He says data on agricultural trade clearly indicates that South Africa should promote exports to China. “This is a market of more than $200 billion (R3 532 billion) in annual agricultural imports, in which South Africa has only a modest share (0,4%),” says Sihlobo.
“China should be encouraged to lower import tariffs for various agricultural products and review phytosanitary measures. This can help build on existing export opportunities for products such as South African beef, avocados and wool.
“It is also important that technical experts in the respective departments ensure that the agreements reached during the state visit are implemented.”
Sihlobo says another priority in the government of national unity (GNU) is that departments such as agriculture, trade, industry and competition, and international relations and cooperation should renew their focus on the Middle East.
In 2023, Asia and the Middle East were responsible for 28% of South Africa’s agricultural exports. Significant Middle East imports include meat products, grains, oilseeds and fruits, and South Africa has surpluses.
“The eastern parts of South Africa and former homelands can also benefit greatly from capital from China and the Middle East,” said Sihlobo. “These areas are usually excluded from agricultural progress due to poor rural management and poor infrastructure, which excludes them from the formal value chains for food, fibre and beverages.
“In some areas, the cost of moving agricultural products is too high due to a lack of roads, rail transport and storage facilities. In regions that were historically part of commercial agriculture, deteriorating network infrastructure has also driven up costs.”
Sihlobo believes countries in the Middle East can also become involved in commercially profitable businesses in these areas. Partnerships can be established with South African agricultural businesses and farms to expand operations.
There is considerable money available in the Middle East where governments are also involved. Hence the idea of an agricultural strategy for trade and investment that should involve political leadership.
He says South Africa urgently needs to become more investment-friendly and create a predictable environment for foreign investments.
In its AgriTrends report for 2024, Absa also refers to the risk posed by South Africa’s dependence on the European market for agricultural exports and says expansion to new markets is necessary.
Besides China and the Middle East, Absa believes India also holds great potential. In 2023, India surpassed China as the country with the largest population (1,44 billion people) and Absa’s report says this should excite any exporter. India is reliant on imports of perishable products such as vegetables and fruits, and the demand for these will only increase.
South African agricultural exports to India are dominated by fruits such as apples, citrus and stone fruits, with avocados as the latest addition, although tariffs still affect competitiveness.
Absa says that despite obstacles such as tariffs, unemployment and inadequate import services, prospects in the Indian market should not be overlooked. Several agricultural businesses from Africa are establishing themselves in Asian markets.
