Photographer: Waldo Swiegers/Bloomberg
CAPE TOWN - Although the impact of the drought, avian influenza and the issue around land reform has had a negative impact on South Africa’s agricultural sector, wine and wool exports, especially to China, have offered the country a glimmer of hope.

This was the key message that came through the Bureau for Food and Agricultural Policy (BFAP) baseline 2018-2027 conference on Friday.

Tracy Davids, a researcher at BFAP, said last year represented a return to profitability for most of South Africa’s livestock sectors and having peaked in 2016, feed grain prices declined substantially while at the same time factors such as the impact of the 2016 drought caused significant herd liquidation in the beef sector, evident in slaughter numbers.

She said the increase in international prices lent support to domestic pork and poultry prices.

In the poultry sector, the impact was exacerbated by the outbreak of avian influenza in Europe, which limited duty-free imports of poultry products from the EU to South Africa, and the combined effect was an increase of 15percent year-on-year in the price of frozen poultry products last year, which was accompanied by an 11 percent increase in pork prices.

However, early this year the outbreak of listeriosis resulted in the recall of several processed meats and a number of meat processing facilities halted production, which caused a sharp decline in pork prices, plummeting by 34 percent from January to May this year.

Losses

Davids said that in the egg industry, the outbreak of avian influenza in the latter half of last year caused significant losses and South Africa’s strategy to contain the disease entailed culling of birds at affected sites.

She said according to a BFAP study it was estimated that by December total cull numbers in the layer industry reached about 4.7 million birds and 700 000 breeding birds were also culled in the broiler industry - bringing the estimated total of culled birds to 5.4 million valued at R317 million.

Regarding wool, Davids said about 90 percent of the wool produced in South Africa was exported, making it to be the third largest exporter of wool in the world last year, while globally the demand for wool had expanded by just under 2percent a year since 2007.

She said in many other agricultural commodities, growth was underpinned by a rapid expansion of 4.5 percent to China.

Economic Opportunities MEC Alan Winde said drought and uncertainty around land reform had been a preoccupation in the agricultural industry. Winde said, however, that there were some areas of excellence that should be highlighted.

“South African wine export volumes grew by 4.7 percent in 2017, with strong growth in export volumes for the US (up 145percent), China (up 16 percent) and the UK (up 8 percent).

Exports to Africa grew by 4 percent, with the exceptional growth in export volumes to Angola (102 percent), Zambia (79 percent) and Senegal (59 percent),” said Winde.

-BUSINESS REPORT