Heatwave and Power Cuts Aside, South Africans Predict a Production Rebound

Summary

South African olive farm­ers are expect­ing a good yield in 2024 despite an ear­lier har­vest due to above-aver­age tem­per­a­tures, with some pro­duc­ers antic­i­pat­ing a 10 – 20% increase in olives har­vested. However, chal­lenges such as load shed­ding and com­pe­ti­tion with lower-priced imports are impact­ing the indus­try, lead­ing to con­cerns about the poten­tial impact on final prod­uct qual­ity and con­sumer demand.

South African olive farm­ers expect a good yield in 2024 even as the har­vest gets under­way ear­lier than usual due to above-aver­age tem­per­a­tures.

The Western Cape region, the hub of the country’s olive indus­try, has expe­ri­enced record-high tem­per­a­tures well above 40 ºC over the past few weeks. The South African Weather Services (SAWS) blames cli­mate change and El Niño.

Meanwhile, Wendy Petersen, the chief exec­u­tive of the South African Olive Industry Association (SA Olive), said some pro­duc­ers expect to har­vest between 10 and 20 per­cent more olives than last year.

In 2023, South Africa pro­duced approx­i­mately 1.2 mil­lion liters of olive oil, com­pared to 1.7 mil­lion liters in 2022.

“A few pro­duc­ers are expect­ing 50 to 60 per­cent higher vol­umes (than last year), but they are in the minor­ity,” Petersen said.

“Over the years, we have seen a sig­nif­i­cant focus on the qual­ity of our prod­uct, and this is very notice­able in the inter­na­tional awards and acco­lades received by South African olive oil pro­duc­ers on inter­na­tional plat­forms,” she added.

However, Petersen warned that table olive and olive oil pro­duc­ers are strug­gling to com­pete with lower prices imports, which has been a prob­lem for the past few years. She added that fraud remains prob­lem­atic as unscrupu­lous importers seek to take advan­tage of high prices.

“The fact that olive oil is not a value-added tax zero-rated agri­cul­tural com­mod­ity influ­ences its com­pet­i­tive­ness in the mar­ket,” Petersen said. ​“The play­ing field is uneven for olive oil.”

“We need the gov­ern­ment to step in and rec­og­nize that olives are a key agri­cul­tural com­mod­ity that stim­u­lates job cre­ation and employ­ment,” she added. ​“This also stim­u­lates new emerg­ing entrants to olive farm­ing and the devel­op­ment of rare and required agri­cul­tural skill sets inter­na­tion­ally.”

Load shed­ding – rota­tional power cuts to pre­vent a national power grid col­lapse – frus­trates the country’s olive farm­ers by rais­ing oper­at­ing costs and adding another unpre­dictable fac­tor dur­ing the har­vest sea­son.

In 2023, the coun­try spent 1,742 hours with no elec­tric­ity, which trans­lated to 72.6 days, with the aver­age South African spend­ing nearly 20 per­cent of the year with no power.

The out­look for 2024 is no bet­ter, with reports of the coal-fired base load (the con­tin­u­ing min­i­mum load that a power sup­ply sys­tem is required to deliver) of the country’s power util­ity, Eskom, stag­nat­ing.

“Load shed­ding has caused higher oper­a­tional costs, which affect farm mar­gins and the final prod­uct prices,” Petersen said. ​“Electricity remains a big chal­lenge in agri­cul­ture, and this is the case with the olive indus­try.”

She added, ​“Other than affect­ing the prices, it also directly affects the qual­ity of the final prod­uct if not processed imme­di­ately after har­vest­ing.”

Nick Wilkinson, the co-owner of Rio Largo Olive Estate, located between Robertson and Ashton in South Africa’s Western Cape province, con­firmed that the main chal­lenge they see ahead is load shed­ding, which cre­ates pro­duc­tion sched­ul­ing issues.

“Whilst we have solar power and gen­er­a­tor backup to off­set the national power grid black­outs, it does increase the cost of pro­duc­tion, and going into win­ter, we can be with­out power for up to eight hours a day,” he said.

“We had a very big har­vest last year, so expect to be a lit­tle down on last year,” Wilkinson added. ​“But the qual­ity looks excep­tional with good grow­ing con­di­tions and no fun­gal dis­eases or pest dam­age. I expect the coun­try’s har­vest to be up on last year.”

Not far from Rio Largo, the team at Mardouw Olive Estate will also start har­vest­ing soon.

“Normally, we start at the begin­ning of April, but due to very high tem­per­a­tures over the past two months, we antic­i­pate the 2024 har­vest will start mid-March,” said Philip King, the company’s gen­eral man­ager.

Still, King is in high spir­its and does not see any issues com­pli­cat­ing the har­vest this year. ​“We are as ready as can be,” he said. ​“Load shed­ding always plays a role, but we have been proac­tive and will have backup power to address this.”

“We expect a much higher crop than 2023 and can’t wait to get going,” King added.

Moving east­wards, Babylonstoren in the Franschhoek wine val­ley started har­vest­ing some green Manzanilla table olives at the end of February.

They moved to Frantoio for oil pro­duc­tion early in March, expect­ing the har­vest to con­tinue until June.

“This year’s har­vest­ing sea­son appears to be com­menc­ing ear­lier than last sea­son, pri­mar­ily due to the intense heat we expe­ri­enced in the Franschhoek wine val­ley this sum­mer,” said Petrus van Eeden, Babylonstoren’s olive spe­cial­ist.

He added that con­sid­er­ing the global mar­ket con­di­tions with low oil sup­ply and high olive oil prices, there is uncer­tainty regard­ing this year’s har­vest com­pared to the pre­vi­ous one.

“While many farms appear to have a promis­ing crop, it remains unclear if the yield will meet our oil demands as effec­tively as before,” van Eeden said. ​“Given the pre­vail­ing high prices, con­sumers might face pres­sure, poten­tially lead­ing to a decrease in local demand over time.”

“Given the lower crop yields we saw in Europe and a down­turn in pro­duc­tion in South Africa last sea­son, it’s rea­son­able to expect that cus­tomers may encounter increased prices for a liter of oil com­pared to pre­vi­ous years,” he added.

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