Johannesburg - The lifting of a three-year ban on South African red meat exports is most opportune as the industry is primed to benefit from the weak rand.
Red meat producers welcomed the end of the ban on animal product exports, and said they would seize this chance to benefit from the exchange rate of about R11 to the dollar.
On Friday the International Animal Health Organisation (OIE) declared South Africa to be free of foot-and-mouth disease, but said it would continue to ensure that the required measures were fully implemented in the disease control areas of Mpumalanga, Limpopo and KwaZulu-Natal.
OIE director-general Bernard Vallat said in a statement that a verification process would take place in December.
When the ban was imposed in 2011, the National Agricultural Marketing Council estimated that the prohibition would cost the red meat industry about R4 billion a year.
According to a beef market value chain report by the Department of Agriculture, Forestry and Fisheries, the country exported about 3.8 million kilograms of beef in 2011, which fetched R137 million. This was a 66 percent drop from the quantity of beef exported in 2002, the report said.
Red Meat Producers’ Organisation chief executive Gerhard Schutte said the industry was pleased with the news.
“Although we are a net importer of red meat, meat producers will surely benefit from the weak rand. Previously this was not worthwhile but at this stage we will definitely see movements in the market in terms of the income from exports,” he said.
Schutte said South Africa only exported about 1 percent of the 600 000 tons of red meat it produced annually. He added that the lifting of the ban would benefit other industries such as the wool, dairy, hides, skins and leather sectors.
“There is potential at this stage because of the dollar rand exchange rate and exports could really hike. Previously the exchange rate was not favourable,” he said.
Schutte said the Department of Agriculture, Forestry and Fisheries’ persistence and hard work had eventually paid off and that his office was already receiving requests from breeders enquiring about procuring export permits.
“This was the sign that the industry is ready to be part of the export market,” he added.
David Wolpert, the chief executive of the Association of Meat Importers and Exporters of SA, said while this was good news for the industry, South Africa did not export a large quantity of red meat.
Wolpert said that before the ban was imposed the country only exported to a small number of countries. The overall meat industry was very small and exported only about 2 000 tons of meat a month, he said.
Nevertheless, meat exporters had lost quite a lot because of the ban, he said.
Simon Streicher, the chief executive of the SA Pork Producers’ Organisation, said the lifting of the ban would grow the pork industry even though it had enjoyed some export benefits during the ban. He said pork was not entirely banned and some pig farmers were able to export their produce.
“Our exports continued but we could not export live animals. All this will now change,” he said.
Leon de Beer, the general manager of the National Wool Growers Association, said the news was extremely positive.
“We had constant threats on wool exports because of the foot-and-mouth disease. And we had to convince our clients and wool importers overseas that our wool was generally produced in areas where the outbreak did not occur,” he said.
The end of the ban would simplify such negotiations, especially with EU markets, De Beer said, adding that the time spent convincing clients had hurt the local industry.
South Africa produces about 50 million kilograms of wool a year and exports about 90 percent of this. The main destinations are China, India and the EU, with the total export market value at about R2.7bn.
The Department of Agriculture, Forestry and Fisheries will brief the press today on how it aims to keep the foot-and-mouth disease free status. - Business Report