OVERVIEW OF SOUTH AFRICA’S AGRI-FOOD TRADE WITH AFRICA
EZRA STEENKAMP DEPUTY DIRECTOR: INTERNATIONAL TRADE DEPARTMENT OF AGRICULTURE, FORESTRY AND FISHERIES SPS WORKSHOP MARCH 2010
A6. Structural shifts: SA’s imports and exports of agricultural products as percentage of world trade in agricultural products for the period 1960 to 2007. Weakening competitive advantage
1.5%
0.6% 0.4% Agric imports as % of world trade
2
Produce Subsidy Estimates 1988 to 2007 % PSEs South Africa v.s the OECD 40
35
30
25
20
15
10
5
0 1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
PSE OECD
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
PSE SA
3
RSA AGRI-FOOD TRADE WITH AFRICA VS THE WORLD (1998-2008) ( BILLIONS OF RSA RANDS) 50 45 40 35 30 25 20 15 10 5 0 1998
1999
2000
2001
2002
2003
Exp to the World
2004
2005
2006
2007
2008
Exp to Africa
4
RSA AGRI-FOOD TRADE WITH AFRICA VS THE WORLD (1998-2008) ( BILLIONS OF RSA RANDS) 45
40
35
30
25
20
15
10
5
0 1998
1999
2000
2001
2002
2003
Imp from the World
2004
2005
2006
2007
2008
Imp from Africa
5
Structural shifts: Increased food dependency PROCESSED AGRICULTURE TRADE, 1990-2008 35 30
ZAR Billion
25
• • •
20
• •
15
•
Strong spending and growth in the SA middle class Government income support to target vulnerable groups/poor Strong currency (from 2003 to 2007) that favoured imports • Rand was largely over valued due to foreign speculation. Population increase in recent years including immigrant influx Prices of many primary products peaked in 2007 (droughts elsewhere e.g. Australia > low levels of world stocks / panic/ export taxes ) 2007 was a dry year in the summer rainfall areas – overall both volumes and prices went up
10 5 -
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
(10)
1990
(5)
Year Processed exports
Processed imports
Net processed trade
6
Change in structure of exports to regions EXPORTS OF AGRICULTURAL PRODUCTS BY REGION, 1998 & 2008 100%
Middle East
Middle East
90%
Percentage contribution
80% 70%
SADC
SADC
Rest of Africa Rest of Africa
Americas
60% 50% 40%
Americas Asia & Pacific Asia & Pacific
Rest of Europe & Central Asia
Rest of Europe & Central Asia
30% 20%
EU
Exports to Africa expand at the expense of exports to the EU
EU
10% 0% 1998
2008 Year
7
Change in structure of import to regions IMPORTS OF AGRICULTURAL PRODUCTS BY REGION, 1998 & 2008 100% 90%
Middle East
Middle East
SADC
Rest of Africa
SADC
Rest of Africa
Percentage contribution
80% Americas
70%
Americas
60% 50% 40% 30%
Asia & Pacific
Asia & Pacific
Rest of Europe & Central Asia
Rest of Europe & Central Asia
20% 10%
EU
EU
1998
2008
0% Year
8
A6. Structural shifts in export basket (over 10 years) EXPORT COMPOSITION OF AGRICULTURAL PRODUCTS, 2008
Tobacco 3%
Rest 6%
Fibres 3%
Meat 3%
Oilseed Beverage Meat Fruit
+2% +7% +1% +1%
Fruit & Veg 30%
Sugar -11% Cereals -7% Process -1%
Wine & Beverages 18%
Oilseeds & Oils 6%
Cereals 15% Processed 11%
Sugar & Confectionary 5%
9
A6. Structural shifts in import basket (over 10 years) IMPORT COMPOSITION OF AGRICULTURAL PRODUCTS, 2008
Rest 20% Tobacco 3%
Meat 7%
Fruit & Veg 4%
Cereals 23%
Fibres 1%
Cereals Processed Oilseed Sugar
+4% +3% +1% +1%
Fibre -4% Beverage -1%
Wine & Beverages 8%
Processed 10% Sugar & Confectionary 5%
Oilseeds & Oils 19%
10
TOP 13 AGRI-FOOD EXPORTS FROM RSA TO AFRICA (62% OF TOTAL R14 BILLION AGRIC-FOOD EXPORTS IN 2008)
3%
2%
Corn (Maize), Other Than Seed Corn
2% 2%
Wheat (Other Than Durum Wheat), And Meslin
3% Cane/Beet Sug Chem Pure Sucrose Refind Nesoi 4% Food Preparations Nesoi 4%
Apples, Fresh 41%
5%
Waters, Incl Mineral & Aerated, Sweetnd Or Flavord Groats And Meal Of Corn (Maize) Cane Sugar, Raw, Solid Form, W/O Added Flav/Color
5%
Ethyl Alcohol, Undenat, Alchol Not Un 80% By Volum Cigarettes Containing Tobacco
5%
Wine, Fr Grape Nesoi & Gr Must W Alc, Nov 2 Liters 6%
Beer Made From Malt Soups And Broths And Preparations Therefor 7% 11%
Sunflower-Seed Or Safflower Oil, Refine, Fract Etc
11
TOP 13 AGRI-FOOD IMPORTS FROM AFRICA TO RSA (73% OF TOTAL R2 BILLION AGRIC-FOOD IMPORTS IN 2008) 2%
2%
2%
2%
Cotton, Not Carded Or Combed
2%
Tobacco, Partly Or Wholly Stemmed/Stripped
2% 27%
3%
Black Tea Fermdt & Other Partly Fermentd Tea Nesoi
Cotton Seed Oilcake & Oth Solid Residue W/N Ground 5% Cocoa Paste, Not Defatted Bran Sharps & Oth Residue Derived Frm Millng Wheat 8%
Cotton Seeds, Whether Or Not Broken Coffee, Not Roasted, Not Decaffeinated Bananas And Plantains, Fresh Or Dried Tobacco, Not Stemmed/Stripped
9%
Kidney Beans & White Pea Beans, Dri Shel, Inc Seed 23% 13%
Cane Molasses From Extraction Or Refining Of Sugar Cocoa Butter, Fat And Oil
12
TRENDS IN SOUTH AFRICA’S AGRI-FOOD EXPORT MARKETS (BILLIONS OF RSA RANDS) Seasonal Year 2007/08 ( QTR3/2007 TO QTR2/2008) Export Market
Seasonal Year 2008/09 ( QTR3/2008 TO QTR2/2009)
Share in RSA total Agri-food exports
Export Value
Export Market
Share in RSA total Agri-food exports
Export Value
Major Exports
United Kingdom
13 %
4333
Zimbabwe
10%
4960
Maize, Sunflower seeds or Oil and Wheat
Netherlands
12 %
4106
Netherlands
10%
4879
Grapes,Orange,Grape Wines
Germany
5%
1762
United kingdom
10%
4831
Grape Wines, Apples, Grapes
Mozambique
5%
1567
Kenya
5%
2584
Maize, Sugar and Maize meal
USA
4%
1326
Mozambique
5%
2361
Maize, Sugar and Maize meal
Japan
3%
1114
Zambia
4%
2064
Wheat, Maize and Food preparation
Angola
3%
1017
Germany
4%
1910
Grape wines, grapes 13 and Apricots preparations
TRENDS IN SOUTH AFRICA’S AGRI-FOOD IMPORT MARKETS (BILLIONS OF RSA RANDS) Seasonal Year 2007/08 ( QTR3/2007 TO QTR2/2008) Import Market
Seasonal Year 2008/09 ( QTR3/2008 TO QTR2/2009)
Share in RSA total Agri-food imports
import Value
Import Market
Share in RSA total Agri-food Imports
Import Value
Major Imports
Argentina
19%
6370
Argentina
16%
6282
Soybean Oils, Wheat and Chicken Cuts
Brazil
9%
3155
Brazil
10%
3989
Chicken Cuts, Soybean, Sunflower Oils and Tobacco
Thailand
8%
2567
Thailand
9%
3368
Rice, Starches & Cereals
United States of America
7%
2384
United States of America
6%
2308
Wheat, Whiskies and Food Preparations
United Kingdom
5%
1843
China
5%
2082
Kidney and White Pea,Beans,Animal Guts
Malaysia
5%
1789
United Kingdom
5%
1988 Whiskies, Rum &Tafia, 14Food prep
China
5%
1557
Malaysia
5%
1899
Edible fats,oil,Cocoa
Trade between SACU and Mozambique, Egypt and Sudan
Mozambique: SA imports: R179 Million (2009) − Mainly: Bran 42, Fruit&Nuts 41, Sugar 38, grain seed 26, Tobacco 10, Vegetables 8 SA export: R 2 070 Million (2009) − Sugar 579, Food+preserved 225+118, Cereals 183, Beverages 138, Dairy 136 Egypt SA import: R 32 Million (2009) − Fruit&nuts 13, Food &preserved 7, vegetables 4, sugars 2 SA export: R 328 Million − Tobacco 277, Cocoa 18, meat 11, fruit&nuts 10 Sudan SA import: R 263 177 (2009) − Vegetable saps, Grain seed SA export: R 207 Million (2009) − Sugar 135, Grain seed 38, beverages 8, fruit&nuts 8, cereals 7, food 2
STANDARDS CAN FACILITATE EXPORT GROWTH BUT CAN ALSO BE A BARRIER TO TRADE Standards can be catalyst for export growth: Grades and standards generally facilitate trade between countries with diverging norms Provide a bridge between producers in developing countries and consumers in high income markets Standards reduce transaction costs Standards promote consumer confidence and can be used as competitive advantage Standards can be technical barriers: Due to low capacity in developing countries on food safety the cost of compliance can be higher for developing countries Requires substantial investment to reach required standards and could undermine competitive capacity Cost of HACCP programs not high: about 3% in some cases Cost of non-compliance can be very high due to bans, border detentions, forgone earnings and damaging reputation Discrimatory use of standards Can be used as protectionist tool if: − Import standards is higher than local standards − Apply different measures to different import countries (and if not science based) − If applied to protect industries and not health/ environment
