The Agricultural Business Chamber(Agbiz) said that there was consensus in the sector that South Africa's agriculture was expanding and “ripe“ to contest more international markets.
Agbiz chief economist Wandile Sihlobo said that in the next few years, the sector could enjoy a growth spurt, especially if the support by government policies, including the master plan on agriculture and agro-processing, come into play.
Sihlobo said that to get a sense of how South Africa's agricultural sector had expanded in the past decade, considering the sector's gross value-added since 2010, which had now expanded by 44percent.
“In volume terms, South Africa's agricultural production has grown by 19 percent over the same period. Encouragingly, this expansion has occurred across all subsectors of agriculture and agro-processing value, that is, horticulture (up 70 percent), animal products (up 43 percent), field crops (up 22 percent) and agro-processing (up 13 percent), according to data from the Bureau for Economic Research (BER) and Bureau for Food and Agricultural Policy (BFAP),” said Sihlobo.
He said that notably, the long-term projections from BFAP also presented an optimistic picture of South Africa's agricultural output growth making the key message that South Africa's agriculture was growing and export markets should be diversified and expanded to accommodate the fields' output volumes.
Agbiz said that bolstering the proposal for export-market expansion was that some of South Africa's agricultural products outputs had already surpassed targets set out in the National Development Plan (NDP) in 2012. These include citrus, macadamias, dairy and pork, amongst others. Sihlobo said that meanwhile, the soybeans, avocados, apples, and table grapes were also fast approaching the NDP levels. He said that this added production and normal growth in other major crops, fruits, vegetables, and livestock need new and growing markets. “In our view, the new markets that the sector should be looking more at are in BRICS. The industry should hone a BRICS strategy that is complemented by robust bilateral engagements with each of the BRICS countries.”
Last week, Agbiz highlighted that South Africa's agricultural sector was highly export-orientated, with exports accounting for roughly half of the production in value terms, about US$10,2 billion in 2020 (up 3 percent year-on-year.
Also last week, the citrus industry announced that it would likely break all previous export season records with an estimated 158,7 million cartons in 2021. If the estimate was reached, it would represent a third consecutive season of record export volumes, with 130 million cartons exported in 2019, followed by 146 million cartons in 2020.
Moreover, the industry estimates indicate that the available citrus for exports could increase by 300 000 tonnes over the next three years.
Agbiz said that the expected growth in South Africa's agriculture sector and export markets also called for increased attention to logistical efficiencies at the ports. He said that South Africa had thus far managed to achieve some efficiency gains. “The industry has been working closely with the government and other stakeholders, such as Transnet to smooth the flow at the ports. There is ongoing work at Transnet to decongest the Durban port. The multi-stakeholder cooperation was key to enabling higher export volumes during a pandemic, and this saw South Africa recording the aforementioned second-largest value on record of about US$10,2 billion in 2020. Export markets should be the main focus going forward,” said Sihlobo.
Agbiz said that within the BRICS story, the attractive markets within this grouping were China and India who accounted for large agricultural import volumes, had growing populations and changing consumer tastes. “Economic recovery in these countries has been robust. As things stand, the BRIC(S) countries account for a relatively small share of South Africa’s agriculture exports, an average of 10 percent over the past 10 years in total agricultural exports of US$9,5 billion. In this respect, China, Russia, India and Brazil are the leading markets, mainly for citrus, wool, nuts, apples and pears, wine, grapes, sugar and jams, amongst other products,” said Sihlobo.
He said that yet, BRICS countries accounted for an average of 12 percent (US$180 Billion) in global agricultural exports, which meant South Africa could play a meaningful role in this market. China was the largest importer accounting for 68percent of the total BRICS agriculture import of US$180 billion, followed by Russia (14percent), India (10percent), Brazil (5 percent) and South Africa (3percent), according to data from Trade Map.
BUSINESS REPORT ONLINE