by Wandile Sihlobo | Apr 14, 2025 | Agricultural Trade
Over the weekend, Chinese President Xi Jinping correctly remarked that there are ‘No Winners’ in tariff wars. The full consequences of the unfolding tariff war are yet to be clear on a global growth scale, but they are certainly on the downside.
However, a few countries may emerge as winners from a sectoral perspective. Brazil and Argentina are evolving as the leading agricultural exporters to China, as U.S. farmers face higher retaliatory tariffs in China.
The Financial Times published an article this past weekend that explains what is unfolding in just these few months. It states that:
“Brazil’s beef sales to China climbed a third in the first quarter of 2025, compared with a year earlier, while Chinese imports of its poultry increased 19 per cent year on year in March, according to local trade associations. Meanwhile, foreign demand has seen Brazilian soybeans trading at a $1.15 premium to their U.S. counterparts on global markets, having sold at a 25-cent discount only in January.”
This is not new. China started shifting to Latin America after the first trade friction with the U.S. during President Trump’s first term. I have shown this chart several times (featured chart), which accurately illustrates what is happening with China’s agricultural imports.
We think more about China in agriculture because China is a dominant player in global trade. In 2023, China was a leading agricultural importer, accounting for 11% of global farm imports, totalling over US$200 billion.
The leading suppliers of agricultural products to China in 2023 were Brazil, the U.S., Thailand, Australia, New Zealand, Indonesia, Canada, Vietnam, France, Russia, Argentina, Chile, Ukraine, the Netherlands, and Malaysia.
The U.S. position will likely decline further this year.
Reflecting on the current shifts in China’s agricultural imports and the dominance of Latin America has partly motivated us to argue that South Africa should also position itself among the key suppliers of farm products to China.
South Africa remains the only African country in China’s top 30 agricultural suppliers, ranked 28 in 2023. Still, South Africa remains a negligible player in the Chinese agricultural market, accounting for a mere 0.4% (US$979 million) of China’s agricultural imports of US$218 billion in 2023.
Given this reality and China’s efforts to diversify its agricultural suppliers, it is key that the South African message in engagements with the Chinese authorities should be more firm and persuasive in promoting agricultural exports.
South Africa has an agricultural surplus yearly, exporting about half of its yearly production. In 2024, South Africa’s agricultural exports amounted to a record US$13.7 billion. Indeed, this is nowhere close to the amount of money China spends annually importing agricultural products from the world, a staggering US$218 billion.
South Africa is not currently deeply involved in China’s agriculture, among other things, because of the higher import tariffs and some phytosanitary constraints on various products.
With China focused on trade matters nowadays, South Africa must press them to open up the market and strengthen agricultural trade with our country. I think this should be a topic of conversation in engagements with Chinese authorities.
The Brazilian and Argentinian farmers cannot be the only winners in this challenging time; South Africa’s agriculture must be part of this global story.
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by Wandile Sihlobo | Apr 6, 2025 | Agricultural Trade
At a time of heightened geoeconomic tensions, it is tempting to argue that countries, industries and businesses must align with particular interests or regions. For businesses and industries, the ideal path should be to remain neutral and continue to broaden business activity with a wider range of countries.
This is especially critical for South Africa’s agriculture. The sector is export-oriented, with exports reaching a record US$13,7 billion in 2024, up 3% year-on-year. The export markets and products are varied, with the African continent absorbing nearly half, while the EU, Middle and Asia, and the UK are also sizable markets. South Africa should not rest on this success but should maintain and deepen trade relations in regions where capacity remains.
The EU-South Africa agricultural trade has had a few frictions, mainly related to citrus. There is a growing sentiment amongst EU farmers that the region must manage its imports and protect the domestic producers. We don’t believe the EU policymakers would respond to farmers’ needs through tariffs or stronger policies discouraging imports. Still, there remains a chance that we could see occasional non-tariff barriers raised in sensitive products.
Critically, the EU market may not offer a lot of growth opportunities for South Africa in our view. Still, maintaining openness and friendship with the EU is vital and key to keeping the current access to agricultural exports that South Africa currently enjoys in this region.
The Middle East promises more potential for expansion, as it is not as saturated as what we observe in the EU, and there are no competing domestic farmer interests in this region. While a significant share of South Africa’s agricultural products are already exported to the Middle East, the presence of South African agriculture in this region is arguably still peripheral.
For example, according to Trade Map data, Saudi Arabia imports roughly US$25 billion of agricultural products a year. South Africa is one of the minor exporters, accounting for a mere 1% of the Saudi Arabian imports, and ranks 31st in the agricultural imports list.
Moreover, the UAE is a large agricultural market that imports roughly US$22 billion of agricultural products annually. South Africa has a 2% share and is the 16th largest supplier. Qatar imports about US$4 billion of agricultural products a year. But here, South Africa also plays a minor role, ranking 10th in the list of suppliers to Qatar and having a 2% market share in Qatar’s agricultural imports.
The countries that occupied a larger market share in these Middle Eastern countries were India, Brazil, Australia, the United States, Canada, New Zealand, United Kingdom, Denmark, Netherlands, Italy, Spain, Argentina, Russia, France, and Turkey. Regarding the products, the Middle East primarily imports various meat products, grains, oilseeds, and fruits, amongst other products.
Given this peripheral participation and the possibility of increasing South Africa’s agricultural production in the coming years, there remains room for greater participation in the Middle-East market. There is a need for targeted promotion and marketing of products, along with government support, to nudge the Middle Eastern countries to address any remaining phytosanitary barriers and tariffs for South African products in these countries.
Equally, South Africa must work to retain the current access for agricultural products and other products in the US. However, a framework for a post-AGOA path must focus on a free trade agreement, and how we manage the higher tariffs imposed by the US government.
The African continent, which remains an anchor of South Africa’s agricultural exports, also requires continuous engagements to strengthen relations. This is ideal to avoid the friction we observed with the vegetable export ban in Botswana (now resolved and reopened) and Namibia (restrictions have not been lifted).
Overall, South Africa should take a long-term vision and appreciate that industry growth relies on relationships with varied countries. The government should lead these efforts collaboratively with businesses to open the export markets continuously. The growth, inclusiveness, and job creation all hinge on the sector’s ability to open as many export markets as possible.
Written for and first appeared in Business Day.
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by Wandile Sihlobo | Apr 4, 2025 | Agricultural Trade
South Africa was not spared of the “Liberation Day” tariffs announced by US President Trump against various countries. South Africa will face tariffs between 10% and 30% in the US for all products. The specificity of by-products is not yet clear.
We know now that a baseline tariff of 10% will apply to imports from all countries. It remains unclear if there are differences in the remaining 20% (that makes up the rest of the 30%) duties levied against South Africa.
Under this environment, it is prudent to assume that South Africa will be out of the AGOA (the African Growth and Opportunity Act), which afforded us duty-free access to the US for a range of products, including the auto industry and agriculture.
We suspect there may be some differences product by product, but that will be clear as soon as the US authorities release more information. We know that the reciprocal tariffs will generally range from 10% to 60% (and to 30% in the case of South Africa). The exact levy will be based on what the White House Council of Economic Advisers thinks is the sum of tariffs and non-tariff barriers on US goods to a specific country.
Indeed, some products face higher tariffs in the South African market, but there are rebates through the International Administration Commission of South Africa (ITAC) to assist any country that requires relief. South Africa is arguably amongst the countries with the lowest tariffs, which some local stakeholders have previously argued was a policy mistake at the onset of South Africa rejoining the global economy after 1994, following years of isolation.
The details of how the various domestic industries engage with this will also be precise in the coming days and weeks. But what I must stress regarding agriculture is that the US accounted for 4% of the total US$13,7 billion in exports in 2024. While this may seem small, it is significant for specific industries, particularly citrus, grapes, wine, and fruit juices. Since the inception of AGOA, South Africa’s share of agricultural exports to the US has remained at similar levels.
With a 30% tariff now, while South African agricultural competitors such as Brazil, Chile, and Australia will face only 10% of the tariff, we will surely face a competitiveness problem in the US market. And yes, the tariff is a tax on the US consumer, not South Africa. However, it affects South African products’ penetration rate in these markets.
It may not be easy, and diverting products to other friendly markets will take time. Still, this should be the main preoccupation of the Department of Agriculture, assisted by the Department of Trade, Industry and Competition. The Middle East and Asia should be the primary focus for South Africa to build access, mainly in China, India, and Saudi Arabia.
The Middle East promises more potential for expansion, as it is not as saturated as what we observe in the EU, and there are no domestic competing farmer interests in this region. While a significant share of South Africa’s agricultural products are already exported to the Middle East, the presence of South African agriculture in this region is arguably still peripheral. For example, according to Trade Map data, Saudi Arabia imports roughly US$25 billion of agricultural products annually. South Africa is one of the most minor exporters, accounting for a mere 1% of the Saudi Arabian imports, and ranks 31st in the agricultural imports list.
Moreover, the UAE is a large agricultural market that imports roughly US$22 billion of agricultural products annually. South Africa has a 2% share and is the 16th largest supplier. Qatar imports about US$4 billion of agricultural products a year. But here, South Africa also plays a minor role, ranking 10th in the list of suppliers to Qatar and having a 2% market share in Qatar’s agricultural imports.
The countries that occupied a larger market share in these Middle Eastern countries were India, Brazil, Australia, the United States, Canada, New Zealand, United Kingdom, Denmark, Netherlands, Italy, Spain, Argentina, Russia, France, and Turkey. Regarding the products, the Middle East primarily imports various meat products, grains, oilseeds, and fruits, amongst other products.
Given this peripheral participation and the possibility of increasing South Africa’s agricultural production in the coming years, there remains room for greater involvement in the Middle-East market. There is a need for targeted promotion and marketing of products, along with government support, to nudge the Middle Eastern countries to address any remaining phytosanitary barriers and tariffs for South African products in these countries.
The case for pushing more agricultural exports to China is clear in Asia. In 2023, China was a leading agricultural importer, accounting for 11% of global agricultural imports, which totalled over US$200 billion, as the chart above shows. The US, Germany, the Netherlands, the UK, France, and Japan trailed China.
The leading suppliers of agricultural products to China are Brazil, the US, Thailand, Australia, New Zealand, Indonesia, Canada, Vietnam, France, Russia, Argentina, Chile, Ukraine, the Netherlands, and Malaysia.
South Africa is the only African country in China’s top 30 agricultural suppliers, which ranked 28 in 2023. Still, South Africa remains a negligible player in the Chinese agricultural market, accounting for a mere 0.4% (US$979 million) of China’s agricultural imports of US$218 billion in 2023.
China is already one of South Africa’s major agricultural markets for fruits, wine, red meat, nuts, maize, soybeans, and wool. However, there is room for more ambitious agricultural export efforts.
What the South African authorities should argue for in China is a need for lower import tariffs and the removal of phytosanitary constraints on various products. This would unlock the export potential into this market.
This diversification approach for South Africa’s agriculture is more urgent. Beyond the US tariffs, we will have a boom in harvesting various fruits in the coming years, which will require a market.
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by Wandile Sihlobo | Mar 29, 2025 | Agricultural Trade
For a sector some have portrayed as being under siege, the trade figures for 2024 and the years before may surprise some. South Africa’s agricultural sector remains resilient, with no direct policy threats.
The challenges the sector faced in 2024 were environmental and animal health in nature, not political, as we see at the start of 2025 through statements of imaginary land grabs. We faced the mid-summer drought that weighed negatively on grain production and the Foot-and-Mouth Disease in cattle.
Still, the robust harvest of fruit, combined with the recovery in livestock and the better stocks of grains from the previous season, supported South African agricultural export growth in 2024. Agricultural exports reached a new record of US$13,7 billion in 2024, up 3% from the previous year, according to data from Trade Map. This reflects both an increase in the volume of agricultural exports and higher prices of some products.
Moreover, while logistics infrastructure efficiency remains a primary concern for the farming sector, the ongoing collaboration between Transnet, private industry, and the various logistical organizations assists in ensuring the continuous flow of products, even if there are delays in specific periods.
The top exported products by value include citrus, grapes, maize, apples and pears, wine, nuts, fruit juices, sugar, berries, dates, pineapples, avocados, wool, apricots and peaches, ciders, and beef, amongst other products.
From a regional perspective, the African continent maintained the lion’s share of South Africa’s agricultural exports in 2024, accounting for 44% of the total value. The products leading the exports list in the African continent were maize, maize meal, wheat, sugar, apples and pears, fruit juices, wine, soybean oil, sunflower oil, oilcake, and rice, amongst other products.
As a collective, Asia and the Middle East were the second-largest agricultural markets, accounting for 21% of the share of overall farm exports in 2024. The exports to this region were mainly citrus, nuts, apples and pears, wool, berries, sugar, beef, mutton, wool, wine, fruit juices, maize, apricots and peaches.
The EU was South Africa’s third-largest agricultural market, with a share of 19%. Citrus, grapes, wines, dates, avocados, pineapples, fruit juices, apples and pears, berries, apricots and cherries, nuts, and wool were amongst the top agricultural products South Africa exported to the EU in 2024.
The Americas region accounted for 6% of South Africa’s agricultural exports in 2024. The main exported products include citrus, grapes, wine, fruit juices, and nuts. The rest of the world, including the United Kingdom, accounted for 10% of the exports.
Given ongoing concerns about South Africa’s participation in the AGOA (Africa Growth and Opportunity Act) trade arrangement, it is worth looking at South Africa’s agricultural exports to the US are only 4% (which is part of the 6% exports to the Americas region we mention above).
Still, this is not to minimize their value, as few specific industries are primarily involved in these agricultural exports to the US. These are mainly citrus, grapes, wine, and fruit juices. Since the start of AGOA, the percentage share of South Africa’s agricultural exports to the US has remained at these levels.
If South Africa were excluded from AGOA, the country would face an average import duty of about 3% (at the Most Favored Nations Rate). This underscores the fact that AGOA mainly offers price competitiveness to the products South Africa exports to the US. The 3% tariff would give an advantage to other competitors that access the US market duty-free (as South Africa currently does under the AGOA).
South Africa does not engage in one-way trade. The country imports various agricultural products. In 2024, South Africa’s agricultural imports amounted to US$7,6 billion, up by 8% year-on-year, according to data from Trade Map. The uptick resulted from a slightly higher value and volume of major products South Africa imports, like wheat, palm oil, rice, poultry and whiskies.
South Africa lacks favourable climatic conditions to grow rice and palm oil and thus relies on imports of these products. Regarding wheat, South Africa imports nearly half of the annual consumption.
In the Free State province, which used to be amongst the major wheat-growing regions of the country, production has declined notably over time because of the unfavourable weather conditions and profitability challenges of wheat relative to other crops. Meanwhile, imports are around 20% of the annual domestic consumption of poultry.
Subsequently, when we account for the exports and the imports, South Africa’s agriculture recorded a trade surplus of US$6,2 billion in 2023, down 2% from the previous year. The decline is primarily because of the jump in the import value.
In the current environment of heightened geopolitical tension, South Africa’s export-oriented agricultural sector must work to maintain the current export markets and broaden to new markets. The focus for both policymakers and agribusinesses and organized agriculture should be on the following aspects:
First, South Africa should maintain its focus on improving logistical efficiency. This entails investments in the port and rail infrastructure and improving roads in farming towns.
Second, South Africa must work hard to retain the existing markets in the EU, the African continent, Asia, the Middle East, and the Americas. This is even more important in the current climate, where US policymakers are increasingly discussing raising tariffs.
Lastly, South Africa’s Department of Trade, Industry and Competition, the Department of International Relations and Cooperation, and the Department of Agriculture should lead the way for export expansion in the current export markets and the search for new export markets. South Africa should expand market access to some key BRICS countries, such as China, India, Saudia Arabia, and Egypt.
The BRICS grouping should emphasize the need for member countries to lower the import tariffs and address artificial phytosanitary barriers hindering deeper trade within this grouping. Other strategic export markets for South Africa’s agricultural sector include South Korea, Japan, Vietnam, Taiwan, Mexico, the Philippines and Bangladesh.
Ultimately, the organized agriculture groupings and the South African government share this ambition for export market expansion. Therefore, in the current fragmented world, more resources and marketing of agricultural products abroad must be used to achieve this work.
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by Wandile Sihlobo | Mar 9, 2025 | Agricultural Trade
I just read a piece in the ChinaDaily about China’s efforts to improve food security. I thought it would be helpful to comment on how South Africa could participate in China’s journey toward food security.
China will continue to be a priority for South Africa’s efforts to enhance its agricultural exports. While we currently lack extensive access to China for our agricultural products, tremendous potential exists.
The latest comments by China’s Agricultural Minister, Mr Han Jun, that their grain supplies remain tight and food security remains a priority again underscores the importance of the Chinese market.
Indeed, China’s long-term ambition is somewhat self-reliance. The Agricultural Minister, Mr Han Jun, stated today, March 8, that:
“As a nation of 1.4 billion people, we must rely on ourselves to feed our population. We cannot depend on others,” .”Food security is a priority, and we must always remain vigilant.”
Still, as a country that accounts for 11% of global agricultural imports, China’s reality of being an importer won’t change soon.
China is the biggest opportunity, mainly because of its population and economic size. China, the world’s second-largest economy after the US, must feed its large population. To do this, China is a huge importer, resulting in an agricultural trade deficit with the rest of the world of about US$117 billion – see the featured chart. This suggests there’s a gap for countries with good agricultural offerings.
South Africa has lagged behind its competitors in gaining from this growth in Chinese imports. It stands at number 32 in the list of countries that supply China with food. South Africa’s agricultural exports to China accounted for a mere 0.4% of Chinese imports in 2023.
China’s size warrants more attention from South African policymakers. The South African agricultural sector has been calling for greater efforts to increase South African exports to China.
China’s top agricultural imports include oilseeds, meat, grains, fruits and nuts, cotton, beverages and spirits, sugar, wool, and vegetables. South Africa is already an exporter of these products to various countries in the world and is producing surpluses for some. This means there is room to expand to China, especially as South Africa’s agricultural production continues to increase, with more volume expected in the coming years.
Therefore, it makes sense for South Africa to focus more on widening export markets to China. This means arguing for a broad reduction in import tariffs that China currently levies on some of the agricultural products from South Africa. Removing phytosanitary constraints in various products is also key.
There is room for more ambitious export efforts. Three government departments must lead the conversation – Trade, Industry and Competition; Agriculture; and International Relations and Cooperation.
The South African authorities must continuously engage China to soften these barriers and encourage agricultural trade between our countries.
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by Wandile Sihlobo | Mar 7, 2025 | Agricultural Trade
The first week of February 2025 was eventful for global agriculture. Following U.S. President Donald Trump’s announcement of further tariffs on China, China retaliated.
On 4 March, China announced retaliatory tariffs on U.S. agricultural products, imposing a 10% tariff on sorghum, soybeans, pork, beef, aquatic produce, fruits, vegetables, and dairy products, alongside a 15% tariff on chicken, wheat, corn, and cotton.
During President Trump’s first term, when China imposed retaliatory tariffs targeting agriculture, U.S. farmers were among the most affected due to China’s significance in their exports. This time around, it will be no different.
One would even argue that China is now more prepared than in the past, as it has been building its domestic agricultural production for the past few years and switching to new suppliers of vital farm products in South and Latin America.
The featured chart clearly illustrates what is happening with China’s agricultural imports. What is clear now is that South America, like in 2018, may be among the winners as China searches for new sources of agricultural products.
The ASEAN countries and the Black Sea region are also among the primary beneficiaries of these changes in agricultural trade shifts.
With all the progress China has made in boosting its agricultural produce, it remains a major importer. In 2023, China was a leading agricultural importer, accounting for 11% of global farm imports, totalling over US$200 billion, as the chart above shows.
The top agricultural products China imports from the world market include soybeans, beef, various fruits, maize, wheat, rapeseed, palm oil, poultry meat, and sorghum, amongst other products.
The major suppliers of agricultural products to China are Brazil, the U.S., Australia, Thailand, Vietnam, New Zealand, Indonesia, Canada, France, Argentina, Chile, Russia, and Malaysia, amongst others.
South Africa is the only African country in China’s top 30 agricultural suppliers, which ranked 28 in 2023. Still, South Africa remains a negligible player in the Chinese agricultural market, accounting for a mere 0.4% (US$979 million) of China’s agricultural imports of US$218 billion in 2023.
Sudan and Zimbabwe are other African agricultural suppliers to China, ranked 33 and 34, respectively.
Are there any opportunities for South Africa during this disruptive time?
There certainly is an opportunity. Even without China’s clashes with the U.S., South Africa had a chance and was willing to expand its access to the Chinese market.
South Africa’s significant challenges in the Chinese markets are higher import tariffs and phytosanitary barriers for various products.
The higher tariffs make South African farm products less competitive than Australia and Chile, which access the Chinese market for duty-free products.
Given the reality of clashes between China and the U.S. and China’s efforts to diversify its agricultural suppliers, it is key that the South African message in engagements with the Chinese authorities is more firm and persuasive in promoting agricultural exports.
South Africa has an agricultural surplus yearly and has maintained a trade surplus for over a decade. In 2024, South Africa’s agricultural exports amounted to a record US$13.7 billion.
Indeed, this is far from the staggering US$218 billion that China spends each year on importing agricultural products from around the globe.
China is already one of South Africa’s major agricultural markets for fruits, wine, red meat, nuts, maize, soybeans, and wool.
However, there is room for more ambitious agricultural export efforts. Importantly, these products would be even more competitive if there were zero duties in accessing the Chinese market.
Ultimately, the South African agricultural sector—organized agriculture and researchers—consistently points out the need to lower import tariffs in China and remove phytosanitary constraints on various products.
The South African government must build on this momentum and message in its engagements with Chinese authorities.
At a time when South Africa’s export-oriented agricultural sector faces some uncertainty in some of its markets, mainly the U.S., it may be appropriate to argue for greater access to China to diversify our agricultural exports and help China diversify its sources.
Still, in engagements with China, South Africa should maintain an open-minded posture with other regions that are key markets. For example, South Africa must consistently work to retain the duty-free access we enjoy in the U.S. market and other key export markets in the African continent, EU, Middle East, Asia, and other regions.
Our engagements with China are primarily for diversification, not replacement of the existing export markets.
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by Wandile Sihlobo | Feb 11, 2025 | Agricultural Trade
Now that US President Donald Trump has followed through with his election promise to impose tariffs on imports from China, Canada and Mexico — and then suspended the latter two — what can we expect next?
And how should organised agriculture and the South Africa’s government prepare themselves for this “new normal”?
Trump’s use of tariffs to pursue America’s mercantilist objectives is no surprise. Similar tariffs were deployed in his first term in 2018, but that was against China, and Western countries were in silent consensus that this was a strategic rivalry. Now also targeting close allies such as Canada and Mexico, this takes trade friction to a whole new level.
In the coming years, as trade friction persists globally, we suspect there will be a change to various regions’ trade approaches, with some preferring more protectionism for their markets.
The EU is one such region. Farmers from France and other major EU countries have for months called for restrictions on imports of agricultural products. This is likely to intensify and in some instances it may take the form of less obvious nontariff barriers.
In the past EU officials have resisted pressure to impose tariffs, preferring to maintain a relatively open market approach. Nontariff barriers have been the EU’s preferred instrument to keep its producers happy. An example of this is SA’s citrus industry, which has a pending case against the EU at the World Trade Organisation.
If trade fragmentation and economic nationalism intensifies SA agriculture and other exporting industries will be at risk. The SA agricultural sector generated much of its growth over three decades through increased exports. Roughly half of what SA agriculture produces in value terms goes to export markets.
For 2024 these exports likely exceeded $14bn mark for the first time. Higher commodity prices and strong fruit exports were the main drivers. The actual figures we have so far are for 2023, where SA’s agricultural exports reached a record $13.2bn, according to Trade Map data.
The EU, broader Africa, Middle-East and Asia are part of our large export markets. In value terms the Americas accounted for only 6% of SA’s overall agricultural exports in 2023. Still, the region is important, for two reasons:
- Exports are concentrated in specific industries, mainly nuts, citrus, wine, grapes and fruit juices. This means while the risks associated with this market are not as significant as for overall agricultural exports, they present challenges to specific industries.
- Negative sentiment arising from any confrontation with the Americas would have a negative effect on SA agriculture. It is, therefore, vital that we maintain positive relations with this region.
SA must focus more on strengthening and revitalising relations with its trade partners beyond Europe. For each export-orientated industry there should be regular engagement between local business representatives, organised business and the government, to hone our export strategies.
In these times SA must maintain a posture as an open global actor that seeks to build relations across the globe on a pragmatic basis. This openness and pragmatism — rather than ideology and dogma — should be its leitmotif in bilateral and multilateral trade relations.
Beyond existing markets we must urgently widen exports of various agricultural products. This could be challenging at a time when the world is fragmented and looking “inward”, which will require considered economic diplomacy rooted in strategic collaborations between the government and industry.
Both the department of trade, industry & competition, and international relations & co-operation have a pivotal role to play. Beyond working together to advance SA’s economic diplomacy, these departments must build strong capabilities in their bilateral trade desks.
Written for and first appeared in the Business Day.
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by Wandile Sihlobo | Feb 4, 2025 | Agricultural Trade
Given the fragmented trade and South Africa’s quest to diversify its exports, we must explore a range of regions. The Middle East is one such interesting region, and it is deepening its economic ties with Africa.
In March 2024, The Economist magazine published an article titled “The Gulf’s scramble for Africa is reshaping the continent.” The article focused on growing geopolitical ties and significant investments in infrastructure projects, such as ports, in various African countries.
The leading countries are the United Arab Emirates (UAE), Saudi Arabia, and Qatar. For countries like South Africa, which has diverse interests worldwide, the Middle East’s growing interest in Africa requires proactive engagement, mainly to attract investments and open up the market for exporting sectors of the economy.
Investment need
Agriculture is one sector that needs investment and a broadening of export markets. Consider the eastern regions of South Africa and the former homelands.
These areas typically are on the periphery of agricultural progress because of poor land governance and weak infrastructure, which effectively isolate them from the formal value chains of the food, fibre, and beverage sectors.
In some areas, the transaction costs of moving agricultural produce to the consumption points become too high due to the lack of roads, rail, and storage facilities.
In the regions, part of the established commercial farming sector, the deteriorating network infrastructure—including roads, rail, water, dams, storage facilities, and on-farm infrastructure—is also increasingly a significant cost driver for businesses.
It is in these areas of South Africa’s agriculture, food, fibre, and beverages value chain that one should ask whether it would be worthwhile to assess whether Middle-East countries seeking investment opportunities would not form commercially viable business ventures that respond to the above challenges with the help of local stakeholders.
Some investments would involve partnering with South African agribusinesses and farming enterprises that aim to expand their operations and require capital for such activities.
Significant funds in these Middle Eastern countries also involve the government in some way. The South African government, particularly the Department of Trade, Industry and Competition (DTIC) and the Department of International Relations and Cooperation (DIRCO), should lead the formulation of a “Middle East-South Africa Agricultural Investment Strategy.”
Such a strategy would help formally start a conversation with Middle Eastern stakeholders and introduce South African firms and farming businesses.
Export drive
Beyond the investment need and the challenges South Africa’s agriculture faces, the country is export-oriented, with exports reaching a record US$13,2 billion in 2023, according to data from Trade Map.
The Middle East region is increasingly important in the South African agricultural trade. For example, in 2023, Asia and the Middle East accounted for 28% of South Africa’s agricultural exports, the second largest region.
South Africa primarily exports citrus, apples and pears, beef, fresh berries, grapes, and sheep and goat meat to the Middle East. These industries have a potential for growth in South Africa and, therefore, prospects of large volumes for exports to the Middle East.
Still, if one focuses on the key economies in the Middle East, South Africa plays a peripheral role in agricultural markets. For example, Saudi Arabia imported US$29,5 billion of agricultural products in 2022, according to data from Trade Map.
South Africa was a minor exporter, accounting for a mere 1% of Saudi Arabian imports. It ranked 31st in the agricultural importers list.
Similarly, the UAE imported US$23,3 billion of agricultural products in 2022, with South Africa capturing a mere 2% market share as the 16th largest supplier.
Qatar, which imported US$3,9 billion of agricultural products in 2022, with South Africa playing a small role, ranked 10th in the list of suppliers and with a 2% market share in Qatar’s agricultural imports.
India, Brazil, Australia, the United States, Canada, New Zealand, the United Kingdom, Denmark, the Netherlands, Italy, Spain, Argentina, Russia, and France. generally held the largest market shares in these Middle Eastern countries
Regarding the products, the Middle East primarily imports various meat products, grains, oilseeds, and fruits, amongst other products.
This means South Africa would benefit from increasing its market share, which is only possible through targeted product promotion and marketing. Government support would also help nudge Middle Eastern countries to address any remaining phytosanitary barriers for South African products in these countries.
Ultimately, the DTIC and DIRCO should formulate a Middle-East-South Africa Agricultural Investment and Trade Strategy with the Department of Agriculture. This Strategy would help rank the priority list of investment products and map out any barriers that should be addressed within the government’s official channels, with timelines.
The document would also outline possible investment paths aligned with industries highlighted in the Agriculture and Agro-processing Master Plan, as well as the opportunities presented on PLAS land and in the former homelands, amongst other opportunities.
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