Despite enduring the worst drought in more than a decade SA’s agricultural sector recorded a positive trade balance of $2.3bn in 2016.
The Agriculture Business Chamber (Agbiz), which represents commercial farmers and agribusiness enterprises nationally, said this was boosted by growth in exports of fruits, beverages, spirits and vegetables, with the total agricultural export value amounting to $8.6bn, up 6% from 2015.
These products are mainly grown in the Western Cape, which continues to be gripped by severe drought.
Meanwhile, imports rose 26% year on year, reaching $6.3bn. This was driven by a notable uptick in grain imports due to the drought, the chamber said.
Agriculture is the backbone of the economy in the Western Cape. The province produces more than half of SA’s agricultural exports, with the EU being one of the province’s main export destinations.
The region also accounts for almost 75% of annual offshore wine sales, worth R5bn.
Agbiz noted in its report on Tuesday that Africa remained SA’s largest market, accounting for 44% of agricultural exports, which is 9% below the five-year average share.
The EU accounted for 26% of SA’s agricultural exports in 2016, with Asia taking up 22%.
The Americas and the rest of the world accounted for 5% and 3% of exports respectively.
SA’s agricultural exports to Europe increased 5%, from $2.1bn in 2015 to $2.2bn in 2016. This was supported by an uptick in exports of fruits, beverages and spirits, wool and meat, among other products.
After falling 18% year on year in 2015, SA’s agricultural exports to other African countries recovered 4% in 2016, reaching $3.8bn.
This uptick was driven by sugar and sugar confectionery, milling products, as well as exports of vegetables and certain roots and tubers.
SA’s agricultural exports to Asia increased 13%, from $1.66bn in 2015 to $1.87bn in 2016. Driving the country’s exports to Asia was an increase in fruits, wool, beverages, nuts and meat exports, among other products.
“Given the recovery in agricultural production, we expect the South African agricultural trade balance to remain positive in 2017,” said Wandile Sihlobo, head of economic and agribusiness research at Agbiz.
“This will essentially support the country’s current account,” he said.