Transnet meets fruit exporters to avert export disaster due to strike

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  • Transnet met with leaders in the deciduous fruit industry to discuss contingency plans to keep exports flowing from the Port of Cape Town during its strike.
  • Agriculture economist Wandile Sihlobo said fruits dominated South Africa's export activity and that foods also featured prominently in fourth-quarter imports.
  • While SA has already reached the end of its citrus export season, the upcoming grapes and stone fruit seasons are a big worry if the impasse is not solved.
  • For more stories, go to the News24 Business front page.

Transnet has said leadership at its Port Terminals business will meet with leaders in the deciduous fruit industry to discuss contingency plans aimed at preventing a calamitous impact on the upcoming grape and stone fruit seasons – this as a strike by two unions kicked into full swing this week.

The deciduous fruit season is not yet in full swing, but the state-owned logistics company says plans are in the pipeline to prioritise the processing of perishables.

The United National Transport Union (UNTU) and the South African Transport and Allied Workers Union (Satawu) have downed tools at Transnet, with unions demanding double-digit wage increases. Transnet maintains it must keep a tight grip on compensation costs, though it has revised its offer to a maximum range of 4.5% to 5% across the board.

On Monday, Transnet harbours – apart from East London – had low manning levels, according to a notice that the entity shared with customers at its port terminals.

According to Francois Hugo of Pomona Fruit in Robertson, the Transnet strike has, so far, not yet impacted fruit exports too significantly, because it is the end of the citrus export season and the stone fruit season is only starting.

But exports from the grape and stone fruit seasons, which are expected to kick into a higher gear soon, would be vulnerable to a protracted strike. And according to the National Agriculture Marketing Council (NAMC), more than 80% of the 380 000 tons of table grapes produced in South Africa are intended for export.

It is a potential blow to a sector that analysts say has otherwise proved resilient in the face of multiple setbacks. According to a 2022 annual report by the Foreign Agriculture Service and the Global Agriculture Information Network, South Africa was set for a record pome fruit and table grape production in the marketing year 2021/22, though it was threatened by Russia's military occupation in Ukraine.

Now, exporters are worried about the threat posed by the strike. Eddy Kreukniet of growers' organisation Exsa Europe said it was a "good point" that the strike had caught the tail end of the citrus season, but raised concerns over the upcoming grape and stone fruit seasons. Kreukniet warned that the strike would be another burden for exporters to bear on top of high container prices and disruptions to power supply.

READ | Transnet insists strike over wages is unprotected, unions vow to continue picketing

In a statement, Transnet said that Port Terminals' leadership in the Western Cape met with members of the deciduous fruit industry, namely Berries SA, Hortgro, and the chair of the NAMC on Tuesday. 

"The deciduous fruit season is expected to fully commence at the end of October 2022. Transnet is working closely with industry to ensure that the perishable products, along with other cargo with a limited shelf-life, are prioritised at the ports," the Transnet statement said.

High export activity looms

Agriculture economist Wandile Sihlobo said products that dominated export activity were citrus, maize, apples and pears, wine, grapes, nuts and berries, wool, soybean oil, apricots, cherries, and peaches.

"Not all these exports are facilitated through Transnet. Still, the point is that the fourth quarter of each year is a high export activity quarter. Given that agricultural production has generally been resilient, we expect that there are substantial volumes of exports of various products scheduled for this month."

Sihlobo said South Africa also typically imports a range of food products in the fourth quarter of the year, with wheat, palm oil, rice, spirits, poultry meat, sunflower oil, and soybean oilcake making prominent appearances in South Africa's fourth quarter imports last year.

According to a 2022 annual report by the Foreign Agriculture Service and the Global Agriculture Information Network, South Africa was set for a record pome fruit and table grape production in the marketing year 2021/22, but this could potentially be undermined by Russia's military occupation in Ukraine.

READ | Transnet and unions to meet in CCMA

In Transnet's statement, the entity said it would establish a joint integrated planning team with the industry "to mitigate any further delays".

"Transnet continues to work closely with the shipping lines and industry broadly to manage the current situation and remains fully committed to moving customers’ cargo as efficiently as possible," it said.

Transnet said it would resume wage talks with unions under the CCMA on Wednesday. On Tuesday, Satawu released a statement in which it said tabled a new offer between 4.25% to 5% across the board.

However, the union said it rejected this offer as an "insult". In the meantime, representatives of Transnet, UNTU, and Satawu signed the picketing rules for the industrial action on Tuesday. 

Exporters Western Cape called on Transnet to resolve the wage negotiations speedily. Exporters Western Cape chair Terry Gale said every single port not operating had a significant knock-on effect on exporters.

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