South Africa’s agricultural sector is export-orientated. Nearly half of the annual produce, in value terms, is exported in regular and good seasons.
The 2020/21 season has been one such season, producing the second consecutive strong output performance, with an even larger harvest for major field crops, horticulture and the wine industry than in 2019/20. This robust production could boost exports to surpass the 2020 level of US$10,2 billion.
For example, in the first quarter of 2021, agricultural exports amounted to US$2,9 billion, which is a 28% year-on-year (y/y) increase. We now have the full data for the second quarter which showed an even stronger performance with exports valued at US$3,2 billion, up 36% y/y. This means that in the first half of 2021, South Africa’s agricultural exports amounted to US$6,1 billion, which is a 30% y/y increase. Compared with last year, the growth is partly because of base effects, as the first half of 2020 was heavily affected by the Covid-19 related disruptions to global supply chains. Still, the growth reflects rising export performance for various products.
In the second quarter of this year, the top exportable products were citrus, apples and pears, maize, wine, grapes, pineapples and avocados, wool, and nuts, amongst other products. These products will likely continue dominating the export list in the second half of the year; thanks to large production volumes.
There were temporary delays in exports in the port of Durban at the start of July because of unrest. Moreover, later in July, there were additional brief delays in export activity across South Africa following IT glitches on Transnet systems. This will likely be reflected in the third quarter export trade activity. However, this does not change my view that exports could be larger in 2021 than the previous year because of the robust harvest.
To illustrate this point, consider the data from the South African Wine Industry Information and Systems, which estimated the 2021 wine grape crop at 1,5 million tonnes, 9% larger than the 2020 harvest. While there was a temporary ban on alcohol sales domestically, the exports continued for those entities with access to export markets, thus contributing to an increase in exports this year.
The Citrus Growers Association forecasts South African citrus exports at a record 159 million cartons for this year, up by 9% from 2020. The citrus industry was affected by the temporary closures in the Port of Durban during the unrest at the start of July and later faced delays in export activity when Transnet experienced IT glitches. Still, the response to these challenges was swift, and export activity quickly resumed.
