The impact of the recent drought in the Western Cape on South Africa’s 2018 agricultural exports is marginal when viewed in value terms. South Africa’s agricultural exports for the first 11 months of 2018 amounted to US$9.9 billion, which is 0.5% lower than 2017 exports. This is according to data from Trade Map. We are yet to see what the overall 2018 agricultural exports value will be when the December 2018 trade statistics are released, but the available data shows minimal impact. The top export products were edible fruits, beverages, spirits, vegetables and wool, among others. In terms of beverages, particularly wine, the spillover of higher global prices was a key factor in boosting the value.
Over the same period, the first 11 months of 2018, South Africa’s agricultural imports fell by 6.2% from 2017 to US$6.3 billion. The top imported products by value were rice, wheat, palm oil, sunflower oil and offal, among others. But, a closer look at the trade statistics shows that South Africa’s agricultural sector recorded a positive trade balance of US$3.6 billion in the first 11 months of 2018, which is a record level in a dataset dating back to 2001.
From a destination point of view, the African continent and Europe continued to be the largest markets for South Africa’s agricultural exports, collectively absorbing 65% of total exports in the first 11 months of 2018, measured in value terms. In more detail, Africa remained South Africa’s largest market, accounting for 38% of agricultural exports. The leading products to these markets were beverages, fruit, wool, sugar and grains.
Asia is also an important market for South Africa’s agricultural exports, demanding a 25% export share in the first 11 months of 2018. Wool, fruit, grains, beverages, vegetables and meat were the leading products exported to Asia. The Americas and the rest of the world accounted for 5% and 4% shares. Exports to these regions were also dominated by fruits, beverages, vegetables, tea, sugar and grains.
Clearly, while the volume of the Western Cape agricultural harvest declined for most commodities, the increase in global prices helped to boost the value which, in turn, supported South African agricultural exports. There is still one-month data point to be released, but from the available evidence, it is fair to say that the sector performed well. –Wandile Sihlobo
Wandile Sihlobo, head of economic and agribusiness intelligence at Agbiz, shares highlights in weekly his update on agricultural commodity markets. Click here for the full report on agri markets for the major commodities.