WANDILE SIHLOBO: Keep the agricultural exports flowing

What a year this has been for SA’s agriculture sector. There are winners and losers, depending on the subsector or crop farmed, leading to a year of mixed fortunes.

Farmers of crops such as grains and oilseeds, and livestock farmers had a bad year. Drought led to huge harvest losses, especially in February and March. For farmers of livestock, and cattle in particular, animal diseases remain challenging, especially in the Eastern Cape and KwaZulu-Natal. 

Fortunately, decent harvests of various fruits meant the horticultural subsector enjoyed a better year. 

Several regular data releases in the past few quarters have mirrored this environment of mixed fortunes. But the trade data for the third quarter paints an even more upbeat story of recovery in the sector’s export performance.

According to data from Trade Map, SA’s agricultural exports amounted to $4.12bn in the third quarter, a 5% increase year on year.

At $10.55bn, the cumulative value of export value for the first three quarters of 2024 was up 4% from the same period last year, reflecting an uptick in the volume of various agricultural exports and a price surge in some products.

Moreover, while logistics infrastructure efficiency remains a primary concern for the farming sector, the ongoing collaboration between Transnet, private companies and the various logistical organisations assists in ensuring the continuous flow of products, even if there are delays at certain times.

The top export products by value were citrus, nuts, maize, apples and pears, wine, fruit juices, sugar, dates, figs, avocados and mangos, berries and grapes.

Destination Africa 

From a regional perspective, Africa remained the main destination for SA’s agricultural exports in the third quarter, accounting for 39% of the total value. The products leading this list were maize, maize meal, wheat, sugar, apples and pears, fruit juices, wine, soybean oil, sunflower oil, oilcake and rice.

Asia and the Middle East collectively were the second-largest agricultural markets, accounting for 25% of the share in overall agricultural exports in the third quarter of 2024. The main shipments to those regions were citrus, nuts, apples and pears, berries, sugar, beef, mutton, wool, wine, fruit juices and maize. 

The EU was SA’s third-largest agricultural market, with a share of 20%. Citrus, fruit juices, wine, dates, figs, pineapples, avocados, mangoes, nuts, apples and pears, berries, cut flowers and wool were among the primary exports to the bloc in the third quarter of 2024.

The Americas accounted for 6% of SA’s agricultural exports in the third quarter, mainly comprising citrus, nuts, fruit juices, wine, grapes, pears, peaches, apples and pears. The rest of the world, including the UK, accounted for 10% of exports. 

SA does not engage in one-way trade though,  importing various agricultural products. Imports amounted to $1,99bn, up 12% year on year according to data from Trade Map.

Cumulative imports for the first three quarters of this year rose 6% year on year to $5.52bn, driven mostly by wheat, palm oil, rice and poultry.

SA’s climate isn’t favourable for cultivating rice and palm oil and the country thus relies on imports of these products. Regarding wheat, SA imports almost half of annual consumption. In the Free State, which was once a major wheat-growing regions of the country, production has declined notably because of unfavourable weather conditions and high input costs relative to other crops. Poultry imports to about 20% of annual domestic consumption. 

Still SA’s agriculture sector recorded a trade surplus of $2.12bn in the third quarter, down 1% year on year, while the year-to-date cumulative trade surplus is up 3% at $5.03bn. 

Policy considerations 

SA’s agricultural sector is largely export-orientated and quarterly trade figures can be volatile because of the usual seasonal changes in production volumes and glitches in logistics. Still, the focus on exports implies there are some policy considerations for policymakers to support the sector’s growth ambitions:  

• SA should maintain its focus on improving logistics efficiency. That entails investments in the port and rail infrastructure and improving roads in farming towns.
• The country must work hard to retain markets in the EU, Africa, Asia, the Middle East and the Americas. This is even more important as the incoming US administration is discussing raising tariffs and promoting trade fragmentation.
• The departments of trade, industry & competition, international relations & co-operation and agriculture should lead the way in expanding export markets and in the search for new ones, including Brics members such as China, India, Saudi Arabia and Egypt.

The Brics grouping should emphasise the need for member countries to lower import tariffs and address phytosanitary barriers that hinder deeper trade. Other export markets for SA's agricultural sector include South Korea, Japan, Vietnam, Taiwan, Mexico, the Philippines and Bangladesh. The private sector and the SA government share this ambition for export market expansion.

My emphasis on these new markets is not at the expense of the existing markets. Data shows that the broader African continent, the EU, Asia, the Middle East, the UK and the Americas are vital for SA’s agricultural exports. We must nurture our relationship with these countries while working to open new export markets.

• Sihlobo is an agricultural economist.