Due to a combination of drought and smaller rooibos harvests, production volumes have been lower this year and there will be less rooibos to go around, reports The South African Rooibos Council.
Rooibos harvests remained good in 2009 and 2010 even though the export market, where most rooibos is sold, declined from 7 200 tonne in 2007 to 6 300 tonne in 2009. It fell by a further 5% last year, with economic uncertainty in Europe and a strong rand both contributing. This resulted in a local surplus of about 3 000 tonne in 2010.
An oversupply of the herbal tea over the past three years led to declining prices and prompted farmers to plant less rooibos in 2009/10. Poor rainfall during last year’s planting season contributed further to lower yields.
Donnée MacDougall, director for marketing at the South African Rooibos Council, says that the export market showed some signs of improving towards the latter half of 2010, although it was still some 16% off pre-recession levels.
Domestic demand increased by about 5% in 2010, with 72% of South African households stocking their tea caddies with rooibos. It is the only sector of the local tea market that is growing and represents about 23% of sales.
The local market is continuing to grow at about 5% per annum and there are opportunities to increase sales, particularly in regions such as KwaZulu-Natal and the Eastern Cape, where market penetration is not as high as in some other provinces. Gauteng remains the largest market, accounting for 35% of sales. Northwest, Limpopo and Mpumalanga together account for 24% and the Western Cape for 14%.
‘Rooibos remains a locally produced, tasty, affordable and healthy option and, despite lower volumes and some price pressure, we’re confident of steady recovery in key export markets such as Germany and continued growth in the local market,’ says MacDougall.
The SA Rooibos Council’s sustainable production initiative, Right Rooibos, could help boost exports. It aims to provide certification for sustainably-produced rooibos, similar to that of international certification programmes such as UTZ and Rainforest Alliance. Right Rooibos is now a step closer to setting a code of conduct following the completion of a socio-economic study late last year. The code will provide guidelines for producers and manufacturers wanting to achieve certification and will help differentiate sustainably-produced rooibos. Much like the successful and internationally recognised Biodiversity in Wine initiative, certification will provide a significant marketing advantage-particularly in European markets.
