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.
Trade is at the core of SA’s agricultural progress. But the past few months brought challenges in key markets such as China and the EU, threatening SA’s export activity. Fortunately, some of these challenges have now been resolved, and SA could see continuous exports, specifically to China.
As we continue to struggle with foot-and-mouth disease in the cattle industry, changes to the plant safety regulations in the EU affecting our exports, and the temporary ban on vegetable exports to Namibia and Botswana, the newfound collaborative approach between the government and industry will be a key to finding a productive path for the good of SA’s agriculture.
SA’s agricultural export activity is likely to soften this year from the 2021 record of $12.4bn. Lower production of key crops, the spread of animal disease and changes in phytosanitary regulations in key markets such as the EU will all weigh on export activity this year.
If Russia keeps to the deal it has signed with Ukraine allowing for the resumption of grain exports, much-needed relief will be provided to importing countries, including many in Africa.
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 saved 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.