Total agricultural exports reached a new record of $13.2 billion last year, up 3% from the previous year, surprising on the upside, according to data from Trade Map, a provider of world trade data.
This was stronger than expected with modest export activity predicted this year despite numerous challenges at the ports and various export markets.
The products that dominated the export list were citrus, maize, apples and pears, nuts, wine, soybeans, sugar, wool, grapes, berries, avocados and fruit juices.
Wandile Sihlobo, the chief economist at the Agricultural Business Chamber (Agbiz), said this improved export activity was a function of improvement in volumes and prices.
“That said, pricing developments over the year were significantly more varied than the average data suggest. While fruit prices picked up, grains and oilseed prices have declined notably from the 2022 levels. Notably, the exports were widely spread across various key markets,” Sihlobo said.
He said Africa remained a leading market, accounting for 38% of South Africa’s agricultural exports in 2023 in value terms. Asia was the second-largest agricultural market, accounting for 28% of exports, followed by the EU, the third-largest market, accounting for 19%.
“These robust export earnings were achieved in the face of various challenges in our ports, electricity supply and critical export markets. Some credit goes to organised agriculture groupings, the government, Transnet and different logistical groups that have worked to ensure a smooth flow of products to export markets.
“The South African agricultural industry has established forums to continuously engage with Transnet and enhance communication about problems at the ports so that the response could be swift to drive the exports of high-value and perishable products. Still, more work is needed as this export success has come at a significant cost to producers and various stakeholders in the value chain,” he added.
John Hudson, Nedbank Commercial Banking head of Agriculture, said achieving $13.2bn exports for agriculture in 2023 was somewhat unexpected.
“Despite the challenges faced this is an outstanding outcome and testament to a sector, which continues to perform and remains resilient. Agricultural imports for the same period reached $7bn and, therefore, a healthy trade surplus of $6.2bn was recorded and this exemplifies the importance of agriculture and its vital contribution to the economy,” Hudson said.
The record exports were achieved despite the logistical issues faced. However, for the sector to prosper and continue to grow, the importance of investing in infrastructure (road, rail and port) and opening up new markets could not be overemphasised, he added.
Agbiz agreed, saying while the recent export expansion was encouraging, South Africa should stay focused on improving the logistical infrastructure efficiency and on the export market expansion mission for the agricultural sector.
“Remarkably, agricultural exports improved in a year where we saw severe load shedding and significant logistical infrastructure constraints at the ports.
“The exports could have been much higher than the current levels without these constraints. There is a need for increased investment in port and rail infrastructure, along with the improvement of roads in the farming towns that continue to constrain the sector’s growth. Importantly, expanding South Africa’s export markets will require better-performing logistical infrastructure,” it said.
Agbiz said the Department of Trade, Industry and Competition (Dtic) and the Department of Agriculture, Land Reform and Rural Development should lead the way for export expansion in these agricultural strategic markets.
This they are actively working towards. Yesterday, the Minister of Agriculture, Land Reform and Rural Development Thoko Didiza received a visit from the Kingdom of Saudi Arabia’s Minister of Environment, Water and Agriculture Abdulrahman Abdulmohsen A. AlFadley. Senior government officials, agricultural state entities, and business leaders from both countries joined the ministers.
The purpose of the visit was to deepen agricultural trade and investment between the two countries and boost agricultural production to improve global food security.
Didiza said the Kingdom of Saudi Arabia was a strategic market for agriculture as it imports about R380bn of agricultural products a year.
BUSINESS REPORT