The Agricultural Business Chamber (Agbiz) has said that while BRICS+ remained a political grouping with no formal trade structure, the bilateral agreements between the BRICS+ countries for increasing trade were encouraging.
Agbiz chief economist Wandile Sihlobo yesterday said that South Africa would continue prioritising the widening of agricultural exports in this grouping, but also keep supplying its key export markets.
“Such efforts will not be at the expense of robust markets in Europe, Africa, the Americas, Asia, and the Middle East,” Sihlobo said.
“South Africa’s agricultural sector still has room to grow and trade is essential to the sector’s growth strategy.”
He said export opportunities for South Africa’s agricultural products were opening up within the BRICS+ countries.
“Over the past two years, China, the Kingdom of Saudi Arabia, and Egypt have widened market access for various agricultural products from South Africa,” Sihlobo said.
“Admittedly, Egypt and the Kingdom of Saudi Arabia have only recently joined the BRICS+ grouping, and market access is part of the long-term bilateral engagements with South Africa. South Africa has access to selected fruits, wine, wool, meat and grains.”
However, Agbiz noted that South Africa aimed to broaden market access in BRICS+ for most of the country’s agricultural products.
For this reason, through the 2023 BRICS Summit in Johannesburg and the prior engagements, South Africa prioritised trade as a significant point on the agenda for discussion.
“The political principals broadly agreed that deepening trade was necessary for the BRICS countries. Still, each country’s trade and agricultural authorities are responsible for taking the lead and seeking market access from member countries,” Sihlobo said.
“The idea of a BRICS agricultural trade agreement that some argued for has not yet been thoroughly ventilated. The priority so far was for each BRICS member to work to reduce import tariffs and address the phytosanitary constraints for various products that BRICS member countries would present.”
Sihlobo said with BRICS adding new members to form a bigger BRICS+ from January 1, 2024, the agricultural trade opportunities had increased.
“The Kingdom of Saudi Arabia and Egypt are some of the newest members. These two countries present enormous opportunities for widening South Africa’s agricultural exports. Egypt spends about $16 billion (R294bn) a year importing agricultural products from the world market. These are mainly wheat, maize, soybeans, palm oil, beef, apples and pears, dairy, cotton, potatoes and tea, among other products,” he said.
“It is here that South African grain farmers, traders and beef producers should focus on increasing exports. Egypt even took the initiative of visiting South Africa at the start of this year in search of maize imports. The Department of Agriculture, Land Reform and Rural Development and the South African Cereals and Oilseeds Traders Association were at the forefront of the engagements.”
Even before adding the new members, the original BRICS countries were already significant importers of agricultural products as this group’s agricultural imports averaged $255bn annually between 2019 and 2022, according to Trade Map data.
China accounts for 71% of all the agricultural imports into the group, followed by India at 11%, Russia at 11%, Brazil at 4% and South Africa at 3%.
The products these countries imported include soybeans, beef, maize, berries, wheat, palm oil, poultry meat, cotton, barley, dairy products, pork, apricots and peaches, sugar, wool, sunflower seed, nuts, sorghum, goat meat, wine, grapes, bananas, avocados, mangos, guavas, and fruit juices, among other products.
South Africa produces some of these products in abundance and has surplus volumes for exports.
Despite these sizeable agricultural import figures, the intra-BRICS agricultural trade remained relatively low.
BUSINESS REPORT