Mzansi’s agricultural output has more than double since 1994. The growth is owed to technological innovation, agrochemicals, and post-harvest technologies, said the Agricultural Business Chamber (Agbiz).
Agbiz believes that South Africa’s open trade policy approach since 1995 has also connected the country’s value chains to the global economy. This subsequently boosted global demand for agricultural products and incentivised domestic farmers to increase production.
Agbiz chief economist Wandile Sihlobo has therefore urged the government to focus on creating new opportunities in the export market.
He reveals that in Agbiz’s interactions with various agribusinesses since the beginning of the year, trade is one issue that consistently comes up in addition to the usual concerns surrounding land reform policy.
Sihlobo believes this could be expected as the agricultural sector is exceedingly export orientated, with exports accounting for roughly half of the production in value terms, about US$10,2 billion in 2020, up by 3% year-on-year.
In citrus farming, IT IS ESTIMATED THAT South Africa’s production could increase by 76% BY 2030.
This is major growth considering the 2021 expected harvest of 148.8 million of the standard-sized 15kg cartons.
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The 2030 estimates means that South Africa should already be working on market access for the forecast citrus beyond the typical markets in which the country is active.
“The same is true, albeit to a lesser extent, for other fruit such as avocados, deciduous fruit, as well as the livestock and wine industry,” said Sihlobo.
Exports to BRICS
He shares that even though there is consistency in the markets in which the industry players are interested in, the exports to these regions are not sufficient. South Africa exports to BRICS countries, the Middle East, and Japan.
“The top imported products across the BRICS countries include wheat, wine, cheese, citrus, palm oil, bananas, rice, apples and pears, beef, coffee, chocolate, and milk.
“While South Africa is a major producer of some of these products, its exports to the BRICS region are meagre. The BRICS countries account for an average of 7% of South Africa’s total agricultural exports over the past ten years,” he said.
Sihlobo added that the crucial markets that South African agricultural role-players are interested in in this grouping are India and China.
“These are countries that South African policymakers should engage with productively to benefit the domestic agricultural and food industry.
“Some products already have access, but increased tariff-free access for a wide range of agricultural products that are likely to see strong growth in the coming years should be a priority for market access,” he suggested.
Access to Japan and Middle East
Furthermore, Sihlobo explained that there is an increasing interest in Japan, which is an important agricultural market, the sixth largest in the world, accounting for an average of US$60 billion agricultural imports a year.
The products Japan typically imports are pork, maize, sausages, tobacco, beef, fish, wine, wheat, soya beans, cheese, coffee, bananas, nuts, and a range of vegetables, among other products.
“Again, these are products that South Africa produces, and in some cases, exports. Now, Japan remains a small market for South Africa, accounting for 2% of South Africa’s overall agricultural exports of the US$10,2 billion a year.
“Fruit juices, maize, beans, and citrus are among the top agricultural products South Africa currently exports to Japan. There is now a growing interest in the wine industry, which could be paired with the broader fruit and beef industry to seek market access for a wide range of products,” he advised.
He said within the Middle East, Saudi Arabia is an important player in the global agricultural trade, being ranked the world’s 20th-largest importer of agricultural products in 2019, valued at US$20 billion, according to data from Trade Map.
Of that, South Africa was a minor player, accounting for less than 2% of all the imports.
Saudi Arabia’s top imported agricultural products were meat and edible offal, rice, barley, milk and cream, cheese, live sheep and goats, sugar cane, maize, chocolate, citrus, palm oil, oilcake, bananas, tea, vegetables, and fruit juices. These are also products that South Africa is a major producer of, and producers are looking to explore export markets.
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