The South African government emphasizes the urgent need to diversify US agricultural exports.
Progress in the agricultural sector in South Africa has partly relied on exports, and now explains about half of production in valued terms. South Africa’s agricultural exports hit a new record of US$13.7 billion in 2024, up 3% from the previous year, according to Trade Map data. South Africa also imports a variety of agricultural products. In 2024, South Africa’s agricultural imports reached US$7.6 billion.
The US accounts for 4% of South Africa’s agricultural exports. The largest agricultural exports to the United States are citrus, wine, grapes and nuts. These are usually in US market tax exemptions and are currently categorized as the 10% to 31% tariff levels that Washington has collected from South Africa.
The Minister of International Relations, Cooperation and Trade, Industry and Competition said in a statement after Washington’s move.
The efforts will intensify efforts to diversify destinations targeting markets across Africa, including Asia, Europe, the Middle East and the US. Furthermore, such efforts include bilateral arrangements that enable us to pursue our national interests, where deemed appropriate.
As a medium to long-term strategy, this makes sense in the context of trade friction with the US and overall growth of the South African agricultural sector. However, diversifying exports takes time to achieve. New markets take time to open, especially as negotiations with the country on agricultural products are complex. For example, it took South Africa 16 years to reopen Thailand for Apple exports.
Additionally, trade agreements typically take a minimum of five years.
This means that in the short term, the South African government is urgently seeking to engage with Washington to maintain critical access to the US market. In their joint statement, the two departments managing fallout said they are seeking “additional exemptions and favorable quota agreements.”
So what does a long-term strategy look like? And what building blocks will need to be introduced in the future to ensure diverse destinations for South Africa’s agricultural products?
As an agricultural economist who has seen these issues for a while, I would recommend these three areas of focus.
First, South African trade authorities should include resources to understand opportunities in the Gulf and Asia dynamic markets. Saudi Arabia, the United Arab Emirates and Qatar are some of the key markets in the Gulf. In Asia, China, India and Vietnam should remain priorities.
Second, the agricultural sector and government need to develop better ways of working. This helps ensure that business relations are cultivated in a country where governments are attractive and there is a parallel between the country’s commercial and political interests.
Third, the South African agricultural sector, government and organized agriculture – must have their homes in order. For example, unless there is control over the necessary disease, promotion of livestock products will not work.
opportunity
The African continent accounts for the largest share of South Africa’s exports at 38%. The EU held a 19% share in 2023. Asia and the Middle East accounted for a quarter of South Africa’s agricultural exports in the same year.
Asia and the Far East, particularly China, have already been identified as major growth areas. Asia and the Middle East are strong destinations, but there remains a large pocket of opportunity in terms of products and countries.
Grouping of BRICS remains important in this effort. Here, the South African government should focus on lowering import duties and plant affiliations barriers in countries such as China, India and Saudi Arabia.
China is the biggest opportunity, primarily due to its population and economic size. China, the world’s second largest economy after the United States, must feed 1.4 billion people. To do this, China is a huge importer, resulting in an agricultural trade deficit of the remaining global US$117 billion. This suggests that there is a gap in countries with good agricultural provisions.
Vietnam and India also have a significant population. Importantly, South Africa remains a small participant in the agricultural market.
Sector value targeting includes horticultural and wine producers. The expansion of exports in these sectors is a long-term topic. We need new energy and urgency from government officials right now.
The livestock industry is also preparing to promote exports.
In the short term
Agriculture stakeholders can play a constructive role in supporting government efforts involved in the United States. Stakeholders can assess the impact of increased US tariffs on local jobs, primarily among citrus fruits, grapes, wine, nuts and other products.
There is also a range of more flexible offerings of American products in the South African market to facilitate current trade tensions. South Africa, for example, is currently allowing US exporters to sell more than 70,000 tons of chicken products to the country without tariffs. However, US poultry producers use less than 60% of this allocation. One reason for this is low quality products that do not meet South African specifications. Therefore, the need to seek negotiation points.
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Next Steps
Trade is about supporting trade-offs and the right winners.
Both organised agriculture – commodity associations – and businesses must work together to define new national priorities and how these can be pursued internationally.
Negotiation of free trade agreements should be the mainstay of trade policy. South Africa has excelled at opening new markets over the past 20 years, and has concluded several free trade agreements with key regional and international markets. These include dealings with the Southern African Development Communities and regional agreements between the European Union and the African Continental Free Trade Area.
You need to expand this list.
However, free trade agreements require strict choices as to which industries are ready to be placed on the table for trade-offs, while building long-term competitiveness in sectors that could be key drivers of growth.
Governments must engage in various agricultural sectors about key priorities and what trade-offs are ready to consider.
Wandil Sirobo, Senior Fellow, Faculty of Agricultural Economics, Stellenbosch University
