On Thursday, we featured a story on the climax of an avocado export deal to China that South Africa had chased for years. In follow up, our team has picked up the first lead on this uptick development, from the South Africa Avocado Growers Association (SAAGA).
According to SAAGA’s CEO Mr. Derek Donkin, South Africa will have to wait a few weeks or more to process the export stipulations of the new agreement.
“At this stage, it is not certain when the first shipments of South African avocados will reach China.” He commented. “It may take a few weeks, even months.”
On August 22, The Minister of Agriculture, Land Reform and Rural Development Thoko Didiza inked the deal on the occasion of China’s President Xi Jinping’s Pretoria visit.
Following this news, the South African Parliament applauded the deal as a BRICS breakthrough. BRICS is a grouping of five large economies including Brazil, India, Russia, South Africa and China.
BRICS is currently after denominational trade that is preferential to the respective members’ national currencies over the US dollar.
China accounts for two-thirds of the $300-billion market value of all BRICS countries’ trade. Thus it holds sway over currency and trade decisions.
Perhaps this is why, among other ratification procedures, it may take some time for South Africa’s avocados to reach China.
“It may take a few weeks, even months, to ensure all parties involved comply with the requirements of the protocol that was signed earlier this week,” concludes Mr. Donkin.
According to SAAGA, South Africa has been averaging 139,400 metric tons of avocado production in the past three years. The country exports 45% of this output to Europe and the Middle-East.
The process towards the agreement with China gained momentum in April, 2023. Chinese officials toured and assessed avocado packing facilities in South Africa at the time.
With this concession, South Africa becomes the other major African country to get a nod into the growing Chinese market. One of the first African countries to gain access into the Chinese avocado market was Kenya in 2020.
When South African exports to China begin, analysts will be keen on the export prices. Will South Africa retain the same prices as those for shipments to Europe?
South Africa charged $2.09 per kg of exported avocados in 2021, which dropped to $1.88 in 2022.