South Africa’s agricultural exports grew by 7% y/y in 2018

In 2018, South Africa’s agricultural exports grew by 7% y/y to US$10.6 billion, a record level in a dataset starting from 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 66% of total exports in 2018, measured in value terms.

From a national policy perspective, in his 2019 State of the Nation Address, President Ramaphosa signalled that potential expansion in agricultural production would mainly be on export-oriented products. There is already a clear pathway for this initiative as South Africa is currently well-positioned in terms of export markets, and there is clarity about products that show a growing demand in the world market.

Although South Africa has an import substitution objective through its Industrial Policy Action Plan, the substitution of some of the key imported agricultural products is unlikely in the foreseeable future as South Africa does not have favourable agroecological conditions, specifically for the production of palm oil and rice.

From a production perspective, at first, it was the International Grains Council which placed its estimate for South Africa’s 2018/19 maize production at 10.7 million tonnes, the United States Department of Agriculture (USDA) has also joined in with an 11.5 million tonnes estimate. Both these estimates are well below 2017/18 production of 13.5 million tonnes (commercial and non-commercial production).

Although most areas of the country received rainfall in the past couple of weeks, there has not been any material improvements in summer grains conditions, particularly in the western parts of South Africa (more precisely North West and Free State).

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Sourced: Agbiz, Agribusiness Research