Despite BRICS not being a trade bloc, its economic cooperation arrangement offers South Africa a strategic platform to advance its trade interests. The agricultural sector is interested in this grouping, mainly in advancing exports into China and India. These countries already import a sizable volume and value of agricultural products from the world market, and South African businesses want to join these suppliers.
These robust exports have enabled South Africa to retain its position as a net exporter of agricultural products over time. In 2022, South Africa’s agricultural exports reached US$12.8 billion, up 4% from the previous year.
Despite various headwinds throughout the year, South Africa’s agriculture exports for 2022 did not decline as much as some feared. Data for the first eleven months of the year show exports at a cumulative US$11,9 billion, up by 3% from the same period in 2021.
The main interest of SA agriculture and agribusiness within BRICS is to advance agricultural exports, specifically to China and India. These are countries that have relatively solid economic growth prospects and large populations (and therefore markets).
In the third quarter of 2022, the value of South Africa’s agricultural exports — food, fibre, and beverages — amounted to $3,7bn, up 10% year on year. The main factors underpinning this are sizeable agricultural output in the 2021/22 production season and higher commodity prices.
South Africa’s agricultural growth path needs a focused trade policy strategy, but this should not be at the expense of existing agreements that have sustained the sector over the years.
One major challenge that emerged this past week that directly impacts South Africa’s agriculture is labour-related tensions at Transnet. The logistics utility declared a force majeure at its port operations last week, citing an illegal strike.
South Africa’s agricultural exports are vulnerable because of reliance on a few markets and weaknesses in domestic logistics chains.
Wandile Sihlobo is the Chief Economist of the Agricultural Business Chamber of South Africa (Agbiz) and the author of “Finding Common Ground: Land, Equity and Agriculture“.
He is a Senior Lecturer Extraordinary at the Department of Agricultural Economics at Stellenbosch University and a Visiting Research Fellow at the Wits School of Governance, University of the Witwatersrand.
Sihlobo was appointed as a member of President Cyril Ramaphosa’s Presidential Economic Advisory Council in 2019 (and re-appointed in 2022), having served on the Presidential Expert Advisory Panel on Land Reform and Agriculture from 2018.
He is also a member of the Council of Statistics of South Africa (Stats SA) and a Commissioner at the International Trade Administration Commission of South Africa (ITAC).
Sihlobo is a columnist for Business Day, The Herald and Farmers Weekly magazine.
His weekly podcast, “Agricultural Market Viewpoint with Wandile Sihlobo“, is available on all podcast platforms.
He holds a Bachelor of Science degree in Agricultural Economics from the University of Fort Hare and a Master of Science degree in Agricultural Economics from Stellenbosch University.