The Kingdom of Saudi Arabia, ranked the world’s 20th largest importer of agricultural products in 2017, is an important player in global agricultural trade. Last week’s engagement between South Africa and the Kingdom’s Minister of Agriculture is of particular interest, as it focused on key areas South Africa is investigating as a means of igniting inclusive growth in the sector. These are areas of trade, investment, capacity building, research and development in the field of agriculture.
During the past five years, Saudi Arabia has imported on average US$21 billion (R297.5 billion) worth of agricultural products. In that, South Africa was a small player accounting for less than 2% share of all agricultural imports. The key exportable products to the Saudi Kingdom were oranges, lemons, pears, grapes, mandarins, apples, plums, grapes and avocados. The dominant suppliers of agricultural products to the Saudi Kingdom were Brazil, India, the US, the United Arab Emirates, Germany, France, Turkey and Egypt. The top imported agricultural products were meat and edible offal, rice, barley, milk and cream, cigars, cheese, live sheep and goats, sugarcane, maize, chocolate, citrus, palm oil, oilcake, bananas, tea, vegetables and fruit juices.
South Africa is a net exporter of some of the aforementioned products, with exports mainly concentrated in European, African and Asian markets. The recent visit could be a first step towards expanding South Africa’s agricultural presence in Saudi Arabia and the Middle-East region. The products that South Africa would need to prioritise are horticultural produce, grains and livestock. South Africa’s desire to expand its agricultural production in some of the currently underutilised land would have to be accompanied by markets for the products. The Saudi Kingdom is one such market given its size in the global agricultural trade.
The other objectives of the visit – investment, capacity building, research and development in the field of agriculture – are also an essential part of the growth strategy of South Africa’s agricultural sector. At this point, however, the agriculture ministers of South Africa and the Kingdom of Saudi Arabia have discussed only a memorandum of understanding on cooperation on the aforementioned subjects. Hopefully, this will be followed by a more ambitious engagement which will seek to open the market for South African agricultural products, and to attract investment. –Wandile Sihlobo
Wandile Sihlobo, head of economic and agribusiness intelligence at Agbiz, shares highlights in his update on agricultural commodity markets. Click here for the full report on agri markets for the major commodities.