Agricultural exports during this quarter amounted to $3.30 billion (R59.4 billion), while imports decreased by 10.6% to $1.76 billion (R31.68 billion). (Photo for illustration/iStock)
In the first quarter of this year, South Africa’s agricultural sector recorded the largest trade surplus ever for a first quarter, despite challenges such as foot-and-mouth disease (FMD) and falling exports to the USA.
According to AgriSA’s latest trade report, the sector achieved a trade surplus of $1.55 billion (more than R28 billion) from January to March this year. This is 16.1% higher than in the same period last year and the highest first quarter trade surplus on record.
Agricultural exports during this quarter amounted to $3.30 billion (R59.4 billion), while imports decreased by 10.6% to $1.76 billion (R31.68 billion). The fall in import costs contributed greatly to the record trade surplus.
Although the figures look positive, AgriSA warns that the growth was not mainly driven by stronger export performance, but rather by lower import expenses.
“The results confirm the resilience and competitiveness of South African agriculture in a complex global trade environment,” says Johann Kotzé, CEO of AgriSA.
“While the record trade surplus is positive, it also shows the importance of strengthening export growth, protecting market access and tackling biosecurity challenges such as foot-and-mouth disease.”
Horticulture excels
The report shows that the horticulture sector continues to be the driving force behind South Africa’s agricultural export industry. Horticultural products represented 55% of all agricultural exports during the quarter.
Grapes, apples, pears, citrus, berries, tree nuts and wine performed particularly strongly and made the largest contribution to export earnings.
According to AgriSA, this performance confirms the sector’s important role in earning foreign exchange, job creation and the expansion of export markets.
(Archive photo: Beefmaster Group/Facebook)
BKS remains an obstacle
However, the report warns that several structural challenges continue to hamper the sector.
Foot-and-mouth disease remains a major obstacle for the livestock industry, limiting exports to lucrative markets in the Middle East and Asia.
In addition, South African agricultural exports to the United States fell by almost 40% during the first quarter.
AgriSA also points out that exports are still concentrated in a relatively small number of markets and sub-sectors, which highlights the need for further diversification.
Photo for illustration: (Elisma van der Watt/Maroela Media)
“Long-term success will depend on our ability to diversify export destinations, maintain reliable trade relationships and create a favorable environment in which producers can remain globally competitive,” says Kotzé.
The report further highlights that new export opportunities are opening up in Asia and the Middle East, which could further strengthen South Africa’s position as a supplier of high-quality agricultural products to global markets.