Professor Johann Kirsten on 28 May facilitated a Creamer Media panel discussion featuring insights from:
- Jabu Mdaki, chief executive of Transnet Port Terminals
- Mmatiou Kalaba, executive director and senior analyst at the Bureau for Food and Agricultural Policy (BFAP)
- Boitshoko Ntshabele, chief executive officer at Citrus Growers Association of Southern Africa; and
- Wandile Sihlobo, chief economist of the Agricultural Business Chamber of South Africa (Agbiz)
This is Part 6 of an eight-part series.
The discussion then shifted to the BRICS grouping as a potential avenue for market diversification. Sihlobo asserted that while past agricultural benefits from BRICS trade have been minimal (less than 10% of total exports, comparable to the UK market), the expanding group offers significant opportunities. He noted that BRICS countries collectively account for half of global agricultural trade, presenting a vast market. His optimism is rooted in the belief that deeper agricultural trade within BRICS can be fostered by addressing import tariffs and phytosanitary barriers.
Ntshabele, while acknowledging the “progressive” nature of BRICS, emphasised the importance of diversification as a risk management strategy. “The portfolio management theory applies to BRICS too,” he stated, highlighting the need to spread risk across various markets. He foresees the next five years being dominated by protectionist policies, not just from traditional partners but also potentially from BRICS members themselves.
Sihlobo underscored that South Africa’s focus on BRICS is not about replacing existing strong relationships with Europe, Africa or the Americas, but rather about “widening that while retaining relationship in other regions”. He acknowledged the historical reality that South Africa hasn’t “been paid for much of the trouble that we get” from its pro-BRICS stance, referring to the relatively low current export volumes to BRICS nations.
The future of the cold chain: reefers on rail
As the conversation turned to the future of logistics, Kirsten raised an intriguing prospect: “reefers on the rail.” Mdaki confirmed that Transnet is actively exploring this as part of its long-term strategy to shift cargo from road to rail, particularly in the Western Cape by connecting the Belcon precinct with the terminal.
This initiative is a critical step towards enhancing the efficiency and sustainability of the cold chain. Moving refrigerated containers by rail offers several advantages:
- Increased capacity: Trains can carry significantly more containers than trucks, alleviating road congestion and increasing overall transport capacity
- Reduced carbon footprint: Rail transport is generally more environmentally friendly than road freight, aligning with global sustainability goals
- Improved efficiency: By leveraging rail, Transnet aims to streamline the movement of perishable goods, ensuring faster and more consistent delivery to ports for export
Mdaki highlighted ongoing efforts to revitalise rail networks, including the central corridor connecting Johannesburg and Durban. The aim is to increase the density of cargo moved by rail, creating opportunities for private sector participation through advertised slots on the rail network. This push for ‘reefers on rail’ signifies a strategic investment in the future of South Africa’s export-oriented agriculture, ensuring that the critical cold chain remains robust and efficient as volumes continue to grow.