Who Owns Whom

trends south african agribusiness

Trends in South African Agribusiness 2023

Stephen Timm | South Africa | 17 July 2023

Trends in South African Agribusiness 2021

Louise Mitchell | South Africa | 02 August 2021

Enquire about this report

Report Coverage

This report on trends in agribusiness in South Africa is one of several trends reports produced by Who Owns Whom that also include trends in mining, FMCG and fintech. The report includes information on trends such as sustainable farming, export growth, high food prices, masterplans, health and wellness, agritech and cannabis. Who Owns Whom trends reports pull together common agri-related trends which can also be found in various Who Owns Whom reports related to the agricultural industry.

Introduction

• South Africa’s agribusiness sector, made up of primary agriculture, agroprocessing and various sectors that provide inputs or services, has come under pressure from power cuts, infrastructure shortages, climate change, land reform, growing protectionism and high food prices, which are eroding its competitiveness.
• The agricultural products sector grew strongly in the year to end-June 2022.
• It has since contracted, largely due to excessive rains affecting field crops, foot-and-mouth disease affecting the cattle industry and loadshedding disrupting poultry production.
• Agribusiness is being shaped by key trends such as the shift to sustainable farming practices and agricultural technology (agritech).

Strengths

• About 50% of production is exported.
• Presence of several large food businesses.
• South Africa’s diverse climate allows it to produce various crops.
• The country’s geographical location makes it suitable to supply Europe with fruit and wine.

Weaknesses

• Agroprocessing is a highly controlled market.
• Declining production due to lack of investment.

Opportunities

• Demand for agritech products can drive innovation in the sector.
• Sustainable farming.
• The AfCTA offers opportunities to increase exports of agricultural products to the rest of Africa.
• The health and wellness trend.
• The local production of cannabis.
• The nearshoring trend may offer opportunities for agroprocessing.
• The production of biofuels as demand for renewable fuels increases.

Threats

• Climate change and El Niño could reduce product.
• Consumers are under pressure from rising costs and food prices.
• Cyber attacks
• Global geopolitical uncertainty and local political instability.
• Increasing protectionism.
• Land reform.
• Livestock diseases and plant pests.
• Loadshedding threatens to reduce output.
• Poor ports, rail, water and road infrastructure threaten to reduce the industry’s competitiveness.
• The deterioration of municipalities.
• The slowing economy.

Outlook

• The outlook is mixed, despite recent favourable weather and high commodity prices, which saw exports grow by more than 10% in 2022.
• Loadshedding, infrastructure shortages and growing protectionism threaten to limit growth.
• The long-term outlook could be affected by the deterioration of municipalities and geopolitical challenges, including South Africa’s position on the Russia-Ukraine war.
• Producers are turning to sustainable farming methods and agritech to innovate, improve yields and adapt to the growing threat of climate change.

Read More..
Trends in South African Agribusiness
Trends in South African Agribusiness 2023

Full Report

R 20 000.00(ZAR) estimated $1100.87 (USD)*

Historical Reports

Trends in South African Agribusiness 2021-08-02

R 6 500.00(ZAR) estimated $357.78 (USD)*

View Report Add to Cart

Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 2
3. SIZE OF THE INDUSTRY 3
4. TRADE 6
5. TRENDS 9
6. CHALLENGES 17
7. COMPETITION 29
7.1. Competition 29
7.2. Ownership Structure of the Industry 29
8. SWOT ANALYSIS 30
9. OUTLOOK 31

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.

Read More..
Trends in South African Agribusiness
Trends in South African Agribusiness 2021

Full Report

R 6 500.00(ZAR) estimated $357.78 (USD)*

Historical Reports

Trends in South African Agribusiness 2023-07-17

R 20 000.00(ZAR) estimated $1100.87 (USD)*

View Report Add to Cart

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