11 January 2024
A tremendous growth opportunity lies ahead for the red meat industry after Saudi Arabia officially approved red meat imports from South Africa.
Fourteen South African facilities now have approval to send products to Saudi Arabia, with the first shipments expected to be sent within 30 days.
“The red meat consumption of the Saudi Arabian market is approximately 2,1 million tons per year, making it one of the largest consumers of red meat in the world,” said Dewald Olivier, CEO of Red Meat Industry Services (RMIS).
“If we can serve 0,5% of that market, it means South Africa adds almost two-thirds of our current export volume.”
RMIS and the departments of trade, industry and competition and agriculture, land reform and rural development worked together to facilitate the trade agreement.
“Saudi Arabia buys high-value cuts from us, while China takes forequarter cuts. This means we now have an excellent market that utilises the entire animal,” said Olivier.
“Furthermore, this agreement means other countries in the Middle East, such as Iran, are now also closer to buying South African red meat. We simply have an exciting opportunity.”
He said the Saudi Arabian delegation that visited South Africa to conduct audits to determine the suitability of facilities was enthusiastic about the red meat presented to them.
“It was not excessive examples but ordinary beef and mutton available on store shelves. This once again shows the excellence of our product.”
An additional advantage is that it is not only the approved facilities that have access to the market but that South Africa as a whole has been approved, with the Saudi Arabian government satisfied that local infrastructure will be maintained to comply with regulations. This means more stakeholders will be able to participate in the market.
“The next big question is to supply enough red meat, and here the opportunity can further extend to assist beginner farmers to become suppliers,” said Olivier. “It will have a wide impact on the entire industry because there is now a strong consumer seeking our product.”
Competition from Australia
Although Australia is also a major supplier of red meat, especially lamb, to the Middle East, Olivier believes it is not a significant threat.
“The cost at which we can deliver, for example, is much lower than Australia. We know we have a good product and we are now focusing on markets that want our meat. With European requirements becoming even stricter, South Africa now has a good trading partner and the requirements to be met have been achieved. The industry finds itself in an extremely favourable position.
Hendri Truter, group CEO of Deli-Co, said the trade agreement offers a great advantage to the red meat industry. “South African red meat still has to establish itself in this market and there is still competition from Australia and New Zealand to consider, but it remains an advantage to have a greater demand for your product.”
Truter believes 10%-20% of local red meat should be exported but 80% should be retained locally to stabilise the industry. “We could see the impact of exports when South Africa could not export due to foot-and-mouth disease and the price dropped.”
Truter said the Saudi Arabian market is not as established as Qatar or Kuwait but it will develop over time. “Along with this, additional Middle Eastern countries offer further export opportunities in the future,” he said. “Anywhere we can achieve a better price for our producers is good. Balance just needs to be maintained.”
