Report Coverage
This report focuses on trends in South African agri-business across several sub-sectors, with cross-references to Who Owns Whom reports on these sectors. The report includes information on trends in farming and processing, investments, trade, corporate actions and other industry developments. It refers to over 20 Who Owns Whom reports covering everything from the fresh fruit and vegetables industry to the manufacture of dairy products, sugar and animal feeds, the liquor and tobacco industries and trade in agricultural raw materials and livestock.
Introduction
Agri-business has the potential to drive economic growth through linkages with other industries that include agriculture, manufacture of capital equipment, chemicals industries, packaging industries, and services such as transport, marketing and retail. South Africa exports processed food products worldwide. Total exports of food products (excluding live animals and animal products) increased by 27.6% to R163.4bn in 2020, as reported by the South African Revenue Service (Sars). Vegetable exports were the biggest driver with year-on-year growth in 2020 of 30.7% to R89.4bn. South Africa exported 146 million cartons of citrus fruits in 2020, and was the second-largest exporter of citrus in the world after Spain, as consumers demanded more fruit to help build immunity against coronavirus. Local and global soft commodity prices have increased, supported by growing demand from China and droughts in parts of South America. Challenges in the agriculture sector include global tariff protection in the United States (US), the European Union (EU) and Japan, diseases in the livestock and poultry subsectors, security issues on farms and the consequences of climate change. Agri-business players respond to drivers by implementing technological innovations and vertical integration. Constraints such as rising input costs, supply disruptions, dumping and illegal trade affect operating income.
Selected Highlights
Government Initiatives
Government’s National Development Plan (NDP), New Growth Path and Industrial Policy Action Plans
• These plans all identify agro-processing as a critical driver of GDP growth, employment, and new business formation. The NDP identifies agriculture and agro-processing as key to increasing exports, increasing employment, and growing SMEs. The IDC’s agro-processing and agriculture business unit funds processing in the following sub-sectors of the agriculture value chain: horticulture including fruit, vegetables, nuts, tea and coffee; field crops processing; animal protein, including red/white meat, aquaculture, poultry; and forestry.
• The government and the IDC set up a R5bn fund in March 2021 to help black farmers gain access to capital and boost their role in commercial agriculture. The DALRRD set aside R1.2bn to assist small scale farmers with turnover of between R20,000 and R1m per annum. These funds are released in the form of vouchers, mainly for inputs. Priority is being given to critical industries such as horticulture and poultry.
Poultry Sector Master Plan
• The Poultry Sector Master Plan was launched by the DTIC in November 2019 and aims to stimulate local demand, boost exports and protect the domestic poultry industry through trade measures. As part of the plan, new tariffs were implemented in March 2020. It is not yet clear whether these will be effective in stemming the tide of dumped imports.
Sugar Industry Master Plan
• The industry has participated in developing a Sugar Industry Master Plan under the guidance of the DTIC. The plan was gazetted in June 2020 and aims to diversify the sugarcane value chain and produce a wider range of globally competitive sugarcane-based products. Industry stakeholders have been exempted in terms of the Competition Act to collaborate on the implementation of the plan.
Outlook
Favourable conditions for all subsectors of agriculture have role players optimistic for various crops to reach record output levels, which will benefit exports and all role players in the agri-business value chain. On the demand side, role players expecting trading conditions to remain challenging given the high unemployment rate and constrained disposable income. With trading under the African Continental Free Trade Area agreement underway, analysts anticipate a significant increase in intra-African trade. Local players are well positioned to continue supplying countries in sub-Saharan Africa with live animals, animal products and processed and prepared foods.
Trends in South African Agribusiness
2021
Full Report
R 1 900.00(ZAR) estimated $110.63 (USD)*
Table of Contents
[ Close ]| PAGE | ||
|---|---|---|
| 1. | INTRODUCTION | 1 |
| 2. | DESCRIPTION OF THE INDUSTRY | 1 |
| 2.1. | Industry Value Chain | 3 |
| 3. | SIZE OF THE INDUSTRY | 4 |
| 4. | COMPETITION | 8 |
| 5. | STATE OF THE INDUSTRY | 10 |
| 5.1. | Coronavirus | 10 |
| 5.2. | Trade | 12 |
| 5.3. | Corporate Actions | 14 |
| 5.4. | Continental | 15 |
| 6. | TRENDS | 17 |
| 6.1. | Trends in Farming | 18 |
| 6.2. | Trends in Agricultural Products (Primary) Processing | 19 |
| 6.3. | Trends in Food (Secondary) Processing | 20 |
| 7. | INFLUENCING FACTORS | 23 |
| 7.1. | Investments | 23 |
| 7.1.1. | Major Transactions | 24 |
| 7.1.2. | Capacity Expansion and Utilisation | 25 |
| 7.2. | Government Initiatives | 27 |
| 7.3. | Unreliable Water and Electricity Supply | 28 |
| 8. | PESTLE ANALYSIS | 28 |
| 9. | OUTLOOK | 30 |
| 10. | REFERENCES | 30 |
| 10.1. | Publications | 30 |
| 10.2. | Websites | 31 |
| APPENDIX 1 | 32 | |
| List of Sectors Covered | 32 |
