Market Trends of Africa Food Cold Chain Logistics Industry
Electricity Crisis is Negatively Affecting the South African Food Cold Chain Logistics Market
South Africa currently hosts most of the continent's cold storage capacity, encompassing many positive (fresh fruit and vegetables) and negative (fish and meat) cold storage options. Numerous cold chain logistics providers operating in Africa are headquartered in South Africa. However, the country is grappling with significant electricity shortages, resulting in widespread daily power cuts lasting up to 10 hours in various regions. As per the Ministry of Mineral Resources and Energy, South Africa's total domestic electricity generation capacity is 58,095 megawatts (MW). Coal remains the predominant energy source, constituting approximately 80% of the country's energy mix. Nonetheless, due to the aging and deteriorating condition of some coal power stations, actual power generation falls substantially short, creating a deficit ranging between 4000 - 6000 MW.
This shortfall has led to severe power cuts, also known as 'load shedding.' A reliable and consistent energy supply is crucial for maintaining the cold chain. In regions with inconsistent or unreliable power, the risk of disruptions to temperature-controlled environments increases. These power cuts are adversely affecting the cold chains within the agricultural sector, particularly impacting the storage and transport of fresh produce. Reports indicate that some retailers have rejected fresh produce due to delivery delays and disruptions in the cold chain, exacerbating the situation during warmer months. This energy crisis is a significant challenge for the South African food cold chain logistics market.
Fresh Fruit Exports are Contributing to the Growth of the Market
Egypt holds the position of being the largest exporter of fruits and vegetables in the region. Annually, the country generates approximately USD 3 billion in revenue from exporting various fresh, dried, and frozen fruit and vegetable products. Key products exported to international markets include oranges, potatoes, frozen strawberries, table grapes, and fresh onions. South Africa also plays a vital role in the export market. The agricultural sector in South Africa is distinctly export-focused, with approximately half of its produce being exported in value terms. The South African fruit industry is a predominant force in the country's agricultural exports, with fresh fruit accounting for around 35% of South African agricultural exports. Decades of research and development and capacity-building initiatives for growers and industry associations have been instrumental in producing high-quality fruit that can compete effectively globally.
South Africa boasts significant rankings in global fruit production, including being the world's 2nd largest citrus exporter, 6th largest pear producer, 7th largest grape exporter, 8th largest apple exporter, and 9th largest avocado exporter. Regarding export markets, the South African fruit industry aims to retain and maximize its traditional markets within the European Union, the United Kingdom, and the United States. Additionally, there is a strategic focus on gaining access to new markets in East Asia and the Middle East. Africa represents a substantial potential export market for various types of fruit from South Africa. Presently, apples and pears are performing well in West and East Africa. The export of these fruits within and outside Africa is a significant demand driver for cold chain logistics, emphasizing the importance of ongoing development in cold chain infrastructure.
