A PROFILE OF THE SOUTH AFRICAN CABBAGE MARKET VALUE CHAIN 2014

A PROFILE OF THE SOUTH AFRICAN CABBAGE MARKET VALUE CHAIN 214 Directorate Marketing Private Bag X 15 ARCADIA 7 Tel: 12 319 8455/6 Fax: 12 319 8131 Email: MogalaM@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. 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. 3 25 Figure 1: Gross value of cabbage production 2 15 1 5 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 24 the industry contribution was the lowest recorded in a 1 year period, despite the highest production output recorded in the same year. This can be attributed to high production which, occurred while the prices were not favorable for the producers. From 25 to 27, 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. During 211, the industry gross value increased by 4.5% when compared to the previous year. This can be attributed to increase in production output, which occurred while the producer prices were favorable. The high industry contribution was recorded in 212 and the gross value has increased by 9% when compared to the 211 gross value. The increase in gross value can be attributed to 19% increase in producer price in the same season. 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 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, Japan, South Korea, 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. 2 18 16 14 12 1 8 6 4 2 Figure 2: Total production of cabbage Source: Statistics and Economic Analysis, DAFF High production volumes were recorded in 24 and during 25, the production output declined by 9.2% when compared to the previous year. During 26, production volumes dropped further and the lowest production output was recorded in 27.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 has increased by 8.9% compared to the 29 production season. 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. 4

Tons 2 18 16 14 12 1 8 6 4 2 Figure 3: Cabbage production vs consumption 24 25 26 27 28 29 21 211 212 213 Production (Tons) Consumption (Tons) 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 144 61 tons per annum. Consumption volumes have gone up by 2.3% compared to 212 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 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 213, approximately 74% of cabbages were distributed through fresh produce markets. The remaining 26% 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 16 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 24, cabbages were sold at the lower prices due to highest volumes of cabbage supplied in the same period. During 25, the price increased by 24.8% when compared to a price in the previous year due to a 1.3% increased cabbage volumes across the markets. From 26 to 27, prices increased steadily as the volume supplied dropped across the markets. In 28 the price dropped by 16% compared to 27 as the volumes increased across the markets. In 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. 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 213, it represented.26% of world exports and it ranked number 29 in the world. South Africa has increased its export share in the world, but its competitiveness in the in world, as it was ranked number 49 in world cabbage exports during 212. South African cabbage exports were mainly destined to Lesotho, Botswana, Swaziland, Namibia, Angola and Mozambique. Figure 5 below illustrates South Africa cabbage export destinations during 213. 6

Figure 5: South Africa's cabbage exports destinations in 213 Other Gabon Zambia Congo Switzerland Netherlands Mauritius Mozambique Angola Namibia Swaziland Botswana Lesotho 1 2 3 4 5 Share in South Africa's exports (%) Source: Trade Map Further details relating to the exports of cabbage in 213 are presented in Table 2. Table 2: South Africa s major cabbage export destinations in 213 Importers Exported value 213 (USD thousand) Share in South Africa's exports (%) Exported quantity 213 (tons) Unit value (USD/unit) Exported growth in value between 29-213 (%, p.a.) Exported growth in quantity between 29-213 (%, p.a.) Exported growth in value between 212-213 (%, p.a.) World 318 1 9659 312 44 71 476 Lesotho 1396 46.3 5383 259 Botswana 947 31.4 2849 332 Swaziland 195 6.5 175 1114 Namibia 15 5 289 519 Angola 14 3.4 95 195 5-8 68 Mozambique 11 3.3 721 14 43 59 35 Mauritius 36 1.2 49 735 38 Netherlands 21.7 2 15-23 -21-5 Switzerland 11.4 1 11-12 -1-62 Congo 1.3 1 1-9 -19 67 Zambia 7.2 5 14 13-21 4 Gabon 6.2 9 667 25 32 United Kingdom 6.2 4 15-53 -54 Source: Trade Map 7

Rand Tons Table 2 indicates that during 213, South Africa cabbage exports, which was left at to ship stores and bunkers dropped to.1%. 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. South African cabbage exports to the world have increased by 44% and 71% in quantity and value between 29 and 213 period. South African exports to the Netherlands have decreased by 23% in value and 21% in quantity between 29 and 213 period. South African cabbage exports to Switzerland have decreased by 12% in value and 1% quantity between 29 and 213 period. Figure 6 below illustrates cabbage exports from South Africa over the past 1 years. In 24 cabbage export volumes were over 8 tons per annum and this can be attributed to high production volume in the same year. During 25, exports dropped by 26% and this can be attributed to 1% drop in domestic production in the same production year. High cabbage exports were recorded in 27 and 28 despite the decline in production volumes 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 increased by 6.9% compared to the previous year. There was a 4.8% increase in 211 cabbage exports and this can be attributed to the increase in domestic production. In 212, cabbage exports increased by 3.7% when compared to the 211 exports. During 213, South Africa s cabbage export has gone up by 21.8%, when compared to the previous year exports and this can be ascribed to 2.3% increase in domestic production output. It was generally more profitable to export cabbage in 25 and 29, since higher export value were recorded for volumes exported. In 213, it was less profitable to export cabbage since low export value was recorded for volume exported. Figure 6: South Africa's cabbage exports 12 1 8 6 4 2 7 6 5 4 3 2 1 Volume (Tons) Value (Rand) Source: Quantec Easydata 8

Volume (Kg) 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 exports were not allocated to any region. A small quantity of cabbage was exported to Asian, Americas and Oceania regions. From 21 to 212, there were no cabbage exports destined to the Americas region. From 23 to 28 and 211, 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 to 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%. 1 9 8 7 6 5 4 3 2 1 Source: Quantec Easydata Figure 7: Cabbage exports to the regions 24 25 26 27 28 29 21 211 212 213 Africa 59121 2646 36972 499151 581724 282171 513457 666328 71365 98862 Americas 3 35 819 281 99 39 Asia 1817 3562 432 4288 1779 1914 467 74 143 7649 Europe 24942 254176 22313 27932 24144 194848 1184 93393 84476 41173 Oceania 2 1631 69 22 Not allocated 16335 14134 159543 218651 27355 198634 19764 1878 266 325 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 212 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. 9

Value(Rands) Value (Rand) 5 45 4 35 3 25 2 15 1 5 Source: Quantec Easydata Figure 8: Value of cabbage export from the regions 24 25 26 27 28 29 21 211 212 213 Africa 5716 882436 755136 1495865 184221 1421178 18322 252251 342758 2715279 Americas 3 69 284 25324 684 272 Asia 4559 4792 1478 5547 65218 68751 4719 18622 1473 7847 Europe 3484332 4585744 251252 2816549 286685 1973199 777369 9253 826767 431916 Oceania 12 1424 12 22 Not allocated 4952 44538 56917 127625 838585 1385 586494 2114 26185 29541 Figure 9 is the illustration of cabbage exports by South African provinces. 6 5 4 3 2 1 Year Figure 9 : Value of cabbage exports by South African Provinces 24 25 26 27 28 29 21 211 212 213 Western Cape 53191 49361 937247 86374 2166573 1933 1433114 83931 91896 149783 Eastern Cape 36 Free State 494583 98298 12594 Kwazulu-Natal 6241 55331 55597 15438 2635 13928 251335 481834 194455 79714 North West 388 24664 19717 2554 Gauteng 319689 491417 27534 3551627 3366175 2472247 152592 231618 1255612 1355255 Mpumalanga 156172 12632 61451 12892 Limpopo 288 5769 1872 395 Source: Quantec Easydata 1

Value (Rand) Figure 9; above illustrates the cabbage exports by the provinces of the past ten years. In 211, South African cabbages were exported through Western Cape, Gauteng, Kwazulu Natal, City of Tshwane and North West 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, Mpumalanga, North West has increased their export value while Kwazulu Natal export value has significantly dropped. 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. 25 Figure 1: Value of cabbage exports by Western Cape Province 2 15 1 5 Source: Quantec Easydata 24 25 26 27 28 29 21 211 212 213 City of Cape Town 53191 49361 937247 86374 2166573 1922973 1424521 86832 915336 1487443 West Coast 191 1965 Eden 756 6692 22469 Cape Winelands 1 3624 1375 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 29, 21 and 211. In 211, Cape Winelands contributed to Western Cape provincial cabbage export for the first time in a 1 year period. The highest export value was recorded in 28 from the City of Cape Town. 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. 11

Value (Rand) Value (Rand) Figure 11: Value of cabbage exports by Kwazulu Natal Province 25 2 15 1 5 24 25 26 27 28 29 21 211 212 213 Uthungulu 9159 Ethekwini 6241 544142 55597 15438 2635 13928 251335 481834 1919268 79714 Sisonke 21187 Source: Quantec Easydata Figure 11 above indicates that cabbage exports from Kwazulu Natal province were from Ethekwini district municipality and the high value was recorded in 27. In 28, the export value dropped significantly and from 29 to 211 the export value has been increasing steadily. Uthungulu district contributed to provincial cabbage exports only in 25. During 212, Ethekwini cabbage export value dropped significantly when compared to 211 export value. In the same year Sisonke contributed significantly for the first time to cabbage export value recorded for 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. 6 Figure 12: Value of cabbage export from Gauteng Province 5 4 3 2 1 24 25 26 27 28 29 21 211 212 213 Sedibeng 138 46 32582 West Rand 26582 13115 17771 75552 Ekurhuleni 1215 46449 24353 247837 354753 164868 1119 12356 184288 City of Johannesburg 39758448675682679163324223333734246795912778421753683 92918 335449 City of Tshwane 1686 61557 7688 4288 56563 3581 54636 47434 Source: Quantec Easydata 12

Value (Rand) As can be seen from Figure 12 above, cabbage exports from Gauteng province were from the City of Johannesburg municipality. Ekurhuleni, City of Tshwane, and West Rand have contributed to a lesser extent. The high export values were recorded in 25 for the City of Johannesburg. From 28 to 21, exports value for the City of Johannesburg municipality has been declining and in 211, the export value has gone up. Sedibeng cabbage export values were insignificant. During 212, West Rand and the City of Tshwane cabbage export values have significantly improved while the values for Ekurhuleni and City of Johannesburg have dropped. In 213, West Rand has contributed significantly to Gauteng cabbage exports, and Sedibeng has recorded a notable export share for the first time in a ten year period. In the same year, Ekurhuleni export value has notably increased while export values for the City of Johannesburg and City of Tshwane have decreased. 6 Figure 13: Value of cabbage exports from Free State Province 5 4 3 2 1 24 25 26 27 28 29 21 211 212 213 Lejweleputswa 494583 8 Xhariep 98297 94594 Source: Quantec Easydata Figure 13 above shows that cabbage exports from Free State province were mainly from Lejweleputswa and the highest export value was recorded in 23. 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 Lejweleputswa and Xhariep district and the increase in cabbage exports can be attributed to cabbage export to neighbouring Lesotho. 13

Value (Rands) Value (Rand) 18 16 14 12 1 8 6 4 2 24 25 26 27 28 29 21 211 212 213 Nkangala 2143 Source: Quantec Easydata Figure 14: Value of cabbage exports by Mpumalanga Province Ehlanzeni 15429 12632 61451 12892 Figure 14 above, shows that the cabbage exports from Mpumalanga province was from Ehlanzeni (26, 211 and 212) and Nkangala (26) municipalities. The highest cabbage export value was recorded in 26 from Ehlanzeni. From 27 to 21, there were no cabbage exports from Mpumalanga province. During 212, the cabbage export value for Ehlanzeni has dropped significantly when compared to 211 export value. In 213, Mpumalanga cabbage exports were from Ehlanzeni and the export value has double when compared to the previous year export. 3 Figure 15: Value of cabbage exports by North West Province 25 2 15 1 5 24 25 26 27 28 29 21 211 212 213 Bojanala 388 Southern Distric 24664 19713 2554 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 211, the cabbage exports were from Southern district and the value was notably higher when compared to zero trade in the previous years. In 212, export value dropped by 2% when compared to 211 export value. During 213, North West cabbage export was still from Southern district and the value has gone up by 29.6% and this can be ascribed to an increase cabbage export to neigbouring Botswana. 6 5 4 3 2 1 Source: Quantec Easydata Figure 16 above illustrates that cabbage export started in 21 and the province has recorded exports from Vhembe, Capricorn and Waterberg. 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 insignificant. 2.3 Share Analysis Figure 16: Value of cabbage exports by Limpopo Province 24 25 26 27 28 29 21 211 212 213 Vhembe 423 578 1854 Capricorn 85 13 Waterberg 158 61 4 395 Table 3 illustrates the provincial share towards national cabbage exports. Western Cape and Gauteng have commanded the greatest share of provincial cabbage export. Free State province has commanded high percentage in 23. In 211, Western Cape province commanded 24.8% and Gauteng 58.28% share of South Africa cabbage exports. The KwaZulu Natal province has gained export share, compared to 21, which was 7.83%. In 211, Mpumalanga province commanded a 2.94% share. This is an improvement as the province had % share for most of the years except for 26. During 212, Kwazulu Natal was a leading province in cabbage export with 45.17% share, followed by Gauteng with 29.22% and Western Cape with 21.39%. 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%. The high export share in the Western Cape and Gauteng can be attributed to registered exporters and exports exit points based in these provinces. 15

Table 3: Share of provincial cabbage exports to the RSA cabbage exports (%) Year 24 25 26 27 28 29 21 211 212 213 Provinces Western Cape 12.84 8.27 24.32 15.93 39.1 42.83 44.64 24.8 21.39 46.78 Free State 11.94 2.29 3.22 Kwazulu-Natal.15 9.28 1.44 18.55.37 2.31 7.83 13.82 45.17 2.5 North West.1.71.46.8 Gauteng 75.7 82.44 7.19 65.52 6.61 54.86 47.52 58.28 29.22 42.53 Mpumalanga 4.5 2.94 1.43 4.4 Limpopo.17.4.1 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 24 25 26 27 28 29 21 211 212 213 District City of Cape Town 1 1 1 1 1 99.63 99.4 96.13 99.61 99.78 West Coast.13.13 Overberg Eden.37.47 2.68 Cape Winelands 1.19.39.9 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. Cape Town Harbour renders the exit point of cabbage exports. In 211, Cape Winelands contributed to cabbage exports for the first time in a ten year period. 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. Table 5: Share of district cabbage exports to Kwazulu Natal provincial cabbage exports (%) 24 25 26 27 28 29 21 211 212 213 District Uthungulu 1.66 Ethekwini 1 98.34 1 1 1 1 1 1 98.91 1 Sisonke 1.9 Kwazulu Natal 1 1 1 1 1 1 1 1 1 1 Source: Calculated from Quantec Easydata Table 5 above, shows that in 24, 26 to 211, Ethekwini has commanded 1% share of cabbage exports from Kwazulu Natal the province. In 25, Uthungula commanded a 1.66% 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. The greatest share by Ethekwini can be attributed to Durban harbour which renders exports exit point. 16

Table 6: Share of district cabbage exports to the Gauteng provincial cabbage exports (%) Year District 24 25 26 27 28 29 21 211 212 213 Sedibeng 2.4 West Rand 1.74 6.45 14.15 55.75 Ekurhuleni.39.95.9 6.98 1.54 1.8 5.46 8.15 13.6 City of Johannesburg 99.61 99.5 99.4 91.29 89.23 99.83 83.74 86.32 73.34 24.75 City of Tshwane.6 1.73.23.17 3.71 1.65 4.35 3.5 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 21, City of Johannesburg cabbage export share has declined; these can be attributed to increase in export share for Ekurhuleni and City of Tshwane. In 211, West Rand and City of Johannesburg have increased their export share. During 212, the export share of the City of Johannesburg has dropped by 12.98%. At the same period City of Tshwane, West Rand and Ekurhuleni cabbage export shares have notably increased. In 213, West Rand was a lead municipality in cabbage export from Gauteng and it has commanded 55.75% share. In the same year Sedibeng has contributed to Gauteng cabbage export share for the first time in a ten year period, while the City of Johannesburg export share has dropped from 73.34% to 24.75%. OR Tambo International Airport renders the exit point of cabbages exports from Gauteng province. Table 7: Share of district cabbage exports to the Free State provincial cabbage exports (%) Year 24 25 26 27 28 29 21 211 212 213 District Lejweleputswa 1 7.8 Xhariep 1 92.2 Free State 1 1 1 Source: Calculated from Quantec Easydata Table 7 above, indicates that Lejweleputswa commanded a 1% share of cabbage exports from the Free State province in 24. 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 92.2% and Lejweleputswa has commanded 7.8% share of cabbage exports from Free State province. Table 8: Share of district cabbage exports to Mpumalanga provincial cabbage exports (%) Year 24 25 26 27 28 29 21 211 212 213 District Nkangala 1.37 Ehlanzeni 98.63 1 1 1 Mpumalanga 1 1 1 1 Source: Calculated from Quantec Easy data 17

Table 8, illustrates that, Ehlanzeni commanded the greatest share of cabbage export from Mpumalanga Province. From 27 to 21 the province has a recorded zero trade for cabbage. During 26, Nkangala contributed insignificantly to Mpumalanga cabbage export share. From 211 and 213, Ehlanzeni has commanded 1% share of cabbage exports from Mpumalanga province. Table 9: Share of district cabbage exports to the North West provincial cabbage exports (%) Year 24 25 26 27 28 29 21 211 212 213 District Bojanala 1 Southern District 1 1 1 North West 1 1 1 1 Source: Calculated from Quantec Easy data Table 9 above shows that from 24 to 29, North West has recorded zero trade for cabbage. In 21, Bojanala commanded a 1% share of cabbage export from North West. From 211 to 213, Southern district commanded a 1% share of cabbage exports. Table 1: Share of district cabbage exports to the Limpopo provincial cabbage exports (%) Year 24 25 26 27 28 29 21 211 212 213 District Vhembe 2.26 98.94 99.9 Capricorn 4.7.69 Waterberg 75.67 1.6.21 1 Limpopo 1 1 1 1 Source: Calculated from Quantec Easy data Table 1 illustrates that, from 24 to 29, Limpopo province has recorded a zero trade for cabbage. In 21 Waterberg commanded the greatest share of 75.67% and Vhembe has commanded 2.26% 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. 2.4 South African Cabbage Imports South Africa is not a major cabbage importer and its cabbage imports represent % of the world imports. During 213, South Africa s imports were ranked 111 in world imports. In 213, South Africa has decreased its cabbage imports as in 212, it was ranked 99 in world cabbage imports. South Africa is self sufficient in terms of cabbage production, hence the low cabbage import except in 25 and 212. United States of America, Canada, Germany, Japan, Russian Federation, Hong Kong and Netherlands were top countries importing cabbage during 213. 18

Volume (Tons) Value (Rand) Figure 17: Cabbage imports by South Africa 35 3 25 2 15 1 5 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 and the significant imports were in 25 and 212. The increase in imports during 25 can be attributed to the slight decrease in production of cabbage in the same year and it was also cheap to import since higher volumes were imported at a lower value. It was expensive to import cabbage except in 24 and 25 since less volume was imported at higher values. In 21 cabbage imports increased significantly 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 dropped by 61.6% during 213 and this can be attributed to 2.3% increase in domestic cabbage output. In the same year, it was more expensive to import cabbage when compared to the other years. Figure 18 below illustrates the South Africa cabbage imports from the regions. From 24 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). South Africa s cabbage imports from Oceania region were only in 23. In 21, South Africa imported considerable amount of cabbages from European region (France and United Kingdom) after six years of not importing from that region. 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. 19

Value (Rand) Volume (Kg) Figure 18 : South Africa cabbage imports from the regions 35 3 25 2 15 1 5 24 25 26 27 28 29 21 211 212 213 Africa 1393 32596 11877 9 998 4421 112 22739 8741 Asia 88 34 33 128 18 274 8 27 Europe 254 6 Source: Quantec Easydata Figure 19 is the illustration of value of South Africa s cabbage exports from the regions. 8 7 6 5 4 3 2 1 24 25 26 27 28 29 21 211 212 213 Africa 18558 884 21919 5 1466 4696 8629 667265 356518 Asia 38 17 522 5964 815 333 1675 13779 Europe 12854 496 Source: Calculated from Quantec Easy data Figure 19: Value of South Africa imports from the regions Figure 19 above 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. 2

2.5 Processing 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%. Volumes of cabbages processed during the past ten years are presented in Table 8. 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) 24 934.5 R 1,168,618 R 44.9 R 19,33 1339.4 R 1,277,947 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 1333 R2,12,16 186 R117,952 839 R259 928 2357 R2,497,896 28 1116 R1,53,537 182 R14,688 269 R85,759 1566 R1,729,984 29 879 R1,862,75 5 R76,4 5 R27,5 976 R1,966,244 21 129 R2,76,322 15 R28,47 144 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 1152 R2,771,343 1 R27,544 1161 R2,798,887 Source: Statistics and Economic Analysis, DAFF The cabbage value chain tree explaining its various uses is illustrated in Figure 2 while the market value chain for cabbage is presented in Figure 21. 21

Figure 2: Cabbage value chain tree explaining its uses Soup Freezing Cabbage Atchaar Dehydration Fresh cabbage Canning Flaked Juice Prickled cabbage Cabbage salads Ink 22

Figure 21: 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 212 and 213 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 212 213 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.% 3.% 3.% 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.% Germany White or red cabbage fresh or chilled Preferential tariff for South Africa.%.%.%.% Hong Kong Cabbage fresh or chilled MFN duties (Applied).%.%.%.% Japan Cabbage fresh or chilled MNF duties (Applied) 3.% 3.% 3.% 3.% 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 chilled Preferential tariff for South Africa.%.%.%.% 24

Estimated total ad valorem equivalent tariff Estimated total ad valorem equivalent tariff Trade regime Applied tariff Applied tariff Country Product description (H749) description 212 213 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 213, South Africa has diversified 89.2% 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 to Mozambique, and 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, Russian Federation and Hong Kong since these countries apply zero tariffs to cabbage exports originating from South Africa. 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 22 below, shows that South Africa cabbage exports are growing faster than the world imports into Gabon, Zambia and Malawi. South Africa s performance in these countries is regarded as gains in the dynamic market. South Africa cabbage exports to Mozambique, Mauritius, Mayotte 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 France, United Kingdom, Democratic Republic of Congo, Switzerland, and Congo. South Africa s exports are growing while the world imports are declining into Zimbabwe and Seychelles. South Africa has gained market share in these declining market. Figure 23 below, shows that Lesotho and Botswana were major markets for cabbage export originating from South Africa during 213. These countries together, they have commanded 77.64% of South Africa cabbage exports. Prospective exports markets for cabbage from South Africa are mainly in Angola but, it have increased its tariff to 5%. Other smaller markets exist in Democratic Republic of Congo, Mauritius and Mayotte. 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 53% between 29 and 213 period. Congo cabbage imports have risen by 3%, and Mayotte imports have risen by 15%. Cabbage imports from the world to Zimbabwe and Seychelles have declined between 29 and 213 and as a result, these countries have recorded a negative growth rate. South Africa cabbage exports which, were left on ship store and bunker has declined by 15% between 29 and 213. 3

Figure 22: Growth in demand for cabbages exported by South Africa in 213 Source: ITC Trade Map 31

Figure 23: Prospects for market diversification for cabbages exported by South Africa in 213 Source: ITC Trade Map 32