Absa AgriTrends 2022

• Inflation and the cost-of-living crisis in the Eurozone and the UK are likely to affect the purchasing power of these consumers which could negatively affect demand. • As a result, price growth is likely to be more subdued compared to the 2017-2022 period.

Average FOB Table Grape Prices (2019-2021) and Price Forecasts (2022- 2025)

• In terms of supply, although

shipping disruptions and costs are reducing, higher shipping costs, compared to pre-pandemic rates, increase risks. The 2021/2022 season has shown the importance of shipping high-quality products. The increased cost and risk associated with shipping could affect volumes exported negatively (from SA and other exporters). This could provide some price support during the next season.

Table 4.2

Table Grapes (USD/4.5 kg)

2018/19 2019/20 2020/21 2021/22

7.52 7.30 7.21 8.25

• Considering these factors, we expect modest price growth of around 2.5% during the coming season.

• Subdued price growth and

persistently elevated input costs are likely to weigh on margins over the coming years. This is expected to cause consolidation in South Africa and other Southern Hemisphere industries which would create an upward price scope for the industries over the medium term. As a result, our forecasts for the last two seasons in the forecast period increase by 3% per annum.

8.45 8.70 8.95 Forecasts

2022/23 2023/24 2024/25

Source: Absa AgriBusiness, 2022

45

Made with FlippingBook interactive PDF creator