The numbers are in and Mzansi’s agri sector recorded year-on-year export growth of 1% in the first quarter of the year. The figure is overshadowed, however, by a drop in the total trade surplus by a full 18%.
The disappointing growth comes despite major export sectors such as the stone fruit and table grape industries having started the season with excellent prospects.
Agricultural economist Wandile Sihlobo says that, just as in previous quarters, exporters faced constraints such as port and rail delays, and deteriorating road infrastructure. This was mitigated to an extent through closer coordination between agriculture industry groups, transporters and Transnet.
Externally, the Russian invasion of Ukraine disrupted trade with the Black Sea region, where South Africa sends 7% of its citrus exports in value terms and 12% of its apples and pears.
“We now have the trade data for the first quarter of 2022 and, positively, exports are up modestly by 1% year on year to 2,96 billion US dollar,” says Sihlobo. “This is also up by 6% quarter on quarter.”
The top exportable products were grapes, maize, wine, apples and pears, peaches, cherries and apricots, wool and fruit juices, amongst others. “The significant factors underpinning this robust export value are the sizeable agricultural output in the 2021-22 production season, combined with general solid global demand, even at higher agricultural commodity prices for maize,” Sihlobo says.
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The top export destinations
The African continent accounted for 41% of Mzansi’n exported products in value terms. The EU and Asia each accounted for a 24% share, and the UK for 9%. The balance of 2% went to the Americas and other regions of the world.
Russia was still a notable export market in the first quarter, accounting for 1% of South Africa’s total agriculture, food and beverages exports and the 21st largest export market.
What about imports?
South Africa still relies on other countries for crucial food products such as wheat, rice, palm oil, sunflower oil and poultry, adds Sihlobo, and agricultural imports increased by 17% year on year to $1,86 billion in the first quarter. Higher commodity prices also contributed to the high import bill.
On the balance, Mzansi recorded an agricultural trade surplus of $1,10 billion in the first quarter of 2022, down by 18% from last year. “The narrowing of the trade surplus is not only caused by modest exports … but rather the increase in imports value and the higher commodity prices,” Sihlobo says.
“Overall, the increased collaboration amongst industry stakeholders and service providers has helped sustain the agricultural trade in the past quarter.”
Outlook for the second quarter
He expects some of the top commodities from the first quarter to continue dominating the export list for the remainder of the year, along with citrus, nuts and sugar. Export volumes to Russia will probably decline.
Even though the response to rebuild damaged infrastructure after the Durban floods was speedy, it can be expected to see a decline in trade activity in the second quarter because of the disruptions.
Sihlobo believes the same collaborative approach that was used among stakeholders in the first months of the year, should be maintained going forward in searching for and promoting South African agriculture, food and beverages to new export markets.
“South Africa is an export-oriented sector, where roughly half of the produce, in value terms, is exported. Therefore, an industry and government approach to promoting South African products in export markets is key.”
He believes efforts to expand exports to China, Japan, India, Saudi Arabia and Bangladesh should be well sequenced and should complement ongoing efforts to boost domestic production.
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