19 February 2021 – The agricultural Business Chamber (Agbiz) said yesterday that South Africa’s agricultural exports could increase further in 2021 after reaching record levels last year in spite of lockdown restrictions.
South Africa’s agricultural exports increased by 3 percent in 2020, registering the second-largest level on record amounting to $10.2 billion (R).
This was the second-largest level after the record exports of $10.7bn in 2018.
Agbiz said the exports were primarily underpinned by large domestic agricultural output, which was supported by favourable weather conditions.
It said the relatively weaker domestic currency also made South Africa’s agricultural products more competitive in the global market.
The top ten exportable products by value were citrus, grapes, wine, apples and pears, maize, nuts, sugar, wool and fruit juices.
Over the same period, South Africa’s agricultural imports fell by 8 percent from the previous year to $5.9bn.
Most declines were experienced in the imports of poultry meat, sugar, spirits, sunflower oil, prepared animal feed, beer made from malt, fish, and coffee.
Agbiz said this was enough to overshadow the increase in imports of the top-three products South Africa typically imports, namely, rice, wheat and palm oil.
As a result of the fall in imports while exports increased, South Africa’s agricultural trade rose by 26 percent year-on-year and swung into a $4.3bn surplus.
Agbiz chief economist Wandile Sihlobo said the government’s decision to leave the agricultural and broader food sector fully operational from the lockdown’s onset provided conducive business conditions.
“The improved favourable conditions have led to an increase in summer crop area plantings and prospects of a larger maize harvest than in 2019/20,” he said.
Mahlobo said this would enable more exports particularly given the context of strong demand and somewhat low stock levels.
“The South African wine grapes production is also set to be somewhat larger than in 2020, thus contributing to a larger wine volume for exports,” he said.
“There is also general optimism about the 2021 harvest in the horticulture subsector and other field crops like sugar, which supports our view of a possible increase in agriculture exports this year.”
According to Statistics South Africa, agriculture was largely unaffected during lockdown and posted solid growth in each of the three quarters in 2020 in spite of shrinking gross domestic product.
During his State of the Nation Address (Sona) last week, President Cyril Ramaphosa reaffirmed the government’s commitment to ensuring that agriculture was amongst the key sectors for growth.
Ramaphosa’s message centred around the Agricultural and Agro-processing Master Plan’s potential role in driving expansion and development in the sector.
Mahlobo said they were expecting the launch of the broader master plan within the first quarter this year.
However, Mahlobo said they were disappointed to hear the continuous emphasis on the expropriation of land for land reform purposes.
“We were also disappointed that the government did not commit to releasing more state land to potential beneficiaries,” he said.
“Overall, the agricultural message within the Sona was a mixed bag; an acknowledgement of the farming potential to create jobs and foster growth, yet a hazy view on land policy and support programmes for land reform beneficiaries.” Source (Business Report)