Positive news is often hard to come by in SA these days. We hear daily of the difficulties and costs to business caused by inefficient ports, weakening municipalities, rising crime and deteriorating roads.

Thus, reading the headline “Saudi Arabia to start SA meat imports as ban ends,” on financial news organisation Bloomberg, was refreshing. This development means everything is now in place for the kingdom to import beef from SA.

This comes after several engagements between the SA government and private sector with Saudi Arabian authorities to unlock this market.

Industry organisations such as Red Meat Industry Services and private sector stakeholders such as Karan Beef, Sparta Beef and Beefmaster, deserve much credit for this uplifting development on the beef export front.

Saudi Arabia has not featured prominently in SA’s beef export markets in the past, with only small volumes last exported in the early 2000s. Renewed access to this market is critical to SA’s ambition to expand beef exports, as the Saudi beef market is sizeable, reported to be worth more than $647m in 2021, according to data from Trade Map.

About 62% of Saudi beef imports are frozen products, while the rest are chilled or fresh meat. Leading suppliers to Saudi Arabia include Brazil, Australia, Pakistan, the US, New Zealand and Canada.

Beyond beef, the Saudi meat market is large, with all meat imports valued on average at $1.9bn annually over the past five years. This means over time, as SA increases its production in other meat value chains, Saudi Arabia could remain a strategic country for growing exports.

The positive news of SA export market development provides some relief considering that the local beef industry has faced a challenging operational environment for several reasons. One of the most significant challenges was the rise in feed prices since 2020, especially maize and soybeans.

The rise in animal feed prices coincided with a worsening of financial strain on consumers due to the damaging effects of the Covid-19 pandemic. We thus saw a decline in demand for red meat products as consumers opted for relatively cheaper forms of protein.

In addition, the spread of foot-and-mouth disease to six of SA’s nine provinces for the first time in history proved a major hurdle for the industry. This brought temporary bans in specific export markets, extending to auctions and livestock movement — mainly cattle — for some time in 2022.

Fortunately, feed prices have now softened. This is in response to large domestic maize and soybean harvests and the easing of global grain prices (irrespective of lingering worries about the Black Sea grain deal).

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), according to data from Trade Map. This is only slightly below the 10-year average.

Fresh beef accounted for 54% of overall exports, while the balance was frozen. Within this total figure a significant decline was recorded in frozen beef exports, which were 12,945 tonnes in 2022, down 24% year-on-year. Meanwhile, fresh beef exports increased by 2% year-on-year to 15,477 tonnes.

The key markets for SA’s fresh beef, accounting for 90% of fresh beef exports in 2022, were Kuwait (22%), Jordan (16%), Mozambique (13%), United Arab Emirates (12%), Qatar (9%), Netherlands (4%), Lesotho (3%), Canada (3%), Zimbabwe (3%), Mauritius (3%) and Eswatini (2%).

In the case of frozen beef, the top export markets for SA were Lesotho (16%), China (14%), Nigeria (14%), United Arab Emirates (9%), Mozambique (7%), Kuwait (6%), Egypt (5%), Qatar (4%), UK (3%), Netherlands (3%) and Jordan (2%). These markets accounted for 82% of SA’s frozen beef exports in 2022.

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 and efforts between the government and private sector.

These efforts should be extended to other commodities, mainly fruit and wine, where exports could be expanded while retaining existing markets in the EU, rest of Africa, Asia and the Americas. Importantly, addressing the daily challenges at SA ports, roads, and municipalities is equally essential for the success of this export initiative.

I have also published this piece on Business Day and The Herald.


Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za

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