A PROFILE OF THE SOUTH AFRICAN DAIRY MARKET VALUE CHAIN ... · PDF fileA PROFILE OF THE SOUTH...

A PROFILE OF THE SOUTH AFRICAN DAIRY MARKET VALUE CHAIN

2010

Directorate Marketing Private Bag X 15

Arcadia 0007

Tel: 012 319 8455/6 Fax: 012 319 8131

Email: [email protected] www.daff.gov.za

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mailto:[email protected]

TABLE OF CONTENTS

1. DESCRIPTION OF THE INDUSTRY 4

1.1. Milk production areas 4

1.2. Production trends 5

1.3. Employment 6

2. MARKET STRUCTURE 6

2.1. DOMESTIC MARKET AND PRICES 8

2.2. IMPORT AND EXPORT OF DAIRY PRODUCTS 8

2.2. EXPORTS 9 2.2.1. Export values of milk and dairy products 11

2.3. SHARE ANALYSIS 17 2.3.1. Share analysis of milk and dairy products exports 17

2.4. IMPORTS 20

2.5. MARKETING CHANNELS IN THE DAIRY INDUSTRY 24

3. EMPOWERMENT PLANS BY THE INDUSTRY 25

4. BARRIERS TO THE LEVEL OF PARTICIPATION BY THE EMERGING SECTOR 26

5. OPPORTUNITIES AND WEAKNESSES 27

6. MARKET INTELLIGENCE 28

6.1. Export Tariffs 28

6.2. Import tariffs 34

7. COMPETITIVENESS OF THE DAIRY INDUSTRY 43

7.1. Exports 43 7.1.1. Milk and cream (neither concentrated nor sweetened) 43 7.1.2. Milk and cream, concentrated or sweetened 49 7.1.3. Buttermilk and yoghurt 55 7.1.4. Whey and other natural milk products 61 7.1.5. Butter and other fats and oils derived from milk 67 7.1.6. Cheese and Curd 73

7.2. Imports 79

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7.2.1. Milk and cream (neither concentrated nor sweetened) 79 7.2.2. Milk and cream, concentrated or sweetened 85 7.2.3. Buttermilk and yoghurt 91 7.2.4. Whey and other natural milk products 97 7.2.5. Butter and other fats and oils derived from milk 103 14.2.6. Cheese and Curd 109

8. ACKNOWLEDGEMENTS 115

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1. DESCRIPTION OF THE INDUSTRY

The contribution of milk production in South Africa makes approximately 0.5% to the world milk production. There are four major dairy breeds in South Africa namely, Holstein, Jersey, Guernsey and Ayrshire. The industry comprises of number of different economic activities and significant differences exist between farming methods and processing of dairy products. These activities involve the production and marketing of raw milk, pasteurized milk and cream, fermented milk, long-life milk and cream, yoghurt, cheese and its by-product whey, milk powder, sweetened and unsweetened concentrated milk, butter and butter oil (ghee).

Figure 1: Gross value of fresh milk production

01,000,0002,000,0003,000,0004,000,0005,000,0006,000,0007,000,0008,000,0009,000,000

10,000,000

1999

/00

2000

/01

2001

/02

2002

/03

2003

/04

2004

/05

2005

/06

2006

/07

2007

/08

2008

/09

Years

R'0

00

Source: Agricultural Statistics. The gross value of production for milk is dependent on the quantity produced and prices received by producers. Figure 1 indicates that the gross value of fresh milk has been moving at an increasing rate and experienced a sharp increase in 2007/08. The average gross value of milk produced amounted to R 4,863,719 million for the past ten years. In 2008/09 the gross value of maize increased by R 5,974,905 compared to 1999/2000 and increased by R 2,940,283 compared to 2006/2007.

1.1. Milk production areas

The coastal areas are more suitable areas for milk production because of mild temperatures as well as good rainfall ensuring good quality natural and artificial pastures. The inland production areas are generally climatically less favourable for milk production. Dairy farming in these areas necessitate intensive and high cost

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feedlot production systems. Figure 2 shows percentage contribution of provinces to milk production in South Africa in 2009.

Figure 2: Milk production per province in 2009

WesternCape28%

EasternCape25%NorthernCape

0%

Kwazulu-Natal20%

FreeState14%

Mpumalanga5%Gauteng

3%North-West

5%

Limpopo0%

Source: MPO.

Western Cape contributed 28% of the total milk produced in South Africa followed by Eastern Cape which took up 25% and KwaZulu–Natal with 20%; Free State contributed 14%, North–West & Mpumalanga 5%, Gauteng 3%, Northern Cape and Limpopo contributed less than a percent.

1.2. Production trends

Over the past ten years the number of dairy cows and milk production has been fluctuating but there is a little increase of 1% and 25% respectively. This may be due to the fact that milk producers are getting more efficient.

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Figure 3: Total milk production and number of dairy cows

0

500

1,000

1,500

2,000

2,500

3,000

1999

/00

2000

/01

2001

/02

2002

/03

2003

/04

2004

/05

2005

/06

2006

/07

2007

/08

2008

/09

Years

Mill

ion

liter

s

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

Num

ber o

f cow

s

Production Dairy cows

Source: Agricultural Statistics and MPO.

1.3. Employment

The South African dairy industry is important to the job market with over 4 000 milk producers employing 60 000 farm workers and providing 40 000 people with indirect jobs within the value chain like milk processing and milling industry.

2. MARKET STRUCTURE

The South African dairy market is divided into 60% liquid and 40% concentrated products. Pasteurized liquid milk and UHT milk are the major liquid products, while hard and semi cheese is the major concentrated product. Different types in each category are shown in Figure 4 and 5.

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Figure 4: Liquid milk products

Yoghurt13%

UHT28%

Pasteurised Milk52%

Maas & Buttermilk5%

Flavoured Milk2%

Source: MPO.

Figure 5: Condensed milk products

Butter11%

Hard and Semi Cheese

38%

Other Cheese16%

Milk Powder19% Buttermilk Powder

1%

Condensed Milk7%

Whey Powder8%

Source: MPO.

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2.1. DOMESTIC MARKET AND PRICES

Local milk consumption and prices is illustrated in Figure 6.

Figure 6: Milk consumption and fresh milk price

0

500

1000

1500

2000

2500

3000

1999

/00

2000

/01

2001

/02

2002

/03

2003

/04

2004

/05

2005

/06

2006

/07

2007

/08

2008

/09

Years

Mill

ion

Litre

s

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

Ran

ds/L

itres

Consumption Price

Source: Agricultural Statistics.

Figure 6 indicates that milk price increased from 1999/00 to 2003/04 and declined from 2004/05 to 2006/07 before a sharp increase from 2007/8 to 2008/09. The period 2004/05 – 2005/06 experienced the decline in prices as processors were positioning themselves for an expected increase in production but this led to a no growth in production that force processors to review their pricing. Consumption of milk started at a low rate from 1999/00 to 2002/03 and increased continually from 2004/05 to 2007/08.

2.2. IMPORT AND EXPORT OF DAIRY PRODUCTS

Internationally the main milk producing regions are as follows: European Union 31%, New Zealand 30%, Australia 12%, USA 5% and the balance 22% are the cumulative total of the other regions in the world. Milk production in South Africa makes a very small contribution to the world production but in terms of the values of agricultural production in South Africa, it is the fifth largest agricultural industry in the country.

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Milk is produced much more cheaply in New Zealand and certain parts of the world than in South Africa. Imported milk from the EU and US is cheaper than in South Africa because of subsidies in these countries. Dairy companies in those countries are paid a guaranteed floor price for designated quantities of dairy products. Dairy companies in both countries are given a subsidy to bridge the gap between the supported domestic price and world market price. In the EU dairy farmers are paid subsidies for the use of certain inputs. The annual imports and exports of dairy products (in litres) from 2000 to 2009 are shown in Figure 8.

Figure 8: Exports and imports of milk and dairy products

05

101520253035404550

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Years

Mill

ion

liter

s

Exports Imports

Source: Quantec easy data.

Figure 8 showed that South Africa became a net importer of milk and dairy products during 2003 and 2005 to 2007. The increase in exports in 2008 to 2009 resulted in a decrease in imports.

2.2. EXPORTS

The dairy industry is also an important earner of foreign exchange. In 2009, exports of dairy products amounted to 41 million kilograms valued at over R 521 million. There was a decrease of 2 million kilograms of milk and dairy products exported and an increase of R 102 million in 2009 compared to 2008. Figure 9 below shows the exports of dairy products from 2000 to 2009.

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Figure 9: Exports of milk and dairy products

05

1015202530354045

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Years

Kilo

gram

s in

mill

ions

0

100

200

300

400

500

600

Mill

ion

Rand

s

Exports quantity Exports value

Source: Quantec Easy data. From Figure 9, exports of milk and dairy products experienced a deep decline in 2001 and 2003 to 2007 before increasing substantially in 2008. Both quantity and value followed the same trend through out the period under analysis.

Figure 10: Export destinations for South African milk and dairy products in 2009

Republic of Korea5%

Malawi3%

Zimbabwe38%

Zambia12%

United Republic of Tanzania

6%

Mozambique22%

Japan4%

Angola10%

Source: Quantec Easy data. Figure 10 shows that during 2009 Zimbabwe hold a bigger market share of South African milk and dairy products exports accounting for 38%

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followed by Mozambique with 22%, Zambia with 12% and Angola with 10%.

Figure 11: Quantity of milk and dairy products exported by South Africa

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Years

Kilo

gram

s

Milk and Cream,Not Concentrated Nor Sweetening Milk and Cream,Concentrated or Sweetening Buttermilk, Cream and Yogurt WheyButter and other fats Cheese and Curd

Source: Quantec Easy data.

Figure 11 shows that in quantities, milk and cream (neither concentrated nor sweetened) dominated exports of milk and dairy products from 2003 to 2009, and milk and cream (concentrated or sweetened) became dominant in 2001 to 2002 and thereafter declined continuously.

2.2.1. Export values of milk and dairy products Figure 12 – 20 shows the export of milk and dairy products from provinces and district municipalities.

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Figure 12: Values of milk and dairy products exported from different Provinces

0

50

100

150

200

250

300

350

400

Years

Mill

ion

Ran

ds

Western Cape 22 35 132 64 39 38 54 69 117 134

Eastern Cape 0 1 2 2 2 4 4 8 16 20

Northern Cape 0 0 0 0 0 0 0 0 0 0

Free State 0 0 0 0 0 0 0 0 0 2

Kw azulu-Natal 4 4 10 7 6 13 8 8 15 12

North West 0 0 0 0 0 0 0 0 0 7

Gauteng 179 160 292 204 189 89 112 131 255 342

Mpumalanga 2 0 1 1 1 6 25 14 11 3

Limpopo 0 0 0 0 1 0 0 2 5 1

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009


Figure 13 illustrates that Gauteng province played a major role in the exports of milk and dairy products from 2000 to 2009 with a peak value of R 342 million in 2009. This may be due to the fact that Gauteng is the main exit point to the SADC region as most of these exports were destined to SADC region. Western Cape Province commanded the second level of milk and dairy products exports followed by KwaZulu–Natal provinces while irregular exports were recorded in Eastern Cape, Mpumalanga, North West, Free State and Limpopo provinces.

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Figure 13: Value of milk and dairy products exported by Western Cape Province

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

140,000,000

Years

Ran

ds

City of Cape Tow n 22,373,335 34,557,880132,059,32 44,007,165 30,990,785 32,766,84739,882,639 48,584,902 79,168,26687,098,853

West Coast 0 0 0 0 0 104,548 499,755 456,688 463,812 1,017,228

Cape Winelands 4,597 0 92,537 20,352,497 8,158,166 5,184,010 13,515,347 19,659,042 37,511,06845,523,197

Overberg 0 0 0 0 682 2,736 1,403 0 0 0

Eden 0 846 0 22,026 3,507 1,308 399,953 0 136,828 505,589

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009


In Western Cape Province, City of Cape Town metropolitan municipality played an important role in the export of milk and dairy products since 2000 with high export value of R 132 million recorded in 2002. Exports of milk and dairy products were also recorded in Cape Winelands district municipality from 2000 to 2009 but diminished in 2001 and irregular export in Eden and West Coast district municipalities.

Figure 14: Value of milk and dairy products exported by Eastern Cape Province

02,000,0004,000,0006,000,0008,000,000

10,000,00012,000,00014,000,00016,000,000

Years

Ran

ds

Cacadu 108,149 961,877 2,062,62 2,459,50 848,923 3,686,86 3,761,26 5,652,69 7,468,48 14,984,4

Amatole 0 340,548 1,522 0 219,362 15,406 1,171 332,778 0 0

Nelson Mandela 222,429 20 3 7,303 540,925 11,746 5,864 2,353,70 8,964,49 4,634,70

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009


In Eastern Cape Province, high milk and dairy products exports values have been recorded from Cacadu district municipality which commanded the highest values except in 2008 followed by Nelson Mandela metropolitan municipality which reached its peak of R 9 million in 2008.

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Irregular exports of milk and dairy products were recorded in the Amatole district municipality.

Figure 15: Value of milk and dairy products exported by KwaZulu-Natal

Province

02,000,000

4,000,0006,000,000

8,000,00010,000,000

12,000,00014,000,000

16,000,000

Years

Ran

ds

Ugu 0 0 0 0 1,849 0 13,558 0 0 63,220

Umgungundlovu 2 0 28,510 80 748,757 1,198,932 14,986 4,560 0 10,271

Uthukela 327 0 0 20,923 0 0 388 0 0 7,726

Amajuba 0 0 0 26,302 0 0 0 0 0 0

Uthungulu 355,460 10,400 866 0 37 749 45,083 0 45 0

iLembe 215,988 107,599 0 14,640 0 0 0 0 994,401 785,709

eThekw ini 3,902,659 3,625,475 9,622,309 6,815,196 5,587,561 11,356,703 7,899,847 7,576,372 13,532,640 11,262,261

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009


In KwaZulu–Natal Province, high milk and dairy products export values have been recorded at eThekwini district municipality throughout the period under analysis. Irregular exports of milk and dairy products were recorded at Uthukulu, iLembe, Amajuba, Uthukela, Umgungundlovu and Ugu district municipalities.

Figure 16: Value of milk and dairy products exported by North West Province

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

Years

Ran

ds

Bojanala 0 0 0 0 0 5,659 0 0 0 0

Central 0 0 0 0 0 0 0 297,525 0 0

Southern 0 0 0 0 0 0 2,517 170 391,436 6,837,588

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009


Intermittent values were recorded in North West Province from three district municipalities (Bojanala, Central and Southern). Southern district municipality recorded a sharp increase of R 6.8 million in 2009.

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Figure 17: Value of milk and dairy products exported by Gauteng Province

0

50

100

150

200

250

300

Years

Mill

ion

Ran

ds

Sedibeng 0 0 3 1 0 0 0 0 0 0

Metsw eding 0 0 0 0 0 0 0 0 0 0

West Rand 2 0 0 0 2 0 0 1 1 6

Ekurhuleni 3 18 4 9 6 6 9 15 26 35

City of Johannesburg 173 140 283 193 178 82 102 113 223 281

City of Tshw ane 2 2 3 1 3 1 1 2 4 20

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009


In Gauteng province, high milk and dairy products export values have been recorded for the past ten years at the City of Johannesburg metropolitan municipality with the highest values in 2002 and 2009. Ekurhuleni district and City of Tshwane metropolitan municipalities also recorded milk and dairy products exports on a regular basis. Irregular exports of milk and dairy products were recorded in Sedibeng, Metsweding and West Rand district municipalities.

Figure 18: Value of milk and dairy products exported by Mpumalanga Province

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

Years

Ran

ds

Gert Sibande 0 0 99,278 0 304,673 534,330 0 119,782 0 534,387

Nkangala 0 0 0 7,303 0 0 0 0 0 1,247

Ehlanzeni 2,359,464 489,704 759,382 1,485,838 840,954 5,655,105 25,136,053 13,922,111 11,118,498 2,754,537

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009


In Mpumalanga Province, Ehlanzeni played a major role in the export of milk and dairy products from 2000 to 2009 and reached its peak of R 25

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million in 2006. Irregular exports of milk and dairy products were recorded from Gert Sibande and Nkangala district municipalities.

Figure 19: Value of milk and dairy products exported by Limpopo Province

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

Years

Ran

ds

Mopani 0 0 0 0 9,487 0 0 280 3,109 0

Vhembe 0 0 62,367 9,153 1,075,837 0 332,392 1,765,905 4,521,999 1,122,107

Capricorn 0 0 0 27,520 184,310 160,106 34,285 108,749 0 55,212

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009


Limpopo Province recorded irregular exports of milk and dairy products from during 2002 to 2009 from Vhembe, Mopani and Capricorn district municipalities. Vhembe district municipality recorded the highest exports value of R 4.5 million in 2008.

Figure 20: Value of milk and dairy products exported by Free State Province

0

2,000,0004,000,000

6,000,000

8,000,000

10,000,00012,000,000

14,000,000

16,000,000

Years

Ran

ds

Motheo 158,336 627,542 212,780 0 0 0 0 0 2,821,321 13,402,46

Lejw eleputsw a 0 0 20,601 0 0 0 0 0 0 0

Thabo Mofutsanyane 0 0 38 0 0 0 0 29 0 0

Northern Free State 0 0 0 0 0 0 0 0 0 1,664,998

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009


Intermittent values were recorded from Free State Province from four district municipalities (Motheo, Lejweleputswa, Thabo Mofutsanyane and Northern Free State). Motheo district municipality recorded a high value of R 1.7 million in 2009.

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2.3. SHARE ANALYSIS

2.3.1. Share analysis of milk and dairy products exports Table 1: Share of provincial milk and dairy products to the total RSA milk and dairy products exports (%). Years Provinces

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Western Cape 10.71 17.23 30.23 23.07 16.38 25.38 26.69 29.64 28.00 25.75 Eastern Cape 0.16 0.65 0.47 0.88 0.67 2.48 1.85 3.60 3.92 3.77 Northern Cape 0 0 0 0 0 0 0 0 0 0 Free State 0 0 0 0 0 0 0 0 0 0.32 KwaZulu-Natal 2.14 1.87 2.21 2.46 2.65 8.37 3.92 3.27 3.47 2.33 North West 0 0 0 0 0 0 0 0.13 0.09 1.31 Gauteng 85.87 80.01 66.88 73.03 79.28 59.54 55.00 56.50 60.78 65.67 Mpumalanga 1.13 0.24 0.20 0.54 0.48 4.13 12.36 6.06 2.65 0.63 Limpopo 0 0 0.01 0.01 0.53 0.11 0.18 0.81 1.08 0.23 Total 100 100 100 100 100 100 100 100 100 100 Source: Quantec Easy data. Table 1 show that Gauteng province commands the greatest share of South African milk and dairy products’ exports. This is in spite of the fact that Western Cape and Eastern Cape provinces are the major milk producing provinces. This may be due to the fact that Gauteng is the exit point for milk and dairy products to the SADC regions. Western Cape, Eastern Cape, KwaZulu–Natal and Mpumalanga Provinces reported regular exports of milk and dairy products. Limpopo, North West and Free State Provinces recorded intermittent export shares of milk and dairy products while there were no milk and dairy exports from Northern Cape Province. Table 2: Share of district milk and dairy products to the total Western Cape provincial milk and dairy products exports (%). Years Districts

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

City of Cape Town 99.98 100.00 99.93 68.35 79.15 86.09 73.45 70.72 67.50 64.93 West Coast 0 0 0 0 0 0.27 0.92 0.66 0.40 0.76 Cape Winelands 0.02 0 0.07 31.61 20.84 13.62 24.89 28.62 31.98 33.94 Overberg 0 0 0 0 0.00 0.01 0.00 0 0 0 Eden 0 0.00 0 0.03 0.01 0.00 0.74 0 0.12 0.38 Total 100 100 100 100 100 100 100 100 100 100 Source: Quantec Easy data. The City of Cape Town metropolitan municipality has commanded the greatest share of milk and dairy products’ exports in the Western Cape Province from 2000 to 2009. Fractional exports of milk and dairy

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products occurred in the Cape Winelands, West Coast, Overberg and Eden district municipalities. Table 3: Share of district milk and dairy products to the total Eastern Cape provincial milk and dairy products exports (%). Years Districts

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Cacadu 32.72 73.85 99.93 99.70 52.75 99.27 99.81 67.78 45.45 76.38 Amatole 0 26.15 0.07 0.00 13.63 0.41 0.03 3.99 0 0 Nelson Mandela 67.28 0.00 0.00 0.30 33.61 0.32 0.16 28.22 54.55 23.62 Total 100 100 100 100 100 100 100 100 100 100 Source: Quantec Easy data. Cacadu district municipality has commanded the greatest share of milk and dairy products exports in the Eastern Cape Province. Fractional exports of milk and dairy products occurred in the Amatole district and Nelson Mandela metropolitan municipalities. Table 4: Share of district milk and dairy products to the total KwaZulu–Natal provincial milk and dairy products exports (%). Years Districts

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Ugu 0 0 0 0 0.029172 0 0.17 0 0 0.52 Umgungu ndlovu 0.00 0 0.30 0.00 11.81 9.55 0.19 0.060151 0 0.08 Uthukela 0.01 0 0 0.30 0 0 0.00 0 0 0.06 Amajuba 0 0 0 0.38 0 0 0 0 0 0 Uthungulu 7.94 0.28 0.01 0 0.00 0.01 0.57 0 0.00 0 iLembe 4.83 2.87 0 0.21 0 0 0 0 6.85 6.48 eThekwini 87.22 96.85 99.70 99.10 88.16 90.45 99.07 99.94 93.15 92.85 Total 100 100 100 100 100 100 100 100 100 100 Source: Quantec Easy data. eThekwini district municipality has commanded the greatest share of milk and dairy products exports in the KwaZulu–Natal Province from 2000 to 2009. Fractional exports of milk and dairy products occurred in Uthukulu, iLembe, Amajuba, Uthukela, Umgungundlovu and Ugu district municipalities. Table 5: Share of district milk and dairy products to the total North West provincial milk and dairy products exports (%). Years Districts

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Bojanala 0 0 0 0 0 100 0 0 0 0 Central 0 0 0 0 0 0 0 99.94 0 0 Southern 0 0 0 0 0 0 100 0.06 100 100 Total 0 0 0 0 0 100 100 100 100 100 Source: Quantec Easy data.

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Intermittent milk and dairy exports in North West Province were recorded from Bojanala, Central and Southern district Municipalities from 2005 to 2009. The Southern district municipality has commanded 100% share of milk and dairy products exports from 2008 to 2009. Table 6: Share of district milk and dairy products to the total Gauteng provincial milk and dairy products exports (%). Years Districts

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Sedibeng 0.00 0.18 0.96 0.31 0.04 0.00 0.13 0.00 0.01 0.01 Metsweding 0.03 0.00 0.02 0.00 0.00 0.00 0.00 0.00 0.17 0.02 West Rand 1.19 0.24 0.04 0.05 0.92 0.09 0.07 0.50 0.41 1.71 Ekurhuleni 1.58 11.25 1.42 4.33 3.42 7.10 7.93 11.76 10.09 10.16 City of Johannesburg 96.35 87.13 96.65 94.85 94.00 91.85 90.96 86.14 87.74 82.26 City of Tshwane 0.85 1.20 0.92 0.47 1.63 0.96 0.91 1.60 1.59 5.83 Total 100 100 100 100 100 100 100 100 100 100 Source: Quantec Easy data. The City of Johannesburg municipality has commanded the greatest share of milk and dairy products exports in Gauteng province from 2000 to 2009. City of Tshwane metropolitan, West Rand district and Ekurhuleni district municipality reported regular exports throughout the period under analysis. Fractional exports of milk and dairy products occurred in the West Rand and Metsweding district municipality. Table 7: dairy products (neither concentrated nor sweetened) to the total Mpumalanga provincial milk and dairy products exports (%). Years Districts

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Gert Sibande 0 0 11.56 0 26.59 8.63 0 0.85 0 16.24 Nkangala 0 0 0 0.49 0 0 0 0 0 0.04 Ehlanzeni 100 100 88.44 99.51 73.41 91.37 100 99.15 100 83.72 Total 100 100 100 100 100 100 100 100 100 100 Source: Quantec Easy data. Ehlanzeni district municipality has commanded the greatest share of milk and dairy products exports in Mpumalanga Province from 2000 to 2009. Irregular exports of milk and dairy products occurred in the Gert Sibande district and Nkangala district from 2002 to 2009.

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Table 8: Share of district milk and dairy products to the total Limpopo provincial milk and dairy products exports (%). Years Districts

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Mopani 0 0 0 0 0.75 0 0 0.01 0.07 0 Vhembe 0 0 100 24.96 84.74 0 90.65 94.18 99.93 95.31 Capricorn 0 0 0 75.04 14.52 100 9.35 5.80 0 4.69 Total 0 0 100 100 100 100 100 100 100 100 Source: Quantec Easy data. Vhembe district municipality in Limpopo province has commanded the greatest share of milk and dairy products exports from 2002 to 2009 but diminished in 2005. Intermittent exports of milk and dairy products were experienced from Mopani and Capricorn district municipalities. Table 9: Share of district milk and dairy products to the total Free State provincial milk and dairy products exports (%). Years Districts

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Motheo 100 100 91.16 0 0 0 0 0 100 88.95 Lejweleputswa 0 0 8.83 0 0 0 0 0 0 0 Thabo Mofutsanyane 0 0 0.02 0 0 0 0 100 0 0 Northern Free State 0 0 0 0 0 0 0 0 0 11.05 Total 100 100 100 0 0 0 0 100 100 100 Source: Quantec Easy data. Free State Province experienced fractional exports of milk and dairy products from Motheo, Lejweleputswa, Thabo Mofutsanyane, Northern Free State district municipalities. Motheo district municipality commanded the greatest share of milk and dairy products during 200 to 2001 and then again in 2008. Northern Free State district municipality had a share of 11.05% only in 2009.

2.4. IMPORTS South Africa is an importer of dairy products. The average import value over the past ten years amounted to over R 440 million and the quantity amounted to over 28 million kilograms. Figure 21 present the imports of milk and dairy products from 2000 to 2009.

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Figure 21: Imports of milk and dairy products

05

101520253035404550

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Years

Kilo

gram

s in

m

illio

ns

0100200300400500600700800900

Mill

ion

rand

s

Imports quantity Imports value

Source: Quantec Easy data. Figure 21 shows that imports of milk and dairy products fluctuated in both quantity and value throughout the period under analysis. There was a significant increase which occurred from 2005 to 2007, which might be attributed to shortages in local production. The imports (Value and quantity) of milk and dairy products reached the peak of over R 830 million and 44 million kilograms respectively during 2007. Figure 22 below shows the different types of milk and dairy products imported from 2000 to 2009 in terms of quantity.

Figure 22: Milk and dairy products imported by South Africa

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Years

Kilo

gram

s

Milk and cream, not concentrated nor sweetened Milk and cream, concentrated or sweetenedButtermilk, cream and yoghurt WheyButter and other fats Cheese and curd

Source: QuantecEasy data.

21

Figure 22 shows that milk and cream (concentrated or sweetened) and whey were the most imported dairy products in South Africa from 2001 to 2007 before declining dramatically in 2008. Milk and cream (not concentrated nor sweetened) increased in quantity and dominated the imports in 2008 to 2009. Figure 23 below shows the different types of milk and dairy products imported from 2000 to 2009 in terms of value.

Figure 23: Value of milk and dairy products imported

0

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

350,000,000

400,000,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Years

Ran

ds

Milk and cream, not concentrated nor sweetened Milk and cream, concentrated or sweetenedButtermilk, cream and yoghurt WheyButter and other fats Cheese and curd

Source: Quantec Easy data. Figure 23 above indicate that milk and cream (concentrated and sweetened) commanded the greatest share of imports followed by cheese & curd and whey was the third level of value in the South African market share. Figure 24 shows the origin of milk and dairy products imported to South Africa.

22

23

Figure 24: Origin of milk and dairy imports in 2009

Argentina49%

Australia

France23%

New Zealand11%

United States6%

11%

Source: Quantec Easy Data.

Figure 24 above shows that the main supplier of milk and dairy products to South Africa in 2009 was Argentina which had an import market share of 49% followed by France which exported 23% market share of milk and dairy products in South Africa. Australia and New Zealand had an equal share of 11% market share each.

2.5. MARKETING CHANNELS IN THE DAIRY INDUSTRY

Figure 25: Marketing Channels.

Milk production in South Africa is mainly by two sectors; Commercial Producers, and Small and Medium size Producers. Commercial Producers sell milk to Dairy Processors. Small and medium size producers sell most of their milk directly to consumers and some to processors. Dairy

Commercial Dairy farms

Bulk collection

Dairy Processors

Dairy Products (Cheese, Butter, etc)

Secondary dairy products

Primary Distribution

Retailers Small and informal trade Institutions

Imports

Small and Medium Dairy Farms

Exports

Consumers

Processors buys milk from farmers and import milk concentrates and produces dairy products for primary distribution to retailers, exports and for further processing.

24

25

3. EMPOWERMENT PLANS BY THE INDUSTRY The following is a list of ventures/projects/programmes. Media releases were arranged for the dairy industry. The MPO, in conjunction with the provincial departments and municipalities and other relevant stakeholders were responsible for these empowerment plans. 3.1. Success ventures: Commercially viable. Grasslands Trust. Wittekleibosch Trust

Fort Hare Dairy Trust outside Alice in Eastern Cape started in 2004 and the first cow was milked in October 2007. The trust started between a partnership between 70 white farmers from the Tsitsikamma and the Underberg area – through their company Amandlelo Agri and University of Fort Hare. The University donated land and the cost of the project was R 22 million (R 2 million donated by University, R 5 million by Amandlelo and 15 million by Land Bank of which 7.5 million is loan). The farmers signed on an empowerment company Vuwa Investments which was given 35% stake in the company. The farmers kept 49 % and the rest was shared among 600 workers from the 70 dairy farms. Today Fort Hare Dairy Trust is a state-of-the-art commercial dairy farm. It has 800 cow rotary parlor that produces approximately 10 000 litres of milk a day much of which is supplied to Clover milk company. The farm that requires 600 tons of maize is sourced from farmers in the Alice area. Every year Amandlelo takes between 10 and 15 black interns. Some of them are sent to Fort Hare Dairy Trust. Farmers are rewarded with cattle as they pass through different stages. This will enable them to start their own full time dairy farming (Pretoria News, 17 June 2009).

3.2. Training Programmes:

Agri SETA accredited farm worker training. Agri SETA accredited emerging farmer training. Workers training funded by MILK SA. Training of Extension officers of Department of Agriculture

in North West Province and Free State. 3.3. Magazines: Ubisi Mail and Dairy Mail are distributed free of charge to emerging farmers.

26

4. BARRIERS TO THE LEVEL OF PARTICIPATION BY

THE EMERGING SECTOR

The low profitability of milk production is the major barrier to entry for the emerging farmers.

Access to credit facilities and financial package specially structured to their needs also plays a role.

The volatility of the market and the effect of imports in depressing producer prices make it difficult for the emerging farmers to enter the industry.

The dynamics of pricing in the dairy industry as well as the shelf life of the products is such that the farmers are squeezed to accept whatever price that the producers/processors offer them to dispose of their products.

The market is dominated by 4 major processors in the milk industry

making it extremely difficult for the emerging farmers to make inroads in the dairy processing industry.

They lack the necessary capital to invest in dairy equipment. The

volume of milk produced may not be sufficient to invest in capital equipment. To form a cooperative would assist in increasing the volume through the collection of milk from several small farms. However the infrastructure and the underdeveloped roads and the great distances between farms could be inhibiting factors to go this route.

Smaller processors tend to pay higher raw milk prices than the

larger processors during periods of seasonal milk shortages because they lack the bargaining power that the larger processors have. During periods of surpluses the large producers dump their products in the retail sector at very low prices making it difficult for the small processors to compete.

The big players in the market have facilities to convert raw milk into

milk powder, butter, cheese or long-life milk which can be stored for longer periods of time. This facility is capital intensive and for the volumes of raw milk produced by the emerging farmers it is not really worth it in the long term.

The farmers/producers lack the expertise, equipment to pasteurize

milk. Transport and the quantity are major deterrents for small farmers to get their products to the big processors. The big processors/buyers find it not worth the effort to access these

27

farmers due to the road infrastructure and small inconsistent and small volumes of milk produced.

5. OPPORTUNITIES AND WEAKNESSES

Success in the dairy market depends on two factors namely: quality products and the support of processors. Successful advertising, exports and the development of new products are also important.

Some consumers like to buy fresh milk direct from producers because the origin of the milk is known. A strong relationship can be built between producer/s and consumers.

Producers can sell direct to small cafes and street vendors shortening the value chain cutting out some transaction costs resulting in an increase in profits. This channel will require higher capital and involves more risks. A sound relationship needs to be in place between the sellers and the buyers.

Since deregulation the number of smaller milk producers has increased dramatically and processors are willing to receive milk from the smaller producers. However this supply channel will require a high level control measures on hygiene and the producer has to comply with the required standards.

High demand of value added products such as sour milk, yoghurt and cheese can be a market to be explored. However to go this route would require high investment, market knowledge and the necessary training.

Packaging to promote brand identification can open an opportunity but this would require market research and knowledge, training and investment.

28

6. MARKET INTELLIGENCE

6.1. Export Tariffs Tariffs that different importing countries applied to milk and dairy products originating from South Africa in 2008 and 2009 are shown in table 10 to 15. Table 10: Milk and cream (neither concentrated nor sweetened) Country 2008 2009

Product Code

Trade Regime Description

Applied Tariffs

Total Ad valorem Equivalent Tariff (estimated)

Applied Tariffs


Angola 0401 (Milk and Cream not concentrated nor sweetened)

MFN duties 2.00% 2.00% 2.00% 2.00%

Mauritius

0401 (Milk and Cream not concentrated nor sweetened)

MFN duties 0.00% 0.00% 0.00% 0.00%

Mozambique


Preferential tariff for South Africa

11.30% 11.30% 15.00% 15.00%

United Republic of Tanzania


MFN duties 60.00% 60.00% 60.00% 60.00%

Zambia


MFN duties Preferential tariff for SA

25.00% 25.00% 15.00%

15.00%

Zimbabwe


MFN duties 40.00% 40.00% 40.00% 40.00%

Source: Market Access Map.

29

Mauritius allow the importation of milk and cream (not concentrated or sweetened) from South Africa duty free. Zambia introduced the preferential tariff of 15% to South Africa and Mozambique increased the preferential tariff from 11.30% to 15%. In 2008 Angola, United Republic of Tanzania and Zimbabwe applied MFN duties of 2%, 60% and 40% respectively to milk and cream (not concentrated or sweetened) originating from South Africa and remained the same in 2009. Table 11: Milk and cream (concentrated or sweetened)

2008 2009 Country Product code


Applied Tariffs


Applied Tariffs


Angola 0402 (Milk and Cream, concentrated and sweetened)

MFN duties 2.00% 2.00% 2.00% 2.00%

Democratic Republic of the Congo

0402 (Milk and Cream, concentrated and sweetened)

MFN duties 5.00% 5.00% 5.00%

5.00%

Malawi 0402 (Milk and Cream, concentrated and sweetened)


10.00% 10.00% 10.00% 10.00%

Mozambique 0402 (Milk and Cream, concentrated and sweetened)


8.50% 8.50% 15.00% 15.00%

Zambia 0402 (Milk and Cream, concentrated and sweetened)


2.8% 2.8% 2.8% 2.8%

Zimbabwe 0402 (Milk and Cream, concentrated and sweetened)

MFN duties 30.1% 30.1% 20.00% 20.00%

Source: Market Access Map. Malawi and Zambia has a preferential tariff for exports of milk and cream (concentrated or sweetened) in 2008 and 2009 of 10% and 2.8% respectively, while the preferential tariff applied by Mozambique was

http://www.macmap.org/trademap/redirectLoginPage.aspx?Country=716&Product=0402&ExpOrImp=I&tool=2&as=(S(aetjvy552nrqtbv1bd5kll55))&[email protected]&ReturnUrl=Quick.Comparison.aspx


30

increased from 8.5% in 2008 to 15% in 2009. Angola and Democratic Republic of Congo (DRC) applied the MFT duties of 2% and 5% respectively in 2008 and 2009. Zimbabwe applies the MFN tariff of 20% of milk and cream (concentrated or sweetened) originating from South Africa and it was reduced from 30.1% in 2008. Table 12: Buttermilk, cream, yoghurt, etc

2008 2009 Country Product Code


Applied Tariffs


Applied Tariffs


Angola

0403 (Buttermilk, curdled milk and cream and yoghurt)

MFN duties 10.00% 10.00% 10.00% 10.00%

Malawi


MFN duties 10.00% 10.00% 10.00% 10.00%

Mozambique



20.00% 20.00% 15.00% 15.00%

Nigeria


MFN duties 12.9% 12.9% 20.00% 20.00%12.9%

Zambia



5.00% 5.00% 0.00% 0.00%

Zimbabwe


MFN duties 40.00% 40.00% 40.00% 40.00%





31

Mozambique and Zambia has a preferential tariff for exports of buttermilk, curdled milk, cream and yoghurt of 15% and 0% (free) respectively in 2009 and both tariffs were reduced from 20% and 5% respectively in 2008. Angola and Malawi apply MFN duties of 10% to buttermilk, curdled milk, cream and yoghurt originating from South Africa. Nigeria and Zimbabwe apply MFN duties of 20%% and 40% respectively to buttermilk, curdled milk, cream and yoghurt originating from South Africa in 2009. Nigeria’s MFN duties were increased from 12.9% in 2008 to 20% in 2009. Table 13: Whey and natural milk products



Applied Tariffs


Applied Tariffs


China 0404 (Whey)

General tariff 2.00% 2.00%

Chinese Taipei

0404 (Whey)

MFN duties 6.2% 6.2% 5.00% 5.00%

Japan 0404 (Whey)

MFN duties 29.80% + 9732.78 $/Ton

322.40%

29.80% + 4043.43 $/Ton

460.02%

Mozambique 0404 (Whey)

Preferential tariff for SA

0.50% 0.50% 0.00% 0.00%

Republic of Korea

0404 (Whey)

MFN duties 42.80% 42.80% 49.50% 49.50%

Zimbabwe 0404 (Whey)

MFN duties 5.30% 5.30% 5.00% 5.00%

Source: Market Access Map. Mozambique allowed importation of whey from South Africa duty free (0%) in 2009 and in 2008 there was a preferential tariff of 0.5% of whey originating from South Africa. China apply a general tariff of 2% while Chinese Taipei, Japan and Zimbabwe apply MFN duties of 5%, 29.8% and 5% respectively to whey originating from South Africa. Republic of Korea applied an MFN tariff of 42.8% in 2008 and it was increased to 49.5% in 2009 for whey originating from South Africa.







32

Table 14: Butter and other fats and oils derived from milk 2008 2009 Country Product

code Trade Regime Description

Applied Tariffs


Applied Tariffs


Malawi

0405 (Butter and other fats)

MFN duties 25.00% 25.00% 25.00% 25.00%

Mauritius


MFN duties 0.00% 0.00% 0.00% 0.00%

Mozambique


Preferential for SA

0.00% 0.00%

Zambia



5.00% 5.00% 0.00% 0.00%

Zimbabwe


MFN duties 40.00% 40.00% 40.00% 40.00%

Source: Market Access Map. Mauritius, Mozambique and Zambia allow importation of whey from South Africa duty free. Malawi and Zimbabwe apply MFN duties of 25% and 40% to butter and other fats and oils derived from milk originating from South Africa.

33

Table 15: Cheese and curd 2008 2009 Country Product


Applied Tariffs


Applied Tariffs


Angola 0406 (Cheese & curd)

MFN duties 10.00% 10.00% 10.00% 10.00%

Malawi 0406 (Cheese & curd)

MFN duties 25.00% 25.00% 25.00% 25.00%

Mauritius 0406 (Cheese & curd

MFN duties 25.00% 25.00%

Zambia 0406 (Cheese & curd)

Preferential tariff for SA

5.00% 5.00% 0.00% 0.00%

Zimbabwe 0406 (Cheese & curd)

MFN 40.00% 40.00% 40.00% 40.00%

Source: Market Access Map. Zambia has a preferential tariff for exports of cheese and curd in 2009 of originating from South Africa of 0% (free) but it was reduced from 5% in 2008. Angola and Mozambique apply MFN duties of 10% and 40% respectively to cheese and curd originating from South Africa while, Malawi and Mauritius apply a 25% MFN duties to South African exports of cheese and curd.

34

6.2. Import tariffs Tariffs that South Africa applied to imports of milk and dairy products originating from all possible countries in 2008 and 2009 are shown in table 16 to 21. Table 16: Milk and cream, neither concentrated nor sweetened



Applied Tariffs


Applied Tariffs


Argentina


MFN duties 0.00% 0.00% 0.00% 0.00%

Australia


MFN duties 0.00% 0.00% 0.00% 0.00%

Germany


MFN duties 0.00% 0.00% 0.00% 0.00%

Nigeria


MFN duties 0.00% 0.00% 0.00% 0.00%

Uganda


MFN duties 0.00% 0.00% 0.00% 0.00%

United Kingdom


MFN duties 0.00% 0.00% 0.00% 0.00%

Uruguay 0401 (Milk and Cream not

MFN duties 0.00% 0.00% 0.00% 0.00%

35



Applied Tariffs


Applied Tariffs


concentrated nor sweetened)

Source: Market Access Map. South Africa applies no tariff on all the imports of milk and cream (neither concentrated nor sweetened). Table 17: Milk and cream, concentrated or sweetened



Applied Tariffs


Applied Tariffs


Argentina

0402 (Milk and cream concentrated or sweetened)

MFN duties 96.00% or 446.98 $/Ton whichever is the lower

20.50% 96.00% or 589.54 $/Ton whichever is the lower

24.47%

Australia




24.47%

France



24.47%

New Zealand




24.47%

Uruguay



24.47%


36

Table 17 indicates that South Africa increased its applied and ad valorem tariff for milk and cream (concentrated or sweetened) from 96% or $ 446.98/ton, whichever is lower and 20.5% respectively in 2008 to 96% or $ 589.54/ton, whichever is the lower and 24.47% respectively in 2009. Table 18: Buttermilk, cream, yoghurt, etc



Applied Tariffs


Applied Tariffs


France

04039010(Buttermilk, curdled milk and cream) 04031000 (Yoghurt)

Preferential tariff for European Union countries

36.48% or 169.85 $/Ton whichever is the lower

8.01%

24.00% or 147.38 $/Ton whichever is the lower 0.00%

6.95% 0.00%

Germany




8.01% 24.00% or 147.38 $/Ton whichever is the lower 0.00%

6.95% 0.00%

Netherlands





6.95% 0.00%

New Zealand

04039010(Buttermilk, curdled

MFN duties 96.00% or 446.98 $/Ton

21.08% 96.00% or 589.54 $/Ton

27.81%

37



Applied Tariffs


Applied Tariffs


milk and cream) 04031000 (Yoghurt))

whichever is the lower

whichever is the lower 0.00%

0.00%

United Kingdom





6.95% 0.00%

United States of United States of America




27.81% 0.00%

Source: Market Access Map. Table 18 indicates that South Africa decreased its applied and ad valorem preferential tariff to European counties for buttermilk, curdled milk, cream and yoghurt from 36.48% or $ 169.85/ton, whichever is lower and 8.1% respectively in 2008 to 24% or $ 147.38/ton, whichever is lower and 6.95% in 2009. In terms of MFN tariff, South Africa decreased its applied and ad valorem MFN tariff for buttermilk, curdled milk, cream and yoghurt from 96% or $ 597.82/ton, whichever is lower and 34.79% respectively in 2008 to 96% or $ 589.54/ton, whichever is lower and 27.81% in 2009. South Africa accepts the imports of yoghurt free of duty.

38

Table 19: Whey and other natural milk products 2008 2009 Country Product


Applied Tariffs


Applied Tariffs


Argentina

0404 (Whey)



30.83%

Australia

0404 (Whey)



30.83%

France 0404 (Whey)




7.71%

Ireland

0404 (Whey)




7.71%

New Zealand

0404 (Whey)



30.83%

United States of America

0404 (Whey)



30.83%

Source: Market Access Map. Table 19 indicates that South Africa decreased its applied and ad valorem preferential tariff to European counties for whey from 36.48% or $ 169.85/ton, whichever is lower and 8.88% respectively in 2008 to 24% or $ 147.38/ton, whichever is lower and 7.71% respectively in 2009. In terms of MFN tariff, South Africa increased its applied and ad valorem MFN tariff for whey from 96% or $ 446.98/ton, whichever is lower and

39

9.39% respectively in 2008 to 96% or $ 589.54/ton, whichever is lower and 30.83% respectively in 2009. Table 20: Butter and other fats and oils derived from milk



Applied Tariffs


Applied Tariffs


Australia

04051000 (Butter) 04059000 (Fats and oils)



31.78 24.48%

Ireland




31.78 24.48%

Israel



31.78 24.48%

Netherland and Antilles

04051000 (Butter)



31.78

40



Applied Tariffs


Applied Tariffs


04059000 (Fats and oils)

24.48%

New Zealand




31.78 24.48%

United States of America




31.78 24.48%

Source: Market Access Map. Table 20 indicates that South Africa increased its applied and ad valorem tariff for butter and other fats and oils derived from milk from 79% or $ 496.65/ton, whichever is lower and 18.56% respectively in 2008 to 79% or 655.04 $/Ton whichever is the lower or 24.48%

41

Table 21: Cheese and curd 2008 2009 Country Product


Applied Tariffs


Applied Tariffs

Total Advalorem Equivalent Tariff (estimated)

Australia

04061000 (Fresh cheese) 04063000 (Processed cheese)



13.13% 12.69%

Denmark




13.13% 12.69%

France




13.13% 12.69%

Ireland




13.13% 12.69%

Italy 04061000 (Fresh cheese)

MFN duties 95.00% or 496.65 $/Ton

10.40% 95.00% or 655.04 $/Ton

13.13%

http://www.macmap.org/trademap/redirectLoginPage.aspx?Country=554&Product=0406&ExpOrImp=E&tool=2&as=(S(aetjvy552nrqtbv1bd5kll55))&[email protected]&ReturnUrl=Quick.Comparison.aspx





42



Applied Tariffs


Applied Tariffs

Total Advalorem Equivalent Tariff (estimated)

04063000 (Processed cheese)



12.69%

New Zealand




13.13% 12.69%

Source: Market Access Map. Table 21 indicates that South Africa increased the applied tariff for cheese and curd from 95.00% or $ 496.65/ton whichever is the lower in 2008 or 10.40% to 95.00% or $ 655.04/ton, whichever is lower or 12.69% in 2009.



43

7. COMPETITIVENESS OF THE DAIRY INDUSTRY

7.1. Exports

7.1.1. Milk and cream (neither concentrated nor sweetened) Table 22: List of importing markets for the product exported by South Africa in 2009 South Africa’s exports represent 0.32% of world exports for Milk and cream, (not concentrated or sweetened), its ranking in worlds exports is 30.

Trade Indicators

Importers Exported

value 2009, USD

thousand

Trade balance 2009 in

USD thousand

Share in South

Africa's exports,

%

Exported quantity

2009

Quantity unit

Unit value, (USD/unit)

Exported growth in

value between

2005-2009, %,

p.a.

Exported growth in quantity between

2005-2009, %, p.a.

Exported growth in

value between

2008-2009, %,

p.a.

Ranking of partner countries in world imports

Share of partner

countries in world imports,

%

Total import

growth in value of partner

countries between

2005-2009, %, p.a.

Tariff (estimated)

faced by South Africa

'World 19,146 13,001 100 21,413 Tons 894 34 25 140 100 10

'Zimbabwe 7,834 7,834 40.9 8,862 Tons 884 222 174 1409 55 0.2 191 '40

'Zambia 3,439 3,439 18 2,570 Tons 1,338 173 177 1058 178 0 12 '15

'Mozambique 3,107 3,107 16.2 4,412 Tons 704 9 9 3 83 0.1 22 '8.4

'United Republic of Tanzania

1,485 1,485 7.8 2,084 Tons 713 34 30 30 72 0.1 33 '60

'Mauritius 665 665 3.5 730 Tons 911 42 37 77 78 0.1 18 '0

'Angola 660 660 3.4 889 Tons 742 -16 -18 -28 45 0.2 37 '2

Source: ITC calculations based on COMTRADE statistics.

44

Table 22 shows that during 2009, South Africa exported a total of 21 413 tons of milk and cream (not concentrated or sweetened) at an average value of US$ 894/unit. South Africa exported greater quantities of milk and cream (not concentrated or sweetened) to Zimbabwe, Mozambique, Zambia and United Republic of Tanzania. The greatest share of South African milk and cream (not concentrated or sweetened) exports were destined to Zimbabwe which commanded 40.9% share during the year 2009 followed by Zambia (18 %). South Africa’s milk and cream (not concentrated or sweetened) exports increased by 34% in value and 25% in quantity between the periods 2005 and 2009. During the same period, exports of milk and cream (not concentrated or sweetened) to Zimbabwe increased by 222% in value while quantity increased by 174%; and Zambia increased in value and quantity by 173% and 177% respectively. Between the periods 2008 and 2009, South Africa’s exports of milk and cream (not concentrated or sweetened) increased by 140% in value. During the same period, Zimbabwe and Zambia increased by 1409% and 1058% respectively in value.

46

The chart illustrates that South Africa’s exports of milk and cream (not concentrated or sweetened) represent 0.32% of world exports. Between 2005 and 2009 South Africa’s milk and cream, not concentrated or sweetened exported to Nigeria, Mozambique and Angola were growing at a rate that is less than their import growth from the world. This means that South Africa is losing the market in the mentioned countries. During the same period, South Africa’s milk and cream (not concentrated or sweetened) exports to Mauritius, United Republic of Tanzania, Ghana, Malawi and Saint Helena were growing at a rate that is greater than their imports from the rest of the world. Therefore South Africa is gaining the market share in those countries.

48

South Africa is currently exporting large quantities of milk and cream, not concentrated nor sweetened to Zimbabwe, and it has a market share on 40.92% of South Africa’s exports. If South Africa wishes to diversify its exports of milk and cream (not concentrated or sweetened), Uganda is an attractive market because although it is a small prospective market, its annual growth is the highest (138%) followed by Madagascar which has an annual growth of 62%.

49

7.1.2. Milk and cream, concentrated or sweetened Table 23: List of importing markets for the product exported by South Africa in 2009 South Africa's exports represent 0.19% of world exports for milk and cream (concentrated or sweetened), its ranking in world exports is 47.

Trade Indicators

Importers Exported

value 2009, USD

thousand


USD thousand

Share in

South Africa's exports,

%

Exported quantity

2009

Quantity unit


Exported growth in value between

2005-2009, %,

p.a.

Exported growth

in quantity between

2005-2009, %,

p.a.

Exported growth in

value between

2008-2009, %,

p.a.

Ranking of

partner countries in world imports

Share of partner


%

Total import


countries between

2005-2009, %,

p.a.

Tariff (estimated)


'World 23,097 9,976 100 8,200 Tons 2,817 26 25 2 100 7

'Zimbabwe 8,180 8,180 35.4 3,232 Tons 2,531 46 52 188 114 0.1 63 '30.1

'Zambia 5,285 5,285 22.9 1,562 Tons 3,383 27 32 -22 102 0.1 32 '0

'Mozambique 5,177 5,177 22.4 1,481 Tons 3,496 29 21 -32 92 0.1 -10 '7.5

'Malawi 2,234 2,234 9.7 645 Tons 3,464 34 20 -24 109 0.1 9 '10

'Democratic Republic of the Congo 504 504 2.2 237 Tons 2,127 -22 -17 26 50 0.4 11 '5

'Angola 388 388 1.7 441 Tons 880 -3 18 -34 38 0.6 14 '2

'Ship stores and bunkers 326 326 1.4 166 Tons 1,964 33 29 28 196 0 6

'Ghana 204 204 0.9 131 Tons 1,557 85 59 57 65 0.2 2 '20

'United Republic of Tanzania 200 200 0.9 50 Tons 4,000 22 24 -5 179 0 6 '60


50

Table 23 shows that during 2009 South Africa exported a total of 8 200 tons of milk and cream (concentrated or sweetened) at an average value of US$ 2 817/unit. South Africa exported greater quantities of milk and cream (concentrated or sweetened) to Zimbabwe, Zambia and Mozambique. The greatest share of South African milk and cream (concentrated or sweetened) exports were destined to Zimbabwe which commanded 35.4% share during the year 2009 followed by Zambia (22.9 %). South Africa’s milk and cream (concentrated or sweetened) exports increased by 26% in value and 25% in quantity between the periods 2005 and 2009. During the same period, exports of milk and cream (concentrated or sweetened) to Zimbabwe increased by 46% in value and 52% in quantity and Zambia increased in value and quantity by 27% and 32% respectively. Between the periods 2008 and 2009, South Africa’s exports of milk and cream (concentrated or sweetened) increased by 2% in value. During the same period, Zimbabwe increased by 188% and Zambia decreased by 22% in value.

52

The chart illustrates that South Africa’s exports of milk and cream (concentrated or sweetened) represent 0.19% of world exports. Between 2005 and 2009 South Africa’s milk and cream, concentrated and sweetened was losing the market share in Zimbabwe, Zambia, Kenya, Saint Helena, Angola, Democratic Republic of Congo and Uganda because imports from South African exports were growing at a rate that is less than their import growth from the world. During the same period, South Africa was gaining the market shares of milk and cream (concentrated or sweetened) exports to Nigeria, United States of America, Mozambique, Malawi and Ghana because imports from South African were growing at a rate that is greater than their imports from the rest of the world.

54

If South Africa wishes to diversify its export of milk and cream (concentrated and sweetened), Kenya will be the attractive market because although it is a small prospective market its annual growth is 51%. South Africa can still increase its exports to Zimbabwe even though Zimbabwe has a market share of 35.42% in South African exports because its import growth from the world is still greater than South African’s export growth to Zimbabwe. Zambia can also be a prospective market due to its 32% annual growth.

55

7.1.3. Buttermilk and yoghurt Table 24: List of importing markets for Buttermilk and yoghurt exported by South Africa in 2009 South Africa’s exports represent 0.3% of world exports for Buttermilk and yoghurt, its ranking in world exports is 32.

Trade Indicators

Importers Exported

value 2009, USD

thousand


USD thousand

Share in


%

Exported quantity

2009

Quantity unit



2005-2009, %,

p.a.

Exported growth

in quantity between

2005-2009, %,

p.a.


2008-2009, %,

p.a.

Ranking of


Share of partner


%

Total import growth in value

of partner

countries between

2005-2009, %,

p.a.

Tariff (estimated)


'World 10,849 8,436 100 5,696 Tons 1,905 34 15 9 100 9

'Angola 5,159 5,159 47.6 2,551 Tons 2,022 56 49 -11 25 0.8 41 '10

'Mozambique 2,460 2,460 22.7 1,525 Tons 1,613 13 -3 8 103 0 28 '9.1

'Zimbabwe 1,440 1,440 13.3 857 Tons 1,680 149 169 310 100 0 242 '40

'Malawi 480 480 4.4 208 Tons 2,308 19 37 145 120 0 45 '10

'Ship stores and bunkers 350 350 3.2 148 Tons 2,365 16 16 -21 114 0 20

'Nigeria 253 253 2.3 129 Tons 1,961 63 76 -37 46 0.3 -26 '14.4

'Zambia 197 197 1.8 86 Tons 2,291 14 5 39 159 0 0 '0

'Ghana 94 94 0.9 33 Tons 2,848 175 226 6 96 0 1 '20

'Seychelles 79 79 0.7 25 Tons 3,160 11 -47 508 125 0 101 '50

'Uganda 63 63 0.6 20 Tons 3,150 3 -15 70 157 0 7 '25


56

Table 24 shows that during 2009 South Africa exported a total of 5 696 tons of buttermilk and yoghurt at an average value of US$ 1 905/unit. South Africa exported greater quantities of buttermilk and yoghurt to Angola, Mozambique and Zimbabwe. The greatest share of South African buttermilk and yoghurt exports were destined to Angola which commanded 47.6% share during the year 2009 followed by Mozambique (22.7%). South Africa’s buttermilk and yoghurt exports have increased by 34% in value and 15% in quantity between the periods 2005 and 2009. During the same period, exports of buttermilk and yoghurt to Angola increased by 56% in value and 49% in quantity; and Mozambique increased in value by 13% and decreased by 3% in quantity. Between the periods 2008 and 2009, South Africa’s exports of buttermilk and yoghurt increased by 9% in value. During the same period, Angola decreased by 11% and Mozambique increased by 8% in value. Zimbabwe commanded 13.3% of South Africa’s buttermilk and yoghurt exports in 2009 and its imports were growing by 310% during the period 2008 and 2009 and 149% during the period 2005 and 2009 in value.

58

The chart illustrates that South Africa’s exports of buttermilk and yoghurt represent 0.3% of the world exports. Between 2005 and 2009 South Africa’ was losing the market share of buttermilk and yoghurt in Malawi, Mozambique, Uganda, and Mauritius because its exports were growing at a rate that is less than their import growth from the rest of the world. During the same period, South Africa’s buttermilk and yoghurt exports to Angola and to the declining markets of Nigeria, Sudan and Saint Helena were growing at a rate that is greater than their imports from the rest of the world. Therefore South Africa is gaining the market share in these countries.

60

South Africa’s exports of buttermilk and yoghurt are dominant in Angola but if South Africa wishes to diversify its exports the most attractive market will be Zimbabwe and Seychelles. Even though their world market share is at 0%, their annual growth which is 242% and 101% respectively, is very attractive. Greece and Saudi Arabia looks to be the biggest markets of world’s buttermilk and yoghurt but their annual growth of 16% and 14% respectively is not attractive. Therefore it might be difficult for South Africa to penetrate their market.

61

7.1.4. Whey and other natural milk products Table 25: List of importing markets for whey and natural milk exported by South Africa in 2009 South Africa's exports represent 0.07% of world exports for whey and natural milk, its ranking in world exports is 38.

Trade Indicators

Importers Exported

value 2009, USD

thousand


USD thousand

Share in South

Africa's exports,

%

Exported quantity

2009

Quantity unit


Exported growth in

value between

2005-2009, %,

p.a.


2005-2009, %, p.a.

Exported growth in

value between

2008-2009, %,

p.a.


Share of partner


%

Total import


countries between

2005-2009, %, p.a.

Tariff (estimated)


'World 1,953 -14,060 100 3,853 Tons 507 66 99 -6 100 7

'Japan 764 764 39.1 1,461 Tons 523 76 5 8 3.7 5 '322.4

'Republic of Korea 700 700 35.8 1,654 Tons 423 36 88 9 3.1 0 '42.8

'Mozambique 153 153 7.8 144 Tons 1,063 109 142 -15 111 0 100 '0

'China 147 147 7.5 325 Tons 452 2 10.8 18 '4.9

'Zimbabwe 38 38 1.9 29 Tons 1,310 -6 -20 -19 149 0 10 '5.3

'Chinese Taipei 33 33 1.7 100 Tons 330 -40 34 0.4 -2 '6.2

'Israel 32 32 1.6 75 Tons 427 62 0.1 11 '30.2

'Zambia 20 20 1 15 Tons 1,333 3 -12 11 152 0 43 '0

'New Zealand 15 -2,363 0.8 4 Tons 3,750 13 9 7 30 0.7 30 '4.5

'Viet Nam 14 14 0.7 25 Tons 560 -75 24 1 17 '25.8


62

Table 25 shows that during 2009 South Africa exported a total of 3 853 tons of whey and natural milk products at an average value of US$ 507/unit. South Africa exported greater quantities of whey and natural milk products to Japan and Republic of Korea. The greatest share of South African whey and natural milk products exports were destined to Japan which commanded 39.1% share during the year 2009 followed by Republic of Korea taking up 35.8%. South Africa’s whey and natural milk products exports increased by 66% in value and 99% in quantity between the periods 2005 and 2009. During the same period, exports of whey and natural milk products to Japan and Republic of Korea increased by 76% and 36% in value respectively. Between the periods 2008 and 2009, South Africa’s exports of whey and natural milk products decreased by 6% in value. During the same period, Japan and Republic of Korea increased by 5% and 88% respectively in value. Mozambique commanded 7.8% of South Africa’s whey and natural milk products exports in 2009 and its imports were growing by 109% in value and 142% in quantity during the period 2005 and 2009 more than South Africa’s leading importers. It represents a new market for South Africa’s whey and natural milk products.

64

The chart illustrates that that South Africa’s exports of whey and natural milk products represent 0.07% of the world exports. Between 2005 and 2009 South Africa’s whey and natural milk products exported to New Zealand, Angola, Zambia and Zimbabwe were growing at a rate that is less than their import growth from the rest of the world. Therefore, South Africa is losing the market share in the mentioned countries. During the same period, South Africa is gaining the market shares of whey and natural milk products exports in the declining markets of Seychelles and Ship stores and bunkers because its exports were growing at a rate that is greater than their imports from the rest of the world.

66

The chart illustrates that China is the biggest importer of whey and natural milk products with a world market share of 10.8% but it is not the main importer of South Africa’s whey and natural milk products. It has a market share of 7.5% in South Africa’s exports and an annual growth of 18%. It is therefore the second biggest prospective market for South Africa’s whey and natural milk products following Mozambique which experienced higher annual growth of 100%.

67

7.1.5. Butter and other fats and oils derived from milk Table 26: List of importing markets for butter and other fats and oils derived from milk exported by South Africa in 2009 South Africa’s export represent 0.09% of world export for butter and other fats and oils derived from milk, its ranking in world exports is 40.

Trade Indicators

Importers Exported

value 2009, USD

thousand


USD thousand

Share in South

Africa's exports,

%

Exported quantity

2009

Quantity unit


Exported growth in

value between

2005-2009, %,

p.a.


2005-2009, %,

p.a.

Exported growth in

value between

2008-2009, %,

p.a.


Share of partner


%

Total import


countries between

2005-2009, %, p.a.

Tariff (estimated)


'World 4,063 -4,537 100 1,292 Tons 3,145 20 16 9 100 2

'Zimbabwe 973 973 23.9 465 Tons 2,092 34 35 185 138 0 73 '40

'Mauritius 933 933 23 244 Tons 3,824 25 14 8 69 0.1 11 '0

'Mozambique 769 769 18.9 177 Tons 4,345 7 -5 -26 141 0 -7 '0

'Zambia 349 349 8.6 103 Tons 3,388 18 20 -8 147 0 13 '0

'Ship stores and bunkers 337 337 8.3 97 Tons 3,474 59 69 -13 129 0 -6

'Malawi 223 223 5.5 66 Tons 3,379 14 8 -7 145 0 23 '25

'Democratic Republic of the Congo

135 135 3.3 49 Tons 2,755 52 43 13 96 0 21 '20

Sources: ITC calculations based on COMTRADE statistics.

68

Table 26 shows that during 2009 South Africa exported a total of 1 292 tons of butter and other fats derived from milk at an average value of US$ 3 145/unit. South Africa exported greater quantities of butter and other fats derived from milk to Zimbabwe, Mauritius and Mozambique. The greatest share of South African butter and other fats derived from milk exports were destined to Zimbabwe which commanded 23.9% share during the year 2009 followed by Mauritius (23%). South Africa’s butter and other fats derived from milk exports increased by 120% in value and 16% in quantity between the periods 2005 and 2009. During the same period, exports of butter and other fats derived from milk to Zimbabwe increased by 34% in value and 35% in quantity; and Mauritius increased in value and quantity by 14% and 8% respectively. Between the periods 2008 and 2009, South Africa’s exports of butter and other fats derived from milk increased by 9% in value. During the same period, Zimbabwe and Mauritius increased by 185% and 8% respectively in value. Democratic Republic of Congo commanded 3.3% of South Africa’s butter and other fats derived from milk exports in 2009 and its imports were growing by 13% during the period 2008 and 2009 and 52% during the period 2005 and 2009 in value, more than South Africa’s leading importers. It represents a new market for South Africa’s butter and other fats derived from milk.

70

The chart illustrates that that South Africa’s exports of butter and other fats and oils represent 0.09% of the world exports. Between 2005 and 2009 South Africa’s butter and other fats exported to United Republic of Tanzania, Saint Helena, Zimbabwe, Uganda, Malawi and Angola were growing at a rate that is less than their export growth to the rest of the world. During the same period, South Africa’s butter and other fats exports to Ghana, Australia, Greece, Nigeria, Mauritius and Mozambique were growing at a rate that is greater than their exports to the rest of the world. Therefore South Africa is gaining the market shares in both dynamic market (Ghana, Australia, Mauritius, and Greece) and declining market (Nigeria and Mozambique).

72

The chart illustrates that Netherlands dominated the import markets of butter and other fats derived from milk, but is not the main importer of South African‘s butter and other fats. Netherlands’ market share in South African exports is 0.05% and its annual growth is 1%. It might be difficult for South Africa to enter its market but if South Africa wishes to diversify Zimbabwe and Uganda because their annual growth at 73% and 48% respectively.

73

7.1.6. Cheese and Curd Table 27: List of importing markets for the product exported by South Africa in 2009 South Africa’s exports represent 0.03% of world exports of cheese and curd, its ranking in world exports is 57.

Trade Indicators

Importers Exported

value 2009, USD

thousand


USD thousand

Share in


%

Exported quantity

2009

Quantity unit



2005-2009, %,

p.a.

Exported growth

in quantity between

2005-2009, %,

p.a.


2008-2009, %,

p.a.

Ranking of


Share of partner


%

Total import growth in value

of partner

countries between

2005-2009, %,

p.a.

Tariff (estimated)


'World 7,421 -18,725 100 1,741 Tons 4,262 20 9 39 100 10

'Mozambique 2,510 2,510 33.8 555 Tons 4,523 15 -3 20 140 0 27 '12.7

'Zimbabwe 1,347 1,347 18.2 343 Tons 3,927 54 58 486 153 0 88 '40

'Zambia 1,152 1,152 15.5 268 Tons 4,299 43 21 37 154 0 30 '0

'Malawi 558 558 7.5 137 Tons 4,073 17 24 78 168 0 15 '25

'Ship stores and bunkers 518 518 7 88 Tons 5,886 30 29 6 133 0 1

'Angola 365 365 4.9 119 Tons 3,067 -3 1 -15 77 0.1 24 '10

'Democratic Republic of the Congo 297 297 4 88 Tons 3,375 29 27 -7 149 0 6 '20

'United Republic of Tanzania 134 134 1.8 20 Tons 6,700 3 2 -33 182 0 -3 '25

'Nigeria 110 110 1.5 31 Tons 3,548 26 37 28 114 0 6 '20

Sources: ITC calculations based on COMTRADE statistics.

74

Table 27 shows that during 2009 South Africa exported a total of 1 741 tons of cheese and curd at an average value of US$ 4 262/unit. South Africa exported greater quantities of cheese and curd to Mozambique, Zimbabwe and Zambia. The greatest share of South African cheese and curd exports were destined to Mozambique which commanded 33.8% share during the year 2009 followed by Zimbabwe (18.2%). South Africa’s cheese and curd exports increased by 20% in value and 9% in quantity between the periods 2005 and 2009. During the same period, exports of cheese and curd to Mozambique increased by 15% in value and declined by 3% in quantity; and Zimbabwe increased in value and quantity by 54% and 58% respectively. Between the periods 2008 and 2009, South Africa’s exports of cheese and curd increased by 39% in value. During the same period, Mozambique and Zimbabwe increased by 20% and 406% respectively in value.

76

The chart illustrates that that South Africa’s exports of cheese and curd represent 0.03% of the world exports. Between 2005 and 2009 South Africa is losing the market share of cheese and curd exports to Mozambique, Angola, Congo, Mauritius, Benin and Kenya because its exports were growing at a rate that is less than their import growth from the rest of the world. During the same period, South Africa is gaining the market share of cheese and curd exports to Ghana, Zambia, Madagascar, Democratic Republic of Congo (DRC), Malawi, Nigeria and United Republic of Tanzania were growing at a rate that is greater than their imports from the rest of the world. This means South Africa is gaining the market shares in both dynamic market (Ghana, Madagascar, Zambia and Malawi) and declining market (DRC, Nigeria and United Republic of Tanzania).

78

The chart shows that Greece and United States of Emirates are the world’s greatest importers of cheese and curd, but are not the main importers of South African cheese and curd. Their shares in South African market are 0.27% and 0.19% respectively and their annual growth is 10% and 22% respectively. Zimbabwe is the most attractive market for South Africa due to its annual growth of 88%.

79

7.2. Imports

7.2.1. Milk and cream (neither concentrated nor sweetened) Table 28: List of supplying markets for the product imported by South Africa in 2009 South Africa’s imports represent 0.1% of world imports for milk and cream (not concentrated nor sweetened), its ranking in world imports is 66.

Trade Indicators

Exporters Imported

value 2009, USD

thousand


USD thousand

Share in South

Africa's imports,

%

Imported quantity

2009

Quantity unit


Imported growth in value between

2005-2009, %,

p.a.

Imported growth

in quantity between

2005-2009, %,

p.a.


2008-2009, %,

p.a.

Ranking of

partner countries in world exports

Share of partner

countries in world exports,

%

Total export growth in value

of partner

countries between

2005-2009, %,

p.a.

Tariff (estimated) applied by

South Africa

'World 6,145 13,001 100 10,881 Tons 565 52 53 -28 100 9

'Argentina 5,896 -5,896 95.9 10,448 Tons 564 177 152 -16 40 0.2 25 '0

'Uruguay 178 -178 2.9 353 Tons 504 -23 -28 -72 55 0.1 -31 '0

'United Kingdom 34 -34 0.6 28 Tons 1,214 -39 -33 -74 6 5 0 '0

'Uganda 21 -9 0.3 44 Tons 477 -93 56 0.1 346 '0

'Germany 13 -13 0.2 4 Tons 3,250 -40 -51 -91 1 23.3 4 '0

'Australia 1 0 0 1 Tons 1,000 -53 17 1.3 -2 '0

'France 1 -1 0 0 Tons 2 11.4 9 '0

'Nigeria 1 28 0 2 Tons 500 80 0 338 '0


80

Table 28 shows that during 2009 South Africa imported a total of 10 881 tons of milk and cream (not concentrated nor sweetened), at an average value of US$ 565/unit. South Africa imported greater quantities of milk and cream, (not concentrated or sweetened) from Argentina and Uruguay. The greatest share of South African milk and cream (not concentrated or sweetened) imports originated from Argentina which commanded 95.9% share during the year 2009 followed by Uruguay (2.9%). South Africa’s milk and cream (not concentrated or sweetened) imports increased by 52% in value and 53% in quantity between the periods 2005 and 2009. During the same period, imports of milk and cream (not concentrated or sweetened) from Argentina increased by 177% in value and 152 in quantity; and Uruguay decreased in value and quantity by 23% and 28% respectively. Between the periods 2008 and 2009, South Africa’s imports of milk and cream (not concentrated or sweetened) decreased by 28% in value. During the same period, Argentina’ and Uruguay of milk and cream (not concentrated or sweetened) exports to South Africa decreased by 16% and 72% respectively in value.

82

The chart illustrates that South Africa’s imports between 2005 and 2009 represent 0.1% of the world’s imports of milk and cream, not concentrated or sweetened. Imports from Germany and United Kingdom were growing at a rate that is less than their export growth to the rest of the world. This means that South Africa is losing the market share in the mentioned countries. During the same period, South Africa is gaining the market share of milk and cream, not concentrated or sweetened imports from Uruguay and Argentina because South Africa’s import growth were growing at a rate that is greater than Uruguay and Argentina’s exports to the rest of the world.

84

The chart illustrates that Germany is not a big supplier of South Africa’s market for milk and cream (not concentrated or sweetened) but it is the world’s greatest exporter of milk and cream (not concentrated or sweetened) over the period 2005 – 2009. Even though Germany is the main supplier (23.3% share of world’s exports), its annual growth of 4% shows that it not easy for South Africa to penetrate its market. South Africa can diversify to Uganda and Nigeria which has the lowest world’s exports share (0.1% and 0% respectively) but their annual growth is 346% and 338% respectively.

85

7.2.2. Milk and cream, concentrated or sweetened Table 29: List of supplying markets for the product imported by South Africa in 2009 South Africa’s imports represent 0.11% of world imports for milk and cream (concentrated or sweetened), its ranking in world imports is 98.

Trade Indicators

Exporters Imported

value 2009, USD

thousand


USD thousand

Share in South

Africa's imports,

%

Imported quantity

2009

Quantity unit


Imported growth in

value between

2005-2009, %, p.a.

Imported growth in quantity between

2005-2009, %, p.a.

Imported growth in

value between

2008-2009, %, p.a.

Ranking of partner countries in world exports

Share of partner


%

Total export


countries between

2005-2009, %, p.a.


South Africa

'World 13,121 9,976 100 5,386 Tons 2,436 -13 -19 -44 100 8

'France 2,041 -2,041 15.6 928 Tons 2,199 299 212 5 5.8 8 '20.5

'New Zealand 1,824 -1,824 13.9 873 Tons 2,089 -36 -39 1 1 22.5 14 '20.5

'Australia 1,683 -1,683 12.8 784 Tons 2,147 -23 -27 19 4 6.1 1 '20.5

'Uruguay 1,075 -1,075 8.2 425 Tons 2,529 -44 7 16 1.3 13 '20.5

'Argentina 957 -957 7.3 300 Tons 3,190 -25 -35 9 8 3.1 -3 '20.5

'Netherlands 838 -838 6.4 353 Tons 2,374 23 32 239 2 10.4 10 '20.5

'Italy 753 -753 5.7 193 Tons 3,902 543 -12 46 0.2 34 '20.5

'Belgium 661 -661 5 201 Tons 3,289 24 37 -42 6 5.5 14 '20.5

'India 628 -628 4.8 126 Tons 4,984 124 88 -10 32 0.4 -10 '20.5

'Germany 622 -622 4.7 281 Tons 2,214 57 58 -56 3 8.2 3 '20.5

'United Kingdom 541 -541 4.1 236 Tons 2,292 51 29 621 15 1.5 0 '20.5


86

Table 29 shows that during 2009 South Africa imported a total of 5 386 tons of milk and cream (concentrated or sweetened), at an average value of US$ 2 436/unit. South Africa imported greater quantities of milk and cream, (concentrated or sweetened) from France, New Zealand and Australia. The greatest share of South African milk and cream (concentrated or sweetened) imports originated from France which commanded 15.6% share during the year 2009 followed by New Zealand (13.9%). South Africa’s milk and cream (not concentrated or sweetened) imports decreased by 13% in value and 19% in quantity between the periods 2005 and 2009. During the same period, imports of milk and cream (concentrated or sweetened) from France increased by 299% in quantity; and New Zealand decreased in value and quantity by 36% and 39% respectively. Between the periods 2008 and 2009, South Africa’s imports of milk and cream (concentrated or sweetened) decreased by 44% in value. During the same period, France’s milk and cream (concentrated or sweetened) exports to South Africa increased by 212% in value while imports from New Zealand increased by 1%. Italy commanded 5.7% of South Africa’s milk and cream (concentrated or sweetened) import market in 2009 and its exports were growing by 543% in value during the period 2005 and 2009. It represents a new supplier for South Africa’s milk and cream (concentrated or sweetened).

88

The chart illustrates that between 2005 and 2009 South Africa’s milk and cream (concentrated or sweetened) imported from New Zealand, Argentina, Australia, United States of America, Uruguay and Czech Republic were growing at a rate that is less than their export growth to the rest of the world. New Zealand is the most competitive market because its world share is 22.5% and its annual growth is 14%. During the same period, South Africa’s milk and cream, concentrated or sweetened imports from Germany, Belgium, Netherlands, Poland and United Kingdom were growing at a rate that is greater than their exports to the rest of the world.

90

The chart illustrates that New Zealand is not a big supplier of South Africa’s market for milk and cream (concentrated or sweetened) but it is the main world exporter and its market was growing (14%) over the period 2005 – 2009. New Zealand is therefore the biggest prospective supplier for South Africa’s milk and cream (concentrated or sweetened). The chart also shows that Italy has experienced higher annual growth rate from 2005–2009. It represents a small possible supplier for South Africa’s milk and cream (concentrated or sweetened). Netherlands is the biggest supplier of South African’s Milk and Cream, Concentrate or sweetened. The share of Netherlands in South African imports is 6.39% followed by Belgium by 5.04% and Germany by 4.74%.

91

7.2.3. Buttermilk and yoghurt Table 30: List of supplying markets for the product imported by South Africa in 2009 South Africa’s imports represent 0.07% of world imports for Buttermilk and yoghurt, its ranking in world’s imports is 84.

Trade Indicators

Exporters Imported

value 2009, USD

thousand


USD thousand

Share in South

Africa's imports,

%

Imported quantity

2009

Quantity unit


Imported growth in

value between

2005-2009, %, p.a.


2005-2009, %, p.a.

Imported growth in

value between

2008-2009, %, p.a.


Share of partner


%

Total export


countries between

2005-2009, %, p.a.


South Africa

'World 2,413 8,436 100 1,381 Tons 1,747 -11 -11 18 100 9

'New Zealand 669 -669 27.7 389 Tons 1,720 -12 -12 62 9 2.4 8 '6.9

'France 663 -663 27.5 408 Tons 1,625 65 2 20.1 15 '2.6

'Netherlands 504 -504 20.9 270 Tons 1,867 28 23 -32 13 1.6 1 '2.6

'Germany 271 -271 11.2 158 Tons 1,715 -16 -9 1029 1 21.4 3 '2.6

'United Kingdom 215 -215 8.9 127 Tons 1,693 109 163 727 10 2.2 11 '2.6

'United States of America

50 -48 2.1 9 Tons 5,556 -39 456 19 0.7 20 '6.9

'Belgium 28 -28 1.2 17 Tons 1,647 -60 -60 -91 3 10.7 5 '2.6

'Mauritius 7 17 0.3 2 Tons 3,500 79 0 '0

'Switzerland 4 -4 0.2 0 Tons 25 0.5 2 '6


92

Table 30 shows that during 2009 South Africa imported a total of 1 381 tons of buttermilk and yoghurt, at an average value of US$ 1 747/unit. South Africa imported greater quantities of milk and cream, (concentrated or sweetened) from New Zealand, France and Netherlands. The greatest share of South African buttermilk and yoghurt imports originated from New Zealand which commanded 27.7% share during the year 2009 followed by France (27.5%) and Netherlands (20.9%). South Africa’s buttermilk and yoghurt imports decreased by 11% in value and declined by 11% in quantity between the periods 2005 and 2009. During the same period, imports of buttermilk and yoghurt from New Zealand decreased by 12% in value and 12% in quantity; and imports from Netherlands increased by 28% in value and 23% in quantity. Between the periods 2008 and 2009, South Africa’s imports of buttermilk and yoghurt increased by 18% in value. During the same period, New Zealand and France’s buttermilk and yoghurt exports to South Africa increased by 62% and 65% respectively. United Kingdom has a share of 8.9% of South African imports and its import growth has increased by 109% in value and 163 in quantity during 2005 to 2009. It represents a new supplier for South Africa’s buttermilk and yoghurt.

94

The chart illustrates that between 2005 and 2009 South Africa’s buttermilk and yoghurt imported from New Zealand, Belgium and Germany were growing at a rate that is less than their export growth to the world. Germany is the most competitive market and it has a world market share of 21.4% followed by Belgium by 10.7% and New Zealand by 2.4%. During the same period, South Africa’s buttermilk and yoghurt imports from Netherlands and United Kingdom were growing at a rate that is greater than their exports to the rest of the world.

96

Germany and Belgium was not the big supplier of South Africa’s market for buttermilk and yoghurt but the size of the bubble indicates that they are the main world exporter and its market was growing over the period 2005 – 2009. Czech Republic and United States of America (USA) is therefore the biggest prospective supplier for South Africa’s buttermilk and yoghurt because their annual export growth is 37% and 20% respectively. Germany can also be a prospective market because it the net exporter of buttermilk and yoghurt but its annual growth is very low (3%) which can be a limiting factor for South Africa to enter its import market.

97

7.2.4. Whey and other natural milk products Table 31: List of supplying markets for the product imported by South Africa in 2009 South Africa’s imports represent 0.61% of world’s imports for whey and natural milk products; its ranking in world imports is 32.

Trade Indicators

Exporters Imported

value 2009, USD

thousand


USD thousand

Share in South

Africa's imports,

%

Imported quantity

2009

Quantity unit


Imported growth in

value between

2005-2009, %, p.a.


2005-2009, %, p.a.

Imported growth in

value between

2008-2009, %, p.a.


Share of partner


%

Total export


countries between

2005-2009, %, p.a.


South Africa

'World 16,013 -14,060 100 6,260 Tons 2,558 15 -5 -36 100 6

'France 8,822 -8,822 55.1 3,670 Tons 2,404 2 -14 -34 4 12.8 4 '9

'New Zealand 2,378 -2,363 14.9 796 Tons 2,987 210 225 -8 3 13.1 8 '19.6

'Australia 1,576 -1,576 9.8 578 Tons 2,727 848 -33 8 2.7 -2 '19.6

'United States of America

1,307 -1,307 8.2 362 Tons 3,610 73 43 -35 2 15.5 17 '19.6

'Argentina 652 -652 4.1 400 Tons 1,630 55 -66 11 2.2 25 '19.6

'Ireland 581 -581 3.6 335 Tons 1,734 -7 -23 -55 6 3.6 2 '9

'Germany 506 -506 3.2 82 Tons 6,171 28 15 -5 1 16.3 3 '9

'Netherlands 97 -97 0.6 27 Tons 3,593 6 -3 -83 5 9.3 7 '9

'Denmark 48 -48 0.3 5 Tons 9,600 -24 -81 9 2.4 -2 '9

'United Kingdom 33 -33 0.2 3 Tons 11,000 88 32 0 14 1.6 -4 '9


98

Table 31 shows that during 2009 South Africa imported a total of 6 260 tons of whey and natural milk products, at an average value of US$ 2 558/unit. South Africa imported greater quantities of whey and natural milk products from France, New Zealand and Australia. The greatest share of South African whey and natural milk products’ imports originated from France which commanded 55.1% share during the year 2009 followed by New Zealand (14.9%) and Australia (9.8%). South Africa’s whey and natural milk products imports increased by 15% in value and declined by 5% in quantity between the periods 2005 and 2009. During the same period, imports of whey and natural milk products from France increased by 2% in value and declined by 14% in quantity; and imports from New Zealand increased by 210% in value and 225% in quantity. Between the periods 2008 and 2009, South Africa’s imports of whey and natural milk products decreased by 36% in value. During the same period, France’ whey and natural milk products exports to South Africa decreased by 34% in value while imports from New Zealand increased by 8% in value. United Kingdom represents a possible supplier to South Africa of whey and natural milk products because its import growth increased by 88% in value and 32% in quantity during 2005 to 2009.

100

The chart illustrates that between 2005 and 2009 South Africa’s whey and natural milk products imported from France, Netherlands and Ireland were growing at a rate that is less than their export growth to the rest of the world. During the same period, South Africa’s whey and natural milk products imported from United States of America, New Zealand, Germany, Australia and United Kingdom were growing at a rate that is greater than their exports to the rest of the world. The most competitive supplier of whey and natural milk products is Germany which has a world‘s exports share of 16.3% followed by USA by 15.5% and New Zealand by 13.1%. South Africa’s import growth from these countries is more that their export growth to the world.

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South Africa’s annual growth of imports from France is 55.09% and its world market share is 12.8% (the fourth largest exporter) but the chart shows that South Africa’s import growth from France it is still less that France’s export growth to the world. Therefore South Africa has a chance to penetrate its market. South Africa can develop a new market in the Republic of Korea because it experienced the highest annual growth of 61%. Therefore, Republic of Korea is the biggest prospect market for South Africa. Netherlands is also a prospect market for South Africa for whey and natural milk products because it’s the fifth largest world’s supplier with the world market share is 9.3% during the period 2005-2009 and its annual growth is 7%.

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7.2.5. Butter and other fats and oils derived from milk Table 32: List of supplying markets for the product imported by South Africa in 2009 South Africa’s imports represent 0.19% of world imports for butter and other fats and oils derived from milk, its ranking in world imports is 57.

Trade Indicators

Exporters Imported

value 2009, USD

thousand


USD thousand

Share in South

Africa's imports,

%

Imported quantity

2009

Quantity unit



2005-2009, %,

p.a.

Imported growth

in quantity between

2005-2009, %,

p.a.


2008-2009, %,

p.a.

Ranking of


Share of partner


%


of partner

countries between

2005-2009, %,

p.a.


South Africa

'World 8,600 -4,537 100 3,201 Tons 2,687 11 2 -22 100 6

'United States of America 2,020 -2,020 23.5 870 Tons 2,322 -58 12 1.8 65 '22.6

'Australia 1,910 -1,900 22.2 908 Tons 2,104 49 41 1274 9 3.8 3 '22.6

'Netherland Antilles 1,503 -1,503 17.5 364 Tons 4,129 1359 51 0 -34 '22.6

'Ireland 1,403 -1,403 16.3 328 Tons 4,277 -14 -30 -65 4 8.3 1 '22.6

'Israel 580 -580 6.7 312 Tons 1,859 43 0.1 '22.6

'New Zealand 438 -438 5.1 218 Tons 2,009 -26 -44 1 20.3 14 '22.6

'Denmark 401 -401 4.7 87 Tons 4,609 -21 -33 -28 7 5.7 3 '22.6

'Belgium 188 -188 2.2 55 Tons 3,418 21 14 -52 3 11.3 5 '22.6

'Germany 62 -62 0.7 15 Tons 4,133 -46 -50 3000 5 7.3 9 '22.6

'Uruguay 49 -49 0.6 25 Tons 1,960 18 0.8 11 '22.6


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Table 32 shows that during 2009 South Africa imported a total of 3 201 tons of butter and other fats, at an average value of US$ 2 687/unit. South Africa imported greater quantities of butter and other fats from United States of America, Australia, Netherlands Antilles and Ireland. The greatest share of South African butter and other fats imports originated from United States of America which commanded 23.5% share during the year 2009 followed by Australia by 22.2% then Netherlands Antilles (17.5%) and Ireland (16.3%). South Africa’s butter and other fats imports increased by 11% in value and by 2% in quantity between the periods 2005 and 2009. During the same period, imports of butter and other fats from Australia increased by 49% in Value and 41% in quantity. Between the periods 2008 and 2009, South Africa’s imports of butter and other fats decreased by 22% in value. During the same period, United States of America’s butter and other fats exports to South Africa decreased by 58% in value while imports from Australia and Netherlands Antilles increased by 1274% and 1359 respectively in value.

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The chart illustrates that between 2005 and 2009 South Africa’s butter and other fats imported from Germany, Denmark and Ireland were growing at a rate that is less than their export growth to the rest of the world. During the same period, South Africa’s butter and other fats imports from France, Belgium and Australia were growing at a rate that is greater than their exports to the rest of the world. Belgium is the most competitive supplier of butter and other fats because its world market share is 11.3% followed by Ireland with 8.3% and Germany with 7.3%.

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The chart illustrates that New Zealand is the main supplier of world’s butter and other fats. If South Africa wishes to diversify USA is the most attractive supplier due to its annual growth of 65%. India and Belarus are also possible suppliers of South Africa’s butter and other fats because their annual growth is 29% and 28% respectively.

Table 33: List of supplying markets for the product imported by South Africa in 2009 South Africa’s imports represent 0.12% of world imports for Cheese and curd, its ranking in world imports is 65.

Trade Indicators

Exporters Imported

value 2009, USD

thousand


USD thousand

Share in

South Africa's imports,

%

Imported quantity

2009

Quantity unit



2005-2009, %,

p.a.

Imported growth

in quantity between

2005-2009, %,

p.a.


2008-2009, %,

p.a.

Ranking of


Share of partner


%


of partner

countries between

2005-2009, %,

p.a.


South Africa

'World 26,146 -18,725 100 5,244 Tons 4,986 12 6 1 100 9

'New Zealand 4,375 -4,375 16.7 1,215 Tons 3,601 1 -6 -43 6 3.8 6 '10.4

'Italy 3,915 -3,915 15 429 Tons 9,126 14 7 -12 4 8.9 10 '6.5

'France 3,195 -3,195 12.2 380 Tons 8,408 3 -6 13 2 15.5 8 '6.5

'Denmark 3,192 -3,192 12.2 462 Tons 6,909 18 6 39 5 6.1 5 '6.5

'Australia 1,974 -1,974 7.5 593 Tons 3,329 32 26 38 9 2.4 -1 '10.4

'Ireland 1,885 -1,885 7.2 513 Tons 3,674 28 27 147 8 3.1 13 '6.5

'Germany 1,881 -1,881 7.2 487 Tons 3,862 18 14 26 1 16 11 '6.5

'Morocco 1,384 -1,384 5.3 237 Tons 5,840 13 1 -19 28 0.4 5 '10.4

'Netherlands 1,223 -1,223 4.7 258 Tons 4,740 18 15 40 3 12.2 7 '6.5

'United Kingdom 1,181 -1,181 4.5 268 Tons 4,407 8 16 174 13 2 5 '6.5

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14.2.6. Cheese and Curd

110

Table 33 shows that during 2009, South Africa imported a total of 5 244 tons of cheese and curd, at an average value of US$ 4 486/unit. South Africa imported greater quantities of cheese and curd from New Zealand, Italy and France. The greatest share of South African cheese and curd imports originated from New Zealand which commanded 16.7% share during the year 2009 followed by Italy (15%), France and Denmark (12.2%). South Africa’s cheese and curd imports increased by 12% and 6% in value respectively, between the periods 2005 and 2009. During the same period, imports of cheese and curd from New Zealand increased by 1% in value and declined by 6% in quantity; imports from Italy increased by 24% in value and 15% in quantity; and imports from France increased by 14% in value and by 7% in quantity. Between the periods 2008 and 2009, South Africa’s imports of cheese and curd decreased by 1% in value. During the same period, New Zealand’s cheese and curd exports to South Africa decreased by 43% in value and imports from Italy decreased by 12% in value while those from France declined by 12%.

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The chart illustrates that between 2005 and 2009 South Africa’s cheese and curd imported from France, Greece, Switzerland, Austria, New Zealand and Belgium were growing at a rate that is less than their export growth to the rest of the world. During the same period, South Africa’s cheese and curd imports from Australia, United States of America, Morocco, Netherlands, Italy, Germany, Portugal, Ireland and United Kingdom were growing at a rate that is greater than their exports to the rest of the world. The most competitive supplier of cheese and curd is Germany; it has a world market share of 16% followed by France by 15.5% and Netherlands by 12.2%.

During 2009, France and New Zealand have exported cheese and curd to the rest of the world at a rate higher than they did to South Africa. At the same time, South Africa has imported cheese and curd from Germany, Denmark, Italy and Netherlands at a rate higher than what they exported to the rest of the world. If South Africa wishes to diversify their imports of cheese and curd, Egypt is the possible supplier, although it is a small market but its annual growth was the highest by 33%. Therefore, it van be a small prospect market and the big prospect market will be France which has the world market share of 15.5% and an annual growth of 8%.

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8. ACKNOWLEDGEMENTS 1. Agricultural Statistics.

www.daff.gov.za. 2. Clover

Roodepoort South Africa 1715 Tel: +27 (11) 471 1400 Fax: +27 (11) 471 1504 www.clover.co.za

3. Competition Commission Tel: 012 394 3300 Fax: 012 394 0169 www.comptrib.co.za.

4. Dairy Belle (PTY) LTD Private Bag 208 Bryanston 2021 Tel: 011 840 4000 Fax: 011 514 0084 www.dairybelle.co.za

5. International Trade Center www.trademap.org

6. LactoData

www.dairyconnect.co.za.

7. MacMap www.macmap.org

8. Milk Producers Organization (MPO). Dr Koos Coetzee 012-8435600 www.mpo.co.za

9. National Agricultural Marketing Council (NAMC). Tel: (012) 3411115 Fax: (012) 3411911 www.namc.co.za

10. Nestle

P O Box 50661, Randburg, 2125 Fax: (011) 889 6559 086 009 6116 (General) 086 009 6789 (Nutrition) 0800 001 691 (Pet Care) www.nestle.co.za

11. Parmalat SA(PTY)LTD

Stellenbosch 7600 Tel: +27 21 809 1400 Fax: +27 21 809 1518 www.parmalat.co.za

12. Quantec.

www.Quantec.co.za.

13. Trade & Industrial Policy Strategies (TIPS)

www.tips.org.za.

Disclaimer: This document and its contents have been compiled by the Department of Agriculture, Forestry and Fisheries for the purpose of detailing the dairy 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.

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http://www.daff.gov.za/

http://www.clover.co.za/

http://www.comptrib.co.za/

http://www.dairybelle.co.za/

http://www.dairyconnect.co.za/

http://www.mpo.co.za/

http://www.namc.co.za/

http://www.nestle.co.za/

http://www.parmalat.co.za/

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

http://www.tips.org.za/

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