Farmers in South Africa who once relied on Russia and Ukraine as key export markets, are trying their level best to find alternative destinations for their top crops. Exporters are now setting their sights on Africa, where the two countries at war have created potentially lucrative gaps.
According to Western Cape fruit exporter and managing director at Riyp, Uzair Essack, more and more farmers – mostly apple, pears, citrus and grape producers – have approached Riyp to help them find new markets.
“A lot of farmers [who exported to Russia and Ukriane] are reaching out to us to handle their exports because we focus on Africa, the Middle East and Ireland. So, those three markets have seen more inflow recently,” Essack says.
Amongst others in Africa, Riyp exports to countries such as Sudan and Burkina Faso.
According to Essack, his company has not been affected as it had not shipped to Russia at all. Containers leaving for Russia are still being shipped by others, though, which means that South African companies continue to trade there.
All eyes are on Africa
Meanwhile, the war has presented an opportunity for the African market to be fully explored, especially in commodities like wheat, maize, canola, vegetable and sunflower oil. This is according to Dr Mmatlou Kalaba, a director and senior analyst in commodity markets and foresights at the Bureau for Food and Agricultural Policy.
While the Africa free trade agreement is still on the table for ratification, Kalaba states that many exporters are looking to get a foot in the door in Africa, where Russia and Ukraine have created a gap.
“While the free trade agreement is still being ironed out in terms of which routes will be explored and tariffs [will be charged], there are exporters who have [ensured] that their products are known before all is sealed and signed on the dotted line,” he says.
The shock of the war, Kalaba says, has created great panic that ultimately led some countries to hold on to agricultural products to secure themselves, while those with buying power are buying more than they need.
“This is what has been happening, and it has led to prices going up. Everyone across the globe has been affected in terms of high pricing by the war and consumers have felt the secondary effects in terms of prices.”
Working through the storm
Food For Mzansi previously reported that several South African companies exporting to Russia, maintained trade relations with Russian clients despite the war. One company said exporters who diverted, left a gap in the market, which created a high demand for fresh produce.
Essack, too, reports that some South African exporters kept up trade despite some setbacks. “What we have seen is that farmers have been able to go to Russia, except in the [first few] weeks of the war.”
According to Dr André van der Vyver, executive director of the South African Cereals and Oilseeds Trade Association, the grain industry and other affected commodities are also slowly seeing a return to normal.
Although South Africa mostly exported its cereals and oilseeds to countries such as Taiwan, Korea and Japan, and wheat and maize farmers continued to trade, the outbreak of the war spared no-one.
“The war impacted us in terms of costs. Consumers were hit hard by oil prices going up. That is why we have seen our inflation going up,” he says. He adds the momentary shortage of fertiliser in the country as a further impact. “Now the uptick is pleasing so it is just a matter of mitigating the situation.
“It has not been easy. [We all] felt the pinch of the war one way or the other. But it has been quite a slow return in the past months.”
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