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LETTUCE VALUE CHAIN PROFILE

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LETTUCE VALUE CHAIN PROFILE Powered By Docstoc
					A PROFILE OF THE SOUTH AFRICAN
CUCUMBER MARKET VALUE CHAIN
                 2010


           Directorate Marketing
             Private Bag X 15
                 ARCADIA
                   0007
           Tel: 012 319 8455/6
            Fax: 012 319 8131
          Email: DM@daff.gov.za
             www.daff.gov.za




                                   1
  TABLE OF CONTENT

     1. DESCRIPTION OF THE INDUSTRY                          2
      1.1 Production areas                                   3
      1.2 Production trends                                  4
      1.3 Production vs. Consumption of cucumber             4
     2. MARKET STRUCTURE                                     5
      2.1 Domestic markets and prices                        5
      2.2 South Africa’s Cucumber Exports                    6
      2.3 Share analysis                                    12
      2.4 Cucumber imports by South Africa                  14
      2.5 Cucumber processing                               16
      2.6 Cucumber value chain tree explaining its uses     17
      2.7 Market value chain for cucumber                   18
     3. MARKET INTELLIGENCE                                 19
      3.1 Tariffs                                           19
      3.2 Non tariff barriers                               22
     4. GENERAL DISTRIBUTION CHANNELS                       24
     5. LOGISTICAL ISSUES                                   25
      5.1 Mode of transport                                 25
      5.2 Cold chain management                             25
      5.3 Packaging                                         25
      5.4 Storage and Conditioning for cucumber             26
     6. Competitiveness of South African cucumber exports   26
     ACKNOWLEDGEMENTS                                       29




1. DESCRIPTION OF THE INDUSTRY



                                                             2
The cucumber (Cucumis sativus) is a widely cultivated plant in the gourd family
Cucurbitaceae, Cucumbers originated in India between the Bay of Bengal and the
Himalayas. They have been in cultivation for some 3,000 years, maybe being one of our
oldest crops. China is world’s number one producer of cucumber. Though cucumber
technically is a fruit, cucumbers are widely considered vegetables. Much like tomatoes and
squash, however, their sour-bitter flavor contributes to cucumbers being perceived, prepared
and eaten as vegetables and there is no conflict in classifying cucumber as both a fruit and a
vegetable. Cucumbers are high in potassium and fiber with moderate amounts of Vitamins
A and C, as well as folic acid, phosphorous, and magnesium. Although they can be cooked,
cucumbers are most often eaten raw in salads, in cold soups and in cucumber based sauces.

                                       Figure 1: Gross value of cucumber production

                 120000000

                 100000000
  Value (Rand)




                 80000000

                 60000000

                 40000000

                 20000000

                         0

                                  00        01        02        03        04         05        06        07        08        09
                             20        20        20        20        20         20        20        20        20        20
                                                                               Years

 Source: Agricultural Statistics

 Figure 1 above illustrates the contribution of the cucumber industry to the gross value of
 agricultural production over 10 years. The cucumber industry contribution has increased
 steadily from 2001 to 2003. There was a slight decrease in gross value in 2004 due to
 decline in prices received by the producers in the same year. From 2005, the gross value
 has increased steadily reaching the peak in 2009 production season. High gross value in
 2009 can be attributed to high production volumes which occurred while the prices were
 still favorable for producers.

 1.1 Production areas

 Cucumbers are produced in almost all the provinces of South Africa. However the
 cucumber production is more concentrated in Western Cape, Eastern Cape, Free State
 and Kwazulu Natal Provinces. China, Russia, Japan, Greece and Netherlands are top
 countries in cucumber production.




                                                                                                                                  3
1.2 Production trends

                                Figure 2: Total production of cucumber
         25000

         20000

         15000
  Tons




         10000

          5000

             0
                    0       1       2      3      4       5      6      7      8      9
                 200    20 0     200    200    200     200    200    200    200    200
                                                      Year

Source: Agricultural Statistics

Figure 2 above illustrates the production volumes of cucumber over the past ten years. The
production has been fluctuating for the past ten years and the lowest volumes were
recorded in 2000 production season. In 2005 the production volume has increase by 6%
compared to the previous year. In 2006, the production volume decreased by 9%
compared to 2005. The production increased steadily from 2007 reaching a peak in 2009.
In 2009, the production increased by 13% compared to 2008 production season. Highest
production volumes can be attributed to increase consumer demand and favorable climatic
conditions.

1.3 Production vs. Consumption of cucumber

Figure 3 below depicts local consumption of cucumber compared to the production over the
period of 10 years. The figure indicates that the production of cucumber has been fairly
higher compared to the consumption nationally over the decade. This indicates that in
terms of cucumber production South Africa is self sufficient and the surplus is exported.
South African average cucumber consumption is approximately 14 027 tons per annum. In
2009 the consumption increased by 22% compared to the previous year. This can be
attributed to the increase in production volume in the same year.




                                                                                          4
                                         Figure 3: Production vs Consumption
         25000

         20000

         15000
  Tons




         10000

          5000

              0

                       00           01        02        03        04         05         06        07        08          09
                  20           20        20        20        20         20         20        20        20          20
                                                                       Year
                                                    Production (Tons)    Consumption (Tons)


Source: Agricultural Statistics

2. MARKET STRUCTURE

There is no regulation or restriction in the marketing of cucumber. The prices of cucumber
are determined by market forces of demand and supply. The industry uses fresh produce
market, restaurants, processors, wholesalers and retailers as channels of marketing.
Cucumbers are also exported to other countries through export agents and marketing
companies. South Africa also imports cucumbers from other countries. Table 1 below
indicates that 71% of cucumbers produced were marketed through fresh produce markets.
The remaining 29% is for cucumbers that were exported and cucumber that were
processed. In 2009, there was a significant decrease in exports despite high production
volumes.

2.1 Domestic markets and prices

Table 1: Cucumber sold through different market channels (In tons)
 Years                      National Fresh Produce                Exports (tons)             Processing (tons)
                            Markets (tons)
 2000                                   11899                                 89                            560
 2001                                   12157                                 83                            1354
 2002                                   16272                                175                            1649
 2003                                   12355                                 69                            2072
 2004                                   12709                                 79                            2380
 2005                                   12651                                124                            3307
 2006                                   12995                                164                            1438
 2007                                   13797                                166                            2216
 2008                                   14349                                227                            2090
 2009                                   13996                                215                            1096
         Source: Agricultural Statistics


                                                                                                                             5
                        Figure 4: Cucumber sold at major fresh produce markets

         16000                                                                           7000
         14000                                                                           6000
         12000                                                                           5000




                                                                                                Rand/ton
         10000
  Tons




                                                                                         4000
          8000
                                                                                         3000
          6000
          4000                                                                           2000
          2000                                                                           1000
             0                                                                           0
                    0      1      2      3       4       5      6      7      8      9
                 200    200    200    200     200     200    200    200    200    200
                                                     Years
                                             Volume(tons)    Rand/ton

 Source: Agricultural Statistics

Figure 4 above illustrates the sales of cucumber in the fresh produce markets over a period
of 10 years. From 2001 to 2002, Cucumber volumes sold in the fresh produce market has
increased. There was a slight decrease in production in 2003 and the production increase
again in 2004. In 2005, the price dropped by 10% due to increase volume in across the
markets. The highest price of cucumber was recorded in 2009 due to decline in cucumber
volumes supplied across the market.


2.2 South Africa’s Cucumber Exports

South Africa's cucumber exports represent 0.02% of world exports for this product and its
ranking in world cucumber exports is 45.This is an improvement as in 2008 South Africa
cucumber exports was ranked 54 in world cucumber exports. A large percentage of South
African cucumber exports were left in ship stores and bunkers. Cucumbers were also
exported to Mozambique, Angola, Zimbabwe, Democratic Republic of the Congo, Nigeria,
Gabon and Saint Helena. Globally Spain, Netherlands, Mexico, Canada, Jordan, Turkey,
United States of America, Iran and Greece are major cucumber exporters. Figure 5 below
illustrates South African cucumber export destinations in 2009.




                                                                                                           6
               Figure 5: South Africa cucumber export de stinations in 2009

                                        Saint Helena Congo
                                             1%       1%           Zambia
                                    Gabon
                                                                     1%
                         Nigeria      1%
                           2%                                       Other 1%
                          DRC
                          3%

                         Zimbabwe
                            5%
                             Angola
                              9%                                        Ship stores and
                                                                            bunkers
                                          Mozambique                         64%
                                             12%

Source ITC Trade Map


 Table 2: South Africa cucumber exports in 2009
                                                                                              Exported
                                                                    Exported     Exported     growth in
                             Share in                               growth in    growth in    value
               Exported      South          Exported                value        quantity     between
               value 2009,   Africa's       quantity   Unit         between      between      2008-
               USD           exports,       2009       value,       2005-2009,   2005-2009,   2009, %,
Importers      thousand      %              (tons)     (USD/unit    %, p.a.      %, p.a.      p.a.
World              316             100         215       1470           22           15          25
Ship stores
and bunkers        206             65.2        106       1943           25           13          20
Mozambique         38              12          63        603            42          43           19
Angola             28              8.9         17        1647            2           -3          65
Zimbabwe           17              5.4         12        1417                       111         750
DRC                 9              2.8          6        1500           18           21          13
Nigeria             5              1.6          3        1667
Gabon               3              0.9          2        1500           8            19
Saint Helena        3              0.9          1        3000           34           0           50
Congo               2              0.6          1        2000
Zambia              2              0.6          1        2000           28           -2          -33
    Source ITC Trade Map

Table 2 indicates that during 2009, 65.2% of South African cucumber exports were left in
ship stores and bunkers. Mozambique commanded 12% share, followed by Angola with
8.9% and Zimbabwe with 5.4% share of South Africa cucumber exports. South African
cucumber exports to Zambia have decreased by 18% and 5% in value and quantity
respectively between 2005-2009 period. South African cucumber exports to Angola have
decrease in quantity during the period under review.


                                                                                                          7
                           Figure 6: South African cucumber export
          250                                                                      3000000

          200                                                                      2500000
                                                                                   2000000




                                                                                             Rands
          150
   Tons




                                                                                   1500000
          100
                                                                                   1000000
           50                                                                      500000
            0                                                                      0




                                                                        08
                00




                                                                              09
                      01




                                    03

                                           04

                                                  05

                                                           06

                                                                  07
                            02




                                                 20




                                                                       20

                                                                             20
            20

                     20

                           20

                                  20

                                         20




                                                         20

                                                                20
                                           Years
                                 Volume (Tons)        Value (Rands)

 Source: Agricultural Statistics

Figure 6 above, illustrates cucumber exports from South Africa over the past ten years. The
volume of cucumber exports has been fluctuating over the years. In 2002, cucumber
exports increased by 109% compared to 2001.The increase in export can be attributed to
increase in production in the same year. There was a significant decline in exports from
2003 to 2005. Cucumber exports increased steadily from 2006 reaching a peak in 2008. In
2009 there was a 5% decrease in lettuce exports despite high production volumes in the
same year. Generally it was less profitable to export cucumber since lower values were
recorded for high volume exported.




                                                                                                     8
                                          Figure 7 : South Africa's Cucumber exports to the regions
                      250000

                      200000
     Volume (Kg)



                      150000

                      100000

                      50000

                               0
      Years                             2000        2001        2002      2003      2004       2005      2006     2007      2008     2009

               Africa                  235940       81669      61555      66649     69047      52333     88069    73710    107618   108074
               Americas                 397          71         31         0         15         89        75       532      139       30
               Asia                     1003        227        109784      0          0         159       15       417      6238     305
               Europe                    0          289         2397       84        841        500        0       410      440       9
               Oceania                  192          0          664        0         0           0         2        0        0        0
               Not allocated             0          611         417       2077      8884       71407     75725    91124    112568   106320


     Source: Quantec Research

Figure 7 above, illustrates the South Africa cucumber exports to the regions. South Africa
exported high quantities of cucumber to African region. From 2005 to 2009 high quantities
of lettuce exports was not allocated to any region. In 2002, South Africa exported high
quantities of cucumber to Asian region. High exports to African countries can be attributed
to low export cost to the neighboring countries and high perishability nature of the product.
Cucumber exports to Americas and Europe regions were very low.

                                                Figure 8: Value of cucumber exports to the regions
                       2000000
       Value (rand)




                       1500000


                       1000000


                         500000


                                   0
                                          2000        2001       2002       2003     2004       2005      2006     2007     2008     2009
     Years
                      Africa             547253      376192      324068    398209    314943    332179    446753   565563   589716   921469
                      Americas               1729        252      318           0         94     472       896     5921     2701     469
                      Asia                83272       1064       167661         0         0     4470       267    17599     63239    3034
                      Europe                   0         782     35452      472      15036      4297       9       3804     5600      85
                      Oceania                514          0      14037          0         0          0     972      0         0       0
                      Not allocated            0      4022        1970     21478     59439     542601    750605   1331542 1407425 1735253




                                                                                                                                             9
Source: Quantec Research

Figure 8 above illustrate value of cucumber exports earned from the regions. It is less
profitable to export to African countries, since high volumes were exported for less value.
Unallocated cucumber exports have a high export values.

                                            Figure 9: Value of cucumber exports by SA Provinces
                     2500000

                     2000000
    Value (Rands)




                     1500000

                     1000000

                       500000

                               0
        Years                        2000     2001     2002     2003     2004     2005     2006     2007     2008     2009

                    Western Cape     183471   214253   269044   269549   88730    95374    742197   396813 1758579 2123997
                    Kw azulu-Natal     0      4487     2279     23215     5576    547014   299195 1270541    69958    156472
                    Gauteng          449297   163572   272183   127395   295206   241631   157487   257075   240146   347861
                    Mpumalanga         0        0        0        0        0        0       623       0               31980




Source: Quantec Research
Figure 9 above, illustrates the cucumber exports by South African provinces for the past 10
years. In 2009, the highlights of cucumber exports were that of Western Cape, Gauteng
and KwaZulu-Natal. Mpumalanga province contributed to a lesser extent. The high export
values for Western Cape, Gauteng and Kwazulu Natal can be attributed to the export exit
points and the registered exporters located in the provinces. The highest export value was
recorded in 2009 from Western Cape Province. The following figures (figure10 -13) show
the value of cucumber exports from the various districts in all provinces of South Africa.




                                                                                                                               10
                                                          Figure 10 : Value of cucumber exports by Western Cape

      Value (Rands)    2500000

                       2000000

                       1500000

                       1000000

                               500000

                                        0
                                            2000           2001         2002         2003         2004       2005      2006      2007      2008    2009
     Years
      City of Cape Tow n                    183471        214253       269044        269549       88730      95374     742197    396813   1758576 2123335
      Eden                                      0            0            0            0            0          0         0         0        0       661


Source: Quantec Research

Figure10 above illustrates that cucumber exports from Western Cape Province were from
City of Cape Town district municipality. Cape Town harbor serves as an export exit point.
The highest cucumber export was recorded in 2009. Eden district municipality contributed
to export for the first time in ten year but the export value was insignificant.

                                                      Figure 11 :Value of cucumbe r e xports by Gaute ng Prov ince
                                      350000
                                      300000
                      Value (Rands)




                                      250000
                                      200000
                                      150000
                                      100000
                                      50000
                                            0
                  Years                             2000         2001         2002         2003     2004       2005      2006     2007     2008     2009

         Sedibeng                                     0            0           0            0            0         0     978        0        0       0
         Metsw eding                                  0            0           0            0       15108          0         0      0        0       0
         West Rand                                    0            0          165           0            0         0         0      0        0     56819
         Ekurhuleni                                 132364       8782         3166         2861     2805       3361     28921     5471     85100   156099
         City of Johannesburg                       316933       154789   268853       124534      277233     238270    127588   251604   155046   134943
         City of Tshw ane                             0            0           0            0           60         0         0      0        0       0


Source: Quantec Research
Figure 11 indicate that, cucumber exports from Gauteng Province are mainly from the City
of Johannesburg and Ekurhuleni district municipalities. West Rand Municipality contributed
to a lesser extent. OR Tambo International Airport serves as an export exit point for
cucumber from these municipalities. The highest export value was recorded in 2000 from
City of Johannesburg district municipality.




                                                                                                                                                            11
                                           Figure 12 :Value of cucumber exports by KwaZulu-Natal Province
                  2000000
  Value (Rands)




                  1500000

                  1000000

                   500000

                                     0
  Years                                    2000        2001        2002          2003        2004       2005       2006      2007     2008     2009

                   Uthungulu                0          4487        1970           0          5376        139         5         0        0       0
                   EThekw ini               0            0         309         23215         200        546875     299190   1270541   69958   1564272


Source: Quantec Research

Figure 12 illustrate that cucumber exports from Kwazulu Natal Province were from
Ethekwini district municipality. The high exports by Ethekwini can be attributed to Durban
Harbour that serves as export exit point. The highest cucumber export value was recorded
in 2009.

                                                Figure 13 :Value of cucumber exports by Mpumalanga Province
                                     35000
                     Value (Rands)




                                     30000
                                     25000
                                     20000
                                     15000
                                     10000
                                         5000
                                            0
                                                  2000        2001        2002        2003      2004       2005      2006     2007    2008    2009
                   Years
                   Ehlanzeni District              0           0           0            0           0          0     623       0       0      31980


Source: Quantec Research

Figure 13, shows that cucumber exports by Mpumalanga Province was recorded in from
Ehlanzeni district and high export value was recorded in 2009.

2.3 Share analysis

Table 3 below is an illustration of provincial share towards national cucumber exports.
Western Cape, Kwazulu Natal and Gauteng commanded the greatest share of South


                                                                                                                                                        12
Africa’s cucumber exports. In 2009, Western Cape commanded 79.84%, Gauteng 13.08%
and KwaZulu-Natal 5.88% share of South Africa cucumber exports. The high export shares
in Western Cape can be attributed to registered exporters and available ports based in this
province.

Table 3: Share of provincial exports to the total of RSA cucumber exports (%)
 Year              2000   2001    2002 2003 2004 2005 2006 2007 2008                          2009
 Provinces
 Western Cape      28.99 56.04 49.50 64.15 22.78 10.79 61.88 20.62 85.01                      79.84
 Kwazulu-Natal 0          1.17    0.42 5.53 1.43 61.88 24.94 66.02 3.38                       5.88
 Gauteng           71.01 42.78 50.08 30.32 75.79 27.33 13.13 13.36 11.61                      13.08
 Mpumalanga        0      0       0       0        0     0     0.05   0       0               1.20
 RSA               100    100     100     100      100   100   100    100     100             100
    Source: Calculated from Quantec Research

Table 4: Share of district exports to the total Western Cape provincial cucumber
exports (%)
 Year                  2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
 District
 City of Cape Town      100    100 100 100 100 100 100 100 100 99.97
 Eden                    0      0       0      0     0     0     0       0   0   0.03
 Western Cape           100    100 100 100 100 100 100 100 100                   100
     Source: Calculated from Quantec Research

Table 4 above indicates that City of Cape Town commanded all the share of cucumber
exports from Western Cape Province. Cape Town Harbour renders exit point of cucumber
exports.

Table 5: Share of district exports to the total Gauteng provincial cucumber exports
(%)
 Year                2000    2001    2002    2003    2004    2005    2006    2007    2008     2009
 District
 Sedibeng              0      0       0       0       0       0       0.62     0       0        0
 Metsweding            0      0       0       0      5.12      0        0      0       0        0
 West Rand             0      0      0.06      0       0       0        0      0       0      16.33
 Ekurhuleni          29.46   5.37    1.16    2.25    0.95    1.39    18.36   2.13    35.44    44.87
 City of
 Johannesburg        70.54   94.63   98.78   97.75   93.91   98.61   81.01   97.87   64.56    38.79
 City of Tshwane       0       0       0       0      0.02     0       0       0       0        0
     Source: Calculated from Quantec Research
Table 5 above, indicates that City of Johannesburg, and Ekurhuleni commanded most
share of cucumber export by Gauteng province. In 2009, City of Johannesburg,
commanded 38.79% share, Ekurhuleni has commanded 44.87% and West Rand
commanded16.33% share of cucumber exports by Gauteng province. OR Tambo
International Airport renders exit point of cucumber exports from Gauteng Province




                                                                                             13
Table 6: Share of district exports to the total KwaZulu-Natal provincial cucumber
exports (%)
 Year               2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
 District
 Uthungulu            0      100 86.44      0    96.41 0.03      0     0     0    0
 Ethekwini            0       0   13.56 100 3.59 99.97 100 100 100 100
 Kwazulu Natal        0      100    100    100    100   100     100 100 100 100
     Source: Calculated from Quantec Research

Table 6 shows that Ethekwini commanded the greatest share of cucumber exports from
Kwazulu Natal Province. Uthungula district has commanded the greatest share of
cucumber exports in 2002 and 2004.The greatest share by Ethekwini can be attributed to
Durban Harbour which renders export exit point.

Table 7: Share of district exports to the total Mpumalanga provincial cucumber
exports (%)
 Year            2000 2001 2002 2003      2004 2005 2006    2007 2008 2009
 Districts
 Ehlanzeni
 District          0     0     0      0     0    0    100     0   0     100
 Mpumalanga        0     0     0      0     0    0    100     0   0     100
Source: Calculated from Quantec Research

Table 7 shows that Ehlanzeni commanded 100% share of cucumber exports from
Mpumalanga province in 2006 and 2009.


2.4 Cucumber imports by South Africa

South Africa cucumber imports represent 0% of world imports and the imports are not
ranked. In 2009, there was no cucumber imports recorded for South Africa. Globally,
Germany, United States of America, United Kingdom, Russian Federation, Netherlands,
France and Czech Republic are top cucumber importers.




                                                                                   14
                              Figure 14: Value of cucumber imports by South Africa
                  140                                                                                                 250000
                  120
                                                                                                                      200000
                  100
                   80                                                                                                 150000




                                                                                                                                  Rands
       Tons




                       60                                                                                             100000
                       40
                                                                                                                      50000
                       20
                        0                                                                                             0
                             00

                                      01

                                             02

                                                    03

                                                           04

                                                                      05

                                                                                06

                                                                                         07

                                                                                                    08

                                                                                                          09
                         20

                                  20

                                           20

                                                   20

                                                          20

                                                                    20

                                                                              20

                                                                                     20

                                                                                               20

                                                                                                         20
                                                                    Years
                                                   Volume (Tons)                Value (Rands)

Source: Quantec Research

Figure 14 above indicates that cucumber imports were relatively unstable for the past ten
years. In 2004 and 2005 it was relatively expensive to import cucumber since less volume
were imported at higher values. The highest import volumes were recorded in 2006 which
can be attributed to the slight decline in production in the same year and it was also
cheaper to import. In 2008, there was a significant decline in imports and in 2009 there
were no cucumber imports by South Africa. This is attributed to increase in production
volumes in the same years.

                                  Figure 15 : South Africa cucumber imports from the regions
                140000
                120000
  Volume (Kg)




                100000
                 80000
                 60000
                 40000
                 20000
                         0
       Years                  2000         2001    2002    2003          2004      2005       2006       2007    2008     2009

                Africa            0         81      0          1       34225       19962      120801     49639    0        0
                Americas          0         0       0          0          0          0          8         0       0        0
                Asia              3        33205    0          42         1          0          0         0       0        0
                Europe            0         0       0          20         0          0        3144        0      3500      0


Source: Quantec Research



                                                                                                                                 15
Figure 15, indicates that in 2001 South Africa imported high quantities of cucumber from
Asian region (China and Japan). From 2004 to 2007 South Africa imported high volumes of
cucumber from African region (Zimbabwe and Zambia). In 2005 and 2008 considerable
cucumber imports were from European region (Germany). South Africa apply 0% tariff for
cucumber imports from Zambia and Zimbabwe.

                                        Figure 16 : Value of cucumber imports from regions
                    250000
     Value (Rand)




                    200000

                    150000

                    100000

                     50000

                             0
     Years                       2000    2001   2002   2003    2004    2005     2006     2007    2008    2009

                    Africa        0      1408    0     42     134662   184167   212874   81230    0       0
                    Americas      0       0      0      0       0        0       170       0       0      0
                    Asia          64    69655   118    580     4120      0        0       0       0       0
                    Europe        0       0      0     1780     0        0      12788     0      23857    0


Source: Quantec Research

Figure 16 above indicates the value of cucumber imports into South Africa from regions.
From 2004 to 2007 South Africa imported cucumber from African countries and this is
indicated by high import values recorded in the same years. From Asia the highest
cucumber import value was recorded in 2001. From Europe, the highest import value was
recorded in 2008. The import value for Americas was insignificant.


2.5 Cucumber processing

Cucumber can be cooked, but they are most often eaten raw in salads, in cold soups and
cucumber based sauces. Cucumbers are also the vegetable of choice for pickles. Pickles
are made by placing cucumber in a seasoned brine or vinegar solution. Cucumber juice is
in great demand in various forms as a cooling and beautifying agent for the skin. Cucumber
juice is also used in the preparation of cosmetics like soap, glycerin, creams and perfumes.
Cucumber can be cooked, but they are most often eaten raw in salads, in cold soups and
cucumber based sauces. Cucumbers are also the vegetable of choice for pickles. Pickles
are made by placing cucumber in a seasoned brine or vinegar solution. Cucumber juice is
in great demand in various forms as a cooling and beautifying agent for the skin. Cucumber
juice is also used in the preparation of cosmetics like soap, glycerin, creams and perfumes.


                                                                                                                16
    2.6 Cucumber value chain tree explaining its uses




                                  Cucumber Essential oil


        Cucumber salad



                                    Fresh Cucumber
                                                                  Canning

          Lotion


                                       Cucumber juice
           Soap



         Glycerin

Cream                            Cream                  Perfume




                                                                            17
2.7 Market value chain for cucumber

   Input Suppliers             Farmers/Producers




                                   Harvesting



                                Cleaning/Handling




      Imports                Quality grade standards
                             and packaging




                             Storage, transportation
                             and distribution



                                                                   Exports
   Fresh produce Markets,
   Wholesalers,
   Supermarkets, Retailers
   and Informal markets


                                                           Processors: Canning

          Consumers


The cucumber value chain can be broken down into the following levels: the producer of
cucumber (farmers), pack house owner (who cleans, grade and quality control); cold
storage and transport facilities (store and transport cucumber on behalf of the farmers);
traders in cucumber (market and sell cucumber); processors (add value to cucumber and
process cucumber to other usable forms) and end users (consumers).


                                                                                      18
    3. MARKET INTELLIGENCE

    3.1 Tariffs

Table 10: Tariffs applied by various exports markets for cucumber originating from South Africa.
                                                                              Estimated            Estimated
                                                                              total ad             total ad
                                                                              valorem              valorem
                                                                   Applied    equivalent Applied   equivalent
                  Product Description      Trade Regime            tariff     tariff     tariff    tariff
 Country          (H070700)                description                     2009                    2010
 Angola           Cucumber and gherkins MFN duties Applied          15.00%      15.00%    15.00%      15.00%
                  fresh or chilled
 Austria          Cucumber fresh or        Preferential tariff for   2.70%       2.70%     0.00%      0.00%
                  chilled                  South Africa
 Belgium          Cucumber fresh or        Preferential tariff for   2.70%       2.70%     0.00%      0.00%
                  chilled                  South Africa
 Canada           Cucumber and gherkins MFN duties Applied           6.00%       6.00%     6.00%      6.00%
                  fresh or chilled
 China            Cucumber and gherkins MFN duties Applied          13.00%      13.00%    13.00%     13.00%
                  fresh or chilled
 Congo            Cucumber and gherkins MFN duties Applied          30.00%      30.00%    30.00%     30.00%
                  fresh or chilled
 Denmark          Cucumber fresh or        Preferential tariff for   2.70%       2.70%     0.00%      0.00%
                  chilled                  South Africa
 Finland          Cucumber fresh or        Preferential tariff for   2.70%       2.70%     0.00%      0.00%
                  chilled                  South Africa
 France           Cucumber fresh or        Preferential tariff for   2.70%       2.70%     0.00%      0.00%
                  chilled                  South Africa
 Gabon            Cucumber fresh or        MFN duties Applied       30.00%      30.00%    30.00%     30.00%
                  chilled


                                                                                                                19
                                                                               Estimated               Estimated
                                                                               total ad                total ad
                                                                               valorem                 valorem
                                                                    Applied    equivalent   Applied    equivalent
                Product Description         Trade Regime            tariff     tariff       tariff     tariff
Country         (H070700)                   description                     2009                       2010
Germany         Cucumber fresh or           Preferential tariff for   2.70%       2.70%      0.00%         0.00%
                chilled                     South Africa
 Mauritius      Cucumber fresh or           MFN duties Applied        0.00%       0.00%      0.00%        0.00%
                chilled
 Mozambique     Cucumber and gherkins        Preferential tariff      15.00%     15.00%     15.00%       15.00%
                fresh or chilled            for South Africa
 Netherlands    Cucumber fresh or           Preferential tariff for    2.70%     2.70%       0.00%        0.00%
                chilled                     South Africa
 Nigeria        Cucumber fresh or           MFN duties Applied        20.00%     20.00%     20.00%       20.00%
                chilled
 Norway         Cucumber and gherkins       MFN duties Applied        $1130.04   69.60%     $1194.04     73.57%
                fresh or chilled: From 10                               /ton                  /ton
                March to 31 October
 Poland         Cucumber fresh or           Preferential tariff for    2.70%     2.70%       0.00%        0.00%
                chilled                     South Africa
 Russian        Cucumber and gherkins        General tariff           $111.83    23.52      $111.83       23.52
 Federation     fresh or chilled            (MFN)                       /ton                  /ton
 Switzerland    Cucumber and gherkins       MFN duties Applied        $87.30/    5.74%      $87.30/       5.74%
                fresh or chilled                                         ton                   ton
 United         Cucumber fresh or           Preferential tariff for    2.70%     2.70%       0.00%        0.00%
 Kingdom        chilled                     South Africa
 United States  Cucumber and gherkins       MFN duties Applied $42.00            3.85%      $42.00/       3.85%
 of America     fresh or chilled                                    /ton                      ton
 Zimbabwe       Cucumber and gherkins       MFN duties Applied        40.00%     40.00%     40.00%       40.00%
                fresh or chilled
Source: Market Access Map


                                                                                                                    20
The lucrative exports markets for cucumber from South Africa are Austria, Belgium, Denmark, Finland, France, Germany,
Netherlands, Poland and United Kingdom since these countries have decrease a preferential tariff from 2.70% to 0.00%
cucumber exports originating from South Africa due to EU-SA Free Trade Agreement (FTA). African markets in Angola,
Zimbabwe and Mozambique are protected by 15%, 40% and 15% tariffs respectively in spite of the existence of the SADC-
FTA. China is the largest producer of cucumber and their domestic producers are protected by 13% tariff.




                                                                                                                  21
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.

3.2.1(a) 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 2200/96. 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
1148/2001) 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.

3.2.2 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 2002/89, 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.




                                                                                             22
3.2.3 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 1935/2004. Recycling
packaging materials are also emphasized under 94/62/EC, whereby member states are
required to recycle between 50% 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 2002/89) and may need to undergo heat treatment, fumigation, etc.

3.2.4 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 8000
(SA8000) 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 successful. 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 non-
sustainable produce. To this end, both governments and private partners have created
standards (such as ISO 14001 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 209/91

3.1.5 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



                                                                                         23
imported into Europe (EC 852/2004), and the ISO 9000 management standards system
(for procedures and working methods), which is certified by the International Standards
Organization (ISO).

3.2 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.

3.3 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 60% 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.




                                                                                          24
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). For some products, in order to
reach the destination market with an acceptable degree of freshness, air transport is the
only option (asparagus, for example, is flown from Peru to the sufficient to cover the
transport costs, and collective agreements between farmers of different commodities with
different harvest periods can become particularly important.

5.2 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 10oC 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 requires an efficiently controlled
supply chain and internationally accepted business standards. At home, store lettuce in a
plastic bag in the refrigerator crisper. Iceberg lettuce should be cored, rinsed lightly and
drained thoroughly before storing. Lettuce should keep in the refrigerator from two to five
days or more.

5.3 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).




                                                                                            25
5.4 Storage and Conditioning for cucumber -The recommended storage temperature is
10° to 13°C at a relative humidity of 95%. Even under these conditions, cucumbers cannot
be expected to keep satisfactorily for more than 2 to 3 weeks. Chilling injury develops
rapidly at temperatures below 10°C, and above 13°C ripening and yellowing occurs. Once
pulled the cucumbers should be cooled as quickly as possible. Humidity should be kept
high to prevent shriveling. Cucumbers for fresh market can be waxed or shrink-wrapped in
polyethylene film to minimize water loss. Holding cucumbers at higher temperatures will
cause a rapid loss of green color. Loss of color will also occur more rapidly if held in the
same room with apples, tomatoes or other ethylene producing crops.
Pickling cucumbers are normally stored for long periods of time in brine solution. If,
however, fresh pickles need to be stored or held for a short period of time before being
processed or placed in brine tanks, the cucumbers should be cooled as rapidly as possible
to 10°C. Hydro cooling has been used successfully to remove field heat.


6. Competitiveness of South African cucumber exports

Figure 17 below shows that South Africa cucumber exports to Democratic Republic of
Congo and Mozambique are growing faster than the world cucumber imports into these
countries. This is regarded as a gain in dynamic market. South African cucumber exports
are growing slower than the world cucumber imports into Saint Helena, Zambia, Gabon and
Angola. South Africa has lost market share in Saint Helena, Zambia, Gabon and Angola.
These markets are dynamic markets and South Africa’s performance is regarded as
underachievement. South Africa cucumber exports to Mauritius are declining faster than
the world imports into this country. South Africa cucumber exports Malawi are declining
while world imports are growing into this country.




                                                                                         26
Figure 17




Source: ITC Trade Map



                        27
Figure 18




Source: ITC Trade Map

Figure 18 above, illustrate that the prospective exports markets for cucumber from South
Africa are mainly in Germany, Czech Republic, Netherlands and France. Other small
exports market exists in Canada, France, Mozambique and Angola. However if South
Africa is to diversify its cucumber exports the most lucrative market exist in Zambia and
Saint Helena which has increased its cucumber imports from the world by 45% and 34%
respectively between 2005 and 2009 period.




                                                                                      28
ACKNOWLEDGEMENTS

The following organizations are acknowledged

National Department of Agriculture, Forestry and Fisheries
Directorate: Agricultural Statistics
Private Bag X246
Pretoria
0001
Tel (012) 930 1134
Fax (012) 319 8031
www.daff.gov.za

Trade and Industrial Policy Strategies (TIPS)
P.O. Box 11214
Hatfield
0028
Tel (012) 431 7900
Fax (012) 431 7910
 www.tips.org.za

Quantec Research
www.quantec.co.za

Market Access Map
www.macmap.org

Economic Research Service/USDA
www.wikipedia.co.za

Disclaimer: this document and its contents have been compiled by the Department of
Agriculture, Forestry and Fisheries for the purpose of detailing the cucumber industry.
Anyone who uses this information does so at his/her own risk. The views expresses in this
document are those of the Department of Agriculture, Forestry and Fisheries with regard to
agricultural industry, unless otherwise stated. The Department of Agriculture, Forestry and
Fisheries, accepts no liability that can be incurred resulting from the use of this information




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