South Africa is exporting extra meals. But it surely wants to seek out new development frontiers

South African agricultural exports have been up for the third consecutive yr in 2022, reflecting favourable production conditions and better commodity costs. The export numbers for the total yr haven’t but been revealed. I’ve calculated the annual information for 2022 utilizing quarterly commerce export statistics revealed by Trade Map, a commerce statistics portal developed by the International Trade Centre, the United Nations Conference on Trade and Development and the World Trade Organisation.

The key export crops continued to be maize, wine, grapes, citrus, berries, nuts, apples and pears, sugar, avocados, and wool.

These merchandise have been the drivers of exports over the previous couple of many years. Particularly, fruit and wine have more and more develop into the main export merchandise. These have pushed an increase within the worth of agriculture (and agro-processing) exports, which have averaged 11% of the South Africa’s overall exports, up from 9% in the decade before.

South Africa now exports roughly half of its agricultural produce in value terms. Citrus, desk grapes, wine and a spread of deciduous fruits dominate the export listing. More and more, we’re seeing the encouraging uptick in beef exports.

These sturdy exports have enabled South Africa to retain its place as a net exporter of agricultural products over time. In 2022, South Africa’s agricultural exports reached US$12.8 billion, up 4% from the earlier yr.

Imports, however, stay important, averaging US$6.6 billion over the previous 5 years. In 2022, the highest imported merchandise have been rice, palm oil, wheat, poultry and whiskies. These originated primarily from Asia, the European Union, the UK and the Americas.

Based mostly on my calculations, utilizing Trade Map 2022 data, South Africa’s agricultural imports amounted to US$7.3 billion, up 6% from the earlier yr. Contemplating this import worth towards the export worth of US$12.8 billion, South Africa’s agriculture realised a file commerce surplus of US$5.5 billion.

In view of this, focus ought to now be on enlargement of South Africa’s agricultural exports past its typical markets within the African continent, EU and components of Asia, to new development frontiers. There’s growth in domestic production, and South Africa would require new markets for the increasing harvest.

The precedence international locations for increasing agricultural exports ought to be China, South Korea, Japan, the US, Vietnam, Taiwan, India, Saudi Arabia, Mexico, the Philippines and Bangladesh. All have sizeable populations and huge imports of agricultural merchandise.

Who’s shopping for South African?

My calculations utilizing Trademap data present that the African continent stays a number one market, accounting for 37% of South Africa’s agricultural exports in 2022.

These exports are concentrated inside the Southern African Growth Neighborhood area. However my recent research shows that South Africa’s agriculture export alternatives inside the African continent might be restricted as a consequence of structural challenges, stopping the agricultural sector from increasing its exports into untapped markets. That is regardless of the hope that’s been placed in the African Continental Free Trade Area.

Asia was the second-largest agricultural market, accounting for 27% of exports, adopted by the EU, accounting for 19%. The Americas area was the fourth largest, accounting for 7%, and the remaining 10% went to the remainder of the world.

Inside the remainder of the world class, the UK, traditionally South Africa’s main marketplace for agricultural produce, was one of many main markets.

The merchandise of exports to those markets have been primarily the identical, with the African continent and Asia importing over two-thirds of maize harvests. In the meantime, exports to different areas have been primarily fruit and wine.

Asia has seen a lot quicker development in exports over the previous six years, whereas the African continent and the EU have remained pretty secure.

Challenges

South Africa’s sturdy export earnings have been achieved within the face of assorted challenges in ports and key export markets.

For instance, at the beginning of 2022, logistical challenges in the port of Cape Town disrupted the exports of desk grapes and different deciduous fruits. Fortunately, the cooperation between DESCRIBE Transnet and organised agriculture helped to minimise the constraints and opened up channels of communication that have been important for managing the circulate of exports and attending to urgent issues.

The Durban port, which handles about 60% of the nation’s exports and imports, confronted fewer challenges than the earlier yr. In consequence, citrus exporters confronted a comparatively higher export season from a logistics perspective. The smoother circulate of agricultural exports by means of Durban was additionally led to by elevated cooperation between organised agriculture and Transnet.

Credit score ought to go to organised agriculture groupings, the federal government, Transnet and varied logistical teams that labored tirelessly to make sure a circulate of merchandise to export locations. Whereas there are nonetheless many challenges inside logistics, Transnet’s willingness to cooperate intently with the agricultural group has helped enhance product circulate.

South African exports additionally confronted non-tariff boundaries in some key export markets, reminiscent of China for wool and the EU for citrus.

China temporarily blocked South African wool in response to the outbreak of foot-and-mouth illness in South Africa.

This was a misstep on China’s half as there’s already a framework for coping with an outbreak of foot-and-mouth illness to make sure the security of wool exports to China. Notably, the outbreak was on cattle, not sheep, which ought to have offered additional consolation concerning the security of wool exports.

China lifted the ban after about 4 months. Nonetheless, it had already had a notable monetary influence on South African wool farmers and exporting companies. China accounts for just over 70% of South Africa’s wool exports.

For its half, the EU imposed protectionist measures on South Africa’s agriculture by changing its regulation on plant safety for citrus with out notifying its buying and selling companions in affordable time.

The brand new regulation purports to guard the EU from a quarantine organism, “false codling moth”, by introducing stringent new chilly therapy necessities, notably on citrus imports from Africa, primarily affecting South Africa, Zimbabwe and Eswatini. This was a contentious challenge, particularly as South Africa had already put rigorous measures to control the moth, which the EU used as a pretext to limit citrus imports from Africa.

Focus areas

Provided that South Africa’s agriculture is export-orientated, the main focus ought to be on sustaining easy relations with present important export markets whereas trying to find extra new markets.

That is notably necessary within the context of rising tensions between the east and the west, specifically the US and China.

South Africa has to keep up open and friendlier relations with each groupings because the exports of agriculture are evenly unfold throughout these areas.