South African beef is now available on the shelves of Saudi Arabia (KSA), the Beefmaster Group announced today.
In its announcement, the company which exports products to Egypt and Jordan as well as the Middle East, like the United Arab Emirates (UAE), Kuwait, Bahrain, Qatar, and now, the Kingdom of Saudi Arabia, said this came after the successful conclusion of a 15-month contract negotiation period, following a landmark agreement between South Africa and the KSA in October 2022.
Gert Blignaut, CEO of Beefmaster Group said they were pleased to probably be the first South African beef company to be officially trading with the nation in over two decades.
“Currently 4% of South Africa’s beef is being exported and increasing this to even between 7% and 8% would be very beneficial for the agricultural industry. It is envisaged that the Saudi market can accomplish this for us,” Blignaut said.
He said that the company had a broad range of products, and would in time expand or refine its offering, depending on consumer preferences.
“We believe that the quality of our product will drive demand, and when quality and price intersect, there will be a significant opportunity to increase exports to the country.”
On Monday the Minister of Agriculture, Land Reform and Rural Development (Dalrrd) Thoko Didiza received a visit from the Kingdom of Saudi Arabia’s Minister of Environment, Water and Agriculture, Mr Abdulrahman Abdulmohsen A Al-Fadley following a successful negotiations on the protocol for red meat export which was agreed to last October. Dalrrd said the South African livestock industry could now export red meat to Saudi Arabia.
According to reports, about 62% of Saudi beef imports were frozen products, while the rest were chilled or fresh meat. Leading suppliers to Saudi Arabia include Brazil, Australia, Pakistan, the US, New Zealand and Canada. The Saudi beef industry was said to be worth about R38 billion.
Blignaut said since exporting their products in 2008, they have seen that every market penetrated has added South African beef to their shelves because of the quality and service assurances, as well as the beef being competitively priced.
The Beefmaster Group said it viewed the KSA as a strategic market, and was encouraged by the investment committed by the nation to grow its economy. Reports indicated Saudi Arabia’s focus was to diversify beyond oil, with Goldman Sachs speculating that the country was likely to invest over $1 trillion over the next decade into various mega projects and sectors. “Our priority is to get closer to the Middle Eastern market and elsewhere globally, given the opportunity for growth.”
To this end, the Group recently attended the Gulfood Trade Show in Dubai, the world's largest, most trusted food and beverage event between 19 and 23 February. “We are very happy to have showcased our products yet again as it gave us an opportunity to expand our market.”
The South African beef industry has made inroads in expanding to new export markets recently.
However, Blignaut said the recent conflict in the Middle East has created significant logistical challenges in getting SA beef product to these nations, on both the airfreight and shipping fronts. This in turn pushed up prices, and further impacted the outlook for the sector.
“We need more exports to lift the SA beef industry out of the doldrums. We are in a slump as we have too much product in the country. Our economy is not strong enough to sustain this situation,” Blignaut said.
He added that there was still a long way to go to unlock more growth from exports.
“For this, we need the government and other players in the sector to mobilise and open new markets,” Blignaut said.
According to the National Agricultural Marketing Council's (Namc) Market Intelligence Report for January this year, a kilogram of beef decreased from 4.79 $/kg in December last year to 4.83 $/kg in January, a decrease of 0.8% m/m end of January.
However, it said that on an annual basis, global beef prices increased from 4.65 US$/kg in January last year to 4.83 US$/kg in January this year, an increase of 3.8% y/y (The World Bank, 2024). These prices contrasted with international beef imports prices reported by FAO at the end of January. Global beef meat prices fell marginally, primarily reflecting high export supplies from Oceania and South America.
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