South African agribusiness must keep a close eye on export markets and opportunities in the rest of Africa

South African agribusiness must keep a close eye on export markets and opportunities in the rest of Africa
Maize hybrids from an Agricol (Pty) Ltd stand on display at Grain SA’s Harvest Day in Bothaville, on May 2019. (Photo: Waldo Swiegers/Bloomberg via Getty Images)

The African continent remains the largest export market for South Africa’s agriculture. In record agricultural exports of $12.8bn in 2022, the continent accounted for 37%.

While South Africa (SA) should expand its agricultural export markets to new frontiers such as India, China, Bangladesh, Saudi Arabia and South Korea, among others, this export drive should not be at the expense of our existing markets.

We should actively engage with existing markets to promote further export growth of South African agricultural products. The engagement needs not only focus on the EU and Asia – both crucial regions for our export growth – but also on the rest of the African continent.

The African continent remains the largest export market for South Africa’s agriculture. In record agricultural exports of $12.8-billion in 2022, the continent accounted for 37%. Importantly, this was not an anomaly. It has accounted, on average, for 38% of SA’s agricultural exports by value per annum over the past five years.

Maize is Africa’s leading export product

Unlike other regions to which South Africa exports, where the composition of products is predominantly fruit, beef, wool and wine, maize is the leading export product on the African continent. Other products exported to the rest of the African continent include apples, wheat, animal feed, prepared foods, wine, fruit juices, soybean oil, sunflower oil, alcoholic beverages and soybean oilcake.

The leading markets were Botswana, Namibia, Mozambique, Zimbabwe, Lesotho, Eswatini, Zambia, Angola, Nigeria and Mauritius. Except for Nigeria, these markets are within the Southern African Development Community’s (SADC) Free Trade Area, which has benefited South Africa greatly. Moreover, these markets’ infrastructure and proximity advantage contributes to the concentration of South African agricultural exports to this region.

As we advance this trade relationship with SADC and the rest of the African continent, various industry and government engagements will be needed to keep warm relations.

Contracted farm workers harvesting Tinta Barocca grapes for Boplaas Winery on 17 March 2022 in Darling in the Western Cape. (Photo: David Silverman / Getty Images)

Blocked vegetable imports

Such an approach would help to avoid erroneous policy decisions, such as what Namibia and Botswana did in 2022 by blocking vegetable imports from South Africa. This policy action negatively affected South African farmers who had increased production, in anticipation of regional demand.

Simultaneously, consumers in Botswana and Namibia were left with little choice as their typical supplies were suddenly off the shelf. Through close collaboration with the regional business community and government, we should address trade concerns without drastic steps by our neighbouring countries, who understandably want to prioritise the interests of local producers and consumers.

African demand likely to increase

Aside from the long-term trade policy direction, the demand for South African agricultural products will likely increase in the 2023/24 marketing year within the African continent. The 2023/24 marketing year corresponds with the 2022/23 production season.

In the previous season, countries such as Zimbabwe, Zambia and Tanzania had decent supplies of grains and other foodstuffs on the back of a reasonably good harvest (although lower than the bumper crops of the previous season).

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Reports from the Famine Early Warning Systems Network (FEWS NET) suggest that dry and hot weather conditions in the earlier part of the 2022/23 production season negatively impacted crops in southern Angola, Zimbabwe, Mozambique, and northern and eastern Madagascar.

Moreover, there are growing concerns that higher fertiliser prices have led to lower usage by farmers in these countries, which would ultimately undermine the yields.

The first glimpse of these countries’ crop conditions and import needs will be through maize production data from the US Department of Agriculture (USDA) in the coming months.

Read more in Daily Maverick: Achieving food security demands that we look at new agricultural pathways

For Zimbabwe, production forecasts are yet to be made available. Still, Zimbabwe would require sizable imports if the crop drops below the previous season’s harvest of 1.6 million tonnes, given its annual maize needs of 2.1 million tonnes. The possible suppliers to Zimbabwe will be Zambia and South Africa. Zambia’s maize production forecasts are yet to be released. Still, there is an expected 15.6 million tonnes for South Africa, up 1% year on year, which should enable South Africa to export at least three million tonnes of maize in the 2023/24 marketing year.

Keep an eye on Kenya

Another country worth keeping an eye on is Kenya. The latest estimates from the USDA place Kenya’s 2023/24 marketing year maize imports at 750,000 tonnes. This is up mildly from the previous season’s maize imports of 700,000 tonnes.

The primary hope for Kenya is to import maize from Tanzania and Zambia, which collectively accounted for 98% of Kenya’s maize imports in the 2021/22 marketing year. South Africa has minimal participation in the Kenyan maize market because of the prohibitive anti-genetically modified crop regulations.

I have used maize as an example, but if maize crops faced production challenges, then one can assume that there are similar challenges for other crops and vegetables. This means South African producers should closely monitor the African market, and increase supplies where market conditions allow.

Beyond these near-term seasonal matters, the South African agribusiness community, as major exporters of produce from South African farms, along with government officials, should maintain close engagement with counterparts across the rest of the African continent. As this is not only a diplomatic consideration but also a commercial matter. DM


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