Market diversity is essential for SA’s agricultural exports amid geopolitics and trade risks

POST-APARTHEID era trade agreements like the Southern African Customs Union (SACU), European Free Trade Association (EFTA), the Southern African Development Community (SADC), and numerous other multilateral and bilateral trade agreements have contributed to a significant increase in agricultural exports from $22.4 billion in 2004 to $81.5 billion in 2023.

- DR SIMPHIVE NGQANGWENI, THABILE NKUNJANA

Due to the recent rate of output growth, increased efforts made through the implementation of the Agricul-ture and Agro-processing Master Plan (AAMP), industry-specific master plans, and various transformative initiatives, the agricultural sector is positioning to incentivise further as a new generation of farmers enters the commercial space.

This calls for the exploration of new markets, but it is crucial to emphasise that while the country navigates the global space to open more markets, risks must be diversified as possible in order to lower the risk associated with trade disputes.

The conflicts between the EU and the citrus sector, or the restrictions placed on SA’s vegetable imports by its neighbours, the important portion of the vegetables destined for their marketplaces, are classic examples.

We’ve seen that a global scale how a highly concentrated market can hinder a country’s trade, which can have a disastrous impact on that country’s economy. Australia and China are two common examples.

China responded to remarks made by Australia regarding COVID-19 by levying a 212% duty on Australian wine. For Australian exporters, their wine was exported almost 40% to China before the dispute; this effectively shut of China as a market. Australia lost about $756.6 million or EU 11.3bn, a year on average from wine exports.