Agri trade balance under strain

South Africa is on the brink of becoming a net importer of food from Europe as growth in the positive trade balance slows down.

“While SA’s overall agricultural trade balance is still positive, the trade deficit is growing,” said Dr John Purchase, CEO of Agbiz.

He was speaking at the Standard Bank agriculture roadshow in Johannesburg.

He noted that SA is losing markets in Europe and simultaneously becoming a net importer of processed food from that continent.

“But we are accessing new markets quickly. Africa has now surpassed Europe as our biggest market,” he said.

Despite all the land and water in Africa, most countries here remain net importers of food, such as wheat, maize, rice, vegetable oils and meat. “This provides a massive opportunity for us to export these products to the rest of the continent,” said Purchase.

He added that the one billion people strong African market will have a big impact on agribusinesses and the dynamics of the industry.

Asia is another market that presents massive opportunities for exporters of agricultural produce. “Unlike Africa they don’t have the land and water to produce enough food. More focus needs to be placed on opening markets here,” said Purchase.

He concluded that trade is key to growing SA’s economy. “We must have a positive trade balance and since agriculture is seen by government as the number one industry for growth, more needs to be done to ensure a growth in exports.”

Twitter: @lindi83