Despite facing various challenges, the agriculture sector in South Africa has shown resilience and posted another year of strong exports in 2022, according to Paul Makube, a senior agricultural economist at FNB-Agribusiness.
The latest export data showed a 4% year-on-year jump in foreign agriculture earnings to $12.8 billion, a new record high underpinned by strong commodity prices.
Makube explained that the year 2022 was characterised by trade distortions, logistics challenges, inclement weather, rising interest rates, higher input costs, and outbreaks of the foot-and-mouth disease (FMD) that halted exports temporarily.
He noted that wool exports to China were temporarily halted due to FMD being a notifiable disease in terms of the World Organisation for Animal Health. Additionally, Mzansi’s biggest citrus market unilaterally imposed new rules on false codling moth despite the rigorous control measures already in place, which came at a significant cost to producers.
Great expectations
However, the export outlook remains positive due to the high demand for quality and affordable agricultural produce, as the global economy recovers. Makube highlighted that with shipping costs on the decline, there are expectations for a rebound in export volumes in the year ahead.
He emphasised that the further opening of new export markets and digitally-enabled trade will have positive implications for the agricultural export sector. He believes that this will enable the sector to continue building on the strong foundations it has set in place, particularly in recent years.
“The future of the sector is bright, with the potential for more exports, job creation and economic growth. The sector has the ability to overcome challenges and maintain its position as a significant contributor to GDP and a key employer in rural areas,” Makube said.
The agriculture sector plays a crucial role in the economy, and its ability to overcome challenges and post strong exports is good news for the sector’s future growth and development. As Makube noted, the sector’s resilience and ability to adapt to changing circumstances are key to its success, and the further opening of new export markets and digital trade will enable the sector to continue to thrive.
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