The global economy is expected to grow at 5.9% for 2021 (International Monetary Fund (IMF), October 2021) and 4.9% for 2022. This is, however, dependant on the impact of COVID-19 over the short to medium term. Recent price pressures, for the most part, reflect unusual pandemicrelated developments and transitory supply-demand mismatches. Inflation is expected to return to its pre-pandemic ranges in most countries in 2022 once these disturbances work their way through prices, though uncertainty remains high.

Risks around the global baseline are to the downside. Slower-thananticipated vaccinerollout would allow the virus to mutate even further and new variants may have a significant impact. Financial conditions could tighten rapidly, for instance, from a reassessment of the monetary policy outlook in advanced economies if inflation expectations increase more rapidly than anticipated. A double hit to emerging market and developing economies from worsening pandemic dynamics and tighter external financial conditions would severely set back their recovery and drag global growth below this outlook’s baseline.

Europe, South Africa’s major trading partner for fresh fruit, is expected to grow at 4.3% in 2022, and expected growth of 5% in 2021, recovering from a decline of nearly 6.3% in 2020 following the impact of COVID-19 on the region. It is further forecasted that emerging markets, including China, will grow at around 5.6% in 2022. Sub-Saharan Africa is set to grow at 3.8% in 2022. Advanced economies are expected to show positive growth of 5.2% for 2021 and the prospects for 2022 are also positive at 4.5%.

Whilst the South African economy remains under severe pressure, prospects for 2022 remain positive and the economy is expected to grow at a healthy 2.2%. South African inflation is currently at 4.41% for 2021 and 4.48% is estimated for 2022.

The battling economy certainly had a negative effect on South Africa’s unemployment figures for quarter 3 (Q3) of 2021 and reported a new record high of 34.9% which represents an increase in unemployment of 0.5%, up from 34.4% in quarter 2 (Q2) of 2021. The rate was the highest since the quarterly labour force survey began in 2008. According to an expanded definition of unemployment that includes those discouraged from seeking work, 46.6% of the labour force was without work in the second quarter, from 44.4% in the first quarter.

The number of unemployed people decreased by 183 000 to 7.6 million. Formal sector employment decreased by 571 000, private households employment decreased by 65 000 (5.4%), and agriculture employment decreased by 32 000 (3.8%) in quarter 3 (Q3) of 2021. Informal sector employment increased by 9 000 (0.4%).

During the 2021 State of the Nation Address, President Ramaphosa reiterated government’s commitment to economic growth that translates into job creation and structural transformation.

The following areas were highlighted by the President:

• Defeat the COVID-19 pandemic;
• Accelerate economic recovery;
• Implement economic reforms to create sustainable jobs and drive inclusive growth; and
• Fight corruption and strengthen the State.

Despite the logistical challenges and the shortage of containers within South Africa, there was good recovery in perishable products exported in containers during September. The year-to-date container volumes exported for this fiscal year was 1.5% above the budgeted volumes. The impact in the Eastern Cape was most felt with lower container volumes moving through the port. Durban and Cape Town had increased container volumes shipped in comparison to the previous year.

Good partnership and commitment resulted in 15 vessels laden with citrus fruit to the United States of America (USA) from the port of Cape Town. The final USA vessel arrived in the USA in the third week of October. This year 63 046 pallets were shipped to the USA on specialised reefer vessels as compared to 48 936 pallets of the previous year which is a 29% increase in volumes. On the opposite side of the scale, shipments to Japan and China shipped on this mode of transportation were down by 11% and 28%, respectively. The year-on-year increase in total volumes shipped on specialised reefer vessels to all destinations is 16%.

The ongoing logistical challenges with the South African ports remain of huge concern. On 22 July 2021 Transnet experienced a cyber breach, security intrusion and sabotage. The hack disrupted normal processes and damaged equipment and information, culminating in the declaration of force majeure at the ports’ container terminals. The force majeure ended on 2 August 2021 and the ports systems were restored to normal.

During the past few months, the South African ports were still heavily congested and underequipped at times to deal with the volumes of containers entering the port. This resulted in massive congestion and delays within the port. The congestion in the ports had a negative impact on the entire logistical value chain that included producers, cold storages, container depots and transporters. The lack of empty refrigerated containers, congestion at cold storages, below-par productivity at Transnet terminals and inclement weather affecting port operations at times all contributed to the perfect storm. This was exacerbated by vessels by-passing South African ports resulting in the short shipment of containers and empty refrigerated containers not entering South Africa. The short shipment of containers added to the port congestion and containers had to spend additional dwell time at the port. It has been reported that some containers had missed several vessels before being shipped.

This will certainly negatively impact the shelf life of the products and could potentially result in food loss and waste. The congestion within the ports, cold storages and container depots was at such a critical level that requests were made to the citrus growers within KwaZuluNatal, Northern Province and Eastern Cape to cease packing citrus fruit to alleviate the congestion. Under these circumstances, the PPECB is not mandated to stop inspections and continues with inspections when requested. Given the situation in the ports, the following actions to mitigate the logistical challenges have been introduced:

• Stakeholder engagement regarding resource allocation and planning;
• Monitoring/oversight of operational activities;
• Weekly meetings between the PPECB/the Department of Agriculture, Land Reform and Rural Development (DALRRD)/Transnet/ Citrus Growers Association (CGA)/depots/coldstores/shipping lines to discuss process and alternate shipping opportunities;
• Cold storage stock reports are generated to monitor the degree of congestion; and
• Continuous lobbying for more specialised reefer vessels to carry South African perishable cargo.

With the increased growth in the production of agricultural produce, the urgent improvement of the situation within the ports cannot be overemphasised. The current situation puts significant pressure on the cost of exports and threatens South Africa’s reputation as a reputable and reliable supplier of perishable produce worldwide. It is therefore crucial that the situation with the ports be addressed as a matter of urgency to ensure the continued success of the sector.

The agricultural sector in South Africa has great potential to support government’s objective to stimulate economic growth and fast-track the creation of additional jobs. Following the devastating drought for three to four years, it appears that the production and export of main fruit commodities have recovered and are on the increase. With South Africa exporting roughly 60% of all fruit produced, the sector’s potential for job creation is not limited to primary production but even further down the value chain. This can be in the form of packing and cooling, marketing, various modes of transport, clearing and forwarding service providers or related professional services, among other things.

In 2021, South African perishable produce exports increased by 9.71% to 3.48 million tonnes to around 92 countries. Year-onyear growth on this front has been steady, except for 2019 when export volumes were below anticipation due to effects the drought and unfavourable market conditions.

Perishable Produce Pallets Exported over a Five-year Period (Jan-Dec)

During 2021, citrus fruit exports soared to a record high of 172 million cartons (14% above expectation) exported until December 2021. This figure is expected to increase even further as new plantings come into production. By the end of December, the year-on-year comparison on citrus volumes is as follows. Grapefruit exports increased by 17%. Soft citrus shipments firmed significantly by 24%. Lemon exports increased by 10%. Navels exported shifted marginally. Valencia exports declined by 9%.

On 18 September, the South African citrus industry suspended the exportation of Valencias and lemons from South Africa’s summer rainfall, citrus black spot (CBS) regions to the European Union (EU) due to the spike in CBS interceptions.

During 2021 deciduous fruit exports were up on expectation, with pome and stone fruit reported at 16% and 18% above expectation, respectively. The 2021 pome season is delivering better than expected volumes across all areas. Last season’s winter showed favourable rain in the majority of the production areas. Cooler weather during spring and the flowering period has resulted in a good crop. Apple and pear export volume estimates for the 2021 season are 18% and 5%, respectively, up on the previous season. Up to 31 December 2021, 58 million cartons of pome fruit were inspected, which is considerably higher than previous years. The impact of COVID-19 on global logistics and, specifically, the availability of refrigerated containers during the season remains a huge concern.

Up to 31 December 2021, 17.96 million cartons of grapes were inspected, which is 19.3% below the budgeted volumes due to the grape season that started later in the Lower Orange River, Groblersdal and Western Cape.

Due to the critical crisis at the Durban port, the industry requested that the Citrus Research Institute (CRI), the PPECB and the DALRRD investigate the possibilities of utilising the Maputo port. The focus was to be able to utilise the Maputo port for citrus exports to Europe using specialised refrigerated vessels. After consultation, the standard operating procedure (SOP) to ship South African citrus from Maputo was approved by the DALRRD. Meetings were also held between the terminal operator, DP World, and the stakeholders to make sure everyone had a common understanding of the procedures.

The unrest experienced in Gauteng and KwaZulu-Natal halted courier services, resulting in samples not being able to get to the PPECB Laboratory. Further to this, many trucks carrying export produce got stuck, which had a devastating impact on exports. From an organisational point of view, as an essential service, continued inspections were under threat as PPECB employees battled to get to work.

The 2021 avocado season commenced with the avocado industry estimating a bigger crop, but this was revised as the season proceeded. The season ended with volumes 26% down from the budgeted crop. The flooding of the Peru crop in the EU displaced South African fruit leading to some exporters holding back as this created unfavourable prices in the market. The quality of the fruit for the season was generally good, except for pockets of rejections due to some quality defects. High volumes of avocado containers were loaded in Johannesburg before being sent to the ports. The outlook for the 2022 avocado season remains positive.

The 2021 maize season was in full swing, with high volumes of bulk maize being exported via deep sea exports. Up to 31 December 2021, inspected grain volumes were 2.6 million tonnes versus a budget of 1.7 million tonnes. Approximately 1.4 million tonnes were exported from the port of Durban. During the month of September, five vessels loaded 278 000 tonnes of maize collectively for export from Durban. This is out of the ordinary as the port does not usually work with this many vessels in a month. Maize exports were expected to increase from 1.9 tonnes in 2020 to around 2.4 million tonnes in 2021.

Looking towards the new maize season, above average rainfall across parts of South Africa’s summer rainfall region resulted in some farmers having to delay the planting of crops such as maize, soya bean and sunflower. Currently, the biggest concern is that planting may not be completed early enough. Certain farmers in the region have completed planting, however fields are now drenched in water and they cannot get machinery onto the lands to perform remedial measures and any follow-up spraying. Farmers in the eastern and western parts of the summer grain production region have reported damage to grain crops following several weeks of rainfall. The situation was exacerbated by the fact that rain occurred on soil where the moisture levels had already reached maximum capacity. The Free State, Mpumalanga and North-West regions had been amongst the worst affected. The lack of prolonged periods of sunshine makes evaporation virtually impossible, causing the plants to become waterlogged.

Volumes for vegetable inspections for 2021/2022, up to 31 December 2021, were 89.6 million kilograms versus a budget of 67.8 million kilograms. However, the inspections from Cape Town substantially decreased due to some restrictions placed by the Namibian authorities on imported vegetables as they are producers of some of these vegetables. The restricted outbound international flights from Cape Town resulted in vegetable volumes produced in the Western Cape being transported to Gauteng for exports.

The South African blueberry season is gaining momentum as growers across the country move to peak production. South Africa is projected to export 25 000 tonnes, which is an increase of 63% on last year’s export volumes. The country remains on track to achieve 5 000 hectares of planting during the next four years. If this materialises, South Africa will export around 55 000 tonnes in 2025, which is 220% more than this year’s anticipated export volume.

Notwithstanding the positive growth, the impact of the recent drought remains a huge concern, especially in the parts of the Eastern Cape and northern parts of the country, which provide around 80% of the total citrus fruit exports. Should the situation not improve, it certainly will have an impact on the citrus volumes for the 2022 season. However, good rains in December 2021/January 2022 might influence the situation positively, but floods were also experienced in the Eastern Cape and KwaZulu-Natal. The situation in the Western Cape was significantly better in 2021. At the time of writing this report, dam levels were already at 77% on average at some dams, which is higher than 2020, when dam levels were reported at just above 62%. The Western Cape experienced an above normal rainfall season, with deciduous fruit volumes expected to be higher for the 2021/2022 season.

From a market perspective, the EU, excluding the United Kingdom (UK), remains the biggest importer of South African fruit, with 36% during 2021. The UK took a further 12% of South African fruit volumes. Based on reported figures, it appears that BREXIT had little effect on the volumes exported to this region to date.

With CBS still an unresolved issue in the EU, the South African citrus industry remains on high alert. To date, for 2021, South Africa recorded 43 CBS interceptions in the EU, from six in the previous year. False codling moth (FCM) became a regulated pest in the EU in 2018 and 16 interceptions were recorded in 2021 compared to 14 in 2020. In addition to this, there were two fruit fly inceptions.

Asia remains a market with huge potential for South African fruit, with 19% of fruit exported to this region during 2021, up from 18% in 2020. The importance of increased market access to this region cannot be overemphasised.

Other high-value products are also increasing significantly from a South African export perspective. One such example is macadamia and pecan nut exports, which have increased from 39 213 tonnes in 2019/2020 to 41 893 tonnes in 2020/2021. For the 2021/2022 cycle, until 31 December 2021, 43 780 tonnes of tree nuts were inspected, which is 18% above the 37 090 tonnes budgeted. It is reported that these products are becoming extremely popular and of great value to South Africa due to their high returns.

International markets have become extremely competitive, especially with new market entrants. This has provided consumers with more options in terms of the availability of fresh produce. Many new entrants can land their products at a lower price, often at a similar quality. South Africa, therefore, needs to differentiate itself by ensuring better quality and delivering to the right markets at the right time. Here quality inspection standards, speed to market (given all the trade barriers), and export information is critical.

Volumes of major fruit products have seen an upswing over the past three years, mainly due to new plantings. Citrus fruit exports alone have grown by 19% in 2021 when compared to 2020. The growth in citrus exports is expected to continue and will put additional pressure on ailing export infrastructure, systems and processes. Furthermore, emerging products like blueberries and macadamia nut volumes are expected to increase drastically as they become more popular in eastern markets.

The need for increased connectivity and mobility has significantly raised the risk of cyber attacks and data breaches over the last few years. It is, therefore, no surprise that both cyber attacks and data breaches have catapulted to amongst the top five risks globally, with South Africa having the third highest number of attacks. This immediately puts the credibility of systems under the spotlight, as data breaches may have far-reaching implications.

It is further believed that the following external factors will shape the business environment over the next three years:

• Client needs;
• Technological advancements;
• A competitive market environment;
• Policy changes;
• An increase in fruit export volumes;
• Information security;
• Change in the world order; and
• Protectionism.

 

In 2019, the PPECB Board approved a business strategy in support of the PPECB’s mediumterm objectives. The strategy is directed to move the organisation from simply being a regulator to an enabler. The strategy is further in support of the PPECB’s drive towards digitisation in order to create further efficiencies. The business strategy has been reconfirmed by the Board in 2022.

It is clear that clients expect a consistent and more professional service as a bare minimum. Most clients operate globally, making mobile interaction crucial to the success of their businesses. Over the past few years, clients have also become accustomed to individualised service offerings, online interactions, and the availability of information at their fingertips.

As a regulator of perishable produce destined for export, the PPECB has a national footprint, holds critical export information, and is internationally renowned and ideally positioned to provide its clients with additional service offerings to support the competitiveness of their respective businesses and South Africa as a whole. The PPECB will therefore remain relevant and successful as an organisation over the next three years by:

“Embracing technology to ease interaction and establishing ourselves as the industry leader for the provision of intelligent market information. We will further review our operational model to allow for digitisation and change in methodologies whilst continuing to ensure compliance. We are committed to improving the overall customer experience through innovation and continuous improvement.”

The PPECB must adapt its products, services and processes to make it more user-friendly and easier to do business. We will further introduce more products and services over and above our core services that will increase our overall value proposition to government and the industry.

Both the organisation and individuals will need to put emphasis on continuous skills development. Individuals will need to develop a different set of competencies which will enable them to cope with digitalisation. The competencies needed, therefore, will be a mixed bag consisting of behavioural, technical and practical competencies. This means it will not be enough to only have the knowledge. The application also becomes important. In the rapid reskilling era, unlimited, unrestricted access to learning is becoming the game changer. However, for us to harness the benefits of this unlimited, unrestricted access to learning, we need to develop into self-directed, agile learners with a strong growth mindset.

The organisational culture required is one that promotes lifelong learning. All generations and types of employees will need to be given the opportunity to upskill themselves. This implies that learning will have to be on-demand, bite-sized and in different formats that can suit all types of learning styles. Employees also need the space to unlearn redundant competencies and re-learn what is relevant for the future.

The PPECB thus needs to evolve, but this cannot be achieved by operating and behaving like an island. Collaboration internally and externally is key, and it is important that the evolution of the PPECB is a journey that includes all its ecosystem members – the DALRRD; suppliers; clients; service providers; processes and services – to move beyond silos and to co-create new opportunities for creating value and to innovate. We thus need to create relevant business platforms as enablers.

To create value for our ecosystem members, we need to do the following as a baseline:

• Increase our infrastructure stability and connectivity;
• Strengthen our BI capacity and knowledge to provide accurate and complete information on time;
• Properly integrate innovation into the business;
• Speed up procurement;
• Properly understand stakeholder needs – internally as well as externally;
• Deliver TITAN 2.0® and Enterprise Resource Planning (ERP) on time;
• Ensure seamless integration between PPECB and client systems where possible (ERP, TITAN 2.0®); and
• Discover new business models to deliver services cost-effectively and quickly.

With these enablers in place, more doors will open in future which will add to the PPECB’s future sustainability. Some of the key outcomes of the PPECB Transformation strategy are:

• To increase the number of women in leadership in the PPECB;
• To provide dignified opportunities for people with disabilities to gain skills, qualifications and work experiences; and
• To create opportunities for youth to gain skills, qualifications and work experience in the industry.

To achieve the outcomes, the PPECB launched pilot programmes in the 2021/2022 financial year for:

• Women in Leadership with eight candidates; and
• People with Disabilities with eight candidates.

The PPECB is also continuing with the flagship Agri Export Technologist Programme (AETP) with a planned intake of 45 candidates aimed at youth, in addition to a new graduate development programme in support areas (Human Capital, Information and Communications Technology (ICT), Legal and Laboratory Services). The PPECB aims to continue with these pilot programmes in 2022 and 2023 should it be sustainable.

In 2022 the PPECB will also launch a development programme for 30 of the current unemployed graduates for a twoyear period to improve the employability of these individuals within the PPECB should vacancies arise. Over the two-year period, these individuals will be afforded the opportunity to gain credits needed as a prerequisite for permanent appointment.

TITAN 2.0®

From 1 April 2020 to 31 December 2021, 200 million cartons (84%) of the main products were inspected on TITAN 2.0® at 670 activity points. The uptake of TITAN 2.0® by clients is dependent on the readiness of the client’s software vendor to integrate with the TITAN 2.0® platform, and up to 31 December 2021, nine software vendors successfully integrated with this platform. Due to vendors and packhouses not being ready for version 2, the PPECB continued to support version 1 and version 2 of TITAN 2.0®. The second iteration of TITAN 2.0® is integrated with the Electronic Certification (eCert) Trade Unit Register. It offers electronic addendums and certification, which is a significant improvement on the previous version with special market validations also being catered for. As a result, TITAN 2.0® version 1 was decommissioned on 14 December 2020.

TITAN 2.0® priorities for 2021 include paperless consignment notes and export certificates, electronic inspection finding sheet, bulk pass, sign-off (multi-select) functionality and Tracking Unit Register (TUR) as single point of entry and cold chain modules. Excellent progress has been made with reviewed and rebased lined priorities for Product Inspection and development for most of these priorities was completed with a significant number of them already successfully deployed.

The current risk of allowing clients to make changes to consignment notes on their packhouse vendor systems after being processed on the TITAN 2.0® platform, prior to presenting consignment notes to an inspector for sign-off of the hard copies, will be mitigated by the planned deployment of the PPECB electronic PDF consignment note in February/March 2022. The changes can result in differences between packhouse and PPECB systems and can lead to unnecessary queries and credit notes and may impact completeness of income.

Bin pack code validation, nett weight validation and validation of class were also successfully deployed and will further strengthen operational internal controls and improve the accuracy of PPECB information. With class validation, only valid classes for the specific product will be allowed. The weight validation will make the inclusion of weight mandatory and improve the accuracy of the weight required and improve the accuracy of information supplied to deciduous and citrus industry bodies in terms of seasonal Service Level Agreements (SLAs).

Cloning of service request development was completed and successfully deployed following system integration and user application testing. The cloning functionality will enable clients with an approved or expired service request to clone information and will save the clients valuable time when completing the service request for the new season.

Volumes Inspected on TITAN 2.0® 2022/2023

PRODUCT	BATCH	TITAN 2.0®	%TITAN 2.0®
Avocados	1 280 958	14 915 654	92.09%
Citrus fruit	9 140 389	166 558 703	94.80%
Grapes	1 022 050	58 722 107	98.29%
Litchis	977 255	707 547	42.00%
Mangoes	77 018	1 316 007	94.47%
Other fruit	9 334 317	4 092 674	30.48%
Pome fruit	14 168 665	49 957 537	77.91%
Stone fruit	1 995 578	19 415 742	90.68%
Grand Total	37 996 230	315 685 971	89.26%

More customers are getting on board with electronic addendum and export certification with subsequent requests for enhancements which include the determination of five days after sail of vessel, excluding weekends and public holidays, which was successfully deployed. The requirements for the updated electronic export certification process will be mapped out and reviewed to ensure all requirements are accurately captured, and eCert and TUR dependencies are clarified. Customer change requests due to urgency require prioritisation above already approved priorities. From April 2021 to December 2021, 2 475 export certificates were processed on the TITAN 2.0® platform.

TITAN 2.0® Electronic Export Certificates.

Region	Electronic Certificates
Durban	203
Gqeberha	0
Cape Town	2 272
Total	2 475

In March 2021, a search function for temperature regimes (Schedule 1) was launched on the TITAN 2.0® platform. Schedule 1 will allow cold chain assessors to look up and cross-reference specifications, ventilation settings, temperature tolerances, target countries and temperature regime codes for all products resulting in less documentation and a more efficient process.

Cold chain electronic export notifications (bookings) went live in June 2021, the benefits of which include:

• Clients can electronically capture and submit bookings for container and vessel loadings and view the status of container loading in real time;
• Lead Assessors are able to assign assessors to loading points electronically; and
• Assessors will be able to access the working programme on their tablet and view the information for the activity points they are assigned to.