A shift in focus from European to Asian markets has kept South Africa’s agri-food export sector out of serious trouble, Agriculture Minister Tina Joemat-Pettersson said on Thursday.
The country’s agri-food export markets had “undergone some structural changes … from 2001 to 2011”, she told reporters at Parliament ahead of debate on her department’s budget in the National Assembly.
Its exports of both primary and processed food products to European Union markets had dropped over the past decade, while those to Asian countries had increased.
As a percentage of the total agri-food export basket, which grew from about R10-billion in 1996 to R48-billion last year, more products were exported to Asian destinations than any other.
In this regard, agri-food exports to China grew from one to 3%; to South Korea from 2% to 3%; to Hong Kong from 2% to 3%; and to the United Arab Emirates from 1% to 3%.
Joemat-Pettersson said all South Africa’s agri-food export markets were showing “strong, positive trade balances”.
‘Drastically increased’
Agricultural exports to Zimbabwe and Mexico had “drastically increased” from 2% to 8%, and from zero to 5%, respectively, between 2001 and 2011.
Across Africa, such exports had grown six-fold.
“We continue to enjoy large and favourable trade balances with all the economic communities across Africa. Exports are almost six times larger than imports from the continent,” she said.
Growth in exports to the Association of Southeast Asian Nations (ASEAN) had grown over the past five years, from R1.4-billion (in 2006) to R4.03-billion (in 2011).
“With regard to China, exports are at a steady level for the past two years (2009 to 2010) to about R2.1-billion.
“South Africa has a positive trade balance with India on forestry products to the value of R350-million. And we have a surplus worth R1.1bn in trade with Russia.”
Political relations
Joemat-Pettersson said South Africa’s “active political relations” with several Asian countries had fostered the growth in agri-food products to this region, together with the “economic meltdown” in the EU.
“[It] is certainly as a result of both active political relations and the fast and consistent growth rate of these [Asian] countries, together with changes in consumption patterns.
“South Africa’s traditional trading partners in the EU and the United States will in future become less significant as new opportunities are being explored elsewhere, notably in the Middle East, Russia and Asia.
“We are not stopping our trade to our EU and US partners. The economic meltdown, especially in the EU, has necessitated our increase in trade to our African and Asian counterparts.
“This has in fact saved our agriculture sector, which was predominantly dependent on markets in the EU. If we had continued this trend, agriculture in South Africa would have been in serious trouble.
“Our alternative markets have cushioned the impact of the economic crisis in the EU,” she said.
Officials at Thursday’s briefing were not immediately able to provide rand figures showing the total extent of the decline in local agricultural exports to EU countries, or similar figures for the total increase in agri-food exports to Asian countries.
Sounding a warning
On the import of products to South Africa, Joemat-Pettersson sounded a warning on what she called South Africa’s “heavy reliance” on processed agri-food imports, saying this was “no less than alarming”.
This amounted to R10-billion last year, and signalled an opportunity to “do a better job on promoting investment in the processing or agri-processing industries”. This would become a focus area for her department over the next three years.
On employment in the agriculture sector, Joemat-Pettersson said there had been an increase in the number of jobs during the third and fourth quarters of 2011.
“It’s a success story. The country has never seen a rise in the creation of agricultural jobs … since 1970.
“For the last two quarters of 2011, we saw a growth of over 25 000 and 6000 jobs respectively,” she said.
The sector employs 630 000 people. — Sapa