The decline in agricultural exports in the second quarter of the year reflects the tough seasonal conditions the agricultural sector faces, said senior agricultural economist at First National Bank Commercial Paul Makube.
South Africa’s agriculture trade surplus shrank by 6% y/y in Q2 of 2024. Makube said the downbeat in agricultural exports shows a modest reversal from an impressive Q1 gain of 6% y/y with the trade surplus having surged by a whopping 20% y/y during the same period.
“A combination of weak import demand amid a depressed global commodity price environment contributed to the lacklustre exports in Q2 of 2024.
“Although operating conditions remain tough on the logistics side, there was a rebound in port performance relative to the previous year as stakeholders from Transnet and the agriculture sector continued to collaborate closely to ensure a smooth transit of products to international markets,” he added.
Impact of weather conditions
According to Makube, major horticulture commodities shipped were citrus, whose export season gained momentum in Q2, avocados, apples and pears, grapes, dates, and pineapples. For field crops, major export products were maize and sugar, and wool in the livestock category while other products included wines and fruit juices.
“Although unscathed by El Niño as water reservoirs were at their best levels for irrigation, inclement weather with severe frost hit some production areas of Limpopo, while parts of the coastal provinces of the Eastern Cape and Western Cape experienced excessive winds and flooding conditions, respectively,” he said.
Related stories
- Wool exports rebound amid industry transformation
- Logistics investment key for cross-border exports in Africa
Makube said not all was lost with the seasonal conditions as local and global challenges were directly impacting the growth of the agricultural sector and the economy.
“On the back of a sharp reduction in harvest, South Africa’s maize exports fell sharply by 36% y/y in Q2 of 2024 at 483,626 tons with the cumulative total for the marketing season to date, down by 45% y/y largely due to declines for yellow maize.
“The above trends indicate that agriculture’s quarterly gross domestic product (GDP) outcomes may soften in the next update. Nonetheless, it is not all doom and gloom as we have recently experienced a sustained electricity supply in the past few months which has reduced operational costs for irrigation, cold storage, and other intensive agriculture operations such as poultry, dairy, and piggeries.”
Makube said the recent Transport and Logistics Committee’s announcement of a timeline for the private sector operators to gain access to the country’s rail network by October 2024 increases optimism about the improvement of operating conditions for the sector.
“The weather outlook has turned the corner with La Niña on the way for the 2024/25 summer rainfall season which indicates potential bumper crops in the year ahead,” he said.
ALSO READ: Sugar industry vows not to leave any growers behind
Sign up for Mzansi Today: Your daily take on the news and happenings from the agriculture value chain.
