A PROFILE OF THE SOUTH AFRICAN DAIRY MARKET ...nda.agric.za/doaDev/sideMenu/Marketing/Annual...1 A...

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A PROFILE OF THE SOUTH AFRICAN DAIRY MARKET VALUE CHAIN

2013

Directorate Marketing Private Bag X 15

Arcadia 0007

Tel: 012 319 8455/6 Fax: 012 319 8131

Email: [email protected] www.daff.gov.za

mailto:[email protected]

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TABLE OF CONTENTS 1. DESCRIPTION OF THE INDUSTRY 1

1.1. Milk production areas 1

1.2. Production trends 2

1.3. Employment 3

2. MARKET STRUCTURE 3

2.1. DOMESTIC MARKET AND PRICES 5

2.2. EXPORT AND IMPORT OF DAIRY PRODUCTS 5

2.2. EXPORTS 6

2.2.1. Export values of milk and dairy products 8

2.3. SHARE ANALYSIS 15

2.3.1. Share analysis of milk and dairy products exports 15

2.4. IMPORTS 20

2.5. MARKETING CHANNELS IN THE DAIRY INDUSTRY 22

3. EMPOWERMENT PLANS BY THE INDUSTRY 24

4. BARRIERS TO THE LEVEL OF PARTICIPATION BY THE EMERGING SECTOR 24

5. OPPORTUNITIES AND WEAKNESSES 25

6. MARKET INTELLIGENCE 26

6.1. Export Tariffs 26

6.2. Import tariffs 30

7. COMPETITIVENESS OF THE DAIRY INDUSTRY 34

7.1. Exports 34

7.1.1. Milk and cream (neither concentrated nor sweetened) 34

7.1.2. Milk and cream, concentrated or sweetened 40

7.1.3. Buttermilk and yoghurt 46

7.1.4. Whey and other natural milk products 52

7.1.5. Butter and other fats and oils derived from milk 58

7.1.6. Cheese and Curd 64

7.2. Imports 70

7.2.1. Milk and cream (neither concentrated nor sweetened) 70

7.2.2. Milk and cream, concentrated or sweetened 76

7.2.3. Buttermilk and yoghurt 82

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7.2.4. Whey and other natural milk products 88

7.2.5. Butter and other fats and oils derived from milk 94

14.2.6. Cheese and Curd 100

8. ACKNOWLEDGEMENTS 106

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1. DESCRIPTION OF THE INDUSTRY

The contribution of milk production in South Africa makes approximately 0.5% to the world milk production. There are four major dairy breeds in South Africa namely, Holstein, Jersey, Guernsey and Ayrshire. The industry comprises of number of different economic activities and significant differences exist between farming methods and processing of dairy products. These activities involve the production and marketing of raw milk, pasteurized milk and cream, fermented milk, long-life milk and cream, yoghurt, cheese and its by-product whey, milk powder, sweetened and unsweetened concentrated milk, butter and butter oil (ghee).

Source: Statistics and Economic Analysis, DAFF

The gross value of production for milk is dependent on the quantity produced and prices received by producers. Figure 1 indicates that the gross value of fresh milk has been moving at an increasing rate and reached its peak of R 9.2 million during 2007/08 and decreased by 1.3% in 2011/12. In contrast there is an exponential increase of 144% during 2011/12 relative 2002/03. The average gross value of milk produced amounted to R 6.5 million for the past ten years.

1.1. Milk production areas

The coastal areas are more suitable areas for milk production because of mild temperatures as well as good rainfall ensuring good quality natural and artificial pastures. The inland production areas are generally climatically less favourable for milk production. Dairy farming in these areas necessitate intensive and high cost feedlot production systems. Figure 2 shows percentage contribution of provinces to milk production in South Africa in 2012.

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Figure 1: Gross value of milk production

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Source: MPO

Western Cape contributed 27% of the total milk produced in South Africa followed by Eastern Cape which took up 24%, KwaZulu–Natal took 23%; Free State contributed 10%; Gauteng 6%; Mpumalanga and North West contributed 3% each, Northern Cape and Limpopo provinces shared the 2%

1.2. Production trends

Over the past ten years the number of milk production and dairy cows has been fluctuating throughout the period under review. The number of cows and milk production increased by 99% and 17% respectively. The fluctuations might be due to the uncertainty of the milk industry namely the outbreak of Rift Valley Fever (RVF) in 2010, unfavourable weather conditions and high input costs.

Western Cape 27%

Eastern Cape 24%

KwaZulu Natal 23%

Free State 10%

Gauteng 6%

Mpumalanga 4%

North West 4%

Others 2%

Figure 2: Milk production per province in 2012

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Source: Statistics and Economic Analysis, DAFF and LACTODATA

1.3. Employment

The South African dairy industry is important to the job market with over 2 474 milk producers employing 60 000 farm workers and providing 40 000 people with indirect jobs within the value chain like milk processing and milling industry.

2. MARKET STRUCTURE

The South African dairy market is divided into 60% liquid and 40% concentrated products. Pasteurized liquid milk and UHT milk are the major liquid products, while hard and semi cheese is the major concentrated product. Different types in each category are shown in Figure 4 and 5.

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Figure 3: Milk production and number of cows

Production Mil Dairy of Cows '000

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Source: MPO

Figure 4 shows that pasteurized milk has the highest percentages of 51% followed by UHT (long life) by 29%; yoghurt by 13%; mass & buttermilk by 5 percent. Flavoured milk commanded the lowest market share of liquid milk with 2% share.

Source: MPO

Flavoured Milk 2%

Maas & Buttermilk 5%

Yoghurt 13%

UHT 29%

Pasteurised Milk 51%

Figure 4: Composition of milk products

Butter 12%

Whey Powder

9%

Buttermilk Powder

1%

Condensed Milk 7%

Hard and Semi Cheese

44%

Other Cheese 18%

Milk Powder 9%

Figure 5: Composition of concentrated products

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Concentrated milk products consist of 44% of hard and semi cheese followed by other cheese with 18%; Butter’s share is 12% then milk powder & Whey powder with a percentage share of 9 each. Condensed milk and buttermilk powder commanded the lowest shares of condensed milk products with the shares of 7% and 1% respectively.

2.1. DOMESTIC MARKET AND PRICES

Local milk consumption and prices is illustrated in Figure 6.

Source: Statistics and Economic Analysis, DAFF

Figure 6 indicates that milk price started low and stagnant from 2002/03 to 2006/06 then started moving at an increasing rate from 2007/08 to 2011/12. During the period 2004/05 – 2005/06 milk price experienced a drastic decline in prices as processors were positioning themselves for an expected increase in production but this led to a no growth in production that force processors to review their pricing. There is an increase of R1.20/ℓ in 2011/12 compared to 2002/03. Consumption of milk has been moving at an increasing trend throughout the period under review and reached the new peak of 2 million kilograms in 2011/12. There was an increase of 26% over the previous decade. The demand of milk and dairy products are expected to grow at a rate of $% per annum.

2.2. EXPORT AND IMPORT OF DAIRY PRODUCTS

The most important producer of milk internationally are Asia, European Union (EU) and North and Central America. Milk production in South Africa makes a very small contribution (0.5%) to the

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Figure 6: Consumption and price of fresh milk

Consumption Price

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world production but in terms of the values of agricultural production in South Africa, it is the sixth largest agricultural industry in the world. Milk is produced much more cheaply in New Zealand and certain parts of the world than in South Africa. Imported milk from the EU and US is cheaper than in South Africa because of subsidies in these countries. Dairy companies in those countries are paid a guaranteed floor price for designated quantities of dairy products. Dairy companies in both countries are given a subsidy to bridge the gap between the supported domestic price and world market price. In the EU dairy farmers are paid subsidies for the use of certain inputs. The annual imports and exports of dairy products from 2003 to 2012 are shown in Figure 8.

Source: Quantec EasyData

Figure 8 showed that South Africa became a net exporter of milk and dairy products during the periods 2004, 2008, 2009 and 2011 and became a net importer during 2003, 2005 to 2007, 2010 and 2012. The increase in exports in 2008, 2009 and 2011 was due to the attractive international price of milk which encouraged more exports.

2.2. EXPORTS

The dairy industry is also an important earner of foreign exchange. In 2012 only, exports of dairy products amounted to 53 million kilograms valued at over R 769 million. There was a significant increase of 130% in quantity and 176% in value of milk and dairy products exported to the world in 2012 compared to 2003. Figure 9 below shows the exports of dairy products from 2003 to 2012.

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Figure 8: Export and import quantities of milk and dairy products

Exports quantity Imports quantity

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From Figure 9, exports quantity fluctuated throughout the period under analysis. Exports of milk and dairy products experienced the lowest exports during the periods 2003 to 2007 before increasing substantially in 2008 and fluctuated at an increasing trend during the following years. The decrease experienced in 2010 was due to the low production in the local market. Both quantity and value almost followed the same trend throughout the period under analysis.


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Figure 9: Exports of milk and dairy products

Quantity Value

Angola 17%

Japan 1%

Malawi 2%

Mozambique 31%

Tanzania 6%

Zambia 5%

Zimbabwe 38%

Figure 10: Milk and dairy products destinations during 2012

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Figure 10 shows that during 2012 Zimbabwe commanded the greatest market share of South African milk and dairy products exports accounting for 38% followed closely by Mozambique with 31% and Angola with 17%. Tanzania commanded 6% and Zambia 5% shares. The smallest shares of 2% and 1% were commanded by Malawi and Japan.


Figure 11 shows that milk and cream (not concentrated nor sweetened) dominated the export market of milk and dairy products and commanded the highest shares from 2003 to 2012. Milk and cream (concentrated or sweetened) commanded the second highest level during the periods 2003 to 2005 and again during 2007 to 2010. Buttermilk commanded the second greatest shares during 2011 to 2012. Butter, other fats and oils commanded the lowest quantities exported during the past decade.

2.2.1. Export values of milk and dairy products

Figures 12 – 21 shows the export of milk and dairy products from provinces and district municipalities.

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Figure 11: Quantity of milk and dairy products exported by South Africa

Milk and Cream,Not Concentrated Nor Sweetened Milk and Cream,Concentrated or Sweetened

Buttermilk, Cream and Yogurt Whey

Butter, other fats and oils Cheese and Curd

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Figure 13 illustrates that Gauteng province played a major role in the exports of milk and dairy products from 2003 to 2012 with the new peak value of R 500 million in 2011. This may be due to the fact that Gauteng is the main exit point to the SADC region as most of these exports were destined to SADC region. Western Cape Province commanded the second level of milk and dairy products exports throughout the period under review. Averagely Gauteng commanded R 250 million followed by followed by Western Cape by R84 million , then Mpumalanga and Kwazulu-Natal provinces which commanded R17 million and R12 million respectively. The lowest value of milk and dairy products were recorded in Free State and Northern Cape provinces with R2 million and R128 000 respectively. Northern Cape recorded fractional exports in 2005 and 2012 only.

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Western Cape 64 382 39 153 38 059 54 299 68 701 117 280 154 568 117 199 83 627 102 350

Eastern Cape 2 467 1 609 3 714 3 768 8 339 16 433 19 619 10 612 18 172 30 206

Northern Cape 0 0 0 0 0 0 0 0 0 1

Free State 0 0 0 0 0 0 1 665 1 655 2 574 10 729

Kwazulu-Natal 6 877 6 338 12 556 7 974 7 581 14 527 12 539 9 121 18 868 24 520

North West 0 0 6 3 298 391 6 841 1 117 3 517 10 362

Gauteng 203 760 189 500 89 300 111 873 130 960 254 610 357 458 281 903 382 278 500 300

Mpumalanga 1 493 1 146 6 189 25 136 14 042 11 118 3 299 19 448 33 044 52 907

Limpopo 37 1 270 160 367 1 875 4 525 1 177 28 019 41 539 37 850

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Figure 12: Values of milk and dairy products from provinces

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In Western Cape Province, City of Cape Town metropolitan municipality played an important role in the export of milk and dairy products throughout the period under analysis with the highest export value of R 113 million recorded in 2010. Regular exports of milk and dairy products were also recorded in Cape Winelands and Eden district municipalities. Fractional exports were recorded from West Coast and Overberg district municipalities.


In Eastern Cape Province, high milk and dairy products exports values have been recorded from Cacadu district municipality which commanded the highest values during the past decade except in

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

City of Cape Town 44 007 30 991 32 767 39 883 48 585 79 168 98 415 112 710 80 818 97 348

West Coast 0 0 105 500 457 464 1 017 0 310 0

Cape Winelands 20 352 8 158 5 184 13 515 19 659 37 511 54 267 1 530 1 324 1 493

Overberg 0 1 3 1 0 0 0 0 0 0

Eden 22 4 1 400 0 137 869 2 959 1 175 3 509

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Figure 13: Values of milk and dairy products exported from Western Cape province

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Cacadu 2 460 849 3 687 3 761 5 653 7 468 14 984 9 552 17 514 30 173

Amatole 0 219 15 1 333 0 0 5 0 25

Nelson Mandela 7 541 12 6 2 354 8 964 4 635 1 055 657 8

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Figure 14: Values of milk and dairy products exported from Eastern Cape province

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2008 followed by Nelson Mandela metropolitan municipality which reached its peak of R 9 million in 2008. Irregular exports of milk and dairy products were recorded in the Amatole district municipality.


Intermittent values were recorded from Free State Province from four district municipalities (Xhariep, Motheo Thabo Mofutsanyane and Northern Free State). Northern Free State district municipality recorded a highest value of R 1.7 million in 2009 and Motheo recorded the highest values from 2010 and 2012. Xhariep commanded the second highest value in 2012.

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Xhariep 0 0 0 0 0 0 0 0 0 3 754 47

Motheo 0 0 0 0 0 0 0 1 281 10 2 573 63 6 964 42

Thabo Mofutsanyane 0 0 0 0 29 0 0 146 0 9 733

Northern Free State 0 0 0 0 0 0 1 664 99 373 935 0 0

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Figure 15: Values of milk and dairy products exported from Free State province

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Source: Quantec Easy data

In KwaZulu–Natal Province, high milk and dairy products export values have been recorded at eThekwini metropolitan Municipality throughout the period of analysis. Other municipalities (Ugu, Umgugundlovu, Uthukela, Amajuba, Uthungulu and iLembe) recorded intermittent exports of milk and dairy products during the past decade.


Intermittent values were recorded in North West Province from three district municipalities (Bojanala, Central, Bophirima and Southern). Southern district municipality recorded a sharp

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Ugu 0 2 0 14 0 0 63 0 0 0

Umgungundlovu 0 749 1 199 15 5 0 10 1 236 280

Uthukela 21 0 0 0 0 0 8 19 10 9

Amajuba 26 0 0 0 0 0 0 0 0 0

Uthungulu 0 0 1 45 0 0 0 7 0 0

iLembe 15 0 0 0 0 994 786 1 113 0 0

eThekwini 6 815 5 588 11 357 7 900 7 576 13 533 11 672 7 982 18 621 24 231

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Figure 16: Values of milk and dairy products exported from KZN province

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Bojanala 0 0 5 659 0 0 0 0 128 044 0 9 730

Central 0 0 0 0 297 525 0 0 0 0 78

Bophirima 0 0 0 0 0 0 0 0 0 847

Southern 0 0 0 2 517 170 391 436 6 840 50 988 567 3 517 45 10 351 1

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Figure 17: Values of milk and dairy products exported from North West province

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increase of R 6.8 million in 2009 and decreased substantially in 2010 before experiencing a sharp increase from 2011 to 2012.


In Gauteng province, high milk and dairy products export values have been recorded for the past ten years at the City of Johannesburg metropolitan municipality with the new peak in 2012 valued at R 389 million. Ekurhuleni district municipality commanded the second level following City of Johannesburg at a distance. Fractional exports of milk and dairy products were recorded in Metsweding district municipality. Sedibeng, West Rand, Ekurhuleni, City of Johannesburg and City of Tshwane recorded regular exports of milk and dairy products.

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Sedibeng 632 69 0 141 1 15 27 14 517 495

Metsweding 0 2 0 0 0 429 67 0 0 49

West Rand 96 1 735 79 79 655 1 050 6 121 1 445 3 153 12 074

Ekurhuleni 8 814 6 486 6 344 8 876 15 401 25 690 39 080 38 399 67 124 84 728

City of Johannesburg 193 269 178 128 82 022 101 756 112 811 223 385 290 881 228 964 284 821 389 476

City of Tshwane 949 3 080 854 1 021 2 092 4 041 21 282 13 081 26 663 13 477

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from Gauteng province

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In Mpumalanga Province, outstanding exports value of milk and dairy products were recorded at Ehlanzeni district municipality which recorded exports regularly during the past decade. Irregular exports of milk and dairy products were recorded from Gert Sibande and Nkangala district municipalities.


Limpopo Province recorded minimal exports of milk and dairy products during 2003 to 2012 from Mopani, Vhembe, Capricorn and Waterberg district municipalities. Vhembe district municipality recorded exports regularly and experienced the highest exports during 2004 and 2006 to 2009. Waterberg district municipality took over the highest position from 2010 to 2012. Fractional exports were recorded from Mopani, Capricorn and Waterberg district municipalities.

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Gert Sibande 0 305 534 0 120 0 536 1 0 288

Nkangala 7 0 0 0 0 0 1 84 68 49

Ehlanzeni 1 486 841 5 655 25 136 13 922 11 118 2 762 19 364 32 975 52 569

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Figure 19: Values of milk and dairy products exported from Mpumalanga province

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Mopani 0 9 0 0 0 3 0 0 7 0

Vhembe 9 1 076 0 332 1 766 4 522 1 122 7 981 11 028 15 596

Capricorn 28 184 160 34 109 0 55 3 447 2 409 1 462

Waterberg 0 0 0 0 0 0 0 16 591 28 095 20 792

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Figure 20: Values of milk and dairy products exported from Limpopo province

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Northern Cape Province has not been recording any exports except in 2005 and in 2012. Siyanda district was the only district in Northern Cape which exported milk and dairy products and again in 2012 together with Namakwa and Frances Baard district municipalities. Frances Baard district municipality commanded the highest value during 2012.

2.3. SHARE ANALYSIS

2.3.1. Share analysis of milk and dairy products exports

Table 1 presents the contributions of the various provinces to total exports value for milk and dairy products of South Africa during the past ten years.

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Namakwa 0 0 0 0 0 0 0 0 0 40

Siyanda 0 0 70 0 0 0 0 0 0 76

Frances Baard 0 0 0 0 0 0 0 0 0 1 096

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Figure 21: Values of milk and dairy products exported from Northern Cape province

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Table 1: Share of provincial milk and dairy products to the total RSA milk and dairy products exports (%). Years Provinces

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Western Cape 23.07 16.38 25.38 26.69 29.64 28.00 27.74 24.99 14.33 13.31

Eastern Cape 0.88 0.67 2.48 1.85 3.60 3.92 3.52 2.26 3.11 3.93

Northern Cape 0 0 0 0 0 0 0 0 0 1

Free State 0 0 0 0 0 0 0.30 0.35 0.44 1.39

KwaZulu-Natal 2.46 2.65 8.37 3.92 3.27 3.47 2.25 1.94 3.23 3.19

North West 0 0 0 0 0.13 0.09 1.23 0.24 0.60 1.35

Gauteng 73.03 79.28 59.54 55.00 56.50 60.78 64.16 60.10 65.50 65.04

Mpumalanga 0.54 0.48 4.13 12.36 6.06 2.65 0.59 4.15 5.66 6.88

Limpopo 0.01 0.53 0.11 0.18 0.81 1.08 0.21 5.97 7.12 4.92

Total 100 100 100 100 100 100 100 100 100 100 Source: Quantec EasyData

Table 1 show that Gauteng province commands the greatest share of South African milk and dairy products’ exports followed by Western Cape province. This is in spite of the fact that Western Cape and Eastern Cape provinces are the major milk producing provinces. This may be due to the fact that Gauteng and Western Cape provinces are the exit points for milk and dairy products to the SADC regions. Eastern Cape, KwaZulu–Natal, Gauteng, Mpumalanga and Limpopo provinces reported regular exports of milk and dairy products. Northern Cape, North West and Free State provinces recorded intermittent export shares of milk and dairy products. Northern Cape province received a share of less than a percent in 2005 and 1 (one) percent in 2012. Table 2: Share of district milk and dairy products to the total Western Cape provincial milk and dairy products exports (%). Years Districts

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

City of Cape Town 68.3

5 79.1

5 86.0

9 73.4

5 70.7

2 67.5

0 63.6

7 96.1

7 96.6

4 95.1

1

West Coast 0 0 0.27 0.92 0.66 0.40 0.66 0 0.37 0

Cape Winelands 31.6

1 20.8

4 13.6

2 24.8

9 28.6

2 31.9

8 35.1

1 1.31 1.58 1.46

Overberg 0 0 0.01 0 0 0 0 0 0 0

Eden 0.03 0.01 0 0.74 0 0.12 0.56 2.52 1.41 3.43


The City of Cape Town metropolitan municipality has commanded the greatest share of milk and dairy products’ exports in the Western Cape Province from 2003 to 2012 followed by Cape Winelands. Fractional exports of milk and dairy products occurred in the West Coast, Overberg and Eden district municipalities.

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Table 3: Share of district milk and dairy products to the total Eastern Cape provincial milk and dairy products exports (%). Years Districts

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Cacadu 99.70 52.75 99.27 99.81 67.78 45.45 76.38 90.02 96.38 99.89

Amatole 0 13.63 0.41 0.03 3.99 0 0 0.04 0 0.08

Nelson Mandela 0.30 33.61 0.32 0.16 28.22 54.55 23.62 9.94 3.62 0.03


Cacadu district municipality has commanded the greatest share of milk and dairy products exports in the Eastern Cape Province. Regular exports were also recorded in Nelson Mandela Metropolitan Municipality and irregular exports were recorded in Amatole district municipality. Table 4: Share of district milk and dairy products to the total Free State provincial milk and dairy products exports (%). Years Districts

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Xhariep 0 0 0 0 0 0 0 0 0 34.99

Motheo 0 0 0 0 0 0 0 77.40 100 64.91

Thabo Mofutsanyane 0 0 0 0 100 0 0 0.01 0 0.09

Northern Free State 0 0 0 0 0 0 100 22.59 0 0

Total 0 0 0 0 100 0 100 100 100 100 Source: Quantec EasyData Free State Province experienced fractional exports of milk and dairy products from Xhariep, Motheo, Lejweleputswa, Thabo Mofutsanyane and Northern Free State district municipalities. Motheo district municipality commanded the highest share of milk and dairy products during the periods 2010 to 2012. Thabo Mofutsanyane district municipality commanded the highest exports value in 2007 and Northern Free State in 2009. Table 5: Share of district milk and dairy products to the total KwaZulu–Natal provincial milk and dairy products exports (%). Years Districts

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Ugu 0 0.03 0.00 0.17 0 0 0.50 0 0 0

Umgungundlovu 0 11.81 9.55 0.19 0.06 0 0.08 0.01 1.25 1.14

Uthukela 0.30 0 0 0 0 0 0.06 0.21 0.05 0.04

Amajuba 0.38 0 0 0 0 0 0 0 0 0

Uthungulu 0.00 0 0.01 0.57 0 0 0 0.07 0 0

iLembe 0.21 0 0 0 0 6.85 6.27 12.20 0 0

eThekwini 99.10 88.16 90.45 99.07 99.94 93.15 93.09 87.51 98.69 98.82


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eThekwini district municipality has commanded the greatest shares of milk and dairy products’ exports in the KwaZulu–Natal Province from 2003 to 2012 and it was consistence during the past decade. Fractional exports of milk and dairy products occurred in Ugu, Umgungundlovu, Uthukela, Amajuba Uthungulu and iLembe district municipalities. Table 6: Share of district milk and dairy products to the total North West provincial milk and dairy products exports (%). Years Districts

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Bojanala 0 0 100 0 0 0 0 11.47 0 0.09

Central 0 0 0 0 99.94 0 0 0 0 0.00

Bophirima 0 0 0 0 0 0 0 0 0 0.01

Southern 0 0 0 100 0.06 100 100 88.53 100 99.90


Intermittent milk and dairy exports in North West Province were recorded from Bojanala, Central, Bophirima and Southern district Municipalities from 2005 to 2012. Bojanala district municipality commanded 100% shares during 2005 and Southern district municipality has commanded 100% shares of milk and dairy products exports during 2006, 2008 to 2009 and 2011 and then 99.9% in 2012. Table 7: Share of district milk and dairy products to the total Gauteng provincial milk and dairy products exports (%). Years Districts

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Sedibeng 0.31 0.04 0 0.13 0 0.01 0.01 0 0.14 0.10

Metsweding 0 0 0 0 0 0.17 0.02 0.00 0.00 0.01

West Rand 0.05 0.92 0.09 0.07 0.50 0.41 1.71 0.51 0.82 2.41

Ekurhuleni 4.33 3.42 7.10 7.93 11.76 10.09 10.93 13.62 17.56 16.94

City of Johannesburg 94.85 94.00 91.85 90.96 86.14 87.74 81.37 81.22 74.51 77.85

City of Tshwane 0.47 1.63 0.96 0.91 1.60 1.59 5.95 4.64 6.97 2.69


The City of Johannesburg municipality has commanded the greatest share of milk and dairy products exports in Gauteng province from 2003 to 2012 followed at a vast distant by Ekurhuleni district municipality. City of Tshwane metropolitan, West Rand, City of Johannesburg metropolitan and Ekurhuleni district municipalities reported regular exports throughout the period under analysis. Fractional exports of milk and dairy products occurred in the Sedibeng and Metsweding district municipalities.

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Table 8: dairy products (neither concentrated nor sweetened) to the total Mpumalanga provincial milk and dairy products exports (%) Years Districts

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Gert Sibande 0 26.59 8.63 0 0.85 0 16.25 0 0 0.55

Nkangala 0.49 0 0 0 0 0 0.04 0.43 0.21 0.09

Ehlanzeni 99.51 73.41 91.37 100.0

0 99.15 100.0

0 83.71 99.56 99.79 99.36


Ehlanzeni district municipality has commanded the greatest shares of milk and dairy products’ exports in Mpumalanga Province from 2003 to 2012. Irregular exports of milk and dairy products occurred in the Gert Sibande district and Nkangala district. Table 9: Share of district milk and dairy products to the total Limpopo provincial milk and dairy products exports (%) Years Districts

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Mopani 0 0.75 0 0 0.01 0.07 0 0 0.02 0

Vhembe 24.96 84.74 0 90.65 94.18 99.93 95.31 28.48 26.55 41.20

Capricorn 75.04 14.52 100 9.35 5.80 0 4.69 12.30 5.80 3.86

Waterberg 0 0 0 0 0 0 0 59.21 67.64 54.93


Intermittent exports of milk and dairy products were recorded in Limpopo Province. Vhembe and Capricorn district municipalities dominated the export market during the past decade. Capricorn district municipality commanded the greatest shares of milk and dairy products exports during 2003 and 2005, Vhembe district municipality commanded the greatest shares during 2004 and 2006 to 2009 while Waterberg district municipality got the greatest shares from 2010 to 2012. Table 10: Share of district milk and dairy products to the total Northern Cape provincial milk and dairy products exports (%). Years Districts

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Namakwa 0 0 0 0 0 0 0 0 0 3.30

Siyanda 0 0 100 0 0 0 0 0 0 6.27

Francis Baard 0 0 0 0 0 0 0 0 0 90.43

Total 0 0 100 0 0 0 0 0 0 100

Siyanda district municipality commanded 100% shares during 2005 the diminished thereafter then indicate some exports in 2012 again. Namakwa and Francis Baard district municipalities started recording exports of milk and dairy products in 2012 and Francis Baard district municipality commanded the greatest share of 90.4% during the same period.

20

2.4. IMPORTS

South Africa is an importer of dairy products. The average imports quantity and value over the past ten years amounted to 347 million kilograms at a value of R 7 billion over the past 10 years. Figure 21 present the imports of milk and dairy products from 2003 to 2012.

Source: Quantec Easydata

Figure 21 shows that imports of milk and dairy products fluctuated in both quantity and value throughout the period under analysis. The imports quantity of milk and dairy products reached the new peak of over 59 million kilograms during 2012 and the value of milk and dairy products imported reached a new peak of over R 1.4 billion in 2012. This might be due to the weaker South African Rand. Figure 22 below shows the different types of milk and dairy products imported from 2003 to 2012 in terms of quantity.

0

200

400

600

800

1 000

1 200

1 400

1 600

0

10

20

30

40

50

60

70

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Mill

ion

Ran

ds

Mill

ion

Kilo

gram

s

Years

Figure 21: Imports of milk and dairy products

Quantities Values

21


Figure 22 shows that milk and cream (concentrated or sweetened), whey and milk & cream (not concentrated nor sweetened) were among the most imported quantities of milk and dairy products in South Africa during the period under analysis. Milk and cream (concentrated or sweetened) commanded the greatest quantities of the imports market in 2003 and 2005 to 2007. Milk & Cream (not concentrated nor sweetened) dominated the imports market from 2008 to 2010 and again in 2012 whereas Whey recorded the highest quantities imported during 2004 and 2011. Figure 23 below shows the different types of milk and dairy products imported from 2003 to 2012 in terms of value.

Source: Quantec Easydata

0

5 000

10 000

15 000

20 000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Tho

usa

nd

Kilo

gram

s

Years

Figure 22: Quantities of milk and dairy products imported by South Africa

Milk and cream, not concentrated nor sweetened Milk and cream, concentrated or sweetened

Buttermilk, cream and yogurt Whey

Butter, other fats and oils Cheese and curd

0

100

200

300

400

500

600

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Mill

ion

Ran

ds

Years

Figure 23: Values of milk and dairy products imported by South Africa

Milk and cream, not concentrated nor sweetened Milk and cream, concentrated or sweetened

Buttermilk, cream and yogurt Whey

Butter, other fats and oils Cheese and curd

22

Figure 23 above indicate that milk and cream (concentrated and sweetened) & cheese and curd commanded the greatest share of milk and dairy products imported by South Africa during 2003 to 2012. On average Cheese and Curd commanded a share of R 214 million per annum followed by Milk and Cream (concentrated and sweetened) by R 183 million then Whey by R 130 million during the period under review. Figure 24 shows the origin of milk and dairy products imported to South Africa in 2012.


Figure 24 above shows that the main supplier of milk and dairy products to South Africa in 2012 was Uruguay which had an import market share of 26% followed by France which exported 18% and New Zealand imported 17% of milk and dairy products to South Africa. Argentina and Australia supplied minimal imports of milk and dairy products, they both had a share of 2% each for South African import market.

2.5. MARKETING CHANNELS IN THE DAIRY INDUSTRY

Milk production in South Africa is mainly by two sectors; Commercial Producers, and Small and Medium size Producers (see Figure 25). Commercial Producers sell milk to Dairy Processors. Small and medium size producers sell most of their milk directly to consumers and some to processors. Dairy Processors buys milk from farmers and import milk concentrates and produces dairy products for primary distribution to retailers, exports and for further processing.

Argentina 2%

Australia 2%

Germany 8%

Denmark 4%

France 18%

United Kingdom 3%

Ireland 9%

Netherlands 4%

New Zealand 17%

United States 7%

Uruguay 26%

Figure 24: Countries of origin for milk and dairy products in 2012

23

Figure 25: Marketing Channels.

Commercial

Dairy farms

Bulk

collection

Dairy

Processors

Dairy

Products

(Cheese,

Butter, etc)

Secondary

dairy

products

Primary

Distribution

Retailers

Small and

informal

trade

Institutions

Imports

Small and

Medium Dairy

Farms

Exports

Consumers

24

3. EMPOWERMENT PLANS BY THE INDUSTRY

The following is a list of ventures/projects/programmes. Media releases were arranged for the dairy industry. The MPO, in conjunction with the provincial departments and municipalities and other relevant stakeholders were responsible for these empowerment plans. 3.1. Successful ventures: Commercially viable. Fort Hare Dairy Trust outside Alice in Eastern Cape started in 2004 and the first cow was milked in October 2007. The trust started between a partnership between 70 white farmers from the Tsitsikamma and the Underberg area – through their company Amandlelo Agri and University of Fort Hare. The University donated land and the cost of the project was R 22 million (R 2 million donated by University, R 5 million by Amandlelo and 15 million by Land Bank of which 7.5 million is loan). The farmers signed on an empowerment company Vuwa Investments which was given 35% stake in the company. The farmers kept 49 % and the rest was shared among 600 workers from the 70 dairy farms. Today Fort Hare Dairy Trust is a state-of-the-art commercial dairy farm. It has 800 cow rotary parlor that produces approximately 10 000 litres of milk a day much of which is supplied to Clover milk company. The farm that requires 600 tons of maize is sourced from farmers in the Alice area. Every year Amandlelo takes between 10 and 15 black interns. Some of them are sent to Fort Hare Dairy Trust. Farmers are rewarded with cattle as they pass through different stages. This will enable them to start their own full time dairy farming (Pretoria News, 17 June 2009). 3.2. Training Programmes: Agri SETA accredited farm worker training. Agri SETA accredited emerging farmer training. Workers training funded by MILK SA. Training of Extension officers of Department of Agriculture in North West Province and Free State.

3.3. Magazines: Ubisi Mail and Dairy Mail are distributed free of charge to emerging farmers.

4. BARRIERS TO THE LEVEL OF PARTICIPATION BY THE EMERGING SECTOR

The low profitability of milk production is the major barrier to entry for the emerging farmers. Access to credit facilities and financial package specially structured to their needs also plays a role. The volatility of the market and the effect of imports in depressing producer prices make it difficult for

the emerging farmers to enter the industry. The dynamics of pricing in the dairy industry as well as the shelf life of the products is such that the

farmers are squeezed to accept whatever price that the producers/processors offer them to dispose of their products.

The market is dominated by 4 major processors in the milk industry making it extremely difficult for the emerging farmers to make inroads in the dairy processing industry.

25

They lack the necessary capital to invest in dairy equipment. The volume of milk produced may not be sufficient to invest in capital equipment. To form a cooperative would assist in increasing the volume through the collection of milk from several small farms. However the infrastructure and the underdeveloped roads and the great distances between farms could be inhibiting factors to go this route.

Smaller processors tend to pay higher raw milk prices than the larger processors during periods of seasonal milk shortages because they lack the bargaining power that the larger processors have. During periods of surpluses the large producers dump their products in the retail sector at very low prices making it difficult for the small processors to compete.

The big players in the market have facilities to convert raw milk into milk powder, butter, cheese or long-life milk which can be stored for longer periods of time. This facility is capital intensive and for the volumes of raw milk produced by the emerging farmers it is not really worth it in the long term.

The farmers/producers lack the expertise, equipment to pasteurize milk. Transport and the quantity are major deterrents for small farmers to get their products to the big processors. The big processors/buyers find it not worth the effort to access these farmers due to the road infrastructure and small inconsistent and small volumes of milk produced.

5. OPPORTUNITIES AND WEAKNESSES

Success in the dairy market depends on two factors namely: quality products and the support of processors. Successful advertising, exports and the development of new products are also important. Some consumers like to buy fresh milk direct from producers because the origin of the milk is known. A strong relationship can be built between producer/s and consumers. Producers can sell direct to small cafes and street vendors shortening the value chain cutting out some transaction costs resulting in an increase in profits. This channel will require higher capital and involves more risks. A sound relationship needs to be in place between the sellers and the buyers. Since deregulation the number of smaller milk producers has increased dramatically and processors are willing to receive milk from the smaller producers. However this supply channel will require a high level control measures on hygiene and the producer has to comply with the required standards. High demand of value added products such as sour milk, yoghurt and cheese can be a market to be explored. However to go this route would require high investment, market knowledge and the necessary training. Packaging to promote brand identification can open an opportunity but this would require market research and knowledge, training and investment.

26

6. MARKET INTELLIGENCE

6.1. Export Tariffs

Tariffs that different importing countries applied to milk and dairy products originating from South Africa in 2011 and 2012 are shown in table 10 to 15. Table 10: Milk and cream (neither concentrated nor sweetened) Country Product Code Trade

Regime Description

2011 2012

Applied Tariffs Total Ad valorem Equivalent Tariff (estimated)

Applied Tariffs

Total Ad valorem Equivalent Tariff (estimated)

Comoros

04011000 5% 5%

DRC 040111000; 04012000 & 04013000

MFN duties 5% 5% 5% 5%

Malawi 040111000; 04012000 & 04013000

Preferential tariff for SA

10% 10% 10% 10%

Mauritius 040111000; 04012000 & 04013000


Mozambique 04011000 & 04012090


15%

15%

15%

15%

United Republic of Tanzania

040111000; 04012000 & 04013000

MFN duties 60% 60% 60% 60%

Zimbabwe 040111000; 04012000 & 04013000

MFN duties 40% 40% 40% 40%

Source: Market Access Map

Mauritius allowed the importation of milk and cream (not concentrated or sweetened) from South Africa duty free during 2011 and 2012. The most protected market exists in United Republic of Tanzania which applied the MFN duties of 60% in 2011 and 2012 followed by Zimbabwe by 40% MFN duties applied. Mozambique continued with preferential tariff of 15%. Democratic Republic of Congo applied the MFN duties of 5% and Malawi applied 10% to South African milk and cream (not concentrated nor sweetened) during 2011 and 2012.

27

Table 11: Milk and cream (concentrated or sweetened) Country Product code Trade Regime

Description 2011 2012

Applied Tariffs


Applied Tariffs


Angola 04021000; 04022100; 04029100 & 04029900


DRC

04021000 MFN duties 5% 5%

Malawi 04021000; 04022100 & 04022900

MFN Duties 10% 10% 10% 10%

Mozambique 04021010 MFN Duties 0% 0%

0%

0%

Zambia 04021010 MFN duties 0% 0%

Zimbabwe 04021010 MFN duties 20% 20% 20% 20%


Mozambique and Zambia has applied a MFN duties of 0% for exports of milk and cream (concentrated or sweetened) from South Africa during 2011. Angola, Democratic Republic of Congo and Malawi applied a reasonable MFN duties to South African milk and cream (concentrated and sweetened) of 2%, 5% and 10% respectively during 2012. Zimbabwe’s market of Milk and Cream (Concentrated & sweetened) is the highest protected market with the MFN duties ranging from 20% to 40% during the period under review. Table 12: Buttermilk, cream, yoghurt, etc Country Product Code Trade

Regime Description

2011 2012


Applied Tariffs


Angola 04031000 & 04039000

MFN duties 10% 10% 10% 10%

DRC

04031000

MFN duties 10% 10% 10% 10%

Malawi 04031000 & 04039000

MFN duties 10% 10% 10% 10%

Mozambique 04031000

Preferential tariff for

15%

15%

15%

15%

http://www.macmap.org/trademap/redirectLoginPage.aspx?Country=716&Product=0402&ExpOrImp=I&tool=2&as=(S(aetjvy552nrqtbv1bd5kll55))&[email protected]&ReturnUrl=Quick.Comparison.aspx

28

Country Product Code Trade Regime Description

2011 2012


Applied Tariffs


South Africa

Zambia 04031000 & 04039000

Preferential tariff for South Africa

0% 0% 0% 0%

Zimbabwe

04031000; 04039000; 04039010 & 04039090

MFN duties 40% 40% 40% 40%


South African exports its buttermilk, cream and yoghurt to Zambia received a preferential free duty during the past two years. Angola, Democratic Republic of Congo and Malawi applied the MFN duties of 10% during 2011 and 2012. Zimbabwe applies the highest MFN duties of 40 to buttermilk, curdled milk, cream and yoghurt originating from South Africa in 2011 and 2012. Table 13: Whey and natural milk products Country Product code Trade

Regime Description

2011 2012

Applied Tariffs


Applied Tariffs


Angola

04041000

MFN duties 2% 2%

DRC 04041000 MFN duties 5% 5%

Mozambique & Zambia

04041000 & 04049000


0% 0% 0% 0%

Malawi 04041000

MFN duties 10% 10%

Zimbabwe 04041000 MFN duties 5% 5% 5%

5%


Mozambique and Zambia allowed importation of whey from South Africa at a preferential rate of 0% in 2011 and 2012. Angola, Democratic Republic of Congo and Zimbabwe applied the MFN tariff of 2%, 10% and 5% respectively in 2012. Malawi’s import market was the most protected market of whey origination from South Africa with applied MFN tariff of 10% during 2012.

29

Table 14: Butter and other fats and oils derived from milk Country Product

code Trade Regime Description

2011 2012

Applied Tariffs



Japan 040510129; 040520090;

MFN duties 29.80% + 9371.25 $/Ton

311.76% 29.80%+ 12058.37 $/Ton

29.8%

Republic of Korea

0405200000 MFN duties 8% 8% 8% 8%

Malaysia

04051000 MFN duties 0% 0% 0% 0%

Lebanon 04051000

MFN duties 0% 0%

0% 0%

Zambia 04051000; 04052000 & 04059000


0% 0% 0% 0%

Zimbabwe 04051000; 04052000 & 04059000

MFN duties 40% 40% 40% 40%


Zambia, Malaysia and Lebanon allowed importation of whey from South Africa duty free in 2011 and 2012. Japan accepted South African butter and other fats with the MFN duties of 29.80% + 12058.37 $/Ton during

2012. The most protected market exists in Zimbabwe with the total ad valorem equivalent tariff estimated at 40% during 2011 and 2012. Table 15: Cheese and curd Country Product code Trade Regime


Applied Tariffs


Applied Tariffs


DRC

04061000; 04062000; 04063000; 04064000 & 04069000

MFN duties 20% 20% 20% 20%

Malawi

04061000; 04062000; 04063000; 04064000 & 04069000

MFN duties 25% 25% 25% 25%

Mauritius

04061000 MFN duties 0% 0%

Mozambique 04061000; 04062000;


15% 15% 15% 15%

30

Country Product code Trade Regime Description

2011 2012

Applied Tariffs


Applied Tariffs


04063000; 04064000 & 04069000

Zambia

04061000; 04062000; 04063000; 04064000 & 04069000


0% 0% 0% 0%

Zimbabwe

04061000; 04062000; 04063000; 04064000 & 04069000

MFN duties 40% 40% 40% 40%


Zambia and Mozambique applied a preferential tariff of 0% to South African cheese and curd during 2011 and 2012. Mozambique applied a preferential of 15% to South Africa while Democratic Republic of Congo applied the MFN duties of 20% during the past two years. Malawi was the most protected market for South African exports of cheese and curd with the MFN duties of 25% during 2011 and 2012.

6.2. Import tariffs

Tariffs that South Africa applied to imports of milk and dairy products originating from all possible countries in 2011 and 2012 are shown in Table 16 to 21. Table 16: Milk and cream, neither concentrated nor sweetened Country Product code Trade Regime


Applied Tariffs


Applied Tariffs


Argentina;

France; Germany;

Brazil; United

Kingdom; Uruguay

04011007; 04011009; 04011090; 04012007; 04012009; 04012090; 04014007; 04014009; 04014090; 04015007;

MFN duties

0%

0%

0%

0%

31

Country Product code Trade Regime Description

2011 2012

Applied Tariffs


Applied Tariffs


04015009 & 04015090


South Africa applies 0% MFN duties to all top exporters of milk and cream (neither concentrated nor sweetened) to the country during 2011 and 2012. The South African top exporters are Argentina, France, Germany, Brazil, United Kingdom and Uruguay, Table 17: Milk and cream, concentrated or sweetened Country Product


2011 2012

Applied Tariffs


Applied Tariffs


Belgium; France; Germany; Ireland; Lithiania & Netherlands

04021010

MFN duties

96.00% or 540.00 $/Ton whichever is the lower

26.47%%

96.00% OR 540.00$/Ton whichever is lower

OTQR: 14.02% ITQR: 19.2%


Table 17 indicates that South Africa applied a total ad valorem equivalent tariff for milk and cream (concentrated or sweetened) of 26.47% to imports from Belgium, France, Germany, Lithiania and New Zealand in 2011 and applied the Inside Tariff Quota Rate (ITQR) of 19.2% and the Outside Tariff Quota Rate (OTQR) of 14.02% during 2012 to imports from the mentioned countries.

32

Table 18: Buttermilk, cream, yoghurt, etc Country Product


2011 2012

Applied Tariffs


Applied Tariffs


Belgium; France;

Germany; Ireland; New Zealand &

United Kingdom

04031000

MFN duties 0% 0%

0% 0%


Table 18 indicates that South Africa applied 0% MFN duties of buttermilk, cream and yoghurt from Belgium, France, Germany, Ireland, New Zealand and United Kingdom during 2011 and 2012.. Table 19: Whey and other natural milk products Country Product


2011 2012

Applied Tariffs


Applied Tariffs


Argentina; France; Germany; Ireland; New Zealand & United States of America

04041000 MFN duties 96.00% or 540.00 $/Ton whichever is the lower

18.24% 96.00% or 540.00$/Ton whichever is the lower

OTQR:18.24% ITQR: 19.2%


Table 19 indicates that South Africa’s MFN duties applied during 2011 and 2012 remained the same to imports of whey and other natural milk products from Argentina, France, Germany, Ireland, New Zealand and United States America at a total ad valorem equivalent tariff of 18.24%.

33

Table 20: Butter and other fats and oils derived from milk Country Product


2011 2012

Applied Tariffs


Applied Tariffs


Australia; Argentina; Denmark Ireland; New Zealand & United States of America

04051000

MFN duties 79.00% or 600.00 &/Ton whichever is lower

17.32%

79.00% or 600.00$/Ton whichever is lower

OTQR: 17.32% ITQR: 15.8%


Table 20 indicates that South Africa applied the MFN duties of 79% or 600 $/Ton whichever is the lower in 2011 and 2012. The main exporting countries of butter and other fats and oils to South Africa was Australia, Argentina, Denmark, Ireland, New Zealand and United States of America. Table 21: Cheese and curd Country Product


2011 2012

Applied Tariffs


Applied Tariffs


Argentina; France; Germany; Ireland; New Zealand &United States of America

04061000 MFN duties 95.00% or 600.00 $/Ton whichever is the lower

7.16% 96.00% or 540.00$/Ton whichever is lower

OTQR: 18.24% ITQR: 19.2%


Table 21 indicates that South Africa applied a total ad valorem equivalent tariff of 7.16% in 2011 and the Outside Tariff Quota Rate (OTQR) of 18.24% and the Inside Tariff Quota Rate of 19.2% during 2012 to imports of cheese and curd from Argentina, France, Germany, Ireland, New Zealand and United States of America.

34

7. COMPETITIVENESS OF THE DAIRY INDUSTRY

7.1. Exports

7.1.1. Milk and cream (neither concentrated nor sweetened)

Table 22: List of importing markets for the product exported by South Africa in 2012 South Africa’s exports represent 0.33% of world exports for Milk and cream, (not concentrated or sweetened), its ranking in world’s exports is 32.

Importers

Trade Indicators

Tariff (estimated)

faced by South Africa

(%)

Exported value 2012

(USD thousand)

Trade balance

2012 (USD thousand)

Share in South

Africa's exports

(%)

Exported quantity

2012

Quantity unit

Unit value (USD/unit)

Exported growth in

value between

2008-2012 (%, p.a.)

Exported growth in quantity between

2008-2012 (%, p.a.)

Exported growth in

value between

2011-2012 (%, p.a.)

Ranking of partner

countries in world imports

Share of partner


(%)

Total import

growth in value of partner

countries between

2008-2012 (%, p.a.)

World 28910 18587 100 28245 Tons 1024 31 8 33 100 4

Zimbabwe 16447 16447 56.9 16413 Tons 1002 109 114 36 48 0.2 111 40

Mozambique 7983 7983 27.6 7219 Tons 1106 28 -12 57 94 0 -1 9.1

United Republic of Tanzania 2397 2397 8.3 2887 Tons 830 21 7 10 98 0 23 60

Mauritius 497 497 1.7 379 Tons 1311 0 -11 26 75 0.1 -8 0

Comoros 363 363 1.3 351 Tons 1034 -3 -5 15 142 0 22 5

Malawi 317 317 1.1 248 Tons 1278 14 6 -12 151 0 -10 10

Democratic Republic of the Congo 204 204 0.7 113 Tons 1805 24 5 -55 110 0 39 5

Zambia 190 190 0.7 126 Tons 1508 -30 -40 -17 183 0 -17 0

Angola 154 154 0.5 162 Tons 951 -37 -42 -31 43 0.3 18 2

Saint Helena 125 125 0.4 135 Tons 926 23 22 -13 197 0 23

Ghana 84 84 0.3 116 Tons 724 -6 0 -42 108 0 19 20

Source: ITC calculations based on COMTRADE statistics.

35

Table 22 shows that during 2012, South Africa exported a total of 28 245 tons of milk and cream (not concentrated or sweetened) at an average value of US$ 1 024/unit. South Africa exported greater quantities of milk and cream (not concentrated or sweetened) to Zimbabwe, Mozambique and United Republic of Tanzania. The greatest share of South African milk and cream (not concentrated or sweetened) exports were destined to Zimbabwe which commanded 56.9% share during the year 2012 followed by Mozambique (27.6 %) then United Republic of Tanzania by 8.3%. South Africa’s milk and cream (not concentrated or sweetened) exports increased by 31% in value and 8% in quantity between the periods 2008 and 2012. During the same period, exports of milk and cream (not concentrated or sweetened) to Zimbabwe increased by 109% in value while quantity increased by 114%; and Mozambique increased by 28% in value and decreased by 12% in quantity. Between the periods 2011 and 2012 South Africa’s exports of milk and cream (not concentrated or sweetened) increased by 33% in value. During the same period, Zimbabwe and Mozambique increased by 36% and 57% respectively in value.

36

Figure 26: Growth in demand for milk and cream exports by South Africa in 2012

Source: ITC Trademap

37

Figure 26 illustrates that South Africa’s exports of milk and cream (not concentrated or sweetened) represent 0.33% of world exports. Between 2008 and 2012 South Africa’s milk and cream, not concentrated or sweetened to Zimbabwe, Democratic republic of Congo, Saint Helena, United Republic of Tanzania, Ghana, Zambia, Angola, Comoros and Seychelles were growing at a rate that is less than their import growth from the world. This means that South Africa is losing the market in the mentioned countries. During the same period, South Africa’s milk and cream (not concentrated or sweetened) exports to Uganda, Mauritius, Nigeria, Mozambique and Malawi were growing at a rate that is greater than their imports from the rest of the world. Therefore South Africa is gaining the market share in those countries. Mauritius, Nigeria, Malawi and Mozambique represent loses in the declining market and Uganda represent gains the dynamic market. Zimbabwe experienced the highest growth in demand of milk and cream not concentrated nor sweetened imports during the periods 2008 to 2012. Annual growth of exports to Zimbabwe was 109%.

38

Figure 27: Prospects for market diversification for milk and cream exported by South Africa in 2012


39

South Africa is currently exporting large quantities of milk and cream, not concentrated nor sweetened to Zimbabwe, and it has a market share on 56.89% of South Africa’s exports (see Figure 27). Zimbabwe’s imports from the world is greater than its imports from South Africa, therefore South Africa can still penetrate Zimbabwe’s import market because its annual growth is also attractive (143%). If South Africa wishes to diversify its exports of milk and cream (not concentrated or sweetened), United Republic of Tanzania is the second fastest growing market with an annual imports growth of 36%. United Republic of Tanzania is the small market but its imports from the world are greater than its imports from South Africa therefore. South Africa has a chance to penetrate this market.

40

7.1.2. Milk and cream, concentrated or sweetened

Table 23: List of importing markets for the product exported by South Africa in 2012 South Africa's exports represent 0.11% of world exports for milk and cream (concentrated or sweetened), its ranking in world exports is 51.

Importers

Trade Indicators

Tariff (estimated)


(%)

Exported value 2012

(USD thousand)

Trade balance

2012 (USD thousand)

Share in South

Africa's exports

(%)

Exported quantity

2012

Quantity unit


Exported growth in

value between

2008-2012 (%, p.a.)


2008-2012 (%, p.a.)

Exported growth in

value between

2011-2012 (%, p.a.)

Ranking of partner


Share of partner


(%)

Total import


countries between

2008-2012 (%, p.a.)

World 21360 -22046 100 7894 Tons 2706 -1 -7 -12 100 8

Mozambique 8714 8714 40.8 3539 Tons 2462 12 18 -30 74 0.2 30 7.2

Zambia 4800 4800 22.5 996 Tons 4819 -11 -34 50 97 0.1 16 0

Zimbabwe 4542 4542 21.3 1359 Tons 3342 6 0 -24 102 0.1 42 30.2

Angola 941 941 4.4 800 Tons 1176 15 1 51 40 0.5 4 2

Malawi 870 870 4.1 238 Tons 3655 -30 -33 21 141 0 -4 10

Democratic Republic of the Congo 528 528 2.5 417 Tons 1266 3 8 32 76 0.2 -2 5

Mali 195 195 0.9 36 Tons 5417 926 78 0.1 6 7.3

Ghana 163 163 0.8 89 Tons 1831 9 5 -49 58 0.3 3 15.8

Madagascar 97 97 0.5 26 Tons 3731 158 121 9 127 0 4 0

Congo 93 93 0.4 146 Tons 637 6 9 69 90 0.1 -2 5

Mauritius 74 74 0.3 34 Tons 2176 -9 -15 68 48 0.4 6 0


41

Table 23 shows that during 2012 South Africa exported a total of 7 894 tons of milk and cream (concentrated or sweetened) at an average value of US$ 2 706/unit. South Africa exported greater quantities of milk and cream (concentrated or sweetened) to Mozambique, Zambia and Zimbabwe. The greatest share of South African milk and cream (concentrated or sweetened) exports were destined to Mozambique which commanded 40.8% share during the year 2012 followed by Zambia (22.5 %) then Zimbabwe by 21.3%. South Africa’s milk and cream (concentrated or sweetened) exports decreased by 1% in value and 7% in quantity between the periods 2008 and 2012. During the same period, exports of milk and cream (concentrated or sweetened) to Mozambique increased by 12% in value and 18% in quantity and decreased by 11% in value and 34% in quantity to Zambia during the period 2008 to 2012. Between the periods 2011 and 2012, South Africa’s exports of milk and cream (concentrated or sweetened) decreased by 12% in value. During the same period, Mozambique decreased by 30% and Zimbabwe increased by 50%.

42

Figure 28: Growth in demand for sweetened milk and cream exported by South Africa in 2012


43

Figure 28 illustrates that South Africa’s exports of milk and cream (concentrated or sweetened) represent 0.11% of world exports. Between 2008 and 2012 South Africa’s milk and cream (concentrated or sweetened) was losing the market share in Zimbabwe, Zambia, Kenya, Malawi, Nigeria, Mozambique and Mauritius because imports from South African were growing at a rate that is less than their imports growth from the world. During the same periods, South Africa was gaining the market shares of milk and cream (concentrated or sweetened) exports to Uganda, Saint Helena, Congo, Angola, Demographic Republic of Congo, Senegal, Madagascar and Ghana because imports from South African were growing at a rate that is greater than their imports from the rest of the world. Countries which has the most imports growing demand of Milk and Cream (Concentrated and sweetened) are Kenya and Mozambique with the annual imports growth of 43% and 30% respectively.

44

Figure 29: Prospects for market diversification for sweetened milk and cream exported by South Africa in 2012


45

Most of South African milk and cream (concentrated and sweetened) destined in Mozambique this country imported more from the rest of the world than from South Africa (see Figure 29). South Africa can either penetrated Mozambique’s import market or diversify to Nigeria. Nigeria is the biggest market of milk and cream (concentrated or sweetened) in the world, with the world’s imports market share of 2.1%. South Africa exported only 0.15% of milk and cream (concentrated and sweetened), therefore South Africa can penetrate this market.

46

7.1.3. Buttermilk and yoghurt

Table 24: List of importing markets for Buttermilk and yoghurt exported by South Africa in 2012 South Africa’s exports represent 0.64% of world exports for Buttermilk and yoghurt, its ranking in world exports is 22.

Importers

Trade Indicators

Tariff (estimated)


(%)

Exported value 2012

(USD thousand)

Trade balance

2012 (USD thousand)

Share in South

Africa's exports

(%)

Exported quantity

2012

Quantity unit


Exported growth in

value between

2008-2012 (%, p.a.)


2008-2012 (%, p.a.)

Exported growth in

value between

2011-2012 (%, p.a.)

Ranking of partner


Share of partner


(%)

Total import


countries between

2008-2012 (%, p.a.)

World 26749 20722 100 12915 Tons 2071 28 24 50 100 2

Angola 16928 16928 63.3 7683 Tons 2203 30 36 102 22 1 13 10

Mozambique 6047 6047 22.6 3607 Tons 1676 31 16 12 96 0.1 23 6.8

Zimbabwe 1274 1274 4.8 602 Tons 2116 35 42 -42 112 0 36 40

Zambia 780 780 2.9 376 Tons 2074 54 57 55 125 0 60 0

Democratic Republic of the Congo 323 323 1.2 106 Tons 3047 63 74 64 129 0 21 10

Malawi 282 282 1.1 132 Tons 2136 6 1 -34 134 0 16 10

Seychelles 265 265 1 112 Tons 2366 89 105 143 122 0 11 50

Nigeria 234 234 0.9 96 Tons 2438 -17 -29 93 41 0.4 8 14.2

Ghana 215 215 0.8 78 Tons 2756 15 -12 221 81 0.1 6 20

Uganda 111 111 0.4 34 Tons 3265 22 4 118 162 0 -4 60


47

Table 24 shows that during 2012 South Africa exported a total of 12 915 tons of buttermilk and yoghurt at an average value of US$ 2 071/unit. South Africa exported greater quantities of buttermilk and yoghurt to Angola, and Mozambique. The greatest share of South African buttermilk and yoghurt exports were destined to Angola which commanded 63.3% share during the year 2012 followed at a distance by Mozambique with 22.6. South Africa’s buttermilk and yoghurt exports have increased by 28% in value and 24% in quantity between the periods 2008 and 2012. During the same period, exports of buttermilk and yoghurt to Angola increased by 30% in value and 36% in quantity; Mozambique increased by 31% in value and 16% in quantity. Between the periods 2011 and 2012, South Africa’s exports of buttermilk and yoghurt decreased by 50% in value. During the same period, Angola and Mozambique increased by 102% and 12% respectively in value.

48

Figure 30: Growth in demand for buttermilk and yogurt exported by South Africa in 2012


49

Figure 30 illustrates that South Africa’s exports of buttermilk and yoghurt represent 64% of the world exports Between 2008 and 2012 South Africa was losing the market share of buttermilk and yoghurt in Malawi, Zimbabwe, Nigeria, Maldives and Saint Helena because its exports were growing at a rate that is less than their import growth from the rest of the world. During the same periods, South Africa’s buttermilk and yoghurt exports to Uganda, Democratic Republic of Congo, Ghana, Mozambique, Congo, Seychelles, Kenya and Angola were growing at a rate that is greater than their imports from the rest of the world. Therefore South Africa is gaining the market share in these countries. The fastest growing market of South African buttermilk and Yogurt exist in Zambia and Zimbabwe with the annual South African exports of 54% and 35% respectively. Their annual import growth is at 60% and 97% respectively.

50

Figure 31: Prospects for market diversification for buttermilk and yogurt exported by South Africa in 2012


51

South Africa’s exports of buttermilk and yoghurt are dominant in Angola but if South Africa wishes to diversify its exports the most attractive market will be Togo (see Figure 31). The smallest possible market is at Zimbabwe. South Africa is currently exporting 4.76% of buttermilk and yogurt to Zimbabwe and its annual import growth is at 97%. This makes it more attractive even if it is the smallest market of buttermilk and yoghurt with a world market share of 0.1%. Zimbabwe is still importing more buttermilk and yoghurt from the rest of the world than from South Africa.

52

7.1.4. Whey and other natural milk products

Table 25: List of importing markets for whey and natural milk exported by South Africa in 2012 South Africa's exports represent 0.03% of world exports for whey and natural milk, its ranking in world exports is 50.

Importers

Trade Indicators

Tariff (estimated)


(%)

Exported value 2012

(USD thousand)

Trade balance

2012 (USD thousand)

Share in South

Africa's exports

(%)

Exported quantity

2012

Quantity unit


Exported growth in

value between

2008-2012 (%, p.a.)


2008-2012 (%, p.a.)

Exported growth in

value between

2011-2012 (%, p.a.)

Ranking of partner


Share of partner


(%)

Total import


countries between

2008-2012 (%, p.a.)

World 1595 -24766 100 1384 Tons 1152 -6 -25 -12 100 14

Japan 649 649 40.7 605 Tons 1073 -6 -21 28 11 2.9 7 29

Zambia 414 414 26 333 Tons 1243 157 173 -13 116 0 136 0

Republic of Korea 181 181 11.3 152 Tons 1191 -22 -44 -25 12 2.5 8 44.9

Zimbabwe 95 95 6 63 Tons 1508 32 37 -37 122 0 72 6.5

Lebanon 54 54 3.4 51 Tons 1059 16 20 111 0 6 5

Malaysia 53 53 3.3 51 Tons 1039 -41 10 2.9 27 0

Mozambique 49 49 3.1 91 Tons 538 -26 -20 -48 138 0 -25 0

Nigeria 46 46 2.9 5 Tons 9200 68 0.1 11 20

Democratic Republic of the Congo 23 23 1.4 18 Tons 1278 -10 -11 -8 132 0 12 5

Botswana 8 8 0.5 7 Tons 1143 108 0 78 0


53

Table 25 shows that during 2012 South Africa exported a total of 1 384 tons of whey and natural milk products at an average value of US$ 1 152/unit. South Africa exported greater quantities of whey and natural milk products to Japan, Zambia and Republic of Korea. The greatest share of South African whey and natural milk products exports were destined to Japan which commanded 40.7% share during the year 2012 followed by Zambia taking 26% and Republic of Korea by 11.3%. South Africa’s whey and natural milk products exports decreased by 6% in value and 25% in quantity between the periods 2008 and 2012. During the same periods, exports of whey and natural milk products to Japan decreased by 6% in value and 21% in quantity and Zambia experienced the highest increased of 157% in quantity and 173% in value; while Republic of Korea decreased by 22% in value and 44% in quantity. Between the periods 2011 and 2012, South Africa’s exports of whey and natural milk products decreased by 12% in value. During the same period, Japan increased by 28%; Zambia decreased by 13% and Republic of Korea decreased by 25% respectively in value.

54

Figure 32: Growth in demand for whey exported by South Africa in 2012


55

Figure 32 illustrates that that South Africa’s exports of whey and natural milk products represent 0.03% of the world exports. Between 2008 and 2012 South Africa’s whey and natural milk products exported to Democratic Republic of Congo, Republic of Korea, Japan, Mozambique, Malawi and Zimbabwe were growing at a rate that is less than their import growth from the rest of the world. Therefore, South Africa is losing the market share in the mentioned countries. During the same period, South Africa is gaining the market shares of whey and natural milk products exports in Zambia, Angola, Saint Helena and Lebanon because their imports from South Africa were growing at a rate that is greater than their imports from the rest of the world. Zambia’s annual demand growth imports of whey and natural milk products is the highest at 136% rate.

56

Figure 33: Prospects for market diversification for whey exported by South Africa in 2012


57

The chart illustrates that Japan is the biggest importer of South African whey and natural milk products with a world market share of 2.9% (see Figure 33). The biggest market exists in China with the world import share of 14.4%. South Africa might look on developing a new market in China especially that its annual import growth is at 28%. The fastest growing markets although small exist in Zambia and Zimbabwe. Zambia’s annual import growth is at 136% followed by Zimbabwe by 128%. Therefore these two markets might be the most attractive markets for South Africa’s diversification.

58

7.1.5. Butter and other fats and oils derived from milk

Table 26: List of importing markets for butter and other fats and oils derived from milk exported by South Africa in 2012 South Africa’s export represent 0.07% of world export for butter and other fats and oils derived from milk, its ranking in world exports is 37.

Importers

Trade Indicators

Tariff (estimated)


(%)

Exported value 2012

(USD thousand)

Trade balance

2012 (USD thousand)

Share in South

Africa's exports

(%)

Exported quantity

2012

Quantity unit


Exported growth in

value between

2008-2012 (%, p.a.)


2008-2012 (%, p.a.)

Exported growth in

value between

2011-2012 (%, p.a.)

Ranking of partner


Share of partner


(%)

Total import


countries between

2008-2012 (%, p.a.)

World 4726 -17610 100 1039 Tons 4549 5 -10 11 100 9

Mozambique 1402 1402 29.7 328 Tons 4274 14 -1 -8 132 0 16 0

Zimbabwe 1204 1204 25.5 246 Tons 4894 28 4 33 122 0 31 40

Zambia 749 749 15.8 162 Tons 4623 18 4 66 131 0 13 0

Mauritius 648 648 13.7 126 Tons 5143 -6 -16 -25 68 0.1 10 0

Malawi 178 178 3.8 37 Tons 4811 -9 -20 12 169 0 -5 25

Democratic Republic of the Congo 149 149 3.2 31 Tons 4806 -1 5 96 101 0 6 20

United Republic of Tanzania 96 96 2 14 Tons 6857 58 50 182 146 0 25 25

Kenya 69 69 1.5 16 Tons 4313 83 34 138 140 0 26 25

United Arab Emirates 50 50 1.1 15 Tons 3333 180 4 19 1.1 8 5

Nigeria 36 36 0.8 14 Tons 2571 -3 34 89 47 0.4 6 14.7

Saint Helena 35 35 0.7 10 Tons 3500 9 12 -22 194 0 14

Ghana 27 27 0.6 5 Tons 5400 -16 -11 35 69 0.1 2 20

Sources: ITC calculations based on COMTRADE statistics.

59

Table 26 shows that during 2012 South Africa exported a total of 1 039 tons of butter and other fats derived from milk at an average value of US$ 4 549/unit. South Africa exported greater quantities of butter and other fats derived from milk to Mozambique, Zimbabwe and Zambia. The greatest share of South African butter and other fats derived from milk exports were destined to Mozambique which commanded 29.7% share during the year 2012 followed by Zimbabwe (25.5%) then Zambia received a share of 15.8%. South Africa’s butter and other fats derived from milk exports increased by 5% in value and decreased by 10% in quantity between the periods 2008 and 2012. During the same periods, exports of butter and other fats derived from milk to Mozambique increased by 14% in value and decreased by 1% in quantity; Zimbabwe increased by 28% in value and 4% quantity and Zambia increased by18% in value and 4% in quantity. Between the periods 2011 and 2012, South Africa’s exports of butter and other fats derived from butter and other fats and oils increased by 11% in value. During the same periods, Mozambique decreased by 8% and Zimbabwe increased by 33% in value.

60

Figure 34: Growth in demand for butter exported by South Africa in 2012


61

Figure 34 illustrates that that South Africa’s exports of butter and other fats and oils represent 0.07% of the world exports. Between 2008 and 2012 South Africa’s butter and other fats exported to United States of America, Mauritius, Mozambique, Saint Helena, Zimbabwe, Nigeria, Uganda, Ghana, Democratic Republic of Congo (DRC), Malawi and Angola were growing at a rate that is less than their export growth to the rest of the world. During the same period, South Africa’s butter and other fats exports to Zambia, United Arab Emirates, Kenya, Ethiopia and United Republic of Tanzania were growing at a rate that is greater than their exports to the rest of the world. United republic of Tanzania, United Arab Emirates and Ethiopia represent gains in the declining market while Zambia and Kenya represent gains in the dynamic market. The most growing demand of butter and other fats and oils exist in Zimbabwe with annual imports growth of 68% per annum during the periods 2008 to 2012.

62

Figure 35: Prospects for market diversification for butter exported by South Africa in 2012


63

Figure 35 illustrates that South Africa is currently exporting most of its butter and other fats to Mozambique and Zimbabwe but if South Africa has to diversify its export market, the biggest market exist in Germany with a world import share of 8.2% buts its annual import growth is low at 4%. Kenya is the small market but its annual import growth of 26% is attractive. It might be difficult for South Africa to penetrate the Germany imports market but easy to penetrate the Kenya market. Therefore South Africa might diversify to those two markets.

64

7.1.6. Cheese and Curd

Table 27: List of importing markets for the product exported by South Africa in 2012 South Africa’s exports represent 0.04% of world exports of cheese and curd, its ranking in world exports is 52.

Importers

Trade Indicators

Tariff (estimated)


(%)

Exported value 2012

(USD thousand)

Trade balance

2012 (USD thousand)

Share in South

Africa's exports

(%)

Exported quantity

2012

Quantity unit


Exported growth in

value between

2008-2012 (%, p.a.)


2008-2012 (%, p.a.)

Exported growth in

value between

2011-2012 (%, p.a.)

Ranking of partner


Share of partner


(%)

Total import growth in value of partner

countries between

2008-2012 (%, p.a.)

World 12155 -51697 100 2453 Tons 4955 23 15 8 100 4

Mozambique 4089 4089 33.6 920 Tons 4445 18 10 18 142 0 4 12.5

Zambia 2738 2738 22.5 465 Tons 5888 36 22 18 135 0 32 0

Zimbabwe 2617 2617 21.5 433 Tons 6044 76 56 -14 139 0 61 40

Malawi 440 440 3.6 116 Tons 3793 4 8 5 178 0 8 25

Angola 433 433 3.6 108 Tons 4009 6 3 -33 75 0.1 7 10

Saudi Arabia 432 432 3.6 121 Tons 3570 113 17 1.4 5 5

Nigeria 394 394 3.2 96 Tons 4104 46 31 72 132 0 0 20

Democratic Republic of the Congo 307 307 2.5 61 Tons 5033 1 -6 -11 145 0 14 20

Ghana 203 203 1.7 41 Tons 4951 19 18 77 136 0 22 20

Mauritius 110 110 0.9 26 Tons 4231 59 70 -8 73 0.1 8 0

United Republic of Tanzania 102 102 0.8 9 Tons 11333 -10 -20 -43 162 0 19 25

Uganda 76 76 0.6 24 Tons 3167 -6 3 46 188 0 12 25

Sources: ITC calculations based on COMTRADE statistics.

65

Table 27 shows that during 2012 South Africa exported a total of 2 453 tons of cheese and curd at an average value of US$ 4 955/unit. South Africa exported greater quantities of cheese and curd to Mozambique, Zambia and. Zimbabwe The greatest share of South African cheese and curd exports were destined to Mozambique which commanded 33.6% share during the year 2012 followed by Zambia with 22.5% then Zimbabwe by 21.5%. South Africa’s exports of cheese and curd increased by 23% in value and 15% in quantity between the periods 2008 and 2012. During the same period, exports of cheese and curd to Mozambique increased by 18% in value and 10% in quantity; Zambia increased by 36% in value and 22% in quantity and Zimbabwe increased by 76% in value and quantity by 56%. Between the periods 2011 and 2012, South Africa’s exports of cheese and curd increased by 8% in value. During the same period, Mozambique and Zambia increased by 18% each and Zimbabwe decreased by 14%.

66

Figure 36: Growth in demand for cheese and curd from South Africa in 2012


67

Figure 36 illustrates that that South Africa’s exports of cheese and curd represent 0.04% of the world exports. Between 2008 and 2012 South Africa is losing the market share of cheese and curd exports to Kenya, Democratic Republic of Congo (DRC), Seychelles, Uganda, Saint Helena, Angola, Inited Republic of Tanzania, Ghana, Congo and Zimbabwe because its exports were growing at a rate that is less than their import growth from the rest of the world. During the same period, South Africa is gaining the market share of cheese and curd exports to Zambia, Nigeria, Mauritius, Mozambique, United Arab Emirates and Rwanda were growing at a rate that is greater than their imports from the rest of the world. The most growing demand for cheese and curd exist in Zimbabwe with an annual import growth of 82%.

68

Figure 37: Prospects for market diversification for cheese and curd exported by South Africa in 2012


69

Figure 37 show that Mozambique, Zambia and Zimbabwe are the world’s greatest importer of South African cheese and curd. They have a share in South African market of 33.64%, 22.53% and 21.53% respectively. If South Africa wishes to diversify Saudi Arabia is the biggest market with a world import market share of 1.4% but its annual import growth is at 5%. Although it is the biggest market it might be difficult for South Africa to develop its market there but the small and fastest growing market is at Zimbabwe. Zimbabwe’s annual import growth is at 82% rate. This is the most lucrative market for South Africa.

70

7.2. Imports

7.2.1. Milk and cream (neither concentrated nor sweetened)

Table 28: List of supplying markets for the product imported by South Africa in 2013 South Africa’s imports represent 0.14% of world imports for milk and cream (not concentrated nor sweetened), its ranking in world imports is 61.

Exporters

Trade Indicators

Tariff (estimated) applied by

South Africa (%)

Imported value 2012

(USD thousand)

Trade balance

2012 (USD thousand)

Share in South

Africa's imports

(%)

Imported quantity

2012

Quantity unit


Imported growth in

value between

2008-2012 (%, p.a.)

Imported growth in quantity between

2008-2012 (%, p.a.)

Imported growth in

value between

2011-2012 (%, p.a.)

Ranking of partner

countries in world exports

Share of partner


(%)

Total export


countries between

2008-2012 (%, p.a.)

World 10323 18587 100 15241 Tons 677 4 1 59 100 4

Uruguay 9331 -9331 90.4 14200 Tons 657 132 113 147 31 0.4 71 0

Germany 403 -403 3.9 576 Tons 700 62 68 78 1 18.5 -1 0

France 205 -205 2 72 Tons 2847 2 11 2 0

United Kingdom 188 -188 1.8 117 Tons 1607 23 -3 41 6 5.3 6 0

Argentina 82 -82 0.8 115 Tons 713 -63 -65 -96 59 0.1 -22 0

Slovenia 76 -76 0.7 112 Tons 679 16 1.7 3 0

Belgium 36 -36 0.3 44 Tons 818 3 9 8 0

Mali 1 -1 0 0 Tons 112 0 -29 0

Nigeria 1 15 0 4 Tons 250 32 105 0 102 0

Austria 5 5.5 1 0

Czech Republic 7 4.5 2 0


71

Table 28 shows that during 2012 South Africa imported a total of 15 241 tons of milk and cream (not concentrated nor sweetened), at an average value of US$ 677/unit. South Africa imported greater quantities of milk and cream, (not concentrated or sweetened) from Uruguay and Germany The greatest share of South African milk and cream (not concentrated or sweetened) imports originated from Uruguay which commanded 90.4% share during the year 2012 followed at a distance by Germany with 3.9%. South Africa’s milk and cream (not concentrated or sweetened) imports increased by 4% in value and 1% in quantity between the periods 2008 and 2012. During the same period, imports of milk and cream (not concentrated or sweetened) from Uruguay increased drastically by 132% in value and 113% in quantity Germany increased in value and quantity by 62% and 68% respectively. Between the periods 2011 and 2012 South Africa’s imports of milk and cream (not concentrated or sweetened) increased by 59% in value. During the same period imports of milk and cream (not concentrated or sweetened) from Uruguay to South Africa increased by 147% and Germany’s imports increased by 78% in value.

72

Figure 38: Competitiveness of suppliers to South Africa for unsweetened milk and cream in 2012


73

Figure 38 illustrates that South Africa’s imports between 2008 and 2012 represent 0.14% of the world’s imports of milk and cream, not concentrated or sweetened. Imports from Argentina to South Africa were growing at a rate that is less than their export growth to the rest of the world. This means that Argentina is losing the South African import market share. During the same period, South Africa is gaining the market share of milk and cream, not concentrated or sweetened imports from Uruguay, United Kingdom and Germany because South Africa’s import growth were growing at a rate that is greater than Uruguay’s exports to the rest of the world. The most competitive market is Uruguay because its annual export growth rate was at 70% during the periods 2008 to 2012, but the biggest market exists in Germany with the world share of 16.1%.

74

Figure 39: Prospects for diversification of suppliers for unsweetened milk and cream imported by South Africa in 2012


75

Figure 39 illustrates that Nigeria is not a big supplier of South Africa’s market for milk and cream (not concentrated or sweetened) but it is the world’s greatest exporter of milk and cream (not concentrated or sweetened) over the period 2008 to 2012. Nigeria’s annual export growth is the highest at 1 015%.. South Africa can easily diversify to Nigeria for market development. The second attractive market exists in Belarus with the annual export growth of 53%.

76

7.2.2. Milk and cream, concentrated or sweetened

Table 29: List of supplying markets for the product imported by South Africa in 2012 South Africa’s imports represent 0.21% of world imports for milk and cream (concentrated or sweetened), its ranking in world imports is 67.

Exporters

Trade Indicators


South Africa (%)

Imported value 2012

(USD thousand)

Trade balance

2012 (USD thousand)

Share in South

Africa's imports

(%)

Imported quantity

2012

Quantity unit


Imported growth in

value between

2008-2012 (%, p.a.)


2008-2012 (%, p.a.)

Imported growth in

value between

2011-2012 (%, p.a.)

Ranking of partner


Share of partner


(%)

Total export


countries between

2008-2012 (%, p.a.)

World 43406 -22046 100 13257 Tons 3274 23 22 47 100 7

France 10789 -10789 24.9 3514 Tons 3070 92 91 111 5 5.9 8 0

New Zealand 9116 -9116 21 2690 Tons 3389 48 40 151 1 29.4 18 0

Germany 6324 -6324 14.6 2048 Tons 3088 57 59 120 3 8.1 7 0

Netherlands 5897 -5897 13.6 1523 Tons 3872 94 89 433 2 8.3 4 0

Ireland 2369 -2369 5.5 731 Tons 3241 111 2 -4 13 1.4 0 0

Lithuania 1850 -1850 4.3 667 Tons 2774 -15 23 0.6 8 0

Belgium 1827 -1827 4.2 562 Tons 3251 25 35 -24 7 4.9 3 0

Argentina 1038 -1038 2.4 220 Tons 4718 8 0 -28 8 4.4 23 0

United States of America 991 -988 2.3 339 Tons 2923 -22 -15 92 4 7.7 9 0


77

Table 29 shows that during 2021 South Africa imported a total of 13 257 tons of milk and cream (concentrated or sweetened), at an average value of US$ 3 274/unit. South Africa imported greater quantities of milk and cream, (concentrated or sweetened) from France, New Zealand and Germany. The greatest share of South African milk and cream (concentrated or sweetened) imports originated from France which commanded 24.9% share during the year 2012 followed by New Zealand by21% and Germany by 14.6%. South Africa’s milk and cream (not concentrated or sweetened) imports increased by 23% in value and 22% in quantity between the periods 2008 and 2012. During the same period, imports of milk and cream (concentrated or sweetened) from France also increased by 92% in value and 91% in quantity; and Germany increased in value and quantity by 48% and 40% respectively. Between the periods 2011 and 2012, South Africa’s imports of milk and cream (concentrated or sweetened) increased by 47% in value. During the same period, France’s milk and cream (concentrated or sweetened) exports to South Africa increase 111% in value and Germany increased by 151% in value during the same periods.

78

Figure 40: Competitiveness of suppliers to South Africa for sweetened milk and cream in 2012


79

Figure 40 illustrates that between 2008 and 2012 South Africa’s milk and cream (concentrated or sweetened) imported from Argentina, Australia, United States of America, Poland and Ukraine were growing at a rate that is less than their export growth to the rest of the world. During the same period, South Africa’s milk and cream, concentrated or sweetened imports from Belgium, Netherlands, France, Italy, Ireland, Germany, New Zealand, Singapore, Switzerland, Brazil and United Kingdom were growing at a rate that is greater than their exports to the rest of the world. New Zealand is the biggest competitive market with a world market share of 28.8% and an annual growth of 18%.

80

Figure 41: Prospects for diversification of suppliers for sweetened milk and cream imported by South Africa in 2012


81

Figure 41 illustrates that New Zealand is not a big supplier of South Africa’s market for milk and cream (concentrated or sweetened) but it is the main world exporter and its exports were growing at 18% per annum over the period 2008 to 2012. New Zealand is therefore the biggest prospective supplier for South Africa’s milk and cream (concentrated or sweetened). The chart also shows that Argentina is the second prospect import market due to its annual exports growth rate of 23% during 2008 to 2012. It represents a small possible supplier for South Africa’s milk and cream (concentrated or sweetened).

82

7.2.3. Buttermilk and yoghurt

Table 30: List of supplying markets for the product imported by South Africa in 2012 South Africa’s imports represent 0.15% of world imports for Buttermilk and yoghurt, its ranking in world’s imports is 62.

Exporters

Trade Indicators


South Africa (%)

Imported value 2012

(USD thousand)

Trade balance

2012 (USD thousand)

Share in South

Africa's imports

(%)

Imported quantity

2012

Quantity unit


Imported growth in

value between

2008-2012 (%, p.a.)


2008-2012 (%, p.a.)

Imported growth in

value between

2011-2012 (%, p.a.)

Ranking of partner


Share of partner


(%)

Total export


countries between

2008-2012 (%, p.a.)

World 6027 20722 100 2146 Tons 2808 38 32 -10 100 1

France 1897 -1896 31.5 713 Tons 2661 44 38 72 2 19.6 1 0

New Zealand 1506 -1506 25 518 Tons 2907 50 41 -50 9 3.3 4 0

Ireland 977 -977 16.2 344 Tons 2840 45 15 1.5 1 0

Germany 674 -674 11.2 227 Tons 2969 60 64 1674 1 21.3 0 0

United Kingdom 460 -455 7.6 159 Tons 2893 86 84 35 12 2.1 1 0

Belgium 272 -272 4.5 96 Tons 2833 30 26 -43 3 7.7 -6 0

Netherlands 176 -176 2.9 58 Tons 3034 -25 -28 -66 8 3.4 27 0

United States of America 24 -23 0.4 20 Tons 1200 28 83 -71 7 3.6 45 0

Italy 23 -23 0.4 3 Tons 7667 30 0.4 7 0

Thailand 11 -11 0.2 7 Tons 1571 -23 -34 16 1.3 28 0


83

Table 30 shows that during 2012 South Africa imported a total of 2 145 tons of buttermilk and yoghurt, at an average value of US$ 32 808/unit. South Africa imported greater quantities of milk and cream, (concentrated or sweetened) from France, New Zealand and Ireland. The greatest share of South African buttermilk and yoghurt imports originated from France which commanded 31.5% share during the year 2012 followed by New Zealand by 25% and Irelands by 16.2%. South Africa’s buttermilk and yoghurt imports increased by 38% in value and declined by 32% in quantity between the periods 2008 and 2012. During the same period, imports of buttermilk and yoghurt from France also increased by 44% in value and 38% in quantity; and imports from New Zealand increased by 50% in value and 41% in quantity during the same periods. Between the periods 2011 and 2012, South Africa’s imports of buttermilk and yoghurt decreased by 10% in value. During the same period, France’s buttermilk and yoghurt exports increased by 72%, New Zealand decreased by50% while Ireland increased by 45%.

84

Figure 42: Competitiveness of suppliers to South Africa for buttermilk and yogurt in 2012


85

Figure 42 illustrates that between 2008 and 2012 South Africa’s buttermilk and yoghurt imported from United States of America (USA), Netherland and Thailand were growing at a rate that is less than their export growth to the world. During the same period, South Africa’s buttermilk and yoghurt imports from New Zealand, Belgium, France, Germany and United Kingdom were growing at a rate that is greater than their exports to the rest of the world. Germany is the most competitive market during the periods 2008 and 2012 due to its world share market of 21.1% followed by New Zealand with the world market share of 19.4%.

86

Figure 43: Prospects for diversification of suppliers for buttermilk and yogurt imported by South Africa in 2012


87

Germany is the biggest supplier of buttermilk and yoghurt and has a share of 11.18% of South African’s imports (see Figure 43). Germany has an annual export growth of 0% which is a limiting factor for South Africa to penetrate the market. South Africa can diversify to the fastest growing markets of buttermilk and yoghurt at United States of America (USA) with an annual export growth of 45%.

88

7.2.4. Whey and other natural milk products

Table 31: List of supplying markets for the product imported by South Africa in 2012 South Africa’s imports represent 0.51% of world’s imports for whey and natural milk products; its ranking in world imports is 33.

Exporters

Trade Indicators


South Africa (%)

Imported value 2012

(USD thousand)

Trade balance

2012 (USD thousand)

Share in South

Africa's imports

(%)

Imported quantity

2012

Quantity unit


Imported growth in

value between

2008-2012 (%, p.a.)


2008-2012 (%, p.a.)

Imported growth in

value between

2011-2012 (%, p.a.)

Ranking of partner


Share of partner


(%)

Total export


countries between

2008-2012 (%, p.a.)

World 26361 -24766 100 9267 Tons 2845 6 9 -1 100 14

France 11424 -11424 43.3 4007 Tons 2851 1 1 -14 3 12 11 0

United States of America 3752 -3752 14.2 638 Tons 5881 15 8 140 1 15.8 15 0

New Zealand 3317 -3317 12.6 913 Tons 3633 8 6 6 4 11.8 8 0

Argentina 2222 -2222 8.4 615 Tons 3613 14 5 29 9 2.6 17 0

Germany 1648 -1648 6.3 430 Tons 3833 50 77 -47 2 13.6 9 0

Ireland 1563 -1563 5.9 748 Tons 2090 15 12 0 8 3 8 0

Denmark 1371 -1371 5.2 1589 Tons 863 82 261 118 12 2 10 0

Canada 611 -611 2.3 200 Tons 3055 49 98 15 1.5 6 0

Belgium 279 -279 1.1 80 Tons 3488 2690 10 2.3 32 0

Netherlands 170 -170 0.6 44 Tons 3864 -21 -9 67 5 9.4 15 0


89

Table 31 shows that during 2012 South Africa imported a total of 9 267 tons of whey and natural milk products, at an average value of US$ 2 845/unit. South Africa imported greater quantities of whey and natural milk products from France, United States of America and New Zealand. The greatest share of South African whey and natural milk products’ imports originated from France which commanded 43.3% share during the year 2012 followed by United States of America and New Zealand with 14.2% in value and 12.6% in quantity. South Africa’s whey and natural milk products imports increased by 6% in value and 9% in quantity between the periods 2008 and 2012. During the same period, imports of whey and natural milk products from France increased by 1% each in value and quantity; and imports from United States of America increased by 15% in value and 8%% in quantity. New Zealand experienced an increase of 8% in value and 6% in quantity during 2008 to 2012. Between the periods 2011 and 2012 South Africa’s imports of whey and natural milk products experienced a decrease of 1% in value. During the same period, France’ whey and natural milk products exports to South Africa decreased by 14% in value while imports from United States of America an increased by 140% in value.

90

Figure 44: Competitiveness of suppliers to South Africa for whey in 2012


91

Figure 44 illustrates that between 2008 and 2012 South Africa’s whey and natural milk products imported from Netherlands, Argentina, United Kingdom, Unites States of America, France and New Zealand were growing at a rate that is less than their export growth to the rest of the world. During the same period, South Africa’s whey and natural milk products imported from Germany, Denmark, Canada and Ireland were growing at a rate that is greater than their exports to the rest of the world. The most competitive supplier of whey and natural milk products is Denmark which has an annual import growth of 82% followed by Germany by 50% and France by 49%. South Africa’s import growth from these countries was greater than their export growth to the world.

92

Figure 45: Prospects for diversification of suppliers for whey imported by South Africa in 2012


93

South Africa is already importing from the biggest exporters of whey and natural milk products which are USA, France and New Zealand. USA has a world market share of 15.8%, France has11.9% while New Zealand has a world market share of 11.7% during 2012. They have a share of South Africa’s imports market share of 14.23%, 43.34% and 12.53% respectively. If South Africa wishes to diversify, it can develop a new market at Lebanon because Lebanon is the fastest growing market with an annual export growth of 433% and South Africa is not importing whey and natural milk products from this country yet.

94

7.2.5. Butter and other fats and oils derived from milk

Table 32: List of supplying markets for the product imported by South Africa in 2012 South Africa’s imports represent 0.33% of world imports for butter and other fats and oils derived from milk, its ranking in world’s imports is 49.

Exporters

Trade Indicators


South Africa (%)

Imported value 2012

(USD thousand)

Trade balance

2012 (USD thousand)

Share in South

Africa's imports

(%)

Imported quantity

2012

Quantity unit


Imported growth in

value between

2008-2012 (%, p.a.)


2008-2012 (%, p.a.)

Imported growth in

value between

2011-2012 (%, p.a.)

Ranking of partner


Share of partner


(%)

Total export


countries between

2008-2012 (%, p.a.)

World 22336 -17610 100 6108 Tons 3657 21 17 61 100 9

New Zealand 12297 -12297 55.1 3890 Tons 3161 136 117 31 1 24.1 14 0

Ireland 4397 -4397 19.7 854 Tons 5149 7 -1 81 3 9.5 12 0

United States of America 3797 -3790 17 993 Tons 3824 -13 -8 373 10 2.6 3 0

Denmark 873 -873 3.9 143 Tons 6105 17 11 12 7 4.3 -1 0

Australia 356 -355 1.6 100 Tons 3560 -43 26 8 3 5 0

Argentina 203 -203 0.9 50 Tons 4060 16 1.1 12 0

Belgium 198 -198 0.9 29 Tons 6828 -5 -13 -53 4 7.8 0 0

France 90 -90 0.4 16 Tons 5625 -6 76 6 6.2 8 0

Uruguay 87 -87 0.4 25 Tons 3480 14 1.5 31 0

Italy 16 -16 0.1 5 Tons 3200 32 19 0.6 6 0


95

Table 32 shows that during 2012 South Africa imported a total of 6 108 tons of butter and other fats, at an average value of US$ 3 657/unit. South Africa imported greater quantities of butter and other fats from New Zealand, Ireland and United States of America (USA). The greatest share of South African butter and other fats imports originated from New Zealand which commanded 55.1% share during the year 2012 followed by Ireland by 19.7% and USA by 17%. South Africa’s butter and other fats imports increased by 21% in value and declined by 17% in quantity between the periods 2008 and 2012. During the same period, imports of butter and other fats from New Zealand increased by 136% in Value and 117% in quantity while Ireland increased by 7% in value and decreased by 1% in quantity. USA decreases by 13% in value and 8% in quantity. Between the periods 2011 and 2012, South Africa’s imports of butter and other fats increased by 61% in value. During the same period, New Zealand’s butter and other fats exports to South Africa increased by 31% in value while imports from Ireland increased by 81%.

96

Figure 46: Competitiveness of suppliers to South Africa for butter in 2012


97

Figure 46 illustrates that between 2008 and 2012 South Africa’s butter and other fats imported from Ireland, United States of America, Belgium and Australia were growing at a rate that is less than their export growth to the rest of the world. During the same period, South Africa’s butter and other fats imports from Denmark, New Zealand and Italy were growing at a rate that is greater than their exports to the rest of the world. New Zealand is the most competitive supplier of butter and other fats because its world market share is 23.7% and its annual exports growth increased by 14% and it imported a share of 136% of butter and other fats to South Africa.

98

Figure 47: Prospects for diversification of suppliers for butter imported by South Africa in 2012


99

Figure 47 illustrates that New Zealand is the main supplier of world’s butter and other fats. If South Africa wishes to diversify from New Zealand, Ethiopia will be the prospective supplier due to its exports annual growth of 90%. It is a small market with a world market share of 0% but South Africa might have a chance to develop a new market. The biggest market is Netherlands with the world share market of 15%. South Africa and also penetrate this market.

100

14.2.6. Cheese and Curd

Table 33: List of supplying markets for the product imported by South Africa in 2012 South Africa’s imports represent 0.23% of world imports for Cheese and curd, its ranking in world imports is 56.

Exporters

Trade Indicators


South Africa (%)

Imported value 2012

(USD thousand)

Trade balance

2012 (USD thousand)

Share in South

Africa's imports

(%)

Imported quantity

2012

Quantity unit


Imported growth in

value between

2008-2012 (%, p.a.)


2008-2012 (%, p.a.)

Imported growth in

value between

2011-2012 (%, p.a.)

Ranking of partner


Share of partner


(%)

Total export


countries between

2008-2012 (%, p.a.)

World 63852 -51697 100 13084 Tons 4880 25 28 58 100 4

Ireland 10970 -10970 17.2 2533 Tons 4331 93 105 65 8 3.1 1 0

France 7647 -7647 12 1302 Tons 5873 29 39 34 2 13.3 0 0

United States of America 6180 -6180 9.7 1686 Tons 3665 60 53 508 7 4 24 0

Italy 5513 -5513 8.6 544 Tons 10134 8 5 0 4 9.1 6 0

United Kingdom 5323 -5322 8.3 1129 Tons 4715 67 90 320 12 2.3 8 0

New Zealand 5318 -5318 8.3 1289 Tons 4126 -4 -4 -11 6 4.2 3 0

Germany 4449 -4449 7 974 Tons 4568 28 31 84 1 16.2 3 0

Australia 4124 -4124 6.5 857 Tons 4812 26 17 68 10 2.8 4 0

Netherlands 3773 -3773 5.9 764 Tons 4938 41 52 87 3 13.1 3 0

Denmark 3262 -3262 5.1 572 Tons 5703 6 12 10 5 5.1 1 0


101

Table 33 shows that during 2012, South Africa imported a total of 13 084 tons of cheese and curd, at an average value of US$ 4 880/unit. South Africa imported greater quantities of cheese and curd from Ireland, France, United States of America and Italy. The greatest share of South African cheese and curd imports originated from Ireland which commanded 17.2% share during the year 2012 followed by France by 12%, United States of America (9.7%) and Italy by 8.6%. South Africa’s imported cheese and curd increased by 25% in value and 28% in quantity between the periods 2008 and 2012. During the same period, imports of cheese and curd from Ireland increased by 93% in value and 105% in quantity; imports from France increased by 29% in value and 39% in quantity; and imports from United States of America increased by 60% in value and by 53% in quantity. Between the periods 2011 and 2012, South Africa’s imports of cheese and curd increased by 58% in value. During the same period, Ireland’s cheese and curd exports to South Africa increased by 65% in value and imports from France increased by 34% in value while those from United States of America also increased extremely by 508%.

102

Figure 48: Competitiveness of suppliers to South Africa for cheese and curd in 2012


103

Figure 48 illustrates that between 2008 and 2012 South Africa’s cheese and curd imported from Switzerland, Belgium, New Zealand and Morocco were growing at a rate that is less than their export growth to the rest of the world. During the same period, South Africa’s cheese and curd imports from Australia, Portugal, Morocco, Netherlands, Germany, Austria, Australia Spain, Denmark, France, United States of America, Poland, Italy, Greece, Ireland and United Kingdom were growing at a rate that is greater than their exports to the rest of the world. The most competitive suppliers of cheese and curd are Poland, Ireland and Austria with the annual growth import share of 140%, 93% and 87% respectively during the period 2008 to 2012.

104

Figure 49: Prospects for diversification of suppliers for cheese and curd imported by South Africa in 2012


105

South Africa’s imports of Cheese and Curd are from the biggest and fastest growing markets in the world which are Germany, France and Netherlands. There is no need for South Africa to diversify it cheese and curd import market. It can only look for chances to penetrate more in New Zealand because New Zealand’s exports to the world are still greater than its exports to South Africa.

106

8. ACKNOWLEDGEMENTS

1. Statistics and Economic Analysis.

www.daff.gov.za. 2. Clover

Roodepoort South Africa 1715 Tel: +27 (11) 471 1400 Fax: +27 (11) 471 1504 www.clover.co.za

3. Competition Commission Tel: 012 394 3300 Fax: 012 394 0169 www.comptrib.co.za.

4. Dairy Belle (PTY) LTD Private Bag 208 Bryanston 2021 Tel: 011 840 4000 Fax: 011 514 0084 www.dairybelle.co.za

5. International Trade Center www.trademap.org

6. LactoData

www.dairyconnect.co.za.

7. MacMap www.macmap.org

8. Milk Producers Organization (MPO). Dr Koos Coetzee 012-8435600 www.mpo.co.za

9. National Agricultural Marketing Council (NAMC). Tel: (012) 3411115 Fax: (012) 3411911 www.namc.co.za

10. Nestle

P O Box 50661, Randburg, 2125 Fax: (011) 889 6559 086 009 6116 (General) 086 009 6789 (Nutrition) 0800 001 691 (Pet Care) www.nestle.co.za

11. Parmalat SA(PTY)LTD

Stellenbosch 7600 Tel: +27 21 809 1400 Fax: +27 21 809 1518 www.parmalat.co.za

12. Quantec.

www.Quantec.co.za.

13. Trade & Industrial Policy Strategies (TIPS)

www.tips.org.za.

Disclaimer: This document and its contents have been compiled by the Department of Agriculture, Forestry and Fisheries for the purpose of detailing the dairy industry. The views expressed in this document are those of the Department of Agriculture, forestry and fisheries with regard to agricultural industry, unless otherwise stated and, therefore the Department of Agriculture, forestry and fisheries does not accept responsibility for any errors in such information and anyone acting on such information does so entirely at his or her own risk.

http://www.daff.gov.za/

http://www.clover.co.za/

http://www.comptrib.co.za/

http://www.dairybelle.co.za/

http://www.dairyconnect.co.za/

http://www.mpo.co.za/

http://www.namc.co.za/

http://www.nestle.co.za/

http://www.parmalat.co.za/

http://www.quantec.co.za/

http://www.tips.org.za/

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