Cape Town - The DA’s stance stance towards Russia in its ongoing war with Ukraine could impact exports to that country in a major way and Western Cape agriculture and aquaculture businesses could be the biggest losers.
Provincial ANC agriculture spokesperson Pat Marran said West Coast farmers who export mussels to Russia, will be among the biggest losers as a result of the provincial government and the DA’s boycott of Russia and support for Ukraine.
Marran made the claim in the legislature during the debate on the Agriculture Department’s budget.
He said for some time trade and investment promotion agency Wesgro had been working hard on accessing the Russian market for mussels.
“Finally they got it right, but with this provincial government’s announcement and irrational boycott of Russia, those markets will soon close again and the exporters of mussels from the Western Cape will suffer.”
A Wesgro fact sheet said Russia was South Africa’s 35th largest export market and 32nd largest import market in 2020.
The fact sheet stated: “Despite the adverse impact of the coronavirus pandemic on global commerce, South Africa’s trade with Russia remained robust, with exports increasing by 13% in 2020 while import growth tracked closely at 12.2% in 2020.
Mussel farming in South Africa is conducted entirely in Saldanha Bay, where four mussel farms are operational. The industry contributes about 50% to South Africa’s marine aquaculture production.
Marran also argued the DA’s stance towards Russia, a major importer of Western Cape agricultural products, will hurt farmers in the province most.
He said the Western Cape exported 28 times more edible fruits to the Russian Federation than it exports to Ukraine. “Western Cape farmers will be the losers in the DA’s arrogance towards Russia.”
Quoting trade statistics, Marran said in 2020 agricultural products accounted for R3.2 billion of South Africa’s exports to Russia and only R120 million worth of these products went to Ukraine.
“In fact, in general, South Africa exported goods and services to the value of R5.7 billion in 2020 to Russia and only R270 million to Ukraine.”
Marran, however, said that the conflict presents the Western Cape with possibilities and opportunities and he supported DA MPL Andricus van der Westhuizen, who had said the Province should be looking into expanding its reach to include especially African markets.
Reached for comment on the issue, Department of Trade, Industry and Competition spokesperson Bongani Lukhele said the exports from South Africa to Russia that stood to be negatively affected by conflict included citrus fruits, particularly fresh or dried mandarins, lemons, limes, table grapes and wine.
He said exports from South Africa to Ukraine that could be negatively affected by the conflict included mainly lemons, limes and grapefruit.
Citrus Growers’ Association of Southern Africa (CGA) CEO Justin Chadwick said the association was working closely with exporters, government and other stakeholders across the citrus value chain to mitigate the impact of the conflict on local citrus growers and exporters.
“When it comes to the Russian market, the country accounts for approximately 7% to 10% of total South African citrus exports annually, with 11.2 million cartons of fruit having been exported to Russia in 2021,” he said.
Chief economist at Agri SA, Kulani Siweya, said: “Blockages of exports to Russia will knock South Africa’s significant trade in agricultural commodities with that country.”
He said agricultural exports to Russia were more than double agricultural imports. Exports grew from R2.1 billion in 2016 to R4bn in 2020. Citrus in particular forms the majority of exports to Ukraine and these were valued at an estimated R133.7m in 2020.
Agriculture MEC Ivan Meyer said that the widespread conflict between Russia and Ukraine was one of the biggest uncertainties facing the agricultural export market.
“The Western Cape agricultural sector is export-oriented and contributes 53% to national agricultural exports. Eight of the 10 main export products from the Western Cape have an agricultural basis.”
Meanwhile, the agriculture budget of R969m for 2022/2023 includes earmarked allocations for ecological Infrastructure to the tune of R37m and a provincial disaster relief grant, for the provision and distribution of livestock feed, of R48.1m.
Among Meyer’s key announcements during his speech was that the department is in the process of developing a provincial African agricultural strategy that will guide the approach to the African Market anchored by the African Continental Free Trade Area Agreement.