SOUTH AFRICA- According to the International Trade Council (ITC), the agricultural sector in South Africa is demonstrating resilience and growth, with exports increasing by 6% to US$3.1 billion in Q1 2024, despite cost challenges associated with high inflation.
According to the ITC report, this positive trend is attributed to higher prices of agricultural products and increased export volume. Apples, grapes, pears, sugar, apricots, fruit juices, peaches, and wool showed particularly strong performances in the export market.
This strong performance is despite high inflation experienced worldwide and load-shedding costs in South Africa, which increased prices.
According to the report, Africa remains the largest export market for South Africa’s agricultural produce, accounting for 42% of the country’s total agricultural exports. The European Union is the second largest agricultural export destination, accounting for 33% in the reported quarter. Asia and the Middle East accounted for 19% of total agricultural exports, while the Americas accounted for 6%.
South Africa’s agricultural trade surplus also improved in Q1 2024- South Africa imported exports worth US$1.6 billion, a 4% decrease from the same quarter in the previous year. The ITC attributed this improvement in trade surplus to lower import volumes and unattractive prices of wheat and rice.
However, despite this improved performance, the agricultural export sector still faces significant logistical challenges. The Transnet National Ports Authority (TNPA) highlighted these challenges in supply chain management in January following disruptions in fruit exports.
TNPA calls for bridging operational gaps in the agricultural exports market by fostering collaborations between organized business entities, regulators, and other stakeholders to streamline logistical operations in South African ports.
The mild decline in grain exports reported by ITC highlights external challenges facing South Africa’s agricultural export sector. This decline was caused by unprecedented price movements caused by the mid-summer drought that caused a slump in decline and a subsequent price increase. ITC calls on stakeholders to follow and respond to such external factors closely.
ITC encourages all stakeholders to invest in agricultural infrastructure from the farm to the point of export, diversify the market, and address domestic needs like load shedding to further improve export performance.
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