One positive development in SA agriculture in the past week was the reopening of the Chinese beef market and the firm establishment of beef access to the kingdom of Saudi Arabia.

The latter has not featured prominently in SA’s beef export markets in the past, with small volumes last exported in the early 2000s. The renewed access is critical to SA’s ambition to expand its beef exports, as the Saudi beef market is sizeable at more than $647m in 2021, according to Trade Map data.

About 62% of the Saudi beef imports was frozen beef, while 38% was chilled or fresh. Some of the leading suppliers to Saudi Arabia include Brazil, Australia, Pakistan, the US, New Zealand and Canada.

Beyond beef, the overall Saudi meat market is large, with total meat imports valued at about $1.9bn a year on average over the past five years. This means as SA increases its production in other meat value chains over time, Saudi Arabia could become a strategic country for export growth.

China has an established trade relationship with SA. Over the past six years China has been the leading importer of SA frozen beef cuts in value terms. Therefore, the easing of import restrictions put in place after an outbreak of foot-and-mouth disease is a welcome development because it is likely to lead to an increase in exports.

These positive developments provide some relief while the SA beef industry has faced a challenging operational environment for several reasons. One of the most significant challenges is the rise in feed prices since 2020, especially for maize and soya beans. The rise in animal feed prices coincided with rising financial strain on consumers due to the Covid-19 pandemic’s damaging effects.

Demand for red meat products fell as consumers opted for relatively cheaper forms of protein. Moreover, the spread of foot-and-mouth disease to six of SA’s nine provinces for the first time yet was particularly challenging for the industry since it brought about temporary bans in specific export markets, extending to auctions and livestock movement, mainly cattle, for some time in 2022.

Feed prices have now softened somewhat, with maize and soya bean prices down 13% year on year on average. This is a response to large domestic maize and soya bean harvests and the easing of global grain prices (irrespective of lingering worries about the Black Sea grain deal). The resumption of exports to China and the opening of export opportunities to Saudi Arabia adds to this improved operational environment.

Despite the foot-and-mouth disease challenge, SA beef exports did not collapse. Some markets remained open, though with strict controls. This is evident in SA’s beef exports for 2022, which amounted to 28,422 tonnes, down 12% from 2021. This is only mildly below the 10-year average.

The key markets for SA’s beef include China, Lesotho, Kuwait, Jordan, Mozambique, United Arab Emirates, Qatar, the Netherlands, Lesotho, Canada, Zimbabwe, Mauritius and Eswatini.

Overall, the broadening of SA’s beef export markets is a welcome development and shows what the country could achieve through collaboration and aligning interests between the government and the private sector.

The type of effort that has led to the opening of key markets such as Saudi Arabia should be extended to other commodities, especially fruits and wine, in which producers are ready and eager to expand their export destinations while retaining existing markets in the EU, rest of Africa and within Asia and the Americas.

Organised agriculture, agribusinesses and the government share this ambition and should therefore continue to collaborate to find new growth opportunities.

Written for and first published on Business Day.

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