South Africa’s agricultural exports amounted to $3.4 billion (R64bn) in the second quarter of this year, up by 0.1% year-on-year, according to data from Trade Map.
While South Africa’s agricultural exports in the first half of the year had been encouraging, the export earnings would likely soften this year from last year’s record, the Agricultural Business Chamber (Agbiz) said yesterday.
Agbiz chief economist Wandile Sihlobo said despite challenges in key export markets such as the EU in the case of citrus, the products that dominated the export list this quarter were citrus, maize, apples and pears, wine, sugar, soybeans, wool, avocados, pineapples, fruit juices, nuts, and grapes.
“Importantly, this good export performance was not only a function of price but also improved volumes. The prices of some agricultural products have declined notably from the 2022 levels,” Sihlobo said.
The lower commodity prices and the stringent regulations of the citrus black spot disease in the EU market were among the factors likely to result in lower export earnings. Agbiz expected the effects of these challenges to be more evident in the second half of this year.
The improvement in agricultural exports were said to partly demonstrate the results of continued collaboration between the industry and Transnet to improve the logistics at the ports. However, the agricultural organisation said more work was needed to improve the efficiencies.
From a regional perspective, the African continent remained the largest market for South Africa’s agricultural exports, accounting for 36% of the exports in the second quarter of this year. Asia and the Middle East were the second-largest region, with a 30% share. The EU was the third-largest region, accounting for 18% of the agricultural exports, with the Americas region at 6%.
The UK remained one of the largest single markets for South Africa’s agricultural exports, accounting for 7% of the exports in the second quarter. The remaining 3% was spread over various other regions of the world.
South Africa’s agricultural imports fell by 6% year-on-year (y/y) in the second quarter of this year to $1.8bn, according to data from Trade Map.
The products that still dominated the import list were rice, wheat, palm oil, whiskeys, and poultry. The whiskeys, wheat and poultry products were the main drivers of the decline in the value of imports in the first half of the year. Overall, South Africa had an agricultural trade surplus of $1.6bn in the first half of this year, up 9% y/y.
Nico Groenewald, the head of Agri Business at Standard Bank Business & Commercial Banking in South Africa, said the increasing local agricultural exports or trade was always good news, demonstrating the resilience of the country’s agri value chains to overcome the several logistical and trade- related challenges to cement its place as a net exporter of quality agricultural produce.
He said this spoke to at least two of the pillars of the Agriculture and Agro- Processing Master Plan (AAMP).
“Besides the positive impact of the trade balance, sustainable export growth is likely to bolster job creation in these value chains too,” Groenewald said.
The bank’s Agri Business unit said continuous collaboration with the government was necessary to keep the opening of new markets, and the widening of existing markets on the agenda.
It said the government can also play an active role in investing in research, “but also bolstered by private institutions contributing to top quality inputs, genetics and sustainable farming practices and tech”.
Groenewald said in the short term, South African agricultural exports were likely to move sideways from the record year seen last year, especially if El Niño became a stronger player for the next season.
Beyond these near-term challenges, Agbiz said South Africa was on an export market expansion mission for the agricultural sector. This meant there was a need to work hard to retain the existing markets in the EU, Africa Asia, Middle East, and the Americas.
“Notably, South Africa should expand market access to some of the key BRICS+ countries such as China, India, and Saudi Arabia. Other strategic export markets for South Africa’s agricultural sector include South Korea, Japan, Vietnam, Taiwan, Mexico, the Philippines and Bangladesh. This export market expansion ambition is shared by both the private sector and the South African government. The Department of Trade, Industry and Competition and the Department of Agriculture, Land Reform and Rural Development should lead the way for export expansion in these agricultural strategic markets.”
The Department of Agriculture, Land Reform and Rural Development said to maintain the growth momentum, the sector should continue its efforts to open new exports markets and equally maintain relations with existing markets.
“Moreover, the sector will upscale its implementation of the Agriculture and Agro-processing Master Plan, which sets out a clear pathway to drive inclusive growth in the sector. Some of the interventions being implemented under the master plan range from accelerating the redistribution of land, making finance affordable and accessible for all farmers, skilling of farmers, in particular smallholder and subsistence (farmers), and building the enabling rural and agricultural infrastructure, amongst others,” the department said.