In the third quarter of this year, the value of South Africa’s exports of agriculture, that is food, fibre and beverages amounted to $3.7 billion (R65bn), up 10% year on year (y/y), Agricultural Business Chamber chief economist, Wandile Sihlobo, said yesterday.
South Africa’s agricultural trade data painted an encouraging picture, despite the sector continuing to struggle with poor road networks and inefficiencies in rail networks and ports.
According to the economist, the main factors underpinning this was the sizeable agricultural output in the 2021/22 production season, and higher commodity prices.
“Citrus, maize, nuts, wine, apples and pears, sugar, fruit juices, berries, soy beans and wool were among the most crucial products exported in the third quarter. We had feared that 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 of the year, Sihlobo said.
“Fortunately, the temporary solution that industry and the government advocated helped to ease trade flows, and its outcome is evident in these trade data. However, there are ongoing engagements between South Africa and the EU authorities for the long term on the new citrus plant safety regulations, which involve stringent new cold treatment requirements. The EU argues that these were introduced to protect them from a quarantine organism, ie the false codling moth,” he said.
Agbiz said ironically, South Africa had rigorous measures to control this organism, which the EU should ideally recognise so that the trade could continue. The outcome of the government’s engagements would be crucial since the EU was a sizeable market for South Africa’s citrus industry and the whole agricultural sector.
In the third quarter of this year, citrus was still the top exportable agricultural product by value in South Africa with roughly the same value as the third quarter last year, just more than $1.06bn.
Wool was another key product that faced export restrictions in China earlier this year. The bounce back on exports observed in the third quarter values was said to also signal the resumption of trade with China. This was an important market for South Africa’s wool, accounting for over two-thirds of exports.
Africa remained the largest agricultural export market for South Africa in the third quarter of this year, accounting for 32% in value terms. Asia and the Middle East collectively were the second largest region accounting for 31% of the exports, with the EU holding the third position with a 19% share in the total exports in value terms.
The UK was one of the most important agricultural markets for South Africa and accounted for 6% of overall agricultural exports in the third quarter. The balance of 12% value constitutes the Americas and other regions of the world.
Sihlobo said South Africa’s trade policy and activity were, of course, not one-directional.
“South Africa is also a significant importer of agricultural products. South Africa relies on other countries for crucial food products such as wheat, rice, palm oil, sunflower oil, poultry and whiskeys. These products dominated the food import bill in the third quarter. Some, such as rice, and palm oil cannot be sustainably produced at scale in South Africa, because of unfavourable climatic conditions. As such, in the third quarter of 2022, agricultural imports increased by 5% y/y to $1.9 billion,” he added.
Besides the increase in volumes of imports, the higher agricultural commodity prices also contributed to the high import bill.
“We believe rice, wheat, and palm oil will continue leading the agricultural import product list when data for the remainder of the year are published,” Sihlobo said.
Overall, South Africa recorded an agricultural trade surplus of $1.9bn in the third quarter of 2022, up by 14% from last year’s corresponding period. The robust exports and a modest increase in imports contributed to this strong trade surplus.
BUSINESS REPORT