market value chain for cabbage is presented in Figure 22. Figure 21: Cabbage value chain tree explaining its uses Soup Freezing Cabbage Atchaar Dehydration Fresh cabbage Canning Flaked Juice Prickled cabbage Cabbage salads Ink 22

Figure 22: Market value chain for cabbage Input suppliers Farmers/Producers Harvesting Handling/Cooling Imports Quality grade standards and packaging Storage and distribution Exporters Fresh produce markets, Wholesalers, Supermarkets, Retailers and informal markets Processors: Dehydration, Freezing and juice extraction Consumers The cabbage value chain can be broken down into the following levels: the producers of cabbage (farmers); pack house owners (cleans, grade and quality control); cold storage and transport facilities (store and transport cabbage on behalf of farmers); traders in cabbage (market and sell cabbages); processors (add value to cabbage and process cabbage to other usable forms); and end users (consumers). 23

3. MARKET INTELLIGENCE 3.1 Tariffs Tariffs applied by the various markets to cabbages originating from South Africa during 213 and 214 are presented in Table 9. Table 9: Tariffs applied by various exports markets to cabbage originating from South Africa. Estimated total ad Trade regime Applied tariff valorem equivalent tariff Applied tariff Estimated total ad valorem equivalent tariff Country Product description (H749) description 213 214 Angola Cabbage fresh or chilled MFN duties (Applied) 15.% 15.% 5.% 5.% China Cabbage fresh or chilled MFN duties (Applied) 13.% 13.% 13.% 13.% Congo Cabbage fresh or chilled MNF duties (Applied) 3.% 3.% 2.% 2.% Botswana Cabbage fresh or chilled Intra SACU rate.%.%.%.% Canada White or red cabbage fresh or chilled Preferential tariff for GSP countries 5.% 5.% 5.% 5.% Gabon Cabbage fresh or chilled MNF duties (Applied) 3.% 3.% 3.% 3.% Malawi White or red cabbage fresh or chilled Preferential tariff for South Africa.%.%.%.% Hong Kong Cabbage fresh or chilled MFN duties (Applied).%.%.%.% Mexico Cabbage fresh or chilled MNF duties (Applied) 1.% 1.% 1.% 1.% Namibia Cabbage fresh or chilled Intra SACU rate.%.%.%.% Mauritius Cabbage fresh or chilled MNF duties (Applied).%.%.%.% Lesotho Cabbage fresh or chilled Intra SACU rate.%.%.%.% Mozambique White or red cabbage fresh or chilled Preferential tariff for South Africa 15.% 15.% 15.% 15.% Netherlands White or red cabbage fresh or Preferential tariff for South.%.%.%.% 24

Estimated total ad valorem equivalent tariff Estimated total ad valorem equivalent tariff Trade regime Applied tariff Applied tariff Country Product description (H749) description 213 214 chilled Africa India Cabbage fresh or chilled MFN duties (Applied) 3.% 3.% 3.% 3.% Russian Federation Cabbage fresh or chilled General tariff 15.% 15.% 15.% 15.% Swaziland Cabbage and edible brassicas Intra SACU rate.%.%.%.% Switzerland United Kingdom United States of America Cabbage fresh or chilled White or red cabbage fresh or chilled Preferential tariff for SACU members.%.%.%.% Preferential tariff for South Africa.%.%.%.% Preferential tariff for GSP countries.%.%.%.% Preferential tariff for South Africa.%.% 25.% 25.% Cabbage fresh or chilled White or red cabbage fresh or Kenya chilled Zimbabwe Cabbage fresh or chilled MFN duties (Applied) 4.% 4.% 4.% 4.% Source: Market Access Map During 214, South Africa has exported 9% of its cabbage exports to Lesotho, Botswana, Swaziland and Namibia. These countries apply % Intra SACU rate to cabbage export originating from South Africa. South Africa also exported 3.3% to Mozambique, and 3.7% to Angola and these countries apply 15% and 5% tariff respectively, in spite of the existence of the SADC-FTA. The lucrative export markets for cabbage from South Africa exist in Mauritius since this country applies zero tariffs to cabbage exports originating from South Africa. In 213, Congo has reduced cabbage tariff from 3% to 2% tariff. In European markets (United Kingdom, Germany and Netherlands) preferential tariff of.% is applied to cabbage exports originating from South Africa due to EU-SA Free Trade Agreement (FTA). Kenya is the second top cabbage producer in Africa and its domestic production is protected by 25% tariff. China and India are the top countries producing cabbage in the world and their domestic producers are protected by 13% and 3% tariff. 25

3.2 Non tariff barriers 3.2.1 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. 3.2.2 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 22/96. 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 1148/21) 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. 3.2.3 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 22/89, which attempts to prevent contact of EU crops with harmful organisms from elsewhere in the world. 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. 26

3.2.4 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 1935/24. Recycling packaging materials are also emphasized under 94/62/EC, whereby member states are required to recycle between 5% 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 22/89) and may need to undergo heat treatment, fumigation, etc. 3.2.5 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 8 (SA8) 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 successfully. 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 141 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 29/91 3.2.6 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 852/24), and the ISO 9 management standards system (for procedures and working methods), which is certified by the International Standards Organization (ISO). 27

3.3 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. 3.4 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 6% 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 circumstances. Export organizations and marketing boards will wash, sort and package the produce. 28

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). 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 1 o C 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). 29

6. COMPETITIVENESS OF SOUTH AFRICAN CABBAGE EXPORTS Figure 23 below, shows that South Africa cabbage exports are growing faster than the world imports into Gabon. South Africa s performance in these countries is regarded as gains in the dynamic market. South Africa cabbage exports to Mozambique, Lesotho and Angola are growing slower than the world imports to these countries. South Africa performance in these countries is regarded as loss in the dynamic markets. South Africa s cabbage exports are declining faster than the world imports into Swaziland, Seychelles, Namibia and Democratic Republic of Congo, South Africa s exports are growing while the world imports are declining into Zimbabwe, Zambia, Congo and Malawi. South Africa has gained market share in these declining markets. Figure 24 below, shows that Lesotho and Botswana were major markets for cabbage export originating from South Africa during 214. These countries together, they have commanded 82.8% of South Africa cabbage exports. Prospective exports markets for cabbage from South Africa are mainly in Gabon and Mauritius. Other smaller markets exist in Angola, Switzerland, and Uganda. However, if South Africa is to diversify its cabbage exports, the most lucrative markets exist in Mozambique as it has increased its cabbage imports from the world by 113% between 21 and 214 period. Zambia cabbage imports have gone down by 14%, and Seychelles imports have dropped by 39%. Cabbage imports from the world to Zimbabwe and Malawi have also declined between 21 and 214 and as a result, these countries have recorded a negative growth rate. In 214, there was no percentage share of South Africa cabbage exports which were left on ship store and bunker. 3

Figure 23: Growth in demand for cabbages exported by South Africa in 214 Source: ITC Trade Map 31

Figure 24: Prospects for market diversification for cabbages exported by South Africa in 214 Source: ITC Trade Map 32