South Africa’s agribusiness records US$660m trade surplus in the first quarter

SOUTH AFRICA – South Africa’s agribusiness sector recorded a trade surplus of US$660 million (R9.53 bn) in the first quarter, up 11 percent from the same period previous year despite a tough start of the year.

According to data from the Agricultural Business Chamber (Agbiz), which represents commercial farmers and agribusiness enterprises, the growth was primarily driven by an 18 % year-on-year decline in the value of imports to US$1.45 billion.

Agbiz said its data showed that the African continent and Europe continued to be the largest markets for South Africa’s agricultural exports accounting, respectively accounting for 44 percent and 30 percent in value terms, reports IOL Business.

According to the data, Asia was the third-largest market, taking 18 percent of South Africa’s agricultural exports in the quarter under review.

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This was a solid start in the African market -as the country’s largest- which booked 39% of agricultural exports in 2018, with beverages, fruit, vegetables, wool, sugar and grains as the leading products.

In a market update, Wandile Sihlobo, the head economist at Agbiz, said exports were underpinned by grapes, wine, apples, pears, wool, fruit juice, apricots, cherries, peaches and maize.

“We expect these products to continue driving South Africa’s agricultural exports in the second quarter of 2019.

“With that said, maize might not feature prominently, as we think South Africa’s 2019/20 maize exports could fall by 55 percent year-on-year to about 1 million tons owing to an expected lower harvest,” Sihlobo said.

However, Agbiz highlighted that South Africa’s agricultural trade prospects for this year were not as positive, as unfavourable weather conditions in parts of the country could lead to lower production, particularly of grains and grapes.

In 2018, the South African agricultural economy contracted by 4.8% year-on-year owing to a poor summer grains harvest on the back of drier weather conditions at the start of the season.

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This was also attributed to lower horticultural harvest at the start of the year due to tail-end effects of the 2017 Western Cape drought.

The most recent data from the International Grains Council suggest that South Africa’s 2019 rice imports could amount to 1.1 million tonnes, up by 10% from 2018.

Looking ahead into the foreseeable future, the overall performance of South Africa’s agricultural economy of the upcoming production seasons will partly depend on the interplay of uncertainties in climate change as well as global trade developments.

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