Agriculture trade exports surge 8% in third quarter, says Agbiz
TRADE data for this year’s third quarter showed exports were up by eight percent year on year (y/y) to $3.4 billion (R52bn), according to the Agricultural Business Chamber.
The chamber’s chief economist, Wandile Sihlobo, said yesterday this put South Africa’s agriculture, food and beverages exports for the first three quarters of this year at $9.6bn.
The top exportable products were citrus, maize, wine, apples and pears, nuts, sugar, fruit juices, and wool, among other products.
Agbiz said it expected some of these products to continue dominating the export list in the fourth quarter of the year. The major factors underpinning this robust export value were the sizeable agricultural output in the 2020/21 production season, combined with general solid global demand even at higher agricultural commodity prices.
There were still ample agricultural and beverages exports ongoing since the start of the final quarter of this year.
“Hence, we are inclined to believe that South Africa could surpass 2020’s agriculture exports of $10.2bn which was the second-highest on record and could even pass the record exports of 2018, which was $10.6bn,” he said.
From a destination point of view, the African continent and Asia were the largest markets for South Africa’s agricultural exports in the third quarter of this year, accounting for 35 percent and 33 percent in value terms, respectively. The European Union was the third-largest market, taking up 23 percent of South Africa’s agricultural exports. The balance of 9% value constitutes the Americas and other regions of the world.
Sihlobo said at the core of this success was the continued co-ordination that organised agribusiness and agriculture, Transnet and various ports operating and truckers’ groups had had since the July unrest.
Agbiz said that for some role players in logistics, Finance Minister Enoch Godongwana’s view in the Medium-Term Budget Policy Statement that South Africa would focus on improving the efficiency of logistics infrastructure was seen as a positive signal for long term sustainability. Notably, the Finance Minister’s indication of plans to have Transnet Freight Rail allow third-party access to the freight rail network by the end of next year would also assist the agricultural sector, which had long desired to increase its share of products transported by rail.
“Efficient logistics are also vital for imports as South Africa still relies on other countries for crucial food products such as wheat, rice and vegetable oils. These products dominated the food import bill in the third quarter, as they cannot be sustainably produced at scale in South Africa because of unfavourable climatic conditions. As such, in the third quarter of this year, agricultural imports increased by 21 percent y/y to $1.8bn The base effect contributed to this notable jump, as 2020 import activity was somewhat interrupted by Covid-19 lockdowns,” Sihlobo said.
“In addition, the higher agricultural commodity prices also contributed to the elevated import bill. We believe rice, wheat, and palm oil will continue leading the agricultural import product list throughout the fourth quarter of the year. In sum, South Africa recorded a trade surplus of $1.6bn in the third quarter of 2021, which is down by 3 percent from the corresponding period last year. The narrowing of the trade surplus is not caused by lower exports, as we noted above, but rather the increase in import value and the higher commodity prices.”
