Given Makola
South Africa's agricultural exports fell 2% year-on-year in the first quarter to $2.9 billion, but were 5% higher than the last quarter of 2022, according to Agricultural Business Chamber chief economist Wandile Sihlobo.
He said South Africa's agricultural sector had a rough start to the year when it came to production and exports.
"The excessive rains brought production challenges that delayed the summer crop planting activity by roughly a month, but later improved. Regarding exports, slowing agricultural commodity prices reduced profitability from the levels farmers enjoyed a year ago, specifically grains and oilseeds," Sihlobo said.
Moreover, some logistical challenges persisted in Cape Town port and this had negatively affected table grape and various horticultural product exports.
"Still, this was not as harsh as in the previous years. The cooperation between organized agriculture groups and Transnet has helped improve agricultural export efficiencies somewhat. With that said, there is still room for improvement, which is essential for all the ports as South Africa has an export-oriented agricultural sector," he said.
The top exportable products were grapes, maize, apples and pears, wine, wool, apricots and peaches, sugar, fruit juices, and soybeans.
From a destination point of view, the African continent remained the largest market for South Africa's agricultural exports in the first quarter, accounting for 39% in value terms.
The European Union(EU) was South Africa's second-largest market, accounting for 23% of all agricultural exports. Asia and the Middle East combined accounted for 21%. The Americas region accounted for 8% of the country’s agricultural exports. The UK was one of the most important agricultural markets for South Africa and accounted for 7% of overall exports in the first quarter.
The balance of 2% value constitutes other regions of the world.
Agbiz said it expected some of the top exportable products would continue to dominate the export list, with the additions being citrus, where harvest and export activity was underway. The organisation said while the start of the year was rough with excessive rains, improving weather conditions from the end of January supported agricultural activity.
"South Africa has one of the best agricultural seasons from a production perspective. For example, the 2022/23 maize harvest could reach 16.4 million tons, 6% higher than the 2021/22 season's harvest and the second-largest harvest on record.
“In addition, the soybeans harvest is estimated at a record 2.8 million tons. South Africa's sugar cane crop will likely increase by 3% to 18.5 million tons in 2023/24. Other field crops and fruits also show prospects for decent harvest this season, which supports better employment prospects in the sector."
The one area, that the organisation said, continued to be a source of concern was citrus export from the Western Cape, following the infrastructure damage in Citrusdal because of heavy rains in June this year. The destruction of a bridge had slowed the citrus exports from the region. The impact of this would likely show in the second and third-quarter export data, Agbiz said.
Sihlobo said load shedding may continue to influence production conditions as all of South Africa's fruits and vegetables were under irrigation, and roughly a third of field crops were produced under irrigation.
He said interventions to ease the load-shedding burden on farmers, such as load curtailment, expansion of the diesel rebate to the food value chain, and, most recently, the launch of the Agro-Energy Fund, all supported production conditions.
"Notably, the rainy season also helped ease the pressure to irrigate crops. As we transition to a potentially drier El Niño season in the 2023/24 production season, the need for irrigation may intensify, which will require a reliable energy supply."
Sihlobo said South Africa's trade approach was not one-sided, pursuing only exports. He said the country imported a significant amount of agricultural products.
"And thus, in the first quarter of 2023, South Africa's agricultural imports amounted to US$1.7 billion, down 9% y/y (but up 4% quarter-on-quarter).
The imported products were primarily wheat, rice, palm oil, sunflower, and poultry. The annual decline in the import bill was mainly because of the relatively lower agricultural commodity prices compared to a year ago.
BUSINESS REPORT