China, Japan, India, Saudi Arabia and Bangladesh are some of the markets where SA agribusinesses are interested in expanding their presence. This is because of their growing populations and improving economic conditions, which support the demand for high-value agriculture, food and beverage products.
Meanwhile, the vandalism and criminality that is destroying Transnet’s infrastructure is of grave concern when it comes to agricultural exports. Some in the industry were worried that this, on top of the unrest in KwaZulu-Natal in July and the cyberattacks at Transnet, would have a notable impact on trade figures for the second half of this year.
We now have the trade data for the third quarter, and on a positive note exports were up 8% year on year to $3.4bn. This puts SA’s agriculture, food and beverage exports for the first three quarters of this year at $9.6bn. The top exportable products were citrus, maize, wine, apples and pears, nuts, sugar, fruit juices and wool. These are likely to continue dominating the export list in the fourth quarter.
The major factors underpinning these robust figures were the sizeable agricultural output in the 2020/2021 production season combined with general solid global demand and higher agricultural commodity prices. And there are still ample agricultural and beverage exports in the pipeline for the final quarter. I am inclined to believe that we could surpass 2020’s agricultural exports of $10.2bn, which were the second-highest on record. This year could even pass the record exports of 2018, which were valued at $10.6bn.
From a destination point of view, the African continent and Asia were the largest markets for SA’s agricultural exports in the third quarter, accounting for 35% and 33%, respectively, in value terms. The EU was the third-largest market, taking up 23% of SA’s agricultural exports. The balance of 9% was absorbed by other regions of the world.
Agriculture’s connected future: How technology can yield new growth
At the core of this success lies improved co-ordination between organised agribusiness and agriculture, Transnet and various port operating and trucker groups since the July unrest. For many role players in logistics the intentions expressed in finance minister Enoch Godongwana’s medium-term budget policy statement that the government would focus on improving the efficiency of logistical infrastructure was seen as a strong positive signal for long-term sustainability.
Notably, the finance minister’s indication of plans to have Transnet Freight Rail allow third-party access to the freight rail network by the end of 2022 will also assist the agricultural sector, which has long desired to increase its share of products transported by rail.
Efficient logistics are also key for imports, as SA still relies on other countries for products such as wheat, rice and vegetable oils. These products dominated the food importation bill in the third quarter as they cannot be sustainably produced at scale in SA because of unfavourable climatic and agronomic conditions.
As such, in the third quarter of this year agricultural imports increased 21% year on year to $1.8bn. The low base effect contributed to this notable jump because 2020 import activity was somewhat interrupted by Covid-19 lockdowns.
In sum, SA recorded a trade surplus of $1.6bn in the third quarter, which is 3% down compared with the corresponding period last year. But, as noted above, the narrowing of the trade surplus was not caused by lower exports. Ultimately, at the heart of this success lies healthy collaboration between various role players, and I urge them to continue with this pivotal engagement.
• Sihlobo (@WandileSihlobo), the chief economist at the Agricultural Business Chamber of SA and author of ‘Finding Common Ground: Land, Equity, and Agriculture’ is a senior fellow in Stellenbosch University’s department of agricultural economics.
