Do Namibian imports influence SA prices?

Dr Frikkie Maré, CEO of the national Red Meat Producers’ Organisation, analyses the scenario surrounding livestock imports from Namibia.

There are currently many concerns regarding the downward trend of South African livestock prices. Although various factors are to be blamed for this, the main concern from livestock producers is the import of live animals from Namibia. This led to a situation where a lot of claims and perceptions are shared among producers and other role players. The Red Meat Producers’ Organisation would like to share the following information to sketch a realistic picture of the scenario surrounding Namibian imports. It is important to note that we do not have access to real-time data and therefore can only report on the recent past.

CATTLE

Cattle imports from Namibia mainly consist of weaned calves destined for feedlots in South Africa. Namibian live cattle imports take up a relatively small portion of the total formal South African slaughtering (8% on average from 2017 to 2023). Although the supply from Namibia will have an influence on the price, it is not enough to cause large price shocks.

Figure 1 represents the monthly cattle import statistics for 2017 to 2023, as well as a comparison between the Namibian export price (N$/Ȳkg) and the South African weaned calf price. The figure proves that there is no relationship between the number of imports and the price, as the price decreases in years when we import less (2019, for example) and vice versa (2018, for example).

The sharp decline currently observed in the weaned calve price also occurred during the same period in the previous two years. When we look at imports from February to April, the numbers are lower than during the winter months when our prices are actually increasing, even though more animals are imported.

SHEEP

Sheep imports from Namibia mainly consist of animals destined for abattoirs in South Africa. As in the case with cattle, the Namibian live sheep imports make up a relatively small portion of the total formal South African slaughtering (8,8% on average from 2017 to 2023).

Figure 2 shows the monthly Nambibian sheep imports, Namibian export price and South African A2 carcass price for 2017 to 2023. The figure also does not reveal that a relationship exists between price and import numbers, as prices often increase while imports are also increasing. The low carcass prices in March also occurred

during the previous two years, after which it started to increase during April. The price increase from April onwards also happened against a backdrop of even higher import numbers. It is also clear that although the Namibian price is about R4/kg lower that the South African price, the difference is not enough to cause ‘dumping’, considering that transport costs should still be added.