Producers in South Africa Expect to Match Results of Last Year's Record Harvest

Summary

Despite fac­ing chal­lenges such as high pro­duc­tion costs and elec­tri­cal out­ages, olive oil pro­duc­ers in South Africa are expect­ing a yield sim­i­lar to last year’s record high, with some grow­ers report­ing lower yields but excep­tional qual­ity. The impact of load shed­ding on the olive har­vest process has led to increased pro­duc­tion costs, but inter­na­tional olive oil prices are ris­ing, pro­vid­ing hope for relief before the end of the year.

Despite high pro­duc­tion costs and fre­quent elec­tri­cal out­ages, pro­duc­ers in South Africa expect a yield on par with last year’s record high.

Some grow­ers have reported lower yields, but they told Olive Oil Times their extra vir­gin olive oils are of out­stand­ing qual­ity this year.

“Our cur­rent esti­mate for 2022 is just under 1.7 mil­lion liters of olive oil pro­duced,” Vittoria Jooste, the chief exec­u­tive of the South African Olive Industry Association (SA Olive), told Olive Oil Times.

“There have been vari­ances in olive har­vests across regions,” she added. ​“However, the vol­ume of olive oil pro­duced is sim­i­lar to 2021.”

Jooste said pro­duc­ers faced enor­mous chal­lenges with load shed­ding (a South African term for power cuts) at the peak moment of har­vest­ing. ​“The worst impact of load shed­ding is not so much on the har­vest as on the trans­for­ma­tion of the olives,” she said.

“If olives are not processed right after pick­ing, defects can develop, which affect the grade of olive oil pro­duced with a neg­a­tive impact on the sell­ing price,” Jooste added. ​“To mit­i­gate this risk, pro­duc­ers have to incur addi­tional costs for over­time, trans­port, fuel for gen­er­a­tors and cold stor­age.”

Brenda Wilkinson, the co-owner of Rio Largo Olive Estate between Worcester and Robertson in the country’s Western Cape province, con­firmed load shed­ding was a hin­drance dur­ing the recent har­vest.

“Load shed­ding made for very dif­fi­cult process plan­ning, as power was often cut off at short notice,” she told Olive Oil Times. ​“Furthermore, every time the power goes off, the whole pro­cess­ing plant must be shut down and fully cleaned, which takes the bet­ter part of two hours.”

“If you don’t shut down and clean the pro­cess­ing plant, there is a risk of fer­men­ta­tion and a neg­a­tive effect on the qual­ity of the oil,” Wilkinson added. ​“Obviously, this increases pro­duc­tion costs and the need to work unsched­uled over­time hours.”

“The over­all effect on the cost of pro­duc­tion is sub­stan­tial when cou­pled with the government’s imposed increase in min­i­mum labor rates and increases in elec­tric­ity and fuel prices that were all well above infla­tion rates,” she con­tin­ued.

Wilkinson explained the rise in fuel prices also affected the run­ning costs of standby elec­tric­ity gen­er­a­tors. She said there is resis­tance from big retail­ers and con­sumers to price increases, and prof­itabil­ity is an issue.

“However, the hot, dry weather in Europe and the recent out­look of a much smaller crop, together with asso­ci­ated logis­tics bot­tle­necks and price increases, have deter­mined that inter­na­tional olive oil prices are start­ing to increase sig­nif­i­cantly,” she said.

Wilkinson expressed opti­mism that price increases will bring relief before the end of this year. Initially, she expected her har­vest to be much smaller than last year’s record. However, she said their oil yield was good and the qual­ity pro­file excel­lent, with the com­pany earn­ing a Gold Award at the 2022 NYIOOC World Olive Oil Competition.

Hedley Manicom, the co-owner of nearby Owl’s Rest Olive and Lavender Farm, told Olive Oil Times they had a suc­cess­ful har­vest this year. ​“It was much bet­ter than last year’s, which was very poor for us,” he said.

Manicom said load shed­ding dis­rupted milling at Owl’s Rest. ​“But this was man­aged with­out major issues,” he added.

Similar to Wilkinson, Manicom said increased pro­duc­tion costs were a chal­lenge.

“The large increase in the min­i­mum wage cre­ated some prob­lems as our work­ers – mostly paid well above the min­i­mum wage – received lower increases than the work­ers that earn min­i­mum wages,” he said. ​“The other issue is the sig­nif­i­cant increases in fer­til­izer and diesel costs that the agri­cul­tural sec­tor has had to deal with.”

“With our labor laws weigh­ing strongly in favor of the employee, low pro­duc­tiv­ity lev­els, increas­ing bureau­cratic require­ments and a sharp increase in the min­i­mum wage and declin­ing infra­struc­ture for exports, I fear that we are going to see a num­ber of farms unable to shoul­der the increased input costs, with resul­tant clo­sures or changes in farm­ing meth­ods, or both,” Manicom added.

Manicom said this would lead to farm­work­ers being replaced by mech­a­niza­tion and also by ille­gal for­eign work­ers, who, he said, are typ­i­cally more pro­duc­tive than the local work­force.

Further inland, in the Klein Karoo region, Ryan Westcott, the sales man­ager for De Rustica Olive Oil Estate, said they were affected to a cer­tain extent by load shed­ding. ​“But our fac­tory is equipped to func­tion regard­less,” he added.

“The pre­vi­ous year’s vol­ume was con­sid­er­ably greater than this year’s,” Westcott said. ​“While our extra vir­gin olive oil yield was incred­i­bly low, the qual­ity of what we have pro­duced has been excep­tional.”