South Africa recorded an agricultural trade surplus of $1.5 billion (about R22bn) in the second quarter of this year, which represented a year-on-year increase of 40 percent, according to the Agricultural Business Chamber (Agbiz). Picture: Zanele Zulu/African News Agency (ANA)
South Africa recorded an agricultural trade surplus of $1.5 billion (about R22bn) in the second quarter of this year, which represented a year-on-year increase of 40 percent, according to the Agricultural Business Chamber (Agbiz). Picture: Zanele Zulu/African News Agency (ANA)

SA records agricultural trade surplus of R22bn

By Given Majola Time of article published Aug 11, 2021

Share this article:

SOUTH Africa recorded an agricultural trade surplus of $1.5 billion (about R22bn) in the second quarter of this year, which represented a year-on-year increase of 40 percent, according to the Agricultural Business Chamber (Agbiz).

Agbiz chief economist Wandile Sihlobo said yesterday that agricultural exports amounted to $2.9bn in the first quarter, which was a year-on-year increase of 28 percent.

“We now have the full data for the second quarter, which showed an even stronger performance, with exports valued at $3.2bn, up 36 percent year-on-year. This means that in the first half of 2021, South Africa’s agricultural exports amounted to $6.1bn, which is a 30 percent year-on-year increase. Compared with last year, the growth is partly because of base effects, as the first half of 2020 was heavily affected by the Covid-19-related disruptions to global supply chains. Still, the growth reflects rising export performance for various products,” said Sihlobo.

Agbiz said the top exports in the second quarter were citrus, apples and pears, maize, wine, grapes, pineapples and avocados, wool and nuts.

Sihlobo said Agbiz expected some of these products to continue dominating the list of exports in the second half of the year, thanks to large production volumes.

He said there were temporary delays in exports from the port of Durban at the beginning of last month because of the unrest.

“Moreover, later in July, there were additional brief delays in export activity across South Africa following IT glitches on the Transnet systems. This will likely be reflected in the third-quarter export trade activity. However, this does not change our view that exports could be larger in 2021 than the previous year, because of the robust harvest.”

The African continent and Asia were the largest markets for South Africa’s agricultural exports in the second quarter, accounting for 34 percent and 26 percent respectively in value terms.

The EU was the third-largest market, taking up 21 percent of South Africa’s agricultural exports in the second quarter. Other regions constituted the balance of 19 percent of the country’s export value.

First National Bank senior agriculture economist Paul Makube said the performance of agricultural exports in the first and second quarters reflected the resilience of the sector despite the ongoing Covid-19-related challenges across the globe.

“The agriculture sector was able to operate during the various lockdown periods due to it being considered an essential service. Weather also came to the party and allowed for an excellent agriculture season, which saw record crops across most commodities, with the grain and oilseed crop topping 17.07 million tons, which is almost 2 percent higher year-on-year.

“Despite logistical challenges, the sector managed to move a hefty quantity of produce to the rest of the world, with the second quarter of 2021 recording a trade surplus of $1.5 million, which is 40 percent ahead of the same period in 2020,” said Makube.

He said South Africa was likely to post another good agriculture season in 2021/22 if the recent weather forecasts of another La Niña year materialised. La Niña is characterised by above-normal rainfall in Southern Africa, which bodes well for agriculture in the year ahead.

Agri SA agricultural economist Kulani Siweya said although the big jump in the trade surplus was largely attributed to base effects associated with Covid-19-related trade restrictions, the underlying drivers were testament to a robust and healthy farming sector.

“This is a result of, among other things, a good production environment. For farmers who in the past years were impacted by drought conditions and animal disease, this allows them to recover financially and potentially hedge for any short- to medium-term risks.

“With the favourable weather conditions still with us, coupled with a somewhat normalisation of trade, prospects look positive, and this will ultimately benefit the sector, particularly in a backdrop of a challenging overall economic environment,” said Siweya.

[email protected]

BUSINESS REPORT

Share this article: