The latest agricultural export figures are in, and despite it being hands down one of the most challenging years for agri exports in the country, South Africa maintained a positive export trend. This is mostly thanks to a sizeable agricultural output in the 2021/22 production season and higher commodity prices, an expert explained.
According to chief economist of the Agricultural Business Chamber of South Africa (Agbiz) Wandile Sihlobo, the value of the country’s agricultural exports amounted to $3.7bn in the third quarter of the year. About 10% higher than the same period for the previous year.
Citrus, maize, nuts, wine, apples, pears, sugar, fruit juices, berries, soybeans and wool were among the most critical products exported in the third quarter.
“We had feared the citrus market access challenges South Africa faced in the EU after plant regulation changes would make a significant dent in export values in the third quarter,” Sihlobo said.
The EU introduced new measures to limit false codling moth (FCM) risks in Europe, and included more stringent phytosanitary requirements for grapefruit and soft citrus, and a revised cold-treatment regime for oranges.
Ironically, South Africa has rigorous measures to control this, which the EU should recognise so trade can continue.
“However, there are ongoing engagements between South Africa and EU authorities for the long term on new citrus plant safety regulations, which involve stringent cold treatment requirements.
“The outcome of the government’s engagements will be critical,” Sihlobo said.
The EU is a sizeable market for South Africa’s citrus industry and the whole agricultural sector.
Sihlobo stated that in the third quarter, citrus maintained its spot as the top exportable agricultural product by value in Mzansi. This was roughly the same value as the third quarter in 2021, just more than $1.06bn (about R18.3bn).
Wool is another key product that faced export restrictions in China earlier this year. This is an important market for South Africa’s wool, accounting for more than two-thirds of exports.
“The bounce-back on exports we observed in third quarter values also signals the resumption of trade with that country,” Sihlobo said.
Expanding beyond current markets
While South Africa’s export future looks promising, the country’s agri sector is export-orientated from a policy perspective. Which is why any improvements in production through various development plans should be anchored on expanding export markets beyond those that exist, Sihlobo believes.
An example of this would be the Agriculture and Agro-processing Master Plan.
China, South Korea, Japan, the US, Vietnam, Taiwan, India, Saudi Arabia, Mexico, the Philippines, and Bangladesh are key markets that South African agribusinesses and farmers are interested in expanding their presence.
“These countries have a sizeable population and large imports of agricultural products, specifically fruits, wine, beef and grains. They are already on the radar of South African authorities,” Sihlobo said.
Fix road, rail and ports
South Africa should, however, be very careful to not neglect continuous constructive engagements with Europe and Africa while searching for new markets, Sihlobo advised.
All this should happen while domestic efforts to improve network industries (road, rail and ports) are underway.
“In this respect, there are promising discussions between Transnet and the agricultural industry focused on improving efficiencies and exploring co-investment options in some areas at ports.
“This will be a long-term endeavour, but its success will be meaningful for the export-orientated South African agricultural sector.”
Sihlobo reckons that there also needs to be increased security within logistics amid escalating cases of criminality against the country’s infrastructure.
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