Citrus exports. Photo: Simphiwe Mbokazi (ANA)
Africa’s demand for South African agricultural products will likely increase in the 2023/24 marketing year, says Wandile Sihlobo, chief economist at the Agricultural Business Chamber (Agbiz).
The 2023/24 marketing year corresponded with the 2022/23 production season.
In the previous season, countries such as Zimbabwe, Zambia, and Tanzania had decent supplies of grains and other foodstuffs on the back of a reasonably good harvest.
“Reports from FEWS NET suggest that dry and hot weather conditions in the earlier part of the 2022/23 production season negatively impacted crops in southern Angola, Zimbabwe, Mozambique, and northern and eastern Madagascar. Moreover, there are growing concerns that higher fertiliser prices have led to lower usage by farmers in these countries, which would ultimately undermine the yields,” Sihlobo said.
He said this meant that South African producers should closely monitor the African market and increase supplies where market conditions allowed.
Beyond these near-term seasonal matters, the country’s agribusiness community, as the major exporters of produce from South African farms, along with the government officials, should maintain close engagement with counterparts across the rest of Africa as this was not only a diplomatic consideration, but also a commercial matter.
Africa remained the largest export market for South Africa’s agricultural produce. The sector recorded agricultural exports of $12.8 billion (R234bn) last year and Africa accounted for 37% of this. Agbiz said this was not an anomaly.
“The continent has accounted on average for 38% of South Africa’s agricultural exports by value per annum over the past five years. Unlike the other regions South Africa exports to where the composition of products is predominantly fruits, beef, wool and wine, maize is the leading export product on the African continent,” it said.
Sihlobo said other products exported to the rest of the Africa included apples, wheat, animal feed, prepared foods, wine, fruit juices, soybean oil, sunflower oil, alcoholic beverages, and soybean oilcake. He said SA’s leading markets were Botswana, Namibia, Mozambique, Zimbabwe, Lesotho, eSwatini, Zambia, Angola, Nigeria, and Mauritius.
“Except for Nigeria, these markets are within the Southern African Development Community’s Free Trade Area, which has benefited South Africa greatly. Moreover, the infrastructure and proximity advantage of these markets contribute to the concentration of South African agricultural exports to this region.”
Sihlobo said although they continued to argue that South Africa should expand its agricultural export markets to new frontiers such as India, China, Bangladesh, Saudi Arabia, and South Korea, among others, the export drive should not be at the expense of the existing markets.
South Africa should actively engage with existing markets to stimulate the continued expansion of South African agricultural exports.
As the country advanced this trade relationship with the Southern African Development Community and the rest of the African continent, various industry and government engagements would need to happen to keep “warm relations”.
“Such an approach would help to avoid erroneous policy decisions, such as what Namibia and Botswana did in 2022 by blocking vegetable imports from South Africa. This policy action negatively affected South African farmers who had increased production in anticipation of the regional demand,” Sihlobo said
Meanwhile, in its input-cost monitoring an update on selected items, the National Agricultural Marketing Council (NAMC) said that between February, 2021, and February this year, local fertiliser price trends between February, 2021, and February this year for potassium chloride (KCL), mono-ammonium phosphate (MAP) and urea (granular) increased by 147.9% (R6 429 to R15 937), 71.4% (R9 753 to R16 717) and 60.9% (R8 012 to R12 890), respectively.
BUSINESS REPORT