Despite being mostly semi-arid, South Africa exported some $12.4 billion (about R184. 4 billion) of agricultural output last year, a record and about half of what it produces in value terms a year, according to the Agricultural Business Chamber (Agbiz).
The organisation’s chief economist Wandile Sihlobo said the export products were diverse and included wine, maize, citrus, nuts, berries, grapes, wool, fruit juices, beef, apples, and pears, among others.
Export markets were also diverse, spreading across Africa, Europe, Asia, the Middle East and the Americas.
“We have achieved this progress, in part, due to the openness of South African policymakers, agribusinesses and farmers to technological advancements, mechanical and biological, which have been instrumental in driving productivity,” Sihlobo said.
He said, however, the sector could not produce all the products that the country needed.
“For instance, our agricultural import bill in 2021 was $6.9bn. The top five products that year were palm oil, rice, wheat, poultry meat, as well as whiskies and other spirits. These account for 30 percent of this import value.
South Africa does not have the climatic conditions to increase the production of palm oil, rice and wheat.
“Palm oil and rice are not even in our plans. We import 100 percent of our annual consumption of these products. In the case of wheat, we import about half of our yearly consumption of around 3.4 million tonnes a year,” he said.
Agbiz said there were discussions in the industry about increasing domestic wheat production, specifically in the Free State, where wheat hectares had declined significantly recently due to profitability and dryness in the winter season.
Sihlobo said wheat production could increase in such areas if seed-breeding efforts advanced to levels where there were seed varieties that could withstand slightly drier weather conditions and provide better yields.
Regarding rice and palm oil, Sihlobo said South Africa was at the mercy of global dynamics.
“For example, drier weather conditions in the past few months have reduced palm oil production in some Asian countries, leading to a notable increase in prices. South Africa, as an importer, is exposed to such increases. Perhaps one positive aspect of the 2021/22 season is that South Africa had its second-largest sunflower seed harvest, at about 959 450 tonnes from 678 000 tonnes in 2020/21.
The improvement in production means we could see vegetable oil import requirements, including palm oil, declining this year. Typically, South Africa imports around half a million tonnes of palm oil a year,” he said.
He said South Africa imports about 1.1 million tons of rice. The International Grains Council suggested that this import volume would remain unchanged this year.
About 70 percent was usually imported from Thailand, with other notable rice suppliers being India, Pakistan, China and Vietnam. Most of these countries expect a reasonably good harvest in the 2021/22 season, which should boost the supplies for exports.
Sihlobo said the Russia-Ukraine war had disrupted the global grains market and raised concern about the potential increase in rice demand in the coming months, as some countries could start using rice to substitute for maize and other grains, where supplies would be relatively scarcer and prices higher.
He said global rice prices had declined significantly over the past few months.
“This softening persisted a month after the invasion of Ukraine while prices of commodities like wheat, maize and vegetable oil increased notably. Such price trends bode well for rice importing countries such as South Africa,” Sihlobo said.
BUSINESS REPORT