BEEF MARKET VALUE CHAIN PROFILE - nda.agric.za · 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 d Years Figure 1: Gross value of cattle and calves

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A PROFILE OF THE SOUTH AFRICAN BEEF MARKET VALUE CHAIN

2017

Directorate Marketing Tel: 012 319 8455 Private Bag X 15 Fax: 012 319 8131 Arcadia E-mail:[email protected] 0007 www.daff.gov.za

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TABLE OF CONTENTS

1. DESCRIPTION OF THE INDUSTRY ........................................................................................................................ 3

1.1 INTRODUCTION ..................................................................................................................................................... 3 1.2 PRODUCTION AREAS .................................................................................................................................................. 4 1.3 PRODUCTION TRENDS ................................................................................................................................................ 4 1.4 LOCAL CONSUMPTION ................................................................................................................................................ 5 1.5 EMPLOYMENT ........................................................................................................................................................... 6

2. MARKET STRUCTURE ......................................................................................................................................... 6

2.1. DOMESTIC MARKET ............................................................................................................................................... 6 2.2. IMPORT – EXPORT ANALYSIS .................................................................................................................................. 7

2.2.1. Exports ......................................................................................................................................................... 7 2.2.3. Imports ....................................................................................................................................................... 17

3. BEEF MARKET VALUE CHAIN ........................................................................................................................... 21

4. MARKET INTELLIGENCE. .................................................................................................................................. 28

4.1. EXPORT TARIFFS. ............................................................................................................................................... 28 4.2. IMPORT TARIFFS ................................................................................................................................................. 29

5. PERFORMANCE OF SOUTH AFRICAN BEEF INDUSTRY IN 2016. ......................................................................... 31

5.1. EXPORTS. ......................................................................................................................................................... 31 5.2. IMPORTS. .......................................................................................................................................................... 43

6. ACKNOWLEDGEMENTS/ REFERENCES ............................................................................................................. 53

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1. DESCRIPTION OF THE INDUSTRY

1.1 Introduction

Beef industry in South Africa is characterized by its dualistic nature of the sector. There is a clear difference between formal (commercial) sector and informal (non-commercial) beef sector. Unlike non-commercial sector, the commercial beef sector is well developed and mature in South Africa. The beef informal (non-commercial) sector may further be divided into two subsectors namely smallholder farmers and subsistence farmers. Smallholder farmers keep their cattle and sell them during Easter and festive seasons, religious purposes and also during their cash strapped seasons. Whilst subsistence farmer do not keep their cattle for economic reasons however for household food security purposes. Typically, these two informal subsectors are not keeping records of their animal stocks, the buyer and seller enter into mouth-to-mouth agreement, followed by exchange of money and cattle then transactions will not be recorded. These informal subsectors are also known of less knowledgeable of animal health, disease control and animal development issues as well as policies regarding animals in South Africa. Beyond their role in generating food and income, cattle are a valuable asset, serving as a store of wealth, collateral for credit an essential security net during calamitous times for informal sector. The beef industry is the second fastest growing commodity in agricultural sector following the broiler sector. This is driven by income growth and supported technological and structural change. In South Africa, stock farming is the only viable agricultural activity in a large part of the country. Approximately 80% of South African agricultural land is suitable for extensive grazing. Areas for grazing declined owing to expanding human settlements and other activities such as mining, crops, forestry and conservation. 80% of the total cattle heads are for beef cattle and the remaining 20% is for dairy cattle. The South African primary beef production is unique due to its dualistic nature of agricultural sector. The gross value of cattle and calves slaughtered in South Africa from 2006/07 to 2015/16 is depicted in figure 1 below. The gross value of beef production is dependent on the number of cattle slaughtered and the prices received by producers from buyers. The gross value of beef production increased from R13 billion in 2006/07 to R30.6 billion in 2015/16. This is an increase of 135 % during the said period. This is due to the increased consumption of beef during this past decade. The average gross value of beef produced during this period amounted to R19 billion per annum.

Source: Statistics and Economic Analysis, DAFF

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Figure 1: Gross value of cattle and calves slaughtered

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1.2 Production Areas

Beef is produced throughout South Africa. Figure 2 below shows the beef production per province during 2016 production year. The amount of beef produced depends on the infrastructure such as feedlots and abattoirs, not necessarily by the number of cattle available in those areas. South Africa has highly developed transport infrastructure that allows movement of cattle and calves from one area to another, even from other countries such as Namibia. According to figure 2, Mpumalanga accounts for the greatest share of beef production in South Africa accounting for 21% of the beef produced in 2016 followed by Free State, Gauteng, KwaZulu-Natal and North West accounting for 19%, 14%, 11% and 9% respectively.

Source: Red Meat Levy Admin

1.3 Production Trends

South Africa currently has approximately 430 abattoirs slaughtering cattle, pigs and sheep on an annual basis. Approximately 40% of all slaughterings are performed by abattoirs that may slaughter an unlimited number of animals (Class A) and approximately 60% of cattle are slaughtered by highly regulated abattoirs (Class A & B). Most of these abattoirs have linkages with feedlots. The total amount of beef produced during the past ten years amounted to 9 million tons. Figure 3 below show the slaughtering of cattle and production of beef during the period 2006/07 until 2015/16.

EASTERN CAPE8%

FREESTATE19%

GAUTENG14%

KWAZULU NATAL11%

LIMPOPO5%

MPUMALANGA21%

NORTHERN CAPE8%

NORTH WEST9%

WESTERN CAPE5%

Figure 2: Beef slaughtering per province during 2016

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Figure 3 above shows that slaughtering and production of beef followed similar trend from 2006/07 to 2015/16. Beef production and slaughtering declined from 2006/07 to 2007/08 and both have picked up from 2007/08 to 2009/10. They both shown a slight decrease from 2009/10 to 2011/12. The decline in 2007/08 might have been caused by the global economic meltdown. However, there is an improvement of beef production and increased number of cattle slaughtered due to drought during 2014/15. An increase of 26% in production and 19% of cattle slaughtered was experienced in 2015/16 compared to 2006/07.

1.4 Local Consumption

Technically, the beef supply chain begin when the cattle are slaughtered for meat consumption. Figure 4 below represents the production and consumption of beef. Figure 4 depict whether the country is self-sufficient in terms of beef production or not. The figure indicates that South African beef production and consumption have been exchanging a high position throughout the period under analysis. However, during 2014/15 and 2015/16 production was higher than consumption and this makes South Africa self-sufficient as beef production satisfies the local demand during the said period.


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Figure 3: Cattle slaughtering and beef production

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Figure 4: Beef production and consumption

Production Consumption

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Production and consumption of beef increased by 5% and 4.7% respectively during the period 2015/16 as compared to 2014/15. For the past decade production increased by 26% whilst consumption increased by 24%. This might be due to the increased affordability of consumers, changes in consumer diets to meat and also population increase. Both production and consumption followed the same trend. They moved on an increasing trend from 2006/07 to 2015/16. The decline during 2007/08 to 2008/09 was due to the global economic meltdown, which led to a decreased disposable income of a large number of consumers. During 2009/10, beef production and consumption experienced some increases because the global economic meltdown started to ease and also due to the FIFA world cup which was hosted in South Africa.

1.5 Employment

Commercial farmers are estimated at 22 000 and employ 138 000 people. Emerging farmers and communal farmers are at 3 million and employ 9 million people. There are approximately 100 commercial feedlots with 5 000 employees in South Africa and 430 abattoirs. Beef industry is a major contributor to livelihoods with 2 125 000 people who are dependent on the livestock industry.

2. MARKET STRUCTURE

2.1. Domestic Market

The red meat industry evolved from a highly regulated environment to one that is totally deregulated today. Various policies, such as the distinction between controlled and uncontrolled areas, compulsory levies payable by producers, restrictions on the establishment of abattoirs, the compulsory auctioning of carcasses according to grade and mass in controlled areas, the supply control via permits and quotas, the setting of floor prices, removal scheme, etc., characterized the red meat industry before deregulation commenced in the early 1990s. Since the deregulation of the agricultural marketing dispensation in 1997, the prices in the red meat industry are determined by demand and supply forces. Price formation is one of the important forces in making decisions regarding production and marketing of beef and beef products. Average producer prices of beef from 2006/07 to 2015/16 are illustrated in Figure 5.


Figure 5 shows that prices of beef increased significantly from 2006/07 to 2015/16 mainly due to increased consumption caused by rising living standards of a large number of consumers and consumer’s diet change

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Figure 5: Average beef producer prices

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from field crops to meat and also population increase. There was an increase of R14.20/Kg in 2015/16 compared to 2006/07. The prices may continue shooting up as the cattle producers are currently battling to rebuild their herds due to increased slaughtering from the past drought season.

2.2. Import – Export Analysis

Figure 6 compares volumes of imports and exports for beef from 2007 to 2016.

Source: Quantec EasyData

Figure 6 indicates that South Africa’s imports and exports were fluctuating during the period under analysis. Imports of beef were higher than exports from 2007 and 2013. This automatically makes South Africa a net importer of beef during the specified period. From 2012 to 2015 imports of beef has shown a decreasing trend whilst exports are increasing. From 2014 to 2016 exports exceeded imports and this was led by South Africa being declared foot and mouth disease free by the International Animal Health Organisation. Due to this declaration, there was more international markets gained. South Africa exported more beef in 2016 as compared to all years under review. There was a significant increase of 36 000 tons of export quantity and an increase of 707 tons of import quantity during 2016 compared to 2007.

2.2.1. Exports

The export value of beef followed the same trend of export quantity except in 2007, 2011 and 2012. South Africa exported 39 000 tons of beef in 2016 yielding an export value of R2 billion. There was a significant increase of 29% of quantity of beef exported during the period 2015 as compared to 2014 and export value showed an increase of 55% during 2015 relative to 2014. The quantity and the value for exports of beef are shown in Figure 7 below.

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Exports 3 4 5 14 19 15 16 28 36 39

Imports 17 7 10 19 27 30 28 24 18,7 19,4

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Figure 6: Exports and imports of beef

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Figure 7 indicates that beef exports quantity was increasing very slowly in 2007 to 2009 and then started increasing faster in 2010 and 2011. In 2012 the exports quantity decreased slightly then followed by an increase from 2013 to 2016, this may be due to South Africa being declared foot and mouth disease free which opened export market opportunities. Export quantity reached its lowest in 2007 during the period under analysis. According to Figure 7, profit from beef exports was under pressure from 2010 to 2012 relative to other years as more quantities were exported at a lower value. Figure 8 below shows the main importing continents for South African beef during the past decade.


South Africa was mainly exporting to Africa and Asia throughout the period under analysis. Africa commanded the highest exports of beef from South Africa from 2007 to 2014. In 2015 and 2016, Asia outstripped Africa and took a lead in the share of beef exported by South Africa to the continents. The demand for beef in Asian countries continues to grow. In total Africa commanded 118 million kilograms of beef from South Africa which accounts for 67% and Asia was the second by 30 million kilograms during the past decade. Oceania commanded the lowest South African beef exports quantity during the period under analysis.

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Quantity 3 4 5 14 19 15 16 28 36 39

Value 107 136 185 331 309 399 592 1114 1762 2023

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Figure 7: Beef exports

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Figure 8: Exports of beef to the continents

Africa Americas Asia Europe Oceania Antarctica

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The following Figures 9 to 13 give an indication of where within the continents (Africa, Europe, Asia and Oceania) is beef from South Africa exported.


Mozambique continues to be the highest importer of South African beef within SADC countries. Figure 9 displays that beef produced in South Africa was mainly exported to Mozambique which has commanded the highest beef exports throughout the decade except in 2008 only. During this period (2008) Angola took the lead, which made it the second country to obtain the highest beef exports from South Africa. Mozambique reached a new peak of 4.8 million kilograms of beef from South Africa in 2015. Tanzania was the lowest importer of South African beef within SADC countries. In total, Mozambique commanded 25 million kilograms of South African exported beef followed by Angola with 6.8 million kilograms. Democratic Republic of Congo and Mauritius commanded just above 3 million each.


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Figure 9: Beef export quantities to SADC

Angola DRC Mauritius Malawi Mozambique

Seychelles Tanzania Zambia Zimbabwe

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Figure 10: Beef export quantities to West Africa

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Nigeria Saint Helena Sierra Leone Senegal

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It is clearly indicated from Figure 10 above that South African beef is exported to Nigeria in Western Africa throughout the past decade. South African beef exports to West Africa decreased in 2015 and 2016. Nigeria reached its new peak of 217 784 kilograms during 2013 and this was followed by a drastic decrease of 20% of South African beef imports during 2014. Ghana absorbed the second highest volume of South African beef exports in 2007 and again from 2009 to 2013. In total for the period under analysis, Mali and Sierra Leone were the lowest importers of South African beef.


In Middle, Northern and Eastern Africa, Egypt commanded the highest share of beef exports from South Africa from 2009 to 2016. Congo commanded the second highest share of beef exported by South Africa from 2009 to 2014. Egypt, which is from Northern Africa, experienced a sharp increase in exports and reached its peak of 949 tons in 2015. In total Kenya, Uganda and Ethiopia, which are the Eastern Africa countries, imported the lowest quantities of South African beef during the past decade.


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Figure 11: Beef exports quantities to Middle, Northern and Eastern Africa

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Figure 12: Beff export quantities to European Union

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Figure 12 above shows beef exported by South Africa to European Union from 2007 to 2016, it is clearly indicated that the Netherlands is not a regular importer of beef. However, in 2009 the country commanded 85% share of South African total beef exports and the products were mainly frozen, fresh or chilled boneless cuts. The United Kingdom (UK) and Germany were regular importers of South African beef. The UK commanded the highest share of imported beef from South Africa from in 2007 and again in 2010, 2011 and 2015 whilst Germany took a lead during 2008, 2012 and 2013. France is the lowest importer of South African beef within the EU countries. Total beef exports to the EU from South Africa have increased from 2015 to 2016.


South African beef exports to Asia are shown in Figure 13. It is clear that the beef exports were regularly going to the United Arab Emirates (UAE), China, HK and Kuwait. The UAE was the biggest export market for South African beef from 2007 to 2008 within Asia. Kuwait have significantly increased its imports from 2013 to 2016 which made it the top importer for the past decade on average. China, HK and Bahrain experienced a decrease of exports by 40% and 89% respectively in 2015. However in 2016, China, HK increased exports whilst Bahrain has shown very little increase in exports. Qatar commanded the greatest share during 2010 while China and Lebanon are the lowest importers of South African beef. Generally, exports of beef to Asia were very minimal during 2009 to 2012. Figure 14 below shows destinations for South African beef in 2016.

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Figure 13: Beef export quantities to Western and Eastern Asia

UAE Bahrain China China, HK Kuwait Lebanon Qatar

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Source: Trade Map

The main destinations of South African beef in 2016 were Viet Nam which commanded 13% of South African beef during 2016, followed by Mozambique, Kuwait and UAE with 11% each, Jordan (10%), Swaziland and Lesotho with 8% and 7% respectively. Values of beef exports from various Provinces of South Africa are presented in Figure 15 below.


Figure 15 indicates that exports of beef in South Africa were mainly from Gauteng. Noteworthy is the fact that the province is one of the main exit points for exports in the country. Furthermore, most exporters of beef are

Viet Nam13%

Mozambique11%

Kuwait11%

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Swaziland8%

Lesotho7%

China,HK7%

Angola4%

Namibia3%

Mauritius2%

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Qatar2%

Botswana1% DRC

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Figure 14: Beef destination in 2016

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Western Cape 12995 16571 38436 15833 17972 27100 57892 163087 277567 378341

Eastern Cape 115 0 0 0 141 1 5287 48631 178827 103408

Free State 8530 3176 32710 8383 4301 3303 1950 71076 57387 86696

KwaZulu-Natal 1131 2588 3643 20722 18654 11099 17406 45782 51248 40042

North West 0 0 8189 8336 4375 7522 13010 57084 187831 275052

Gauteng 81764 96827 77357 246583 218063 281133 390942 352425 516756 582096

Mpumalanga 2730 16617 24541 32160 44480 68387 105645 375780 491046 555313

Limpopo 0 0 7 94 574 1 16 445 1090 2456

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Figure 15: Value of beef exported by Provinces

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situated in Gauteng province and the greatest proportion of beef was exported to neighbouring countries. Mpumalanga Province was the second biggest exporter for the period under analysis followed by the Western Cape Province. North West, Eastern Cape and Limpopo Provinces have recorded irregular exports that made them to be the lowest exporters during this period. In 2014, Mpumalanga outstripped Gauteng and became the highest exporter of beef, then in 2015 and 2016 Gauteng took a lead again. The following figures (Figures 16 - 23) show the value of beef exports from the various district municipalities in the eight Provinces of South Africa. Northern Cape Province did not export beef during the period under analysis.


In the Western Cape Province, regular exports of beef were recorded mainly in the City of Cape Town Metropolitan Municipality. The City recorded highest export values throughout the period under review with the lowest level of approximately R11.7 million in 2007 and experienced the highest value of R375 million during 2016. This is due to the fact that the City of Cape Town is the main exit point in the province. Fractional exports were also recorded from West Coast, Cape Winelands and Eden District Municipalities. City of Cape Town recorded 100% share of beef exports in 2006, 2010 and 2013, and during the rest of the years, the City accounted for more than 90% of the provincial share.


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City of Cape Town 11718 16561 38431 15833 17904 27028 57892 161565 275362 375542

West Coast 33 0 5 0 0 0 0 786 12 0

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Eden 1244 0 0 0 39 72 0 736 998 2799

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Figure 16: Value of beef exports from Western Cape Province

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Cacadu 0 0 0 0 0 0,83 0 50 0 0

Joe Gqabi 0 0 0 0 0 0 0 2 19 0

Alfred Nzo 0 0 0 0 0 0 0 46 30 53

Nelson Mandela Bay 115 0 0,153 0 141 0 0 0 371 169

Buffalo City 0 0 0 0 0 0 5287 48533 178403 101946

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Figure 17: Value of beef exported from Eastern Cape Province

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In the Eastern Cape Province, beef exports were recorded from Buffalo City, Joe Gqabi, Alfred Nzo, Cacadu District Municipalities and Nelson Mandela Metropolitan Municipality. On average, Buffalo City is the highest exporter of beef followed Nelson Mandela Bay and Alfred Nzo District Municipality. Nelson Mandela Metropolitan Municipality recorded export values during 2007, 2009, 2015 and again in 2016. In its record, the District Municipality recorded 100% share of exports except in 2015. Joe Gqabi District Municipality recorded beef exports in 2014 and 2015. Buffalo City recorded exports from 2013 to 2016. Nelson Mandela Bay recorded 100% share of beef exports in 2007, 2009 and 2011 whilst Cacadu recorded in 2012 and Buffalo City in 2013. There were no exports records from Eastern Cape Province in 2008 and 2010. No regular exports recorded from the Eastern Cape Province from 2007 to 2016.


Figure 18 indicates that exports of beef from the Free State province occurred regularly in Mangaung District Municipality. The district has exported beef worth more than R130 million which accounts for 47% of total share from 2007 to 2016 in the Free State. Followed by Thabo Mofutsanyane with exports records from 2014 to 2016 worth about R112 million and this accounted for 40.7% of total share. Lejweleputswa District Municipality recorded beef exports in 2010, 2015 and 2016 which added up to R31 million and Xhariep District Municipality recorded exports from 2012 to 2016 which were R2.6 million. Both Xhariep and Fezile Dabi have accounted for 1% share of the Free State beef exports for the entire period of analysis. Mangaung led beef exports from 2007 to 2013 with an exports share ranging from 97% to 100%. Thabo Mofutsanyane took a lead in 2014 with a share of 53% in 2015 and 52% in 2016.

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Xhariep 0 0 0 0 0 89 767 120 482 1192

Lejweleputswa 0 0 0 180 0 0 0 0 15840 14985

Thabo Mofutsanyane 0 0 0 0 0 0 0 37985 29386 45490

Fezile Dabi 0 0 0 0 0 0 0 0 0 316

Mangaung 8530 3176 32710 8203 4301 3214 1184 32971 11609 24713

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Figure 18: Value of beef exported from Free State Province

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In the KwaZulu–Natal Province, beef exports were mainly from eThekwini Metropolitan Municipality showing increases in a fluctuation mode from 2007 until 2016. Its lowest exports value was experienced in 2007 and its peak in 2015. Umzinyathi District Municipality recorded beef export values only in 2016. Intermittent and minimal export values were recorded in UMgungundlovu, UThukela and iLembe District Municipalities during the period under review. EThekwini recorded 100% share of beef exports within the Province from 2007 to 2010 and from 2012 to 2014. On other years the District Municipality accounted for more than 90%.


In North West Province, beef exports were recorded from all District Municipalities. Dr. Ruth Segomotsi Mompati District Municipality has shown regular beef exports from 2009 to 2016, Dr. Kenneth Kaunda District Municipality has recorded exports in 2013, 2015 and 2016 whilst Bojanala’s record was only in 2014 and Ngaka Modiri Molema recorded in 2015 and 2016. There were no records of exports in the Province from 2007 to 2008. Dr Ruth Segomotsi Mompati District Municipality recorded highest value of exports of R 187 million in 2015. The district further accounted for a 100% share of exports from 2009 to 2012 and above 90% from 2013 to 2015. In 2016, Dr Kenneth Kaunda shot up its exports and took a lead with a share of 65% beef exports.

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Umzinyathi 0 0 0 0 0 0 0 0 0 3

UMgungundlovu 0 0 0 0 713 0 0 0 2 0

Uthukela 0 0 0 0 0 0 0 0 0 36

iLembe 0 0 0 0 0 0 0 0 187 25

eThekwini 1131 2588 3643 20722 17942 11099 17406 45782 51055 39978

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Figure 19: Value of beef exports from KwaZulu Natal Province

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Bojanala 0 0 0 0 0 0 0 1540 0 0

Ngaka Modiri Molema 0 0 0 0 0 0 0 0 1 123

Dr Ruth Segomotsi Mompati 0 0 8189 8336 4375 7522 12722 55544 187817 95719

Dr Kenneth Kaunda 0 0 0 0 0 0 288 0 14 179210

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Figure 20: Value of beef exported from North West Province

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Figure 21 shows the value of exports by Gauteng Province from 2007 to 2016. The highest values of beef exported in Gauteng Province were mainly from City of Johannesburg Metropolitan Municipality. City of Johannesburg Metropolitan Municipality commanded the greatest shares from 2007 to 2016 . Ekurhuleni, City of Johannesburg and City of Tshwane recorded regular exports of beef while Sedibeng and West Rand recorded intermittent records of beef exports. During the past decade the City of Johannesburg Metropolitan Municipality recorded the highest value of R2.1 billion followed by Ekurhuleni and City of Tshwane District Municipalities with value of R359 million and R247 million respectively. City of Johannesburg Metropolitan Municipality recorded an average exports share of 80% for the past 10 years. In 2016, City of Johannesburg recorded exports share of 55% followed by Ekurhuleni with 25% and City of Tshwane with 18%.


Figure 22 shows the value of exports by Limpopo Province from 2007 to 2016. Irregular exports of beef recorded in Limpopo Province were from Vhembe, Capricorn and Waterberg District Municipalities during the period under analysis. The highest export values were recorded from Vhembe District Municipality in 2016. There were no exports of beef recorded from Limpopo province during the period from 2007 to 2008. The Waterberg district only recorded beef exports from 2014 to 2016. Vhembe district municipality accounted for 100% exports share in 2009 and 2011, Capricorn District Municipality in 2012 and 2013, lastly Waterberg in

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Sedibeng 995 0 0 5023 0 0 0 2153 4194 1706

West Rand 22702 662 1461 799 8 643 0 24 1106 0

Ekurhuleni 7903 4656 13185 2501 1431 7554 19337 37694 116182 149246

City of Johannesburg 49413 91509 60592 214806 193444 250987 356852 288875 365425 323234

City of Tshwane 751 0,23 2120 23453 23180 21948 14753 23679 29551 107910

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Figure 21: Value of beef exported from Gauteng Province

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Vhembe 0 0 7 32 574 0 0 0 546 1522

Capricorn 0 0 0 62 0 0,64 16 0 6 7

Waterberg 0 0 0 0 0 0 0 445 537 927

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Figure 22: Value of beef exported from Limpopo Province

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2014. On average Vhembe district municipality recorded highest exports followed by Waterberg then Capricorn for the past decade. In 2016, Vhembe shot up its exports and took a lead with a share of 62% beef exports.

Source: Quantec EasyData Figure 23 shows the value of exports by Mpumalanga Province from 2007 to 2016. In Mpumalanga province, Gert Sibande and Ehlanzeni District Municipalities appeared to be main exporters of beef for the past decade. Irregular exports were recorded from Nkangala District Municipality. Gert Sibande shown an immense increase of exports from 2014 to 2016. Gert Sibande, Nkangala and Ehlanzeni District Municipalities have played an important role in the exports of beef during the period under review. Gert Sibande commanded the highest market shares during the periods 2008 to 2009 and again from 2014 to 2016. Ehlanzeni District Municipality commanded the highest exports shares within the Province during, 2007 and 2010 to 2013.

2.2.3. Imports

Figure 24 below show the imports of beef from 2007 to 2016. South African beef imports have been fluctuating for the past decade. The import values and quantities of beef followed the same trend throughout the previous decade.


2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Gert Sibande 1445 16564 21252 16526 25081 23506 42647 243124 339975 426825

Nkangala 0 0 0 0 0 862 16 0 0 0

Ehlanzeni 1286 53 3289 15634 19399 44019 62983 132656 151054 128488

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Figure 23: Value of beef exported from Mpumalanga Province

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Figure 24: Beef imports quantities and value

Quantity Value

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During 2016 compared to 2007, there was an increase of 14% on imported beef quantity and beef value increased by 260% during the same period. South Africa imported approximately 19 000 tons of beef in 2016 at an estimated value of R634 million. The import quantity increased by 4% in 2016 compared to 2015. Furthermore, the figure shows that it was profitable to import beef from 2007 to 2009 compared to the rest of the years as more quantities were purchased at a lower value.


Figure 25 above indicates the main suppliers of beef to South Africa from 2007 to 2016. The Americas have been the main supplier from 2007 to 2009, and then Africa took a lead from 2010 to 2016. The beef quantity from America decreased from 15.7 million kilograms to 2.3 million kilogram during the past decade. Oceania has been a regular supplier of beef though it was relatively smaller quantities. There were intermittent imports of beef recorded from Asia during the period under review. Figures 26 to 28 indicate the origins of beef in Africa, America and Oceania.


The beef imports from the African continent to South Africa are mainly from Botswana and Namibia. Figure 26 above clearly indicate that the imports were very low from 2007 to 2009. In 2010 the imports shot up, mainly

0

5000000

10000000

15000000

20000000

25000000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Kilo

gram

s

Figure 25: Beef quantities imported from the continents

Africa Americas Asia Europe Oceania

0

2000000

4000000

6000000

8000000

10000000

12000000

14000000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Kilo

gram

Figure 26: Beef quantities imported from Africa

Botswana Namibia

19

from Namibia with a share of 77% beef imports. From 2010 the Namibian beef imports were fluctuating between 10 and 12 million kilograms until 2014. South Africa imposed high standards to Namibia in 2014 hence the huge decrease of imports in 2015 and 2016. Beef imports from Botswana shown an immense increase in 2012 and then started declining until 2016. During the increase in 2012, Botswana became the highest source of beef imports and took a lead again from 2014 to 2016. In total, Namibia supplied South Africa with 66 million kilograms of beef and Botswana with 63.8 million kilograms during the entire period under analysis.


Figure 27 shows the beef quantities imported from Americas. Paraguay commanded the greatest share during 2007 only and Uruguay was the greatest from 2008 to 2016. For the period under analysis, Uruguay have commanded 55% share of South African market, followed by Paraguay with 31%, Argentina and Brazil with 12% and 0.8% respectively. The figure clearly shows that South African beef imports from Americas are deteriorating, and in total, they have declined by 85% from 2007 to 2016. Figure 28 below present beef quantities imported from Oceania. The South African imports from Oceania continent were mainly coming from Australia and New Zealand.


0

2000

4000

6000

8000

10000

12000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Ton

s

Figure 27: Beef quantities imported from Americas

Argentina Paraguay Uruguay Brazil

0

1000

2000

3000

4000

5000

6000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Ton

s

Figure 28: Beef quantities imported from Oceania

Australia New Zealand

20

Australia is known as one of the top producers of beef in the world. Within Oceania, the country has been the main supplier of beef for South Africa during the period under analysis and it reached its peak of 5 368 tons during 2011. New Zealand commanded the second highest level of beef imports from 2007 to 2016.

Source: Trade map

Figure 29 above shows the top suppliers of beef to South Africa during 2016. It is evident that South Africa obtains most of its beef from Botswana and Namibia, which are SACU members. Botswana commanded 49% share of South Africa’s import market of beef followed by Namibia commanding up to 33%, and Uruguay with 12%. Australia, New Zealand and United Kingdom commanded 3%, 2% and 1% respectively.

Botswana49%

Namibia33%

Uruguay12%

Australia3%

New Zealand2%

United Kingdom

1%

Others0%

Figure 29: Countries of origin for beef imports in 2016

21

3. BEEF MARKET VALUE CHAIN

Beef market value chain is illustrated on Figure 30.

Figure 30: South African Beef Market Value Chain

Source: ARC, Statistics & Economic Analysis, DAFF, Easydata

Affluent consumers

(Premium

beef markets)

1.2 billion kg produced

19.4 million kg imported

39 million kg exported

Under

Privileged

Consumers

Meat Processors

(430 Abattoirs)

1.1 million tons Consumption

Per capita consumption = 20.9 kg / year

87 000 with potential to

commercialize

Local Markets

Butchers - 18%

Auctions - 41%

Festivities - 35%

Previously Disadvantaged Groups

240 000 emerging

farmers

3 million

subsistence farmers

Sanga types - 29%

Zebu types - 11%

British types - 26%

European types - 27%

Dairy / other - 7%

13.319 million cattle

5. 69 million cattle

Feedlot sector (65 to 70% of

cattle slaughtered)

50 000 Commercial Producers

22

It is estimated that there are approximately 22 000 commercial farmers currently farming with livestock. This includes producers that keep livestock as their main enterprise and those that keep livestock as a secondary enterprise. They own around 13.3 million cattle. There are 240 000 small-scale farmers and 3 million subsistence farmers that own around 5.69 million cattle. The beef supply chain has become increasingly vertically integrated. This integration is mainly fuelled by the feedlot industry where most of the large feedlots own their own abattoirs, or at least have some business interest in certain abattoirs. In addition, some feedlots have integrated further down the value chain and sell directly to consumers through their own retail outlets. Some abattoirs have also started to integrate vertically towards the wholesale level. Under the previous marketing regime, wholesalers mostly bought carcasses through the auction system. Currently, many wholesalers source live slaughter animals (not weaners) directly from farmers or feedlots on a bid and offer basis, i.e. they take ownership of the animal before the animal is slaughtered. The animal is then slaughtered at an abattoir of the wholesaler’s choice, where after the carcass is distributed to retailers. In some instances, the public can also buy carcasses directly from wholesalers. The abattoir industry has expanded tremendously in number and in capacity. In this regard, it is important to note that this industry can be divided into those abattoirs that (i) are linked to the feedlot sector and the wholesale sector, or are owned by municipalities and (ii) those that are mainly owned by farmers and SMME’s. The former abattoirs are mainly class A and B abattoirs, whereas the latter are usually classified as C, D and E class abattoirs. The beef industry produces around 1.1 million tons of meat and imports around 19.4 million kilograms while exporting 39 million kilograms. Per capita consumption is around 20.9 kg and number of consumers is around 55 million. Table 10 below shows the industry role players.

23

Table 1: Industry role players No. Name Description Contact Details

1 AUSTIN EVANS FEEDLOT

Feedlot P O Box 397, Somerset East, 5850 T : (042) 243 2076 F : (042) 243 1356

2 ADAM AGRI

Feedlot PO Box 75, Colesberg, 9795 T: (051) 753 1301 F: (051) 086 5021182

3 BEEFCOR It is situated east of Pretoria. It owns and operates the Bayview Feedlot, Boskop Ranch and Beefcor Wholesale. The feedlot carries 25 000 head and markets between 80 000 and 90 000 head annually, most of which are distributed in Gauteng. The company also has a 20% share in Hidskin Processors and a 25% share in Chamdor Abattoir.

P O Box 187, Bronkhorstspruit, 1020 T : (013) 932 7000 F : (013) 392 7100

4 BEEFMASTER

It is a private, family owned business situated 10 km from Christiana, in the North-West province. The feedlot carry around 20 000 cattle standing at any given time. It currently supplies approximately 10% of the country’s beef and with its geographic position delivers to all nine provinces within 24 hours.

P O Box 425, Christiana, 2680 T : (053) 441 9100 F : (053) 441 2791

5 Bull Brand It is owned by Bull Brand - integrated Meat Company situated in Krugersdorp. It has fresh meat production process-abattoir, deboning, added value department and canning. They own two feedlots in Potchefstroom and Magaliesberg and they both carry 40 000 heads of cattle at any point in time.

6 BRAAMS VOERKRALE BK

Feedlot P O Box 158, Durbanville, 7551 T : (021) 976 3053 F : (021) 976 7690

7 CB FEEDLOT

Feedlot P O Box 44, Reitz, 9810 T: (058) 863 1460 F : (058) 863 1460

8 CHALMAR BEEF

It is situated in Bronkhorspruit. Its feedlot carries 15 000 head of cattle standing at any given time. When the new abattoir and de-boning facility opened for business in 2003, Chalmar beef became fully integrated.

P O Box 914-1144, Wingate Park, 0153 T : (011) 964 1049 F : (011) 964 1514

9 D C LOUW FEEDLOT

Feedlot P O Box 56, Adelaide, 5760 T : (046) 684 0700 F : (046) 684 0706

10 DOORNBULT VOERKRALE (Pty) Ltd

Feedlot P O Box 13, Ladanna, 0704 T : (015) 293 2575

24

No. Name Description Contact Details

F : (015) 293 2064

11 EAC Group Started by Claassen 40 years back. In 1986, joined the force with two shareholders and started Midland meat factory. They have distribution network in Kwazulu–Natal. Four modern abattoirs operate from Wolwehoek, Harrismith, Vereeniging and Frankfort. All three feedlots are situated in the calf weaner and lamb weaner producing areas and they carry 35 000 cattle at any specific time. The feedlots thus form an ideal marketing channel for weaner producers.

12 FORTRESS BONSMARAS

It is situated 12 km north-west of Frankfort, Free State. It is a beautiful farm (2.925 ha) and the capacity of the feedlot is about 6000 weaners of Bonsmara or Bonsmara-cross per annum.

P O Box 630, Frankfort, 9830 T : (011) 394 2810 F : (011) 394 2471 F : 058 813 3947

13 KAMEELDRIFT VOERKRAAL

Feedlot PO Box 15648, Kameeldrift – Oos T: 082 375 1826 F: 012 808 5986

14 KANHYM ESTATES LTD.

Feedlot P O Box 89, Middelburg, 1050 T : (013) 249 7852/3 F : (013) 246 6211

15 Karan Beef It is a family business situated at Heidelberg, south of Johannesburg. It operates feedlot, feed mill, abattoir and meat processing. The feedlot accommodates over 120 000 head of cattle - making the Karan Beef feedlot the largest in Africa. The abattoir has the capacity to process up to 1 600 head of cattle every day.

PO Box 53, Heidelberg, 1438, RSA Tel: +27 16 342 1214 Fax: +27 16 342 1212 E-mail: [email protected]

16 KELLERMAN BOERDERY

Feedlot P O Box 74,Koringberg,7312 T : 083 300 8134 F: (021) 854 5069

17 KLEYNFAAN FEEDLOT

Feedlot P O Box 169, Vryheid, 3100 T : (034) 981 5421 F : 086 675 0574

18 KOODOOLAKE

Feedlot P O Box 275, Stella, 8650 T : 083 441 5909 F : 083 457 2809

19 KOREM FARM

Feedlot PO Box 58893, Karenpark, 0118 T : 012 549 2840 F : 012 549 2840

20 LIEBENBERGSTROOM Feedlot P O Box 130, Edenville, 9535

mailto:[email protected]

25


VOERKRAAL BPK

T : (056) 631 0120 F : (056) 631 0120

21 MANJOH RANCH

Feedlot P O Box 1052, Nigel, 1490 T : (011) 819 2882 F : (011) 819 2801/3/4 F : (011) 819 1889

22 MADIKOR

Feedlot P O Box 1050,Louis Trichardt,0920 T : (015) 516 4464 F : (015) 516 1441 / 086 689 4693

23 MIKRON BOERDERY

Feedlot PO Box 357, Bultfontein, 9670 T: 051 853 2257 F: 051 853 2257

24 MLEKI`S BEEF

Feedlot Postnet Suite 327, Private Bag x 2020 Isando, 1600 T: 011 974 0309 F: 011 974 0464 C: 083 3752596

25 MUSHLENDOW

Feedlot P O Box 357, Koster, 0348 T : (014) 543 2388 F : (014) 543 8904

26 MVB FEEDERS

Feedlot P O Box 848, Louis Trichardt, 0920 T : (015) 516 0843 F : (015) 516 4150

27 PIET WARREN PLASE

Feedlot P O Box 1, Gravelotte, 0895 T : (015) 318 4469 F : (015) 318 4301

28 POPPIELAND TRUST

Feedlot P O Box 9, Bultfontein, 9670 T : (051) 853 1129 F : (051) 853 4002

29 RANCH ESTATES

Feedlot P O Box 1270, Delmas, 2210 T : (013) 667 9023 F : (013) 667 9033 R : (011) 804 2320

30 SIS FARMING

Is located in the Bethal/Ermelo region of the Mpumalanga escarpment. It purchases weaners from other farmers to fatten for subsequent sale and

P O Box 201, Bethal, 2310 T (013) 291 5600

26


delivery to the Witbank Abattoir. It has 22 000 cattle standing at any given time. F : (013) 291 5611

31 SKS BOERDERY

Feedlot P O Box 348, Middelburg, 1050 T : (013) 243 8154 F : (013) 243 8151

32 SPARTA BEEF

It is a family-owned and operated cattle feedlot and farming concern. The feedlot has around 40 000 cattle standing at any time. The present operation was established on the farm "Sparta", a sub-division of the farm "Middel " in the Marquard district, during the 1960's. The farm "Middel", has been in the family for over 100 years and since inception, farmed as a family business. Originally mixed farming - cattle, sheep, pigs, plus various crops, such as maize (corn), wheat, oats and potatoes - was practiced on the farm. Sparta Beef expanded its horizons by entering into a joint venture where it tans cattle hides in Butterworth, Eastern Cape. Later, in January 1999, it acquired a large abattoir in Welkom, Northern Free State, with Black Empowerment and other local business interests now known as Sparta Foods (Pty) Ltd. At the beginning of 2001, it started a wholesale department called Sparta Foods in Benoni (Gauteng).

P O Box 64, Marquard, 9610 T : (051) 991 9200 F : (051) 991 9274 R : (051) 991 9241

33 TAAIBOSCHBULT Pty Ltd

Owned by Bull Brand P O Box 2092, Potchefstroom, 2520 T : (018) 291 1035 F : (018) 291 1439

34 THERON BOERDERY

Feedlot Elsonstraat 84, Pretoriawes, 0183 T : (012) 327 5040 F : (012) 327 5048

35 TRIPLE C FEEDLOT

feedlot P O Box 1723, Dundee, 3000 T: (034) 212 3716 F: (034) 218 1334 C: 083 653 2145

36 VENCOR

Feedlot P O Box 749, Ladanna, 0704 T : (015) 293 2150 F : (015) 293 2579 C : 083 626 0319

37 VERCUIEL

Feedlot PO Box 245,Stella,8650 T:082 866 4433 F: 0866 759 451

38 WINDHOEK Feedlot PO Box 387,Pietersburg,0700

27


BOERDERY

T: 082 460 4432 F: 015 297 4350

39 VERGEZIGHT FEEDLOT

Feedlot PO Box 1034, Heilbron,9650 T: 058 852 3701/2/3 F: 058 852 3700

Source: SA feedlot Association.

28

4. MARKET INTELLIGENCE.

4.1. Export tariffs.

Tariffs that different importing countries applied to beef originating from South Africa in 2015 and 2016 are shown in Tables 2 and 3. Table 2: Export tariffs of beef (fresh or chilled)

Country Product Code Trade Regime Description

2015 2016

Applied Tariffs

Total Ad valorem Equivalent Tariff (estimated)

Applied Tariffs


United Arab Emirates and Jordan

02011000; 02012000 & 02013000

MFN duties Applied 0% 0% 0% 0%

Mozambique 02011000; 02012000 & 02013000

Preferential tariff for South Africa

15% 15% 0% 0%

Swaziland, Lesotho and Namibia

02011000; 02012000 & 02013000

Intra SACU rate 0% 0% 0% 0%

China , Hong Kong

02011000; 02012000 02013000

MFN duties Applied

0% 0% 0% 0%

Source: Market Access Map

Table 2 indicates that during 2015 and 2016 United Arab Emirates and Jordan applied MFN duties of 0% exports of fresh or chilled beef. Mozambique applied preferential tariff for South Africa 15% in 2015 and 0% in 2016. Swaziland, Lesotho and Namibia applied a 0% Intra SACU rate to beef originating from South Africa during 2015 and 2016. Table 3: Export tariffs of frozen beef


2015 2016

Applied Tariffs


Applied Tariffs Total Ad valorem Equivalent Tariff (estimated)

Angola 02021000; 02022000 & 02023000

MFN duties Applied

10% 10% 10% 10%

Viet Nam 0202100000; 0202200000 & 0202300000

MFN duties Applied

20% 20% 20% 20%

China, HK

02021000; 02022000; 02023010 &

MFN duties Applied

0% 0% 0% 0%

29


2015 2016

Applied Tariffs



02023090

Kuwait

02021000 02022000 02023010 02023090

MFN duties Applied

5% 5% 5%

5%

Mozambique

02021000; 02022000 & 02023000

Preferential tariff for South Africa

15%

15%

0%

0%


Table 3 above shows that Viet Nam applied the highest tariff rate of 20% on frozen beef to South Africa followed by Mozambique with a preferential tariff rate of 15% only in 2015, Angola and Kuwait with 10% and 5% respectively during the period 2015 and 2016. China, Hong Kong applied MNF of 0%. Most of the tariffs applied to South African frozen beef remained the same during the periods 2015 and 2016 except Mozambique.

4.2. Import tariffs

Tables 4 below shows the import tariffs of beef, fresh or chilled during 2015 and 2016. Botswana and Namibia received an Intra SACU tariff rate of 0% for the past two years when exporting fresh or chilled beef carcasses and half carcasses to South Africa. South Africa also applies a preferential tariff rate of 0% to SADC. Table 4: Import tariffs of beef, fresh or chilled

Country Product Code

Trade Regime Description

2015 2016

Applied Tariffs


Applied Tariffs


Namibia and Botswana

02011000; 02012000 & 02013000

Intra SACU 0% 0% 0% 0%


Table 5: Import tariffs of beef, frozen



2015 2016


Applied Tariffs


30



2015 2016


Applied Tariffs


Australia and Uruguay

02021000 & 02022000

MFN duties Applied

40.00% or 208.43 $/Ton whichever is the greater

OTQR: 40% ITQR: 13.8

OQTR: 40% or 151.95 $/Ton whichever is the greater IQTR : 13.80%

OTQR: 40% ITQR: 13.8

02023010 MFN duties Applied

40.00% or 208.43$/Ton whichever is the greater

OQTR: 40.00% IQTR : 32.00%

OQTR: 40% or 151.95 $/Ton whichever is the greater IQTR : 32%

OTQR: 40% ITQR: 32%

Botswana and Namibia

02021000; 02022000 & 02023010

Intra SACU 0% 0% 0% 0%


Table 5 above shows the import tariffs applied by South Africa to the exporting countries of frozen beef. Australia and Uruguay receive the applied tariff of 40% or 208.43$/ton whichever is the greater during 2015 and 40% or 151.95 $/Ton whichever is the greater during 2016. Botswana and Namibia received 0% Intra SACU rate when exporting frozen beef carcasses and half carcasses to South Africa in 2015 and 2016.

31

5. PERFORMANCE OF SOUTH AFRICAN BEEF INDUSTRY IN 2016.

5.1. Exports.

Table 6: List of importing markets for Beef (fresh or chilled) exported by South Africa in 2016 South Africa’s export represents 0.3% of world export for the Beef (fresh or chilled); its ranking in world exports is 24.

Importers

Trade Indicators

Value exported in 2016

(USD thousand)

Trade balance

2016 (USD thousand)

Share in South

Africa's exports

(%)

Quantity exported in 2016

Quantity unit

Unit value (USD/unit)

Growth in exported

value between

2012-2016 (%, p.a.)

Growth in exported quantity between

2012-2016 (%, p.a.)

Growth in exported

value between

2015-2016 (%, p.a.)

Ranking of partner

countries in world imports

Share of partner

countries in world imports

(%)

Total imports

growth in value of partner

countries between

2012-2016 (%, p.a.)

Average tariff

(estimated) faced by

South Africa (%)

World 72831 69246 100 21068 Tons 3457 23 16 19 100 0

Jordan 15270 15270 21 3821 Tons 3996 1212 3 35 0.3 3 7.6

United Arab Emirates 15151 15151 20.8 3830 Tons 3956 823 498 61 22 0.9 10 0

Kuwait 12293 12293 16.9 2748 Tons 4473 148 215 -4 28 0.5 14 0

Mozambique 7223 7223 9.9 3198 Tons 2259 -1 11 38 74 0.03 29 0

Swaziland 7101 7101 9.7 2716 Tons 2615 -15 -19 43 72 0.03 -15 0

Namibia 2773 -431 3.8 866 Tons 3202 77 101 227 90 0.01 58 0

Lesotho 2767 2767 3.8 1357 Tons 2039 -25 -18 12 91 0.01 -25 0

Mauritius 2100 2100 2.9 424 Tons 4953 -1 12 132 68 0.04 5 0

Angola 1350 1350 1.9 262 Tons 5153 1 11 -45 89 0.01 -4 10

Qatar 1015 1015 1.4 268 Tons 3787 66 135 -39 44 0.2 13 0

Source: ITC calculations based on COMTRADE statistics.

32

Table 6 shows that during 2016 South Africa exported a total of 21 068 tons of beef (fresh or chilled) at an average value of US$ 3 457/unit. The major export destinations for beef (fresh or chilled) originating from South Africa during 2016 were Jordan, United Arab Emirates (UAE), Kuwait, Mozambique and Swaziland. On average, during the period 2012 and 2016 South Africa’s exports for beef (fresh or chilled) increased by 23% in value and increase by 16% in quantity. At the same period, UAE experienced an increase of 823% in value and 498% in quantity per annum and Kuwait increased by 148% in value and 215% in quantity South Africa’s exports for beef (fresh or chilled) to the world increased by 19% during the period between 2015 and 2016. At the same period Jordan and UAE increased by 3% and 61% respectively whilst Kuwait decreased by 4%.

33

Figure 31: Growth in demand for fresh beef exported from South Africa in 2016

Source: Trademap, ITC

34

Figure 31 illustrates that between 2012 and 2016, South Africa’s beef (fresh or chilled) exports to Mozambique, Mauritius, Egypt, Gabon, Swaziland and Lesotho were growing at a rate that is less than their import growth from the rest of the world. South Africa’s beef (fresh or chilled) exports to Kuwait, UAE, Qatar, Hong Kong China, Bahrain, Namibia, and Angola were growing at a rate that is greater than their imports from the rest of the world during the periods 2012 and 2016. United Arab Emirates is the biggest export market for beef with South African exports growth to United Arab Emirates of 823%. The most growing demand of South African fresh or chilled beef is in United Arab Emirates and Kuwait with an annual growth of South African import of 10% and 14% respectively.

35

Figure 32: Prospects for market diversification for fresh beef exported by South Africa in 2016


36

Figure 32 above indicates that South Africa’s fresh or chilled beef has been mainly exported to Jordan with a share of 20.97% of SA’s beef exports during 2016. If South Africa wishes to diversify its exports of fresh or chilled beef exports, the biggest market exist in Egypt with a world share of 0.02 % and annual import of 81% per annum. Currently South Africa’s export of beef to Egypt has a market share of 1.35 %. Although this is the biggest market, South Africa might not penetrate the market easily. The fastest growing market of beef imports exist in Namibia at a rate of 58%. This market is the most lucrative market for South Africa, although it is a small market with the world share of 0.01%, South Africa might penetrate it easily because South Africa’s annual export growth to Namibia is 3.81%.

37

Table 7: List of importing markets for the Beef (frozen) exported by South Africa in 2016. South Africa’s export represents 0.3% of world export for frozen beef; its ranking in world exports is 24.

Importers

Trade Indicators

Value exported in 2016 (USD thousand)

Trade balance

2016 (USD thousand)

Share in South

Africa's exports (%)

Quantity exported in

2016

Quantity unit


Growth in exported

value between

2012-2016 (%, p.a.)

Growth in exported quantity between

2012-2016 (%, p.a.)

Growth in exported

value between

2015-2016 (%, p.a.)

Ranking of partner

countries in world

imports

Share of partner

countries in world

imports (%)

Total imports


countries between

2012-2016 (%, p.a.)

Average tariff

(estimated) faced by

South Africa (%)

World 64550 24992 100 18054 Tons 3575 45 59 22 100 3

Viet Nam 16830 16830 26.1 4988 Tons 3374 423 112 3 10.8 18 14.5

Hong Kong, China 8939 8939 13.8 2777 Tons 3219 176 130 110 4 7.9 17

Kuwait 7125 7125 11 1505 Tons 4734 377 477 -20 31 0.3 -5 5

Angola 5558 5558 8.6 1243 Tons 4471 18 36 86 34 0.3 -24 10

Mozambique 4247 4247 6.6 1236 Tons 3436 7 21 -48 118 0.02 9 0

Egypt 2919 2919 4.5 595 Tons 4906 115 170 39 6 5 8 0

Mauritius 2531 2531 3.9 482 Tons 5251 76 76 117 79 0.06 0 0

Lesotho 2069 2069 3.2 1554 Tons 1331 -4 36 -14 132 0.01 -4 0

Sudan 1741 1741 2.7 392 Tons 4441 31 123 0.02 -5

United Arab Emirates 1369 1369 2.1 421 Tons 3252 414 281 38 22 1 -2 5


38

Table 7 shows that during 2016 South Africa exported a total of 18 054 tons of frozen beef at an average value of US$ 3 575/unit. The major export destinations for frozen beef originating from South Africa during 2016 were Viet Nam, Hong Kong China, Kuwait, Angola and Mozambique. Exports of frozen beef exported by South Africa to the world during the periods 2012 and 2016 experienced an increase of 45% in value and an increase of 59% in quantity. During the same periods exports to Hong Kong China increased by 176% in value and 130% in quantity. South Africa’s exports of frozen beef to the world between the period 2015 and 2016 increased by 22% in value. At the same period, Viet Nam and Hong Kong China increased by 112% and 110% respectively whilst Kuwait decreased by 20% during the same periods.

39

Figure 33: Growth in demand for frozen beef exported from South Africa in 2016


40

Figure 33 illustrates that between 2012 and 2016 South Africa’s frozen beef exports to Democratic Republic of Cong (DRC), Botswana, Lesotho and Mozambique were growing at a rate that is less than its import growth from the world. South African exports growth to Lesotho and Nigeria are declining at a rate of 4% and 14% respectively. During the same period, South Africa’s frozen beef exports to Hong Kong China, Egypt, Qatar, UAE, Kuwait, Namibia, Angola, Congo, Mauritius and Nigeria were growing at a rate that is greater than their imports from the rest of the world. UAE experienced the highest growing demand of South African frozen beef with an annual growth of 414%.

41

Figure 34: Prospects for market diversification for frozen beef exported by South Africa in 2016


42

Figure 34 above shows the prospects for market diversification for beef (frozen) exports by South Africa in 2016. South African’s frozen beef was mostly exported to Viet Nam, which commanded SA’s beef exports share of 26.07%. If South Africa is to diversify its frozen beef exports, the most attractive market exists in Kenya, which experienced an annual import growth of 120%. It looks easy for South Africa to penetrate this market because it is still a small market with a world’s import market share of 1.87% of South African exports.

43

5.2. Imports.

Table 8: List of supplying markets for the beef (fresh or chilled) imported by South Africa in 2016 South Africa represents 0% of world imports for beef (fresh or chilled); its ranking in world imports is 88.

Exporters

Trade Indicators

Value imported in 2016 (USD thousand)

Trade balance

2016 (USD thousand)

Share in South

Africa's imports (%)

Quantity imported in

2016

Quantity unit


Growth in imported

value between

2012-2016 (%, p.a.)

Growth in imported quantity between

2012-2016 (%, p.a.)

Growth in imported

value between

2015-2016 (%, p.a.)

Ranking of partner

countries in world

exports

Share of partner

countries in world

exports (%)

Total exports


countries between

2012-2016 (%, p.a.)

Average tariff

(estimated) applied by

South Africa (%)

World 3585 69246 100 1414 Tons 2535 -40 -33 22 100 0

Namibia 3204 -431 89.4 1256 Tons 2551 -32 -24 79 27 0.3 -3 0

Botswana 380 73 10.6 156 Tons 2436 -56 -49 -67 29 0.2 29 0

Area Nes 1 -1 0 2 Tons 500 -69 -58

Jordan 15270 74 0 -17 40

United Arab Emirates 15151 48 0.03 11 40

Source: ITC Trade Map.

44

Table 8 shows that during 2016 South Africa imported a total of 1 414 tons of beef (fresh or chilled) at an average value of US$ 2 535/unit. The major suppliers of beef (fresh or chilled) imported by South Africa during 2016 were Namibia and Botswana that commanded 89.4% and 10.6% respectively. South African growth of beef imports during 2012 to 2016 decreased by 40% in value and 33% in quantity. At the same period Namibia decreased by 32% in value and 24% in quantity and Botswana also decreased by 56% in value and 49% in quantity. Between the periods 2015 and 2016 South African beef imports increased by 22% in value. Namibia increased by 79% in value whilst Botswana decreased by 67% during the same period.

45

Figure 35: Prospects for diversification of suppliers for fresh or chilled beef imported by South Africa in 2016


46

Figure 35 above shows the prospects for diversification of suppliers for fresh or chilled beef imports by South Africa in 2016. The figure above shows that Namibia commanded the greatest market share of South Africa’s fresh or chilled beef imports with an annual share of 89.37% followed by Botswana by 10.6% during the year 2016. If South Africa is to diversify its imports, the most attractive supplier exists in Mauritius due to its export growth of 76%. This means South Africa can develop a new market in this country because currently South Africa does not import fresh or chilled beef from it.

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Table 9: List of supplying markets for the beef (frozen); imported by South Africa in 2016. South Africa's imports represent 0.2% of world imports for beef (frozen); its ranking in world imports is 42.

Exporters

Trade Indicators

Value imported in 2016 (USD thousand)

Trade balance

2016 (USD thousand)

Share in South

Africa's imports (%)

Quantity imported in

2016

Quantity unit


Growth in imported

value between

2012-2016 (%, p.a.)

Growth in imported quantity between

2012-2016 (%, p.a.)

Growth in imported

value between

2015-2016 (%, p.a.)

Ranking of partner

countries in world

exports

Share of partner

countries in world

exports (%)

Total exports


countries between

2012-2016 (%, p.a.)

Average tariff

(estimated) applied by

South Africa (%)

World 39558 24992 100 17970 Tons 2201 -23 -12 43 100 2

Botswana 21346 -20779 54 9273 Tons 2302 -18 -7 43 27 0.3 -1 0

Namibia 11405 -10406 28.8 5259 Tons 2169 -25 -14 18 32 0.1 -17 0

Uruguay 4576 -4576 11.6 2298 Tons 1991 18 24 327 6 5.3 2 40

Australia 1259 -1259 3.2 535 Tons 2353 -51 -49 61 3 16.6 4 40

New Zealand 500 -500 1.3 382 Tons 1309 -33 -25 173 5 8.6 6 40

United Kingdom 376 -376 1 194 Tons 1938 -30 21 0.4 -2 40

United States of America 54 -54 0.1 3 Tons 18000 4 12.9 6 40

Ireland 41 -41 0.1 25 Tons 1640 -89 13 1 2 40

Swaziland 1 512 0 0 Tons 55 0.01 -11 0


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Table 9 shows that during 2016 South Africa imported a total of 17 970 tons of frozen beef at an average value of US$2 201/unit. The major suppliers of frozen beef imported by South Africa during 2016 were Botswana, Namibia, Uruguay and Australia. The greatest share of South African frozen beef imports were from Botswana which commanded 54% during the year 2016 followed by Namibia which commanded 28.8%, Uruguay and Australia commanded a share of 11.6% and 3.2% respectively. South Africa’s frozen beef imports decreased by 23% in value and 12% in quantity between the periods 2012 and 2016. During the same period, imports of frozen beef from Botswana decreased by 18% in value and 7% in quantity. South Africa’s imports for frozen beef from the world increased by 43% per annum in value during 2015 and 2016 and Botswana's exports to South Africa increased by 43% in value during the same periods.

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Figure 36: Competitiveness of suppliers to South Africa for frozen beef in 2016


50

Figure 36 illustrates that between 2012 and 2016, South Africa’s frozen beef imports from the Australia, New Zealand, Botswana and Namibia were growing at a rate that is less than their export growth to the world. South Africa’s annual import growth from Australia, New Zealand, Botswana and Namibia has declined by 51%, 33%, 18% and 25% respectively during 2016. South Africa’s imports from Uruguay is growing at a rate that is greater than its import growth from the world. Uruguay commanded the greatest share of SA’s import market with an annual growth of 18%. New Zealand was the most competitive market during the periods 2012 to 2016 with a world export market share of 8.64%.

51

Figure 37: Prospects for diversification of suppliers for frozen beef imported by South Africa in 2016.


52

Figure 37 above shows the prospects for diversification of suppliers for frozen beef imports by South Africa. The country imports most frozen beef from Botswana but if South Africa is to diversify its frozen beef imports, the biggest supplier exists in United States of America with the world export share of 12.68% with an export growth of 6%. The most attractive market is Kuwait due to its highest annual export growth of 164%. Currently South Africa is not importing frozen beef from Kuwait. Therefore, South Africa can develop a new importing market in this country.

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6. ACKNOWLEDGEMENTS/ REFERENCES

1. International Trade Centre

www.trademap.org/ 2. Quantec

www.Quantec.co.za/ 3. Red Meat Abattoir Association

Tel: 012-349 1237/8/9 Fax: 012-349 1240

www.rmaa.co.za 4. SAMIC

www.SAMIC.co.za 5. South African Feed Lot Association

www.safeedlot.co.za 6. Bureau for Food and Agricultural Policy

www.bfap.co.za

Disclaimer: This document and its contents have been compiled by the Department of Agriculture, Forestry and Fisheries for the purpose of detailing the beef/ bovine industry. The views expressed in this document are those of the Department of Agriculture, Forestry and Fisheries with regard to agricultural industry, unless otherwise stated and, therefore the Department of Agriculture, Forestry and Fisheries does not accept responsibility for any errors in such information and anyone acting on such information does so entirely at his or her own risk.

http://www.trademap.org/

http://www.quantec.co.za/

http://www.rmaa.co.za/

http://www.samic.co.za/

http://www.safeedlot.co.za/

http://www.bfap.co.za/

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