Agriculture Minister John Steenhuisen signed three key market access instruments with China on Monday, including the Memorandum of Understanding (MoU) on foot-and-mouth disease (FMD), and two protocols for the export of greasy wool and dairy products from South Africa to China.
Steenhuisen told Business Report yesterday that the Dairy Protocol would allow access to the Chinese market for South African dairy products, while the Greasy Wool Protocol would keep the trade in greasy wool open after an agreed treatment method.
“The foot-and-mouth MoU will mean that, for the first time, the Chinese will accept a compartmentalisation of the import of South African beef products. In the past, an outbreak of foot-and-mouth anywhere in the country would have led to a shutdown of the entire beef export market,” Steenhuisen said.
“Under the new MoU, it will only be restricted from the affected province. This is just the beginning of opening up the Chinese market for South African products, with more exciting announcements to be made later in the year.”
As part of the state visit, the two presidents, Cyril Ramaphosa and President Xi Jinping of China, jointly witnessed the signing of several bilateral co-operation instruments.
On Sunday, the Agricultural Business Chamber of SA (Agbiz) said China trade was under the spotlight again in the wake of the Forum on China–Africa Cooperation (FOCAC).
Agbiz’s chief economist, Wandile Sihlobo, said some African countries would likely use this opportunity to advocate for deeper trade, especially in agriculture.
“This is understandable in view of China’s dominant role in global agriculture. According to Trade Map data, China spends just over $200 billion a year on the imports of agricultural products,” Sihlobo said.
“Few African countries benefit from these imports due to low productivity. The leading suppliers are Brazil, the US, Thailand, Australia, New Zealand, Indonesia, Canada, Vietnam, France, Russia, Argentina, Chile, Ukraine, the Netherlands, and Malaysia.”
Sihlobo added that the only African country that featured in China’s Top 30 agricultural suppliers was South Africa, ranked 28th last year, accounting for a mere 0.4% ($979 million) in China's agricultural imports of $218bn last year.
“South Africa remains a negligible player in the Chinese agricultural market. Sudan and Zimbabwe are other African agricultural suppliers to China, and are ranked 33 and 34, respectively,” he said.
Agbiz said the African continent has weak productivity and low agricultural output, which explained its underperformance in agricultural exports to China.
Sihlobo said the South African message must be different from that of many African countries because it had an agricultural surplus each year, exporting about half of the country’s yearly production.
“South Africa’s agricultural exports amounted to a record $13.2bn in 2023. Indeed, this is nowhere close to the amount of money China spends annually importing agricultural products from the world, a staggering $218bn in 2023.”
China was already one of South Africa’s major agricultural markets for a range of fruits, wine, red meat, nuts, maize, soya beans and wool, among other products. But there was room for more ambitious export efforts.
“The South African agricultural sector consistently points out the need for a broader lowering of import tariffs in China and removing phytosanitary constraints in various products,” Sihlobo said.
“Indeed, the FOCAC is a high-level engagement and may not deal with the specifics of each value chain of agriculture or any product. However, a message of support and direction to the relevant departments of Chinese and South African government to work on lowering import tariffs and promoting agricultural trade would go a long way.”
BUSINESS REPORT