Brics+ is a chance to lift SA’S agricultural exports
Export opportunities for SA’S agricultural products are opening up within Brics+ countries. Over the past two years China, Saudi Arabia and Egypt have widened market access for various SA agricultural products.
Egypt and Saudi Arabia have recently joined the Brics+ grouping, and market access is part of the long-term bilateral engagements with SA, which can provide access to selected fruits, wine, wool, meat and grains.
However, SA aims to broaden market access to the majority of the agricultural products the country produces. For this reason, through the 2023 Brics summit in Johannesburg and prior engagements, SA prioritised trade as a significant point on the agenda for discussion.
The political principals broadly agreed that deepening trade was necessary for the Brics countries. Still, each country’s trade and agricultural authorities are responsible for taking the lead and seeking market access from member countries.
The idea of a Brics agricultural trade agreement that some argued for has not yet been thoroughly ventilated. The priority so far is for each Brics member to work to reduce import tariffs and address the phytosanitary constraints for various products member countries would present.
Even before adding the new members, the original Brics countries were already significant importers of agricultural products. Between 2019 and 2022, that group’s agricultural imports averaged $255bn annually, according to Trade Map data.
China accounted for 71% of all the agricultural imports into the group, followed by India at 11%, Russia at 11%, Brazil at 4% and SA at 3%. Despite these sizeable import figures, intra-brics agricultural trade stayed relatively low.
The products these countries imported include soya beans, beef, maize, berries, wheat, palm oil, poultry meat, cotton, barley, dairy products, pork, apricots, peaches, sugar, wool, sunflower seeds, nuts, sorghum, goat meat, wine, grapes, bananas, avocados, mangos, guavas and fruit juices.
SA produces some of these products in abundance and has surplus volumes for exports. The country thus championed a need to deepen trade at the 2023 Brics summit.
With Brics having added new members to form an expanded Brics+ bloc, the agricultural trade opportunities have increased. Saudi Arabia and Egypt are some of the newest members. These two countries present enormous opportunities for widening SA’S agricultural exports.
Egypt spends about $16bn a year importing agricultural products from the world market. These are mainly wheat, maize, soya beans, palm oil, beef, apples, pears, dairy, cotton, potatoes and tea. It is here where SA grain farmers, traders and beef producers should focus on increasing exports.
Egypt even took the initiative by visiting SA at the start of this year in search of maize imports. The department of agriculture, land reform & rural development and the SA Cereals and Oilseeds Traders Association were at the forefront of engagements with Egypt for grain trade.
Similarly, Saudi Arabia’s agriculture minister and senior leadership in the sector visited SA earlier this year in search of grains and beef imports. The SA government authorities and industry also used the opportunity to showcase the fruits SA could export to the kingdom. SA also raised the investment opportunities in the domestic business community that Saudi Arabia could explore. China is steadily opening its markets to some SA agricultural products.
That said, there have been times when China has unfairly restricted SA’S wool exports.
This issue has now been resolved and there is a unique protocol in place to handle wool exports even in times of animal disease outbreaks.
Russia is now the global chair of the Brics+ agribusiness working group, having taken over from SA. Encouragingly, “deepening agricultural trade” among the Brics+ community remains on the agenda for 2024.
Overall, while Brics+ remains a political grouping with no formal trade structure, the bilateral agreements between Brics+ countries for trade are encouraging.