Watch Botswana, but don’t lose sight of developing export markets for South African beef

Watch Botswana, but don’t lose sight of developing export markets for South African beef

by | Sep 17, 2019 | Agricultural Trade

Farmer’s Weekly carried an article noting South African farmers’ concern that Botswana’s ambitions to export live cattle which could end up in South Africa, would add pressure on prices. This is an understandable concern given that the South African beef industry has experienced financial pressures because of the ban on exports earlier this year following an outbreak of foot-and-mouth disease. Exports to a couple of markets have resumed since, but the industry is not completely out of the woods. Rising feed costs on the back of a poor maize harvest is another challenge.

But there is another way of looking into this Botswana live cattle exports story, which I will try to illustrate by highlighting three points.

Firstly, these countries (South Africa and Botswana) are part of the same trade block — The Southern African Development Community – which means there is a free movement of goods amongst member states.

Secondly, Botswana’s cattle herd is six times smaller than that of South Africa – as illustrated in Figure 1 below – at 2.1 million. This is according to data from the Food and Agricultural Organization of the United Nations (FAO).

Figure 1: South Africa and Botswana cattle herd
Source: FAO, DAFF, and Agbiz Research

 

Lastly, Botswana is generally not a major exporter of live cattle. Over the past five years, the largest exports amounted to US$2.9 million according to data from the Trade Map.  By way of comparison, the value of South Africa’s live cattle exports averaged US$19.9 million over the past five years.

My sense is that if Botswana sends some of its live cattle to South Africa, it is conceivable that there might be a blip on cattle and beef prices, but the impact might not be notable as feared. Only time will tell.

My sense is that South Africa should increase its focus on expanding its export markets. This would ensure that there is no supply glut in the domestic market even if Botswana suddenly exports more live cattle to South Africa than we have seen in the past. The South Africa red meat industry and government have already made notable strides over the recent past, as illustrated in Figure 2 below.

Figure 2: South Africa beef trade
Source: Trade Map, Agbiz Research

 

The one and most important thing for government, working with industry, is to increase investments in biosecurity so that South Africa’s beef export zeal is not interrupted as was the case earlier this year. So, my personal humble take on this matter is that we should monitor developments in Botswana, while at the same time increasing our efforts on the export expansion for great South African beef, folks.

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

Sorghum consumption is not only falling in South Africa, but across the African continent

Sorghum consumption is not only falling in South Africa, but across the African continent

by | Jul 22, 2019 | Agricultural Production

We have been hearing a lot about the change in consumer preference, with some people preferring what is perceived as healthier diets. But sorghum, which is nutritious, has not taken off, at least in the African continent. Its consumption per capita has been falling over the past few decades as shown in Figure 1 below (focus on the orange line).

Figure 1: Africa’s grains per capita consumption (look at the sorghum line)
Source: CABRI, FAO

 

Here at home (South Africa), sorghum per capita consumption was estimated at 1.62 kilograms per year in 2018, down by 16% from the year 2000. To be fair, this has not been solely a sorghum story, as South Africa’s maize per capita consumption has also fallen by 15% over the same period to about 77.32 kilograms in 2018. But the maize story is somewhat different, while per capita consumption has declined over the recent past, overall maize usage continues to increase due to demand from the animal products, and South Africa also enjoys a good standing in global agricultural markets.

This is not the case for sorghum. South Africa’s overall sorghum usage was estimated at 159 037 tonnes in the 2018/19 marketing year, down by 45% from 1999/00 marketing year. South Africa’s sorghum exports have also declined over time as traditional markets such as Botswana — see figure 2 below — started to increase their domestic production.

Figure 2: South Africa’s sorghum exports to Botswana
Source: Agbiz Research, ITC

 

These worrying trends (specifically figure 2) have invariably had a negative impact on sorghum production in South Africa, and farmers are starting to switch to relatively more profitable crops. Now, sorghum is an ancestral crop to Africa, which means the continent should do more to promote it and elevate its standing amongst consumers. Otherwise, the current declining trend might continue for some time.

My previous piece on sorghum:

Can SA’s stagnating sorghum industry be revived? Click here to read.

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

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