South Africa’s trade performance –

exports of grains, fruit, and fruit juice

Workshop– South Africa’s Way Ahead: New, Old or Close Friends

Presented by: Ms Y Potelwa

Outline of the presentation

• Introduction

• Grain industry

• Fruit industry

• Trade performance

– Fruit industry

– Grain industry

– Fruit juice industry

• Challenges faced by industries

Introduction

• The movements of good and services mainly justifies by trade theories

– Mercantilist views – wealth of the nation

– Adam Smith-absolute advantage

– Ricardo –comparative advantage

• South Africa’s advantage in agricultural sector

– Fruit, grain and fruit juice

• South Africa trade agreements and political ties with various markets (SADC,EU, BRICs and USA)

INTRODUCTION

• Agriculture sector plays an important role on the South African

Economy

– Agriculture estimated to contribute a total amount of R208

billion:2.5%

– The country is the larger producer of grains (16.6 million tons)

and fruit (6.3 million tons)

– Both sectors play important role in employment and export

earnings

Grain industry

• In 2014. the grain industry contributed about 18.9% (18 million tons)

to the total Agricultural GDP

– Maize (14 million tons)

– Wheat (1.7 million tons)

– Soyabean (938 thousand tons)

Grain industry

-26%

22%

-10%

3%

18%

-32%

1%

63%

-3% 2%

-11%

11%

-1%

17%

-40%

-20%

0%

20%

40%

60%

80%

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Total grain production Growth change %

Fruit industry

• In 2014, the fruit sector contributed about 13.4% (6.7 million tons)to the total agricultural GDP Export earnings

– Citrus fruit (2.1 million tons)

– Grape (1.9 million tons)

– Top fruit (1.2 million tons)

• About 60% of is exported in the international market and 40% remains in the local industry for consumption and processing

Fruit industry

-1%

10%

5%

3%

-9%

6%

5%

3%

0%

-3%

0%

7%

5%

3%

-15%

-10%

-5%

0%

5%

10%

15%

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8

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

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Total fruit production Growth change %

Agricultural export performance

•South Africa estimated to trade approximately about R105 billion (with average growth

about 13% per annum between 2001 and 2014)

₋Fruit industry commands a share of 29% on agricultural exports (↑growth of 15%)

₋Grain sector commands a share of 8% on the total agric exports (↑ growth of

16%)

₋Fruit Juice industry commands share of 3.4%

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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

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SA Agric exports Fruit exports Fruit juice exports Grains exports

Fruit industry export performance

• SA’s fruit industry has been a net exporter since early 2000s ₋ Fruit exported a total value R30 billion value in 2014

₋ Main exported fruit products includes ₋ Oranges (R6.4 billion)

₋ Grapes (R5.3 billion)

₋ Nuts (R3.8 billion)

– The top five per country destinations are Netherlands

(21.8%), United Kingdom (15%), Hong Kong (7.9%), United

Arab Emirates (6.7%) and Russia (6.5%)

Main exported fruit products

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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

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Oranges Grapes Apples Lemons and limes Pears

South Africa’s market growth and share for

fruit

Markets Export share in 2001:% Export share in 2014:%

EU 28 66.1% 45.3%

Middle East 8.1% 12.1%

BRIC 2.5% 6.8%

USA 8.1% 5.6%

SADC 3.3 4.9%

Grain industry export performance

• South Africa grain industry exported a total amount of R8.7 billion in 2014.

₋ Main exported fruit products includes between 2001 and 2014 ₋ Maize corn (R4.8 billion with average growth of 16%)

₋ Maize seed (R1.6 billion with average growth of 26%))

₋ Wheat and Muslin (R945 million with average growth of 24%)

– The top five per country destinations are Chinese Taipei

(19.7%), Zimbabwe (16.4%), Botswana (13.8%), Lesotho

(7.9%) and Namibia (6.4%)

Main exported grain products

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Maize (corn) seed

Wheat and meslin

Rice, semi-milled

Rice, broken

Maize (corn) nes

South Africa markets for grains: Export

growth and share

Markets Export share in 2001:% Export share in 2014:%

Africa 36.5% 56.8%

Asia (exl China and India) 61.9% 34.9%

EU 28 0.8% 5%

Fruit Juice industry Export

performance

• The investments in infrastructure can able to increase exports of the fruit juice industry

• The industry is net exporter of fruit juices (↑ growth of 13%)

• Main exported fruit products includes

– apples juice,

– fruit juice

– and fruit & vegetable juice

• Main markets of fruit juice are Netheralands (13.2%), Namibia (9.7%), Botswana (9.2), Mozambique (8.3%) and Japan (5.6)

Main exported fruit juice products

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Mixed fruit juice Orange juice Fruit and Veg juice Grapefruit juice, Single citrus fruit juice

South Africa’s fruit juice markets: Growth

and share

Markets Export share in 2001:% Export share in 2014:%

Africa 36.5% 58.8%

Asia (exl China and India) 61.9% 34.9%

EU 28 0.8% 5%

BRIC 0.1% 0.2%

USA 0.1% 0.1%

Challenges faced by industries

• Limited infrastructure

• Barriers into international markets

• Dependency of on their traditional markets