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

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TABLE OF CONTENT

1. DESCRIPTION OF THE INDUSTRY 2

1.1 Production areas 3

1.2 Production trends 4

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1.3 Production vs. Consumption of cucumber

2. MARKET STRUCTURE 2.1 Domestic markets and prices

2.2 South Africa’s Cucumber Exports

2.3 Share analysis

2.4 Cucumber imports by South Africa

2.5 Cucumber processing

2.6 Cucumber value chain tree explaining its uses

2.7 Market value chain for cucumber

3. MARKET INTELLIGENCE 3.1 Tariffs

3.2 Non tariff barriers

4. GENERAL DISTRIBUTION CHANNELS 5. LOGISTICAL ISSUES

5.1 Mode of transport

5.2 Cold chain management

5.3 Packaging

5.4 Storage and Conditioning for cucumber

6. Competitiveness of South African cucumber exports ACKNOWLEDGEMENTS

1. DESCRIPTION OF THE INDUSTRY

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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

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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.

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1.2 Production trends

Figure 2: Total production of cucumber

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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.

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Figure 3: Production vs Consumption

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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

Markets (tons) Exports (tons) Processing (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

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Figure 4: Cucumber sold at major fresh produce markets

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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.

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Figure 5: South Africa cucumber export destinations in 2009

Other 1%

Ship stores and bunkers

64%

DRC3%

Mozambique12%

Angola9%

Zimbabwe5%

Zambia1%

Saint Helena1%

Nigeria2%

Gabon1%

Congo1%

Source ITC Trade Map

Table 2: South Africa cucumber exports in 2009

Importers

Exported value 2009, USD thousand

Share in South Africa's exports, %

Exported quantity 2009 (tons)

Unit value, (USD/unit

Exported growth in value between 2005-2009, %, p.a.

Exported growth in quantity between 2005-2009, %, p.a.

Exported growth in value between 2008-2009, %, 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.

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Figure 6: South African cucumber export

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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.

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

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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

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

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

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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

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

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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

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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

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

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.

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Figure 10 : Value of cucumber exports by Western Cape

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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

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

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 cucumber exports by Gauteng Province

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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

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

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.

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Figure 12 :Value of cucumber exports by KwaZulu-Natal Province

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Uthungulu 0 4487 1970 0 5376 139 5 0 0 0

EThekw ini 0 0 309 23215 200 546875 299190 1270541 69958 1564272

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

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

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Ehlanzeni District 0 0 0 0 0 0 623 0 0 31980

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

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

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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 Provinces

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Western Cape 28.99 56.04 49.50 64.15 22.78 10.79 61.88 20.62 85.01 79.84Kwazulu-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 13.08Mpumalanga 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 District

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

City of Cape Town 100 100 100 100 100 100 100 100 100 99.97Eden 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 District

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

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

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Table 6: Share of district exports to the total KwaZulu-Natal provincial cucumber exports (%) Year District

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

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 Districts

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

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.

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Figure 14: Value of cucumber imports by South Africa

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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

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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

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Source: Quantec Research

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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

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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

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

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.

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2.6 Cucumber value chain tree explaining its uses

Cream

Cucumber salad

Cucumber Essential oil

Fresh Cucumber

Cucumber juice

Perfume

Glycerin

Soap

Lotion

Cream

Canning

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2.7 Market value chain for cucumber

Input Suppliers Farmers/Producers

Harvesting

Imports

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

Consumers

Quality grade standards and packaging

Exports

Cleaning/Handling

Storage, transportation and distribution

Processors: Canning

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).

3. MARKET INTELLIGENCE

3.1 Tariffs Table 10: Tariffs applied by various exports markets for cucumber originating from South Africa.

Applied tariff

Estimated total ad valorem equivalent tariff

Applied tariff

Estimated total ad valorem equivalent tariff

Country Product Description (H070700)

Trade Regime description 2009 2010

Angola Cucumber and gherkins fresh or chilled

MFN duties Applied 15.00% 15.00% 15.00% 15.00%

Austria Cucumber fresh or chilled

Preferential tariff for South Africa

2.70% 2.70% 0.00% 0.00%

Belgium Cucumber fresh or chilled

Preferential tariff for South Africa

2.70% 2.70% 0.00% 0.00%

Canada Cucumber and gherkins fresh or chilled

MFN duties Applied 6.00% 6.00% 6.00% 6.00%

China Cucumber and gherkins fresh or chilled

MFN duties Applied 13.00% 13.00% 13.00% 13.00%

Congo Cucumber and gherkins fresh or chilled

MFN duties Applied 30.00% 30.00% 30.00% 30.00%

Denmark Cucumber fresh or chilled

Preferential tariff for South Africa

2.70% 2.70% 0.00% 0.00%

Finland Cucumber fresh or chilled

Preferential tariff for South Africa

2.70% 2.70% 0.00% 0.00%

France Cucumber fresh or chilled

Preferential tariff for South Africa

2.70% 2.70% 0.00% 0.00%

Gabon Cucumber fresh or chilled

MFN duties Applied 30.00% 30.00% 30.00% 30.00%

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Applied tariff

Estimated total ad valorem equivalent tariff

Applied tariff

Estimated total ad valorem equivalent tariff Product Description Trade Regime

Country (H070700) description 2009 2010 Germany Cucumber fresh or

chilled Preferential tariff for South Africa

2.70% 2.70% 0.00% 0.00%

Mauritius Cucumber fresh or chilled

MFN duties Applied 0.00% 0.00% 0.00% 0.00%

Mozambique Cucumber and gherkins fresh or chilled

Preferential tariff for South Africa

15.00% 15.00% 15.00% 15.00%

Netherlands Cucumber fresh or chilled

Preferential tariff for South Africa

2.70% 2.70% 0.00% 0.00%

Nigeria Cucumber fresh or chilled

MFN duties Applied 20.00% 20.00% 20.00% 20.00%

Norway Cucumber and gherkins fresh or chilled: From 10 March to 31 October

MFN duties Applied $1130.04/ton

69.60% $1194.04/ton

73.57%

Poland Cucumber fresh or chilled

Preferential tariff for South Africa

2.70% 2.70% 0.00% 0.00%

Russian Federation

Cucumber and gherkins fresh or chilled

General tariff (MFN)

$111.83 /ton

23.52 $111.83 /ton

23.52

Switzerland Cucumber and gherkins fresh or chilled

MFN duties Applied $87.30/ ton

5.74% $87.30/ ton

5.74%

United Kingdom

Cucumber fresh or chilled

Preferential tariff for South Africa

2.70% 2.70% 0.00% 0.00%

United States of America

Cucumber and gherkins fresh or chilled

MFN duties Applied $42.00 /ton

3.85% $42.00/ ton

3.85%

Zimbabwe Cucumber and gherkins fresh or chilled

MFN duties Applied 40.00% 40.00% 40.00% 40.00%

Source: Market Access Map

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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.

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.

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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

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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.

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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).

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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.

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Figure 17

Source: ITC Trade Map

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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.

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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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