South Africa’s wool industry experienced a tough year in 2019. China, which accounts for an average of 71% of South Africa’s wool exports in value terms, placed a ban following the outbreak of the foot-and-mouth disease in Limpopo. This lasted for months and weighed on the farmers’ finances.
With the agricultural trade data for 2019 out, we now have a sense of the impact of this ban on exports. South Africa’s wool exports fell by 24% year-on-year in 2019 to US$302 million. The notable decline was in exports to China, which fell by almost a third from 2018, in both volume and value terms. What’s more, the Chinese share in South Africa’s wool exports fell to the lowest level in nine years – at 55%, as illustrated in Exhibit 1 below.
The countries where South Africa saw its wool exports expanding were mainly the Czech Republic, Italy, India and Bulgaria. With that said, these are small markets, China remains an important market for wool. In 2018, China accounted for roughly half of global wool imports in volumes terms, and more than half in value terms. Fortunately, South Africa’s wool exports to China has resumed, and if that continues with minimal interruptions, 2020 could show some level of recovery from 2019 levels. There are now measures in place to continue exporting wool to China, regardless of the most recent foot-and-mouth disease outbreak.
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