South Africa - Country Commercial Guide
Agricultural Sector

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2020-10-01

Overview                           

South Africa has a market-oriented agricultural economy that is highly diversified and includes the production of all the major grains (except rice), oilseeds, deciduous and subtropical fruits, sugar, citrus, wine and most vegetables. Livestock production includes cattle, dairy, hogs, sheep, and a well-developed poultry and egg industry. Value-added activities in the sector include slaughtering, processing and preserving of meat; processing and preserving of fruit and vegetables; dairy products; grain mill products; crushing of oilseeds; prepared animal feeds; sugar refining and cocoa, chocolate, and sugar confectionery amongst other food products.

The agricultural sector contributed around 10 percent to South Africa’s total export earnings in FY 2019 at a value of $10.7 billion.  Citrus, wine, table grapes, corn and wool accounted for the largest exports by value. South Africa also exports nuts, sugar, mohair, apples and pears to name just a few products.

South Africa imported $7.6 billion in agricultural and food products in FY 2019, which is a decrease of 3 percent from FY 2018.  The major products imported were rice ($448 million), wheat ($421 million), chicken cuts and offal ($377 million), palm oil ($261 million), whiskies ($176 million), cane sugar ($149 million) and soybean meal ($131 million). 

In FY 2019, the United States exported $389 million of agricultural, fish and forestry products to South Africa, up 9 percent from the previous fiscal year.  Major products exported by the United States to South Africa included, poultry meat, wheat, planting seeds, distilled spirits and tree nuts.  Other products imported by South Africa from the United States included dairy products and sorghum.  

USDA’s Foreign Agricultural Service (FAS) in Pretoria prepares more than thirty market intelligence reports for different agricultural commodities in the Southern Africa region.  FAS also prepares reports that highlight the opportunities and regulatory processes for United States agricultural exports to South Africa. 

The Exporter Guide for South Africa is a good starting point for United States agricultural and food companies that view South Africa as a potential market.  Please feel free to contact the Foreign Agricultural Service in Pretoria for further information at the following address:

Foreign Agricultural Service

U.S. Embassy

Pretoria

South Africa

Tel: +27 (0)12 431 4057;

Fax: +27 (0)12 342 2264

Email: agpretoria@fas.uda.gov

Sub-sector Best Prospects

Grains

The grain industry (barley, maize, oats, sorghum and wheat) is one of the largest agricultural industries in South Africa, contributing more than 30% to the total gross value of agricultural production. The industry is comprised of a number of key stakeholders including input suppliers, farmers, silo owners, traders, millers, bakers, research organizations, financiers, etc. The animal feed industry is an important client and role player in the grain supply chain. Around 6.0 million tons of grain and 1.6 million tons of oil cake (from imported and locally produced sunflower and soybeans) are used by the animal feed manufacturing industry in South Africa.

Corn is the largest locally produced field crop, and the most important source of carbohydrates in the SADC region for animal and human consumption.  South Africa is the main corn producer in the SADC region, with an average production of around 12 million tons per annum.  Local commercial consumption of corn amounts to more than 11 million tons, and surplus corn is usually exported.  Wheat is produced mainly in the winter-rainfall areas of the Western Cape and the eastern parts of the Free State with considerable annual fluctuations in production.  Average wheat production has been about 1.8 million tons a year.  There is, however, a distinct downward trend in the area planted to wheat over the past few years.  Thus, South Africa has become more dependent on imports to meet the local demand of about 3.3 million tons.

Grains

FY  2017

FY  2018

FY  2019

Total Exports

505,000

448,000

310,000

Total Imports

553,000

409,000

510,000

Imports from the U.S.

79,000

15,000

48,000

Unit: $thousand

Wheat

South Africa is the only country in the region with significant wheat production. However, over the past 20 years, and especially after the deregulation of the market in 1997, there has been a decreasing trend in the area planted with wheat despite increasing local consumption.  Declining profit margins saw local wheat farmers scaling down wheat production and switching to other crops like canola, corn, soybeans or increased livestock production. Furthermore, the trend in wheat production has been sporadic over the past 20 years because of unpredictable weather conditions.  Without an advance in technology or policy changes, the decreasing trend in hectares planted with wheat in South Africa will continue.  

Hence, FAS/Pretoria forecasts that the declining trend in hectares planted with wheat will continue in the 2020/21 marketing year, due to the crop’s decreasing profitability. FAS/Pretoria estimates producers will plant about 520,000 hectares of wheat which could, on average yields, realize a wheat crop of about 1.7 million tons.   Annual wheat consumption in South Africa is about 3.4 million tons, or about 55 kg per capita, which means South Africa will have to import at least 1.9 million tons of wheat to meet local demand.  South Africa’s wheat consumption is the highest in Sub-Saharan Africa and is expected to increase annually with population growth and increased urbanization to South Africa's major cities.

 

Wheat

FY 2017

FY 2018

FY 2019

Exports

33,000

17,000

42,000

Imports

327,000

398,000

421,000

Imports from the USA

21,000

7,000

35,000

Unit: $thousand

 

 

 

 

Opportunities

Contact U.S. Wheat Associates Cape Town office for current opportunities in the South African market for U.S. wheat at http://www.uswheat.org.

Web Resources on Wheat

U.S. Wheat Associates has an office in Cape Town, South Africa. They can help any company interested in purchasing or exporting U.S. wheat. They can be contacted at InfoCPT@uswheat.org           

Alcoholic Beverages        

South Africa consumes more than 4.5 billion liters of alcoholic beverages per annum and is also an important exporter of alcoholic beverages, especially wine.  However, South Africa also imports a significant amount of alcoholic beverages, especially whiskies.   Recent trends indicate that consumers are turning to new and innovative distilled spirits, including a greater prominence in previously disadvantaged areas.

 

South Africans’ tastes and preferences are becoming more sophisticated and the average consumer is increasingly expecting a wider range of alcoholic products on retail shelves.  As a result, an extensive range of new imported products has become available in the market.  Openness to new products and an increasing middle class has helped to create a positive climate for the sale and promotion of United States distilled spirits.  However, price sensitivity, rather than brand loyalty dictates consumer purchasing behavior.

 

Alcoholic Beverages

FY 2017

FY 2018

FY 2019

Total Exports

983,000

1,105,000

990,000

Total Imports

380,000

497,000

578,000

Imports from the U.S.

13,000

17,000

18,000

Unit: $thousand

Above Figures are from Global Trade Atlas

Web Resources on Alcoholic beverages

 The Distilled Spirits Council of the United States can help U.S. distillers with market information and advice on how to export to South Africa (http://www.discus.org/).

 Other Sub-sector Best Prospects       

Poultry

The South African poultry meat industry, with a gross value of almost R47 billion (US$3.0 billion), is the country’s largest individual agricultural industry and is contributing almost 17 percent to the total gross value of agricultural products.  Broiler production makes up most of the poultry industry.  However, South Africa only produces about 1.5 percent of the total broiler meat in the world and needs imports to augment local production and meet local demand.                                     

Between 2000 and 2010, steady economic growth and increased average income in South Africa pushed large numbers of consumers towards protein-filled diets and convenience; as a result, meat consumption levels skyrocketed. The per capita meat consumption in that period increased on average by more than 4 percent per annum. Chicken meat consumption per capita grew by more than 7 percent per annum in the same period. As South Africans’ disposable income grew, their buying behavior reflected their strong fondness for meat. Since 2010, however, a slowdown in South Africa’s economic growth also impacted the growth in meat consumption. The per capita consumption growth rate of meat slowed down to about 1 percent per year.

South Africa consumes about 3.9 million tons of poultry, beef, lamb, and pork meat per annum. In 2018, the South African consumer spent approximately R225 billion (US15 billion) on meat products, which represented 35 percent of total expenditure on food. Poultry meat represents more than 60 percent of total meat consumption in South Africa with a per capita consumption of 42kg per annum. As poultry meat is relatively inexpensive and ubiquitous, it is the most important protein source in the diet of the majority of South Africans. This is especially true in low-income households, who constitute the majority of consumers.

Three fundamental characteristics distinguish South Africa’s chicken meat market from many other countries. The first characteristic is the predominant demand for bone-in (brown meat) chicken cuts compared to breast meat (white meat). Bone-in chicken cuts represent almost 60 percent of total chicken meat demand mostly sold as “individually quick frozen” pieces in the form of low-priced 2kg and 5kg mixed packs. Brining is the second characteristic. Almost all locally produced frozen chicken contains brine in order to preserve and enhance the quality of the meat.

In 2016, the South African Department of Agriculture introduced a regulation to restrict the brined content to a maximum of 15 percent of the mass sold. Prior to 2016, brining levels of up to 43 percent were recorded, which resulted in higher water content per package of frozen chicken meat. The third characteristic is the relatively small demand for fresh (not frozen) chicken meat. Fresh chicken meat represents less than 10 percent of total consumption of chicken meat in South Africa. These characteristics reflect the predominance of a lower-income consumer base, as fresh chicken meat is usually sold at a premium over frozen and brined bone-in chicken pieces.

Broiler meat accounts for more than 95 percent of all poultry meat imports by South Africa, with the balance largely being turkey products.  South Africa imported 538,000 tons of poultry meat in FY 2019 at a value of $435 million.  Chicken cuts and edible offal represented the largest category of poultry meat imports, namely 55% or 295,000tons, at a value of $277 million (64% of the total value of poultry meat imports).  The second largest category in volume is mechanically deboned meat with a share of 35% or 190,000 tons, at a value of $95 million (22% of the total value of poultry meat imports).  These two poultry meat product segments represent 90% of total poultry meat imports in quantity by South Africa.

Brazil is the leading trading partner for South Africa in terms of poultry meat, with 45% market share in value followed by the United States with 17% market share.  tons, at a value of $95 million (22% of the total value of poultry meat imports).  These two poultry meat product segments represent 90% of total poultry meat imports in quantity by South Africa.   Brazil is the leading trading partner for South Africa in terms of poultry meat, with 45% market share in value followed by the United States with 17% market share. 

Poultry

FY 2017

FY 2018

FY 2019

Total Exports

105,000

94,000

85,000

Total Imports

455,000

513,000

435,000

Imports from the U.S.

73,000

103,000

86,000

Unit: $thousand

Above Figures are from Global Trade Atlas

Chicken bone-in portions

Overview

 United States bone-in broiler meat exports to South Africa have been hampered by an anti-dumping duty that was put in place in 2000.  In 2012, the anti-dumping duty was extended for another 5 years and was set at R9.40 per kilogram.  However, in June 2015, representatives from the United States and South African poultry industries agreed on a tariff rate quota of 65,000 tons of United States bone-in chicken meat to enter South Africa without the anti-dumping duty. Notably, these bone-in chicken meat imports are still subject to a most favored nation (MFN) duty, which increased from 37 to 62 percent in March 2020.

In January 2016, the U.S. and South African governments concluded negotiations of the final health certificates, and the first shipment of United States bone-in broiler meat landed in South Africa in March. Exports continued and as a result the United States exported about 20,000 tons poultry meat to South Africa at a value of almost US$ 18 million in FY 2016. In FY 2017, the volume increased to 74,000 tons at a historical high value of US$73 million.

Notwithstanding this improvement, South Africa again extended the anti-dumping duty in 2017 for an additional 5-year period. The positive trend in poultry exports continued in FY 2018 with the United States exporting 95,000 tons of poultry products to South Africa at a record value of $103 million.  In 2019, pursuant to the administrative guidelines, the South African Department of Agriculture raised the tariff rate quota to 68,590 tons for the 2019/20 quota year (April to March).  In FY 2019, the United States exported 85,000 tons of poultry products to South Africa at a value of $86 million.

Web Resources on Poultry

The U.S.A. Poultry and Egg Export Council can help U.S. poultry exporters with market information and advice on how to export to South Africa (http://www.usapeec.org).

For more information, the U.S. Commercial Service Commercial Specialist for Agriculture in Johannesburg, South Africa, can be contacted via email at:

Mohammed.Essay@trade.gov

Phone: +27 11 290 3025

or visit our Website:  http://export.gov/southafrica/index.asp.