SA beef exports did not collapse despite foot-and-mouth disease threat – Agbiz

Despite the foot-and-mouth disease livestock challenge, South African beef exports did not collapse, the Agricultural Business Chamber (Agbiz) said yesterday.

Agbiz’s chief economist, Wandile Sihlobo, said some markets remained open, although with strict controls.

South Africa’s beef exports for last year amounted to 28 422 tons (down 12% from 2021), according to data from Trade Map. 

“This is only mildly below the ten-year average. Fresh beef accounted for 54% of overall exports, while the balance was frozen beef. Within this total figure, a significant decline was recorded in frozen beef exports, which were 12 945 tons in 2022, down 24% year-on-year. Meanwhile, fresh beef exports increased by 2% year-on-year to 15 477 tons,” Sihlobo said.

The key markets for South Africa’s fresh beef were Kuwait (with a market share of 22%), Jordan (16%), Mozambique (13%), United Arab Emirates (12%), Qatar (9%), Netherlands (4%), Lesotho (3%), Canada (3%), Zimbabwe (3%), Mauritius (3%), and Eswatini (2%). These markets accounted for 90% of South Africa’s fresh beef exports last year.

In the case of frozen beef exports, the top export markets for South Africa were Lesotho (16%), China (14%), Nigeria (14%), United Arab Emirates (9%), Mozambique (7%), Kuwait (6%), Egypt (5%), Qatar (4%), UK (3%), Netherlands (3%), and Jordan (2%). These markets accounted for 82% of South Africa’s frozen beef exports last year.

Sihlobo said the re-opening of the Chinese beef market and the firm establishment of beef access to the Kingdom of Saudi Arabia over the past week were positive developments. 

The Kingdom of Saudi Arabia has not featured prominently in South Africa’s beef export markets in the past, with only small volumes last exported in the early 2000s. The renewed access to this market is critical to South Africa’s ambition to expand beef exports, as the Saudi beef market is sizeable at over $647 million (R12 billion) in 2021, according to data from Trade Map.

About 62% of the Saudi beef imports were frozen beef, while 38% were chilled or fresh beef imports, Sihlobo said.

Some leading suppliers to Saudi Arabia included Brazil, Australia, Pakistan, The US, New Zealand, and Canada. Beyond beef, the Saudi meat market was said to be large, with all meat imports valued, on average, at $1.9bn annually over the past five years. 

Sihlobo said this meant that over time, as South Africa increased its production in other meat value chains, Saudi Arabia could remain a strategic country for growing exports.

Regarding China, Agbiz said the country had an established trade relationship with South Africa as over the past six years, China had been the leading importer of South Africa’s frozen beef cuts in value terms. 

“Therefore, easing import restrictions that were put in place following an outbreak of the foot-and-mouth disease is a welcome development, as that could lead to an increase in exports,” he said.

These positive developments provided some relief as the South African beef industry has faced a challenging operational environment for several reasons.

Agbiz said, “One of the significant challenges was the rise in feed prices since 2020, especially for maize and soybeans. The rise in animal feed prices coincided with a worsening financial strain on consumers due to the Covid-19 pandemic’s damaging effects. Thus, we saw a decline in the demand for red meat products as consumers opted for relatively cheaper forms of protein. 

“Moreover, the spread of foot-and-mouth disease (FMD) to six of South Africa’s nine provinces for the first time in history was another challenge for the industry. This brought temporary bans in specific export markets, extending to auctions and livestock movement, mainly cattle, for some time in 2022.”

The feed prices have now softened somewhat, with both maize and soybean prices, on average, down 13% year on year.