South Africa is actively pursuing the expansion of its exports to China and India to take advantage of burgeoning demand for agricultural products that the country is competitively positioned to supply. Agricultural Business Chamber chief economist Wandile Sihlobo said the Far East region, in particular India and China, were important areas of focus for SA exporters given the size of their economies and population growth. SA agricultural exports totalled US$10.6 billion overall in 2018, of which Asian exports accounted for around 25% at $2.6 billion. However, he said India and China did not currently represent significant volumes of SA exports despite the potential. Key Far and Middle East markets for SA exports were UAE, Hong Kong, Vietnam, Japan, Malaysia, Saudi Arabia and Singapore, Bangladesh, South Korea and Taiwan followed by India. “These two countries, China and India, have a third of the world’s population. India’s economy is worth $3.2 trillion and China’s economy is valued at $15.5 trillion. The two elements of these countries is that there is a rapidly growing population and the standard of living is also improving, which are both prerequisites for demand,” he said. “SA’s agricultural sector is export led; we export in value about 49% of what we produce. If we think of the development of expanding agriculture in former homelands and other areas, we need to ensure we also focus on growing trade in the same way as on the production side,” he said. SA was only the 46th largest supplier of agricultural products to India, which largely imports from South America and the United States, he added. “India imported $21.2 billion worth of agricultural products in 2018 and within that SA only accounted for 0.3%. China imported $129.7 billion worth in 2018, and SA only supplied about 0.5%, the rest was from the US, South America and the EU.” He said it was key for SA to finalise a trade agreement with India but challenges were its highly protectionist policies and non-tariff barriers such as its rules around phytotechnology. In terms of China, with the exception of wool – SA exports 70% of its wool to China – the country’s agricultural products do not feature prominently. Sihlobo said he was optimistic that in the long run SA would be able to successfully penetrate these key markets.
INSERT: It’s key for SA to finalise a trade agreement with India. – Wandile Sihlobo
