honey bush tea - Department of Agriculture: Western Cape

2.4.2 Influencing factors to calculations
Moreover, higher transportation costs that make a significant difference between import
and export parity prices will result in low volumes to be available for international trade,
because they are at the disadvantage of the exporter. However, the export parity price
confronting a particular exporter of any product can be increased i.e. a premium can be
earned. This can be achieved through strategic marketing, which involve activities that
convince buyers that the exporter’s product is superior (e.g. more in consistent quality,
no chemicals used, healthy etc) compared to other exporters.
Another potential influencing factor in these prices is an exchange rate, as a weaker
rand against the dollar would raise South African prices in rands. Freight rates also
influence the calculation. If at import parity, then higher freight rates could raise the SA
exfarm price, similarly, if at export parity, it could lower the SA exfarm price.
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