South Africa’s beef exports to Saudi Arabia are crucial to industry growth

South Africa’s beef exports to Saudi Arabia are crucial to industry growth

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

Great news for South Africa’s beef industry

Great news for South Africa’s beef industry

One positive bit of news I noticed this morning is about South Africa’s beef industry, with an encouraging headline stating, “Saudi Arabia to start South African meat imports as ban ends“. This means everything is now in order for Saudi Arabia to import beef from South Africa.

The Kingdom of Saudi Arabia has not featured prominently in South Africa’s beef export markets in the past, with only small volumes last exported in the early 2000s. The renewed access to this market is critical to South Africa’s ambition to expand beef exports, as the Saudi beef market is sizable at over US$647 million in 2021, according to data from Trade Map.

About 62% of the Saudi beef imports were frozen beef, while 38% were chilled or fresh beef imports. Some 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 US$1,9 billion annually over the past five years. This means over time, as South Africa increases its production in other meat value chains, Saudi Arabia could remain a strategic country for growing exports.

Broadly, these positive news of export markets development provides some relief when the South African beef industry has faced a challenging operational environment for several reasons. One of the significant challenges was the rise in feed prices since 2020, especially for maize and soybeans.

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

Moreover, the spread of foot-and-mouth disease (FMD) to six of South Africa’s nine provinces for the first time in history was another challenge 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, the feed prices have now softened somewhat. 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).

Therefore, the opening of beef export opportunities to the Kingdom of Saudi Arabia adds to this improving operational environment going forward.

Despite the foot-and-mouth disease challenge, South African beef exports did not collapse. Some markets remained open, although with strict controls. This is evident in South Africa’s beef exports for 2022, which amounted to 28 422 tonnes (albeit down 12% from 2021), according to data from Trade Map. This is only mildly below the ten-year average.

Fresh beef accounted for 54% of overall exports, while the balance was frozen beef. 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.

Overall, the broadening of South Africa’s beef export markets is a welcome development and shows the possibilities the country could achieve through collaboration and aligned interests between the government and private sector.

These efforts of opening key markets such as the Kingdom of Saudi Arabia should extend to other commodities, mainly fruits and wine, that are eager to expand the export markets while retaining the existing markets in the EU, African continent, and Asia and the Americas, amongst other regions.


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

South Africa’s agriculture within BRICS+

South Africa’s agriculture within BRICS+

South Africa is on an export market expansion mission for the agricultural sector. This means there is a need to work hard to retain the existing markets in the E.U., African continent, Asia, Middle East, and the Americas.

In an increasingly divided world where geopolitics are fragile, South Africa must walk a careful path so its foreign policy approach does not result in a negative approach to trade or growing protectionism by traditional trading partners. This is critical for South Africa’s agricultural growth, sustainability, and job creation.

Notably, South Africa should expand market access to some of the key BRICS+ countries, such as China, India, and Saudi Arabia. Other strategic export markets for South Africa’s agricultural sector include South Korea, Japan, Vietnam, Taiwan, Mexico, the Philippines and Bangladesh.

This export market expansion ambition is shared by both the private sector and the South African government. The Department of Trade, Industry and Competition and the Department of Agriculture, Land Reform and Rural Development should lead the way for export expansion in these agricultural strategic markets.

The outcome of the 15th BRICS conference in agriculture also focused on the need to deepen trade within the BRICS+ countries while retaining other markets outside this grouping. This was anchored on the emphasis for BRICS members to lower import tariffs and address SPS barriers that currently hinder deeper trade within this grouping.

The trade and SPS aspect is vital because the BRICS countries collectively imported about US$320 billion of agricultural products from the world market in 2022 (according to data from Trade Map). About 74% of the Group’s agricultural imports were China, 12% was India, 8% was Russia, 4% was Brazil and 2% was South Africa. The value will be much larger now that we are in a BRICS+ environment.

The key agricultural products the original BRICS grouping imports are soybeans, palm oil, beef, maize, berries, wheat, cotton, poultry, pork, apricots and peaches, sorghum, rice, and sugar.

These are products that are produced at scale by some BRICS countries. Yet the imports to other BRICS members typically originate from suppliers outside the grouping because of the tariffs and SPS barriers.

Ultimately, the focus for South Africa’s agriculture going forward should remain on market development and maintenance of the existing markets. This is a matter that should also be well appreciated by the political leadership in the foreign policy space within the South African government.


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

South Africa’s agricultural exports were robust in Q3, 2023

South Africa’s agricultural exports were robust in Q3, 2023

South Africa’s agricultural exports amounted to US$3.9 billion in the third quarter of this year, up by 4% y/y (according to data from Trade Map). This quarter, the products that dominated the export list were citrus, maize, apples and pears, nuts, wine, soybeans, sugar, and fruit juices.

This solid export activity was both a function of improvement in volumes and prices, specifically of fruits. This more than offsets the effects of lower grains and oilseed prices, which have declined notably from their 2022 levels.

Overall, South Africa’s agricultural exports amounted to US$10,2 billion in the first nine months of the year, up 1% from the same period in 2022.

This export activity was mainly before the intensified challenges at the South African ports. Given that the inefficiency challenges at the ports and in railway lines are not new, the agricultural export’s success resulted from continued collaboration between the industry and Transnet to improve the logistics at the ports.

The South African agricultural industry has established forums to continuously engage with Transnet and enhance communication about problems at the ports so that the response could be swift to drive the exports of high-value and perishable products. Still, as evidenced by the worsened logistical efficiency since the start of the fourth quarter of this year, more work and investment are needed to improve the efficiencies.

From a regional perspective, the African continent remained the largest market for South Africa’s agricultural exports, accounting for 32% of the exports in the third quarter of 2023. Asia and the Middle East were the second largest regions, with a 31% share.

The E.U. was the third largest region, accounting for 19% of the agricultural exports, with the Americas region at 7%. The U.K. is also one of the largest single markets for South Africa’s agricultural exports, accounting for 6% of the exports in the third quarter. The remaining 5% was spread to other various regions of the world.

Regarding imports, South Africa’s agricultural imports fell by 7% y/y in the third quarter of this year to US$1,8 billion (This is according to data from Trade Map). As with the previous quarters, the products that still dominate the import list are wheat, rice, palm oil, whiskeys, sunflower oil and poultry. Wheat and palm oil were the main drivers of the decline in the value of imports.

South Africa’s agricultural imports amounted to US$5,3 billion for the first nine months of the year, down by 7% from the same period in 2022.

Positively, South Africa had an agricultural trade surplus of US$2,1 billion in the third quarter of 2023, up 15% y/y.

The path ahead and policy considerations

While South Africa’s agricultural exports remain encouraging, we think export earnings will likely soften this year from the 2022 record exports of US$12,8 billion. The relatively lower commodity prices and volumes in various products and the intensified logistical constraints in the last quarter of the year may weigh on the export value this year.

Beyond these near-term challenges, South Africa is on an export market expansion mission for the agricultural sector. This means there is a need to work hard to retain the existing markets in the E.U., African continent, Asia, Middle East, and the Americas.

In an increasingly divided world where geopolitics are fragile, South Africa must walk a careful path so its foreign policy approach does not result in a negative approach to trade or growing protectionism by traditional trading partners. This is critical for South Africa’s agricultural growth, sustainability, and job creation.

Notably, South Africa should expand market access to some of the key BRICS+ countries, such as China, India, and Saudia Arabia. Other strategic export markets for South Africa’s agricultural sector include South Korea, Japan, Vietnam, Taiwan, Mexico, the Philippines and Bangladesh.

This export market expansion ambition is shared by both the private sector and the South African government. The Department of Trade, Industry and Competition and the Department of Agriculture, Land Reform and Rural Development should lead the way for export expansion in these agricultural strategic markets.

The outcome of the 15th BRICS conference in agriculture also focused on the need to deepen trade within the BRICS+ countries while retaining other markets outside this grouping. This was anchored on the emphasis for BRICS members to lower import tariffs and address SPS barriers that currently hinder deeper trade within this grouping.

The trade and SPS aspect is vital because the BRICS countries collectively imported about US$320 billion of agricultural products from the world market in 2022 (according to data from Trade Map). About 74% of the Group’s agricultural imports come from China, 12% from 12% from India, 8% from Russia, 4% from Brazil and 3% from South Africa.

The key agricultural products the BRICS grouping imports are soybeans, palm oil, beef, maize, berries, wheat, cotton, poultry, pork, apricots and peaches, sorghum, rice, and sugar. These are products that are produced at scale by some BRICS countries. Yet the imports to other BRICS members typically originate from suppliers outside the grouping because of the tariffs and SPS barriers.

Ultimately, while I have reflect on the excellent near-term agricultural trade performance, the focus going forward should remain on market development and maintenance of the existing markets. This is a matter that should also be well appreciated by the political leadership in the foreign policy space within the South African government.


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

SA agricultural export policy and regulations must be clear

SA agricultural export policy and regulations must be clear

International trade is at the heart of SA’s agricultural success. For this reason any disruptive legislative and logistical constraints to exports constrain the sector’s growth and are cause for concern. Equally, the differences in the interpretation of export-related legislation by industry leaders versus regulators could have adverse effects on the sector or dent sentiment.

It is therefore critical that the meaning and intent of regulation and policy be clearly articulated and communicated in a way that is commonly understood.

A case in point was the weekend newspapers that misinterpreted the export legislation relating to the EU market, causing unnecessary panic in the sector. The regulations outlined the procedure for exports from the Southern African Customs Union (Sacu) and Mozambique to the EU and the UK to take advantage of preferential tariff rate quotas for certain agricultural and agro-processed products contained in an annexure to the agreement. However, they were reported as though they were new stringent BEE regulations for exports.

The reality is that these requirements are not new and mirror the previous years’ requirements. There is no new BEE threshold or level that an applicant must reach to be awarded an export permit.

The critical nature of trade in SA’s agricultural sector is evident from the fact that the sector has more than doubled since 1994, in both value and volume terms. Admittedly, trade wasn’t the only catalyst for growth. The improvement in seed varieties, genetics and farming techniques has played a key role in improving farm productivity.

However, equally important is the expansion of the export markets that enabled and sustained the growth of the SA farming sector, ensuring that output derived from productivity gains has a wider reach to a range of export markets.

As highlighted in the past, in 2022 SA’s agricultural exports reached a record $12.8bn, up 4% from the previous year. This considerable success in a year of logistical challenges is commendable. The relatively higher commodity prices and large harvest were at the heart of the success.

Maize, wine, grapes, citrus, berries, nuts, apples and pears, sugar, avocados and wool were some of the top exportable products in 2022, spread across various key markets. Africa remained a leading market, accounting for 37% of SA’s agricultural exports in 2022. Asia was the second largest, accounting for 27% of exports, followed by the EU at 19%. The Americas was the fourth-largest region, accounting for 7%, and the remaining 10% went to the rest of the world. The UK was one of the leading markets within the “rest of the world” category.

Considering the share and composition of the exports to the EU market, it is unsurprising that farmers and agribusinesses in the horticulture and wine industry were most surprised by the talk of changes in export regulations to the EU. However, in our interpretation there are no material changes, but rather a misinterpretation of the regulations by various sections of the media.

Appreciating the importance of trade as a catalyst of growth in agriculture, SA’s strategic focus should be on broadening the export markets even further in the coming years. The markets ideal for expansion, which both the government and private sector favour, are China, South Korea, Japan, the US, Vietnam, Taiwan, India, Saudi Arabia, Mexico, the Philippines and Bangladesh.

Crucially, the broadening of the export markets should happen while simultaneously focusing on maintaining smooth relations with these critical export markets such as the EU, the US and the African continent. Furthermore, the drive to export markets should be in a form of SA Inc and not to the exclusion of any stakeholder.

Provided there is room for expansion of agricultural production in the underutilised land now on government books and the former homelands, the export drive will become even more vital to accommodate further growth of SA’s agricultural sector in the coming years.

Written for and first appeared in the Business Day


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

SA agricultural exports remained robust in the second half of the year

SA agricultural exports remained robust in the second half of the year

South Africa’s agricultural exports amounted to US$3.4 billion in the second quarter of this year, up by 0,1% y/y (According to data from Trade Map). Despite challenges in key export markets such as the EU in the case of citrus, the products that dominated the export list this quarter were citrus, maize, apples and pears, wine, sugar, soybeans, wool, avocados, pineapples, fruit juices, nuts, and grapes. Importantly, this good export performance was not only a function of price but also improved volumes.

The prices of some agricultural products have declined notably from the 2022 levels. The improvement in agricultural exports also partly demonstrates the results of continued collaboration between the industry and Transnet to improve the logistics at the ports. However, more work is needed to improve the efficiencies.

The South African agricultural industry has established forums to continuously engage with Transnet and enhance communication about problems at the ports so that the response could be swift to drive the exports of high-value and perishable products.

From a regional perspective, the African continent remained the largest market for South Africa’s agricultural exports, accounting for 36% of the exports in the second quarter of 2023. Asia and the Middle East were the second largest region, with a 30% share.

The EU was the third largest region, accounting for 18% of the agricultural exports, with the Americas region at 6%. The UK remained one of the largest single markets for South Africa’s agricultural exports, accounting for 7% of the exports in the second quarter. The remaining 3% was spread to other various regions of the world.

Regarding imports, South Africa’s agricultural imports fell by 6% y/y in the second quarter of this year to US$1,8 billion (This is according to data from Trade Map). The products that still dominate the import list are rice, wheat, palm oil, whiskeys, and poultry.

The whiskeys, wheat and poultry products were the main drivers of the decline in the value of imports in the first half of the year. Overall, South Africa had an agricultural trade surplus of US$1,6 billion in the first half of 2023, up 9% y/y.

Looking ahead

While South Africa’s agricultural exports in the first half of the year have been encouraging, we think export earnings will likely soften this year from the 2022 record. The lower commodity prices and the stringent regulations of the citrus black spot disease in the EU market are among the factors likely to result in lower export earnings. We expect the effects of these challenges to be more evident in the second half.

As we stated recently in one of our notes, the citrus challenges in the EU are not new. In the 2022 export season, South Africa experienced another challenge in that market, where the EU proposed changes to its plant safety regulations for citrus.

These changes purported to protect the EU from a quarantine organism, the false codling moth, by introducing stringent new cold treatment requirements, particularly on citrus imports from Africa, mainly impacting South Africa, Zimbabwe and the Kingdom of Eswatini. But South Africa had already put rigorous measures to control false codling moth. As such, we viewed this as a measure to protect the EU’s citrus-growing countries like Spain.

The engagements on this issue between South Africa and the EU are ongoing, and the citrus black spot disease issue adds to this challenging environment.

The appropriate channel for resolving the matter is through the continuous engagement of the South African government with the EU authorities. From a South African perspective, the EU is a crucial export market for the citrus industry.

Beyond these near-term challenges, South Africa is on an export market expansion mission for the agricultural sector. This means there is a need to work hard to retain the existing markets in the EU, African continent, Asia, Middle East, and the Americas. Notably, South Africa should expand market access to some of the key BRICS+ countries, such as China, India, and Saudia Arabia.

Other strategic export markets for South Africa’s agricultural sector include South Korea, Japan, Vietnam, Taiwan, Mexico, the Philippines and Bangladesh. This export market expansion ambition is shared by both the private sector and the South African government.

The Department of Trade, Industry and Competition and the Department of Agriculture, Land Reform and Rural Development should lead the way for export expansion in these agricultural strategic markets.


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

South Africa’s agricultural exports were robust in Q3, 2023

Saudi Arabia’s inclusion in BRICS+ bodes well for South Africa’s agricultural exports

This past week, the Kingdom of Saudi Arabia was mentioned as one of the countries that are set to join the BRICS in January 2024. This is a major development and one that offers another avenue for diversifying the geographic destinations of South Africa’s agricultural exports.

There is no doubt that South Africa’s agriculture stands to benefit enormously from close cooperation with Saudi Arabia. As chair of the 15th BRICS Summit, South Africa championed the need to deepen trade and investments amongst the BRICS countries, a point that other members overwhelmingly supported. The agribusiness working group of the BRICS Business Council, in particular, raised the trade aspect and the need to resolve non-tariff barriers that would distort agricultural trade amongst BRICS countries.

Initially, South African agribusinesses had their eyes on China and India as countries with reasonably higher tariffs on some agricultural products and a range of non-tariff barriers. With the inclusion of Saudi Arabia in the BRICS, South Africa would now look at three significant markets to broaden agricultural exports. It is important for a country like South Africa to push for geographic diversification of trade, especially in the light of intensifying geoeconomics tensions and the growing protectionism in traditional markets.

The original BRICS countries are already an important agricultural market. According to data from Trade Map, they collectively import about US$320 billion of agricultural products from the world market in 2022. About 74% of the Group’s agricultural imports come from China, 12% from 12% from India, 8% from Russia, 4% from Brazil and 3% from South Africa.

The key agricultural products the BRICS grouping imports are soybeans, palm oil, beef, maize, berries, wheat, cotton, poultry, pork, apricots and peaches, sorghum, rice, and sugar. These are products that are produced at scale by some BRICS countries. Yet, intra-BRICS trade remains low because of tariffs and non-tariff barriers.

Saudi Arabia is a major agricultural importer. Over the past five years, Saudi Arabia imported, on average, $21bn of agricultural products. The dominant suppliers of farm products to Saudi Arabia are Brazil, India, the U.S., the United Arab Emirates, Germany, France, Turkey and Egypt. The top imported agricultural products were meat and edible offal, rice, barley, milk and cream, cigars, cheese, live sheep and goats, sugar cane, maize, chocolate, citrus, palm oil, oilcake, bananas, tea, vegetables and fruit juices.

South Africa is a minor player in the Saudi Arabian agricultural market, accounting for less than 2% of all the imports. The essential exportable products to the Saudi kingdom were oranges, lemons, pears, grapes, mandarins, apples, plums, grapes and avocados. An additional product likely to join this list in the coming months will be beef, as South Africa recently established market access for exports to Saudi Arabia.

Notably, South Africa is generally a net exporter of some of the products mentioned above that Saudi Arabia imports from the world, albeit mainly concentrated in European, African and Asian markets. Therefore, the possibility of close cooperation and deepening of agricultural trade through the BRICS+ forum from early 2024 will benefit South Africa.

Again, this is not to minimize South Africa’s close relationship with the E.U., the U.S., the African continent and other regions. These current markets remain strategically crucial to South Africa’s agriculture.

For example, South Africa exported a record US$ 12.8 billion agricultural products in 2022. The African continent was the leading market, accounting for 37% of South Africa’s agricultural exports in 2022. Asia was the second largest agricultural market, accounting for 27% of exports, followed by the E.U., the third largest market, accounting for 19%. The Americas region was the fourth largest, accounting for 7%, and the remaining 10% went to the rest of the world. The U.K. was one of the leading markets within the ‘rest of the world’ category.

So, crucial markets such as these cannot be overshadowed by the BRICS+ possibilities. The enthusiasm around BRICS+ is not at the expense of these key markets but an addition. South Africa is driven to expand and diversify its agricultural export markets. This is a view or ambition of the South African government and the private sector. Therefore, the possibility of accessing new markets serves this national ambition.


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

The re-opening of beef export markets is positive for South Africa

The re-opening of beef export markets is positive for South Africa

One positive development in SA agriculture in the past week was the reopening of the Chinese beef market and the firm establishment of beef access to the kingdom of Saudi Arabia.

The latter has not featured prominently in SA’s beef export markets in the past, with small volumes last exported in the early 2000s. The renewed access is critical to SA’s ambition to expand its beef exports, as the Saudi beef market is sizeable at more than $647m in 2021, according to Trade Map data.

About 62% of the Saudi beef imports was frozen beef, while 38% was chilled or fresh. Some of the leading suppliers to Saudi Arabia include Brazil, Australia, Pakistan, the US, New Zealand and Canada.

Beyond beef, the overall Saudi meat market is large, with total meat imports valued at about $1.9bn a year on average over the past five years. This means as SA increases its production in other meat value chains over time, Saudi Arabia could become a strategic country for export growth.

China has an established trade relationship with SA. Over the past six years China has been the leading importer of SA frozen beef cuts in value terms. Therefore, the easing of import restrictions put in place after an outbreak of foot-and-mouth disease is a welcome development because it is likely to lead to an increase in exports.

These positive developments provide some relief while the SA beef industry has faced a challenging operational environment for several reasons. One of the most significant challenges is the rise in feed prices since 2020, especially for maize and soya beans. The rise in animal feed prices coincided with rising financial strain on consumers due to the Covid-19 pandemic’s damaging effects.

Demand for red meat products fell as consumers opted for relatively cheaper forms of protein. Moreover, the spread of foot-and-mouth disease to six of SA’s nine provinces for the first time yet was particularly challenging for the industry since it brought about temporary bans in specific export markets, extending to auctions and livestock movement, mainly cattle, for some time in 2022.

Feed prices have now softened somewhat, with maize and soya bean prices down 13% year on year on average. This is a response to large domestic maize and soya bean harvests and the easing of global grain prices (irrespective of lingering worries about the Black Sea grain deal). The resumption of exports to China and the opening of export opportunities to Saudi Arabia adds to this improved operational environment.

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. This is only mildly below the 10-year average.

The key markets for SA’s beef include China, Lesotho, Kuwait, Jordan, Mozambique, United Arab Emirates, Qatar, the Netherlands, Lesotho, Canada, Zimbabwe, Mauritius and Eswatini.

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 between the government and the private sector.

The type of effort that has led to the opening of key markets such as Saudi Arabia should be extended to other commodities, especially fruits and wine, in which producers are ready and eager to expand their export destinations while retaining existing markets in the EU, rest of Africa and within Asia and the Americas.

Organised agriculture, agribusinesses and the government share this ambition and should therefore continue to collaborate to find new growth opportunities.

Written for and first published on Business Day.


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

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