China is one of the countries that quickly placed a temporary ban on purchases of South African beef after the formal announcement of the foot and mouth disease outbreak. But in today’s environment, where trade policy matters can be easily viewed with suspicion, or frankly are political, some have already asked if China is taking a strong stance because they have recently agreed to increase beef imports from Australia. My answer to this would be: no.
What China has done is generally aligned with the typical practice of countries when there is an outbreak of animal diseases. It is mainly for protecting themselves against any possible risks.
Of course, not all of South Africa has foot-and-mouth disease cases. We only have this challenge in a few provinces and certain farms, mainly in KwaZulu-Natal, Mpumalanga, Eastern Cape, and Gauteng. Under these circumstances, it is fair to argue that temporary export restrictions should be imposed on the affected regions, not across the country. Notably, South Africa has long advocated for this approach. It may be fair for South African authorities to try to engage China in this possibility.
We also know that China and South African authorities signed a Memorandum of Understanding on foot-and-mouth disease last year. The document sought to encourage China to accept the compartmentalisation of South African beef imports, meaning that only the affected province would face restrictions rather than halting beef exports nationwide.
We also need to provide sufficient comfort to China about the quarantine in the affected areas, and the fact that the foot and mouth disease does not cross all livestock. It is mainly cattle, and even there, selected farms in particular provinces.
I am raising the specificity of “cattle” because China is South Africa’s largest export market for wool, accounting for roughly 70% of South Africa’s wool exports. In 2022, when we had an outbreak of foot and mouth disease, China also temporarily banned imports of wool, which had not been affected. So, we don’t want to see such challenges again as they present immense financial challenges to farmers.
The ideal step then is for the South African authorities to engage China about the sheep industry again proactively.
In a way, one would summarise the possible interventions insofar as trade in livestock products is concerned as the following:
- South Africa must again underscore to trading partners that the foot and mouth disease outbreak is in a few farms, mainly in KwaZulu-Natal, Mpumalanga, Gauteng, and the Eastern Cape. Stringent controls are already in place in these farms. Therefore, the unaffected areas should be permitted to continue trading.
- The trade in sheep, sheep products, and other small stock is unaffected, and no trade restrictions should exist.
- It also provides comfort that South Africa will increase its surveillance and vigilance and provide continuous, transparent updates.
Ultimately, we can’t blame countries like China for being extra careful. A few years ago, China had challenging animal diseases like African swine fever, significantly reducing China’s pork production and presenting upside food inflation pressures. That experience possibly adds to the extreme vigilance we are witnessing there.
Ultimately, some will question what this means for food inflation in South Africa. When there are still trade frictions, we may see some downward pressure on prices, at least in the near term.
We were in an environment where red meat prices started to increase. Because of improving domestic demand, we flagged meat as an upside risk to food price inflation. That view may have to be revised somewhat in the face of the current trade restrictions on red meat exports, which will lead to a slight increase in domestic supplies.
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