SA needs to expand export markets: Agbiz

Wandile Sihlobo, the chamber’s chief economist, said industry stakeholders already knew the markets they were interested in.

“These are the markets which the government should prioritise in its engagement with foreign equals in exploring trade opportunities. We are mindful that this is not an easy process as other countries would probably want a reciprocal arrangement when South Africa is pursuing a localisation industrial and trade policy approach. Nevertheless, those are trade-offs for policymakers to balance; all the industry could do is express its views on export markets that will support the expansion in domestic agricultural output,” said Sihlobo.

Agbiz noted it was unsurprising that South Africa’s agricultural sector was highly export oriented, with exports accounting for roughly half of the production in value terms, about $10.2 billion (R153bn) in 2020, up 3 percent year-on-year.

“The increase in domestic agricultural output in the recent past and planned expansion in various sub-sectors in the coming years means that South African policymakers should focus on creating new opportunities in the export market.

“In citrus farming, industry projections suggest that by 2030, South Africa’s output could increase by 76 percent from the 2021 expected harvest of 148.8 million of the standard 15kg cartons. This means that South Africa should already be working on market access for the forecast citrus beyond the typical markets that the country is active in. The same is true, albeit to a lesser extent, for other fruits such as avocados and deciduous fruits, as well as the livestock and wine industry,” indicated the organisation.

Sihlobo said there was coherence in markets that the industry players were interested in. The BRICS bloc countries, the Middle East and Japan were where the industry was focused.

The BRICS countries were an essential agricultural market, accounting for 12 percent or $180 billion of global agriculture and agro-processing imports, according to data from Trade Map, he said.

The chamber said that the key markets that South African agricultural role-players were interested in in BRICS were India and China.

“There is also increasing interest in Japan, which is an important agricultural market, the sixth-largest in the world, accounting for an average of $60 billion in agricultural imports a year. The products Japan typically imports are pork, maize, sausages, tobacco, beef, fish, wine, wheat, soya beans, cheese, coffee, bananas, nuts and a range of vegetables, among other products. Again, these are products that South Africa produces, and in some cases, exports,” Sihlobo pointed out.

At the moment, Japan remained a small market for South Africa, accounting for a mere 2 percent of South Africa’s overall agricultural exports of the aforementioned $10.2bn a year. He said fruit juices, maize, beans and citrus are among the top agricultural products South Africa currently exported to Japan.

He added that there is now a growing interest in the wine industry, which could be paired with the broader fruit and beef industry to seek market access for a wide range of products. -IOL