South Africa’s agricultural exports hit a record R255 billion as trade tensions loom written by RONELLE SNYDERS

[Nat Quinn]

South Africa’s agricultural exports have risen to record highs, reaching $13.7 billion (R255.5 billion) in 2024, an increase of 3% from the previous year.

Despite this positive trend, the Agribusiness Chamber (Agbiz) warned on Monday that the country faces headwinds from rising trade tensions, particularly between the US and China, a situation that could have ripple effects on South Africa’s export market.

The findings show a trade surplus of $6.2 billion, although this represents a slight decline of 2% from the previous year.

This fluctuation in figures comes as economists warn of continued volatility in the rand, driven primarily by developments in the US and fluctuations in the US dollar. Prospects of relative strength in the rand loom as upcoming US tariff applications may be less than initially expected.

South Africa’s agricultural sector is increasingly under pressure to diversify its market dependence, especially with the US, given the tit-for-tat trade war that has erupted with China.

In a defiant retaliation, China responded to a 25% tariff imposed by the US, which is accused of neglecting the influx of fentanyl into American territory.

Such geopolitical maneuvers underscore the urgent need for South Africa to improve logistical efficiency and maintain and even expand its market presence across the European Union (EU), Africa, Asia, the Middle East and the Americas.

Wandile Sihlobo, chief economist of Agbiz, said that if South Africa is excluded from the African Growth and Opportunity Act (Agoa), the country will face an average import duty of about 3% at the Most Favoured Nation rate.

This highlights the fact that Agoa offers a lot of price competitiveness to the products that South Africa exports to the US.

“The 3% tariff will benefit other competitors who gain duty-free access to the US market as South Africa currently does under Agoa. South Africa’s agricultural exports to the US – mainly citrus, grapes, wine, and fruit juices – account for 6% which also includes exports to the Americas,” Sihlobo said.

“This is still not to diminish their value as few specific industries are primarily involved in these agricultural exports to the US. Since the inception of Agoa, the percentage share of South Africa’s agricultural exports to the US has remained at these levels.”

South Africa has been placed on short notice with the US, as that country highlights that the government has taken aggressive stances towards the US and its allies, including accusing Israel, and not Hamas, of genocide at the International Court of Justice, and reviving its relations with Iran.

According to Annabel Bishop, chief economist at Investec, markets are also seeing a weakening in the political relationship between SA and the US after the former recently withdrew financial assistance from South Africa, and concerns are growing about South Africa’s Agoa free trade access to the US.

According to Agbiz, the EU is South Africa’s third largest agricultural market in 2024, with a share of 19%. Citrus, grapes, wines, dates, avocados, pineapples, fruit juices, apples and pears, berries, apricots and cherries, nuts and wool were among the top agricultural products that South Africa exported to the EU in 2024.

Sihlobo said the country needs to accelerate initiatives, including investments in port and rail infrastructure and the improvement of roads in farm towns.

“South Africa must work hard to retain existing markets in the EU, the African continent, Asia, the Middle East and the Americas. This is even more important in the current climate, where US policymakers are increasingly discussing raising tariffs,” Sihlobo said.

He added that the departments of trade, industry and competition, as well as international relations and cooperation, and agriculture, should lead the way for export expansion in current export markets and the search for new export markets.

Sihlobo said South Africa needs to expand market access to some key BRICS countries, such as China, India, Saudi Arabia and Egypt.

“The BRICS grouping should emphasize the need for member countries to reduce import tariffs and address artificial phytosanitary barriers that hinder deeper trade within this grouping,” he said.

He also noted that other strategic export markets for South Africa’s agricultural sector include South Korea, Japan, Vietnam, Taiwan, Mexico, the Philippines and Bangladesh.

“The private sector and the South African government share this ambition for export market expansion. In the current fragmented world, more resources and marketing must be used for this work,” he said.

 

SOURCE:South Africa’s agricultural exports hit a record of R255 billion as trade tensions loom – Volksskrag Nuus

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