The lack of a specific trade policy in the National Industrial Policy Framework (NIPF) is not good news for the country’s current account deficit, warned Riaan de Lange, an economist at Tariff and Trade Intelligence. He said South Africa doesn’t know what it’s aiming at in terms of trade because there’s no trade policy in place. “It’s not only tariff increases that should be looked at,” he said.
“Tariffs should also be reduced where needed.” The deficit of around 9% of the gross domestic product, or R195 billion, is among the highest in the world and can’t be changed to a surplus without a policy on how to handle imports. mport tariffs are supposed to be set and reviewed by the International Trade Administration Union of South Africa (ITAC), which advises the minister of trade and industry on the country’s international trade and tariff policy.
But De Lange said ITAC is “a law unto themselves”. “Even the recent Cosatu strikes would not shake them up enough to start working on trade and tariff policies to help to counter the looming food crisis,” he said. The March 2008 cut-off date for the revision of import tariffs in the manufacturing sector, and on machinery, chemicals, textiles, metals and the agricultural sector, was not met and the Department of Trade and Industry doesn’t seem to be in a hurry to put an import tariff policy in place, De Lange said. – Drieka Burger
Markets unscathed by strike action
The recent countrywide Cosatu strike was felt more at some fresh produce markets than at others. While both Tshwane and Cape Town reported slight decreases in morning sales as a result of public transport being affected, Springs and Durban reported marked decreases in public attendance and labour constraints.
Peter Matthews of Cape Town’s fresh produce market said that as a result of contingency plans such as hiring casual labour, “nothing earth-shattering” happened. “We were only affected in the morning but then everything ran smoothly,” he said, adding that attendance was slightly down. Market agent Paul Botha said that the market was definitely quieter than normal with about 50% of the morning staff not arriving for work. “I lost about 30% of my normal turnover,” said Botha, adding that he makes up about a quarter of his sales at the market. “The next day, however, many more people came to buy.” – David Steynberg
Wheat farmers blamed for rooibos price crash
The current Rooibos surplus and price collapse from R16,50/kg to R5,50/kg can be attributed to poor wheat prices five years ago, said Willem Engelbrecht from the Big Five Rooibos Company in Clanwilliam. H e explained that low wheat prices in 2002 and 2003 encouraged many producers to plant rooibos, which was attaining very high prices at that time. This was followed by a few seasons of good winter rain and record production of up to 1 000kg/ha was achieved.
The total harvest for 2008 was 18 000t, which is 3 000t up from 2007. Germany buys 60% of all rooibos that’s exported. But because they use it as a base for mixed flavoured teas, the percentage they use can vary as prices go up or down, Engelbrecht said. This has resulted in the current over-supply of the market and the drop in price, he said. To ensure sustainable rooibos production, only 10% of a producer’s land can be planted in a given year, explains Engelbrecht. But since 2003, many non-traditional rooibos farmers planted vast tracts of land, farming purely for money, with no long-term objectives in mind.
Engelbrecht advised producers to rather keep stock on the farm until prices improve. “If you are in the rooibos industry for the long term, you must also harvest now, because shortages will occur again and then you need to be able to supply the market,” he said. – Wouter Kriel
