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 2 of an eight-part series.
Technology is a critical driver of agricultural growth, influencing both mechanisation and productivity.
Sihlobo highlights technology’s dual role. Firstly, mechanical advancements, particularly in logistics and cold chain management through entities like Transnet, are crucial for facilitating the trade and export of agricultural products, ensuring temperature-sensitive goods arrive in optimal condition. Secondly, technological improvements in agrochemicals, seed cultivars and genetics have significantly boosted productivity. For example, grain yields have soared from roughly two tons per hectare in 2000 to over six tons today, largely due to the adoption of advanced seed varieties.
While the US market remains significant for specific sectors, the panel emphasised the strategic imperative of market diversification. Mmatiou Kalaba of BFAP agreed on the need to broaden South Africa’s export horizons to manage risk. South Africa has already demonstrated this capability, with agricultural exports to the African market growing from less than 10% in 1994 to more than a third, approaching 40% today.
Kalaba highlighted the significant, yet largely untapped, opportunities in East Asia for agricultural exports. This region presents a compelling market due to its expanding economy, rising incomes and vast population. However, diversifying into East Asian markets isn’t without its hurdles. Kalaba pointed to intense competition and stringent market access requirements as key challenges. These demands necessitate a robust cold chain infrastructure, capable of maintaining precise temperature controls, adhering to strict phytosanitary regulations, and ensuring rapid transit times to preserve the quality and marketability of agricultural products.
Despite ongoing global disruptions, such as droughts, the COVID-19 pandemic and geopolitical conflicts impacting input prices, the South African agricultural export sector has consistently demonstrated its resilience. Moving forward, the sector’s continued success and growth will hinge on a steadfast focus on enhancing infrastructure, embracing technology, and strategically diversifying markets.
South American countries like Peru, Argentina and Brazil, with their well-established presence and refined processes, present a significant challenge. These competitors have a long track record, existing market share, and established client bases.
Kalaba expressed strong confidence in South Africa’s competitive ability in agricultural exports, citing the country’s extensive experience with stringent international markets. He noted that South Africa’s largest agricultural export markets are the US and the European Union, which for the past 30 years have imposed some of the most demanding regulatory, sanitary and phytosanitary requirements. This consistent exposure to rigorous standards, particularly those concerning cold chain integrity and temperature controls for perishable goods, has thoroughly prepared South Africa to compete effectively in any global market. The high standards of quality and temperature adherence developed for the EU and US serve as a solid foundation for new export initiatives.
Ntshabele, representing the citrus growers, detailed the industry’s ambitious ‘Vision 260’, aiming to export 260 million cartons by 2032. While the US market is vital for citrus, especially with the threat of punitive tariffs, Ntshabele emphasised the critical need for market diversification. “The challenge with Trump indicates a very important point for us, the need for diversification of markets,” he affirmed. The industry is actively exploring opportunities in India and other regions, advocating for mutually beneficial trade agreements to address existing tariff barriers. The ability to achieve Vision 260 hinges on the efficient and reliable transport of this highly perishable commodity, necessitating an unbroken cold chain from the moment of harvest until it reaches distant consumers.