The agriculture sector has proved its resilience after a 4% year-on-year (y/y) jump in foreign agriculture earnings.
According to FNB’s Senior Agricultural Economist, Paul Makube, earnings jumped to US$12.8 billion, which is a new record high underpinned by strong commodity prices.
Paul said that it was a relatively tough year of various challenges that impeded operations. He explained that last year was especially difficult for citrus trade because of various problems.
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The EU made new rules that were hard for citrus to meet, bad weather made it hard to grow citrus, and there were disease outbreaks that stopped exporting for a while.
“Also, it was more expensive to grow citrus because of high interest rates and costs,” he said.
Makube explained that wool exports to China were also temporarily halted as a result of the outbreak of foot-and-mouth disease.
“The outbreak of foot-and-mouth disease (FMD) curtailed exports with wool exports to China temporarily halted as it is a notifiable disease in terms of the World Organisation for Animal Health (WOAH, founded as OIE).
“SA’s biggest citrus market unilaterally imposed new rules on False Codling Moth (FCM) despite rigorous control measures that were already in place that came at a huge cost to the producers,” he noted.
However, Makube also observed that the agriculture sector’s success was due to the strong desire for reasonably priced and high-quality farm products.
“The export outlook still points to high demand for quality and affordable agricultural produce as the global economy recovers.
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“With shipping costs on the decline, expectations are for a rebound in export volumes in the year ahead,” he said.
In conclusion, Makube noted that the agriculture export industry in South Africa has already set strong foundations, and expanding into new markets and utilising digital technology for trade will bring even more benefits. He said that these changes are expected to have a very positive impact on the sector’s growth and allow it to keep building on its success from recent years.
