BEEF MARKET VALUE CHAIN PROFILE · 6 Production and consumption of beef decreased by 4% each during...

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A PROFILE OF THE SOUTH AFRICAN BEEF MARKET VALUE CHAIN

2018

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

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TABLE OF CONTENTS

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

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

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

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

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

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

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

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

5. PERFORMANCE OF SOUTH AFRICAN BEEF INDUSTRY IN 2017. ......................................................................... 31

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

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

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1. DESCRIPTION OF THE INDUSTRY

1.1 Introduction Beef industry in South Africa is characterized by its dualistic nature of the sector. There is a clear difference between formal (commercial) sector and informal (non commercial) beef sector. Unlike non-commercial sector, the commercial beef sector is well developed and mature in South Africa. The beef informal (non-commercial) sector may further be divided into two subsectors namely smallholder farmers and subsistence farmers. Smallholder farmers keep their cattle and sell them during easter and festive seasons, for religious purposes and also during their cash strapped seasons. Whilst subsistence farmers do not keep their cattle for economic reasons however for household food security pursposes. Typically, these two informal subsectors are not keeping records of their animal stocks, the buyer and seller enter into mouth to mouth agreement, followed by exchange of money and cattle without recording the transactions. These informal subsectors are also known to have less knowledge about animal health, desease control and animal development issues as well as policies regarding animal production in South Africa. Beyond their role in generating food and income, cattle are a valuable asset, serving as a store of wealth, collateral for credit an essential security net during calamitous times for informal sector. The beef industry is the second fastest growing commodity in agricultural sector following the broiler sector. This is driven by income growth and support technological and structural change. In South Africa, stock farming is the only viable agricultural activity in a large part of the country. Approximately 80% of South African agricultural land is suitable for extensive grazing. Areas for grazing declined owing to expanding human settlements and other activities such as mining, crops, forestry and conservation. 80% of the total cattle heads are for beef cattle and the remaining 20% is for dairy cattle. The gross value of cattle and calves slaughtered in South Africa from 2007/08 to 2016/17 is depicted in figure 1 below. The gross value of beef production is dependent on the number of cattle slaughtered and the prices received by producers from buyers. The gross value of beef production increased from R12 billion in 2007/08 to R33 billion in 2016/17. This is an increase of 175 % during the said period. This is due to the increased consumption of beef during this past decade. The average gross value of beef produced during this period amounted to R21 billion per annum.

Source: Statistics and Economic Analysis, DAFF

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Figure 1: Gross value of cattle and calves slaughtered

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1.1. Production Areas

Beef is produced throughout South Africa. Figure 2 below shows the beef production per province during 2016/17 production year. The amount of beef produced depends on the infrastructure such as feedlots and abattoirs, not necessarily by the number of cattle available in those areas. South Africa has highly developed transport infrastructure that allows movement of cattle and calves from one area to another, even from other neighbouring countries. According to Figure 2, Mpumalanga accounts for the greatest share of beef production in South Africa accounting for 21% of the beef produced in 2016/17 followed by Free State, Gauteng, KwaZulu-Natal and North West accounting for 18%, 16%, 11% and 8% respectively.

Source: Red Meat Levy Admin

1.2. Production Trends

South Africa currently has approximately 430 abattoirs slaughtering cattle, pigs and sheep on an annual basis. Approximately 40% of all slaughterings are performed by abattoirs that may slaughter an unlimited number of animals (Class A) and approximately 60% of cattle are slaughtered by highly regulated abattoirs (Class A & B). Most of these abattoirs have linkages with feedlots. The total amount of beef produced during the past ten years amounted to 9 million tons. Figure 3 below show the slaughtering of cattle and production of beef during the period 2007/08 until 2016/17.

EASTERN CAPE 8%

FREESTATE18%

GAUTENG 16%

KWAZULU NATAL11%

LIMPOPO5%

MPUMALANGA 21%

NORTHERN CAPE8%

NORTH WEST8%

WESTERN CAPE5%

Figure 2: Beef slaughtering per province during 2016/17

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Figure 3 above shows that slaughtering and production of beef followed similar trend from 2007/08 to 2016/17. Beef production and slaughtering was both from lower base in 2007/08 and both have picked up from 2009/10. They both shown a slight decrease from 2009/10 to 2011/12. The lower base in 2007/08 might have been caused by global economic meltdown. However, there is an improvement of beef production and increased number of cattle slaughtered due to drought during 2014/15. An increase of 36% in production and 28% of cattle slaughtered was experienced in 2016/17 compared to 2007/08.

1.3. Local Consumption

Technically, the beef supply chain begin when the cattle are slaughtered for meat consumption. Figure 4 below represents the production and consumption of beef. Figure 4 depict if the country is self-sufficient in terms of beef production. The figure indicates that South African beef production and consumption have been exchanging a high position throughout the period under analysis. However, from 2014/15 to 2016/17, the figure shows that the production was higher than the consumption, this makes South Africa self-sufficient regarding beef production during the said period.


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Figure 3: Cattle slaughtering and beef production

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Figure 4: Beef production and consumption

Production Consumption

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Production and consumption of beef decreased by 4% each during the periods 2016/17 as compared to 2015/16. For the past decade production increased by 36% whilst consumption increased by 34%. This might be due to the increased affordability of consumers, consumer’s diet change from field crops to meat and also population increase. Both production and consumption followed the same trend. They moved on an increasing trend from 2007/08 to 2016/17. The decline during 2007/08 to 2008/09 was due to the global economic meltdown which led to a decreased disposable income of a large number of consumers. During 2009/10 beef production and consumption experienced some increases because the global economic meltdown started to ease and also due to the FIFA world cup which was hosted in South Africa.

1.4. Employment

Commercial farmers are estimated at 22 000 and employs 138 000 people, emerging farmers and communal farmers are at 3 million which employs 9 million people. There are approximately 100 commercial feedlots with 5 000 employees in South Africa and 332 abattoirs. Beef industry is a major contributor to livelihood with 2 125 000 people who are dependent on the livestock industry.

2. MARKET STRUCTURE

2.1. Domestic Market

The red meat industry evolved from a highly regulated environment to one that is totally deregulated today. Various policies, such as the distinction between controlled and uncontrolled areas, compulsory levies payable by producers, restrictions on the establishment of abattoirs, the compulsory auctioning of carcasses according to grade and mass in controlled areas, the supply control via permits and quotas, the setting of floor prices, removal scheme, etc., characterized the red meat industry before deregulation commenced in the early 1990s. Since the deregulation of the agricultural marketing dispensation in 1997, the prices in the red meat industry are determined by demand and supply forces. Price formation is one of the important forces in making decisions regarding production and marketing of beef and beef products. Average producer prices of beef from 2007/08 to 2016/17 are illustrated in Figure 5.


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Figure 5: Average beef producer prices

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Figure 5 shows that prices of beef increased significantly from 2007/08 to 2016/17 mainly due to increased consumption caused by rising living standards of a large number of consumers and consumer’s diet change from field crops to meat and also population increase. There was an increase of R19.3/Kg in 2016/17 compared to 2007/08. The prices may continue shooting up as the cattle producers are currently battling to rebuild their herds due to increased slaughtering on the past drought season.

2.2. Import – Export Analysis

Figure 7 compares volumes of imports and exports for beef from 2008 to 2017.

Source: Quantec EasyData

Figure 6 indicates that South Africa’s imports and exports were fluctuating during the period under analysis. Imports of beef were higher than exports from 2008 and 2013. This automatically makes South Africa a net importer of beef during this specified period. From 2012 to 2015 imports of beef has shown a decreasing trend whilst exports are increasing. From 2014 to 2017 exports exceeded imports, this was led by South Africa declared foot and mouth desease free by International Animal Health Organisation. Due to this declaration, there was more international markets gained. South Africa exported more beef in 2016 as compared to all years under review. There was a significant increase of 28 000 tons of export quantity and an increase of 8 000 tons of import quantity during 2017 compared to 2008.

2.2.1. Exports

The quantity and value of beef exports from 2008 to 2017 are shown in Figure 7 below. South Africa exported 32 000 tons of beef in 2017 yielding an export value of R1.4 billion. There was a significant decrease of 18% of quantity of beef exported during the period 2017 as compared to 2016 and export value showed an decrease of 24% during 2017 relative to 2016.

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Exports 4 5 14 19 15 16 28 36 39 32

Imports 7 10 19 27 30 28 24 18,6 19 15

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Figure 6: Exports and imports of beef

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Figure 7, indicates that beef exports quantity was increasing very slowly in 2008 to 2009 and then started increasing faster in 2010 and 2011. In 2012 the exports quantity decreased slightly then followed by an increase from 2013 to 2016 and decreased in 2017, this may be due to South Africa being declared foot and mouth desease free which opened export market opportunities. The export value of beef followed the same trend of export quantity except in 2011 and 2012. Export quantity reached its lowest in 2008 during the period under analysis. Figure 8 below shows the main importing continents for South African beef during the past decade.


South Africa was mainly exporting to Africa and Asia throughout the period under analysis. Africa commanded the highest exports of beef from South Africa from 2008 to 2014 and again in 2017. In 2015 and 2016 Asia outstripped Africa and took a lead on a share of beef exported by South Africa to the continents. The demand of beef in Asian countries continues to grow. In total, Africa commanded 129 765 tons of beef from South Africa which accounts for 66% and Asia was the second by 64 415 tons (33%)during the past decade. Oceania commanded the lowest South African beef exports quantity during the period under analysis.

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Quantity 4 5 14 19 15 16 28 36 39 32

Value 111 179 241 190 239 477 1069 1768 1900 1450

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Figure 7: Beef exports

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Figure 8: Exports of beef to the continents

Africa Americas Asia Europe Oceania Antarctica

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


Mozambique continues to be the highest importer of South African beef within SADC countries. Figure 9 displays that beef produced in South Africa was mainly exported to Mozambique which has commanded the highest beef exports throughout the decade except in 2008 only. During this period (2008) Angola took the lead, which made it the second country to obtain the highest beef exports from South Africa. Mozambique reached a new peak of 4.8 million kilograms of beef from South Africa in 2015. Tanzania was the lowest importer of South African beef within SADC countries. In total, Mozambique commanded 19 million kilograms of South African exported beef followed by Angola with 10 million kilograms. Democratic Republic of Congo with 4 million kilograms and Mauritius commanded just above 3 million each. There was a huge decline (39%) on Mozambique’s imports of beef from the previous year. Thus South Africa is slowly loosing its main market within SADC.

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Figure 9: Beef export quantities to SADC

Angola DRC Mauritius Malawi Mozambique

Seychelles Tanzania Zambia Zimbabwe

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It is clearly indicated from Figure 10 above that most of South African beef is exported to Nigeria within Western Africa throughout the past decade. South African beef exports to West Africa decreased in 2015, 2016 and 2017. Nigeria reached its peak of 217 784 kilograms during 2013 and this was followed by a drastic decrease of 20% of South African beef imports during 2014. Ghana absorbed the second highest volume of South African beef exports in 2009 to 2013 and again in 2017. In total for the period under analysis, Mali and Sierra Leone were the lowest importers of South African beef.


In Middle, Northern and Eastern Africa, Egypt commanded the highest share of beef exports from South Africa from 2009 to 2017. Congo commanded the second highest share of beef exported by South Africa from 2009 to 2014. Egypt, which is from Northern Africa, experienced a sharp increase on exports and reached its peak of 949 tons in 2015.The country experienced a drastic decline of 89% in 2017. In total Kenya, Uganda and Ethiopia, which are the Eastern Africa countries imported the lowest quantities of South African beef during the past decade.

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Figure 10: Beef export quantities to West Africa

Côte d'Ivoire Ghana Liberia Mali

Nigeria Saint Helena Sierra Leone Senegal

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

Congo Egypt Ethiopia Gabon Kenya Uganda

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Figure 12 above shows beef exported by South Africa to European Union from 2008 to 2017, it is clearly indicated that the Netherlands is not a regular importer of beef. However, in 2009 the country commanded 85% share of South African total beef exports and the products were mainly frozen, fresh or chilled boneless cuts. The United Kingdom (UK) and Germany were regular importers of South African beef. The UK commanded the highest share of imported beef from South Africa in 2010, 2011 and 2015 whilst Germany took a lead during 2008, 2012 and 2013. France is the lowest importer of South African beef within the EU countries. Total beef exports to EU from South Africa have decreased from 2016 to 2017.


South African beef exports to Asia are shown in Figure 13. It is clear that the beef exports were regularly going to the United Arab Emirates (UAE), China, HK and Kuwait. The UAE was the biggest export market for South African beef in 2008 within Asia. Kuwait have significantly increased I’ts imports from 2013 to 2017 which made it the top importer for the past decade on average. China, HK and Bahrain experienced a decrease of exports by 40% and 89% respectively in 2015. However in 2016, China, HK increased exports before it

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sFigure 12: Beef export quantities to European Union

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Figure 13: Beef export quantities to Western and Eastern Asia

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decreased in 2017 whilst Bahrain shown a very little increase in exports. Qatar commanded the greatest share during 2010 while China and Lebanon are the lowest importers of South African beef. Generally, exports of beef to Asia were very minimal during 2009 to 2012. Figure 14 below shows destinations for South African beef in 2017.

Source: Trade Map

The main destinations of South African beef in 2017 was UAE which commanded 14% of South African beef during 2017, followed by Lesotho with 11%, then Kuwait and Mozambique with 10% each, Eswatini (9%), China, HK and Jordan with 8% each. Values of beef exports from various Provinces of South Africa are presented in Figure 15 below.


United Arab Emirates14%

Lesotho11%

Kuwait10%

Mozambique10%Eswatini

9%

Hong Kong, China8%

Jordan8%

China5%

Viet Nam5%

Angola4%

Mauritius3%

Others13%

FIGURE 14: BEEF DESTINATION IN 2017

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Western Cape 21098 15130 20762 28211 39086 108300 298749 528920 665616 283559

Eastern Cape 0 0 0 282 2 10574 96815 351904 197812 65103

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

Free State 4657 60003 11610 0 0 683 17521 74384 81203 124027

KwaZulu-Natal 5114 6416 35623 35495 19792 24607 70941 96912 70437 52621

North West 0 16377 4992 0 1464 9776 47624 130122 180322 99202

Gauteng 73418 60649 138560 112383 163735 274117 366152 359618 465818 564527

Mpumalanga 6998 20479 30911 13661 14768 48521 171341 225910 236526 259529

Limpopo 0 0 7 12 0 0 45 404 2467 1147

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Figure 15: Value of beef exported by Provinces

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Figure 15 indicates that exports of beef in South Africa were mainly from Gauteng. Noteworthy is the fact that the province is one of the main exit points for exports in the country. Furthermore, most exporters of beef are situated in Gauteng province and the greatest proportion of beef was exported to neighboring countries. Mpumalanga Province was the second biggest exporter for the period under analysis followed by the Western Cape Province. North West, Eastern Cape and Limpopo Provinces have recorded irregular exports which made them to be the lowest exporters during this period. After 2014, Western Cape outstripped Gauteng and became the highest exporter of beef untin 2016, then in 2017 Gauteng took a lead again. The following figures (Figures 16 - 23) show the value of beef exports from the various district municipalities in the eight Provinces of South Africa. Northern Cape Province did not export beef during the period under analysis.


In the Western Cape Province, regular exports of beef were recorded mainly in the City of Cape Town Metropolitan Municipality. The City recorded highest export values throughout the period under review with the lowest level of approximately R15.1 million in 2009 and experienced the highest value of R375 million during 2016. This is due to the fact that the City of Cape Town is the main exit point in the province. Fractional exports were also recorded from West Coast, Cape Winelands and Eden District Municipalities. City of Cape Town recorded 100% share of beef exports between 2008 and 2010 , the rest of the years accouted more than 90% share.


2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

City of Cape Town 21098 15130 20762 28132 39028 108300 298044 526924 662015 266339

West Coast 0 0 0 0 0 0 705 0 0 0

Cape Winelands 0 0 0 0 0 0 0 0 0 14595

Eden 0 0 0 78 58 0 1 1996 3601 2625

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Figure 16: Value of beef exports from Western Cape Province

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Cacadu 0 0 0 0 2 0 0 0 0 0

Joe Gqabi 0 0 0 0 0 0 0 37 0 0

Alfred Nzo 0 0 0 0 0 0 8 17 41 287

Nelson Mandela Bay 0 0 0 282 0 0 0 742 0 0

Buffalo City 0 0 0 0 0 10574 96807 351099 195290 64811

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Figure 17: Value of beef exported from Eastern Cape Province

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In the Eastern Cape Province, beef exports were recorded from Buffalo City, Joe Gqabi, Alfred Nzo, Cacadu District Municipalities and Nelson Mandela Metropolitan Municipality. On average, Buffalo City is the highest exporter of beef followed Nelson Mandela Bay and Alfred Nzo District Municipality. Nelson Mandela Metropolitan Municipality recorded export values during 2011 and 2015. In its record, the District Municipality recorded 100% share of exports except in 2015. Joe Gqabi District Municipality recorded beef exports in 2014 and 2015. Buffalo City recorded exports from 2013 to 2017, the District shows over 90% to 100% in its records. Nelson Mandela Bay recorded 100% share of beef export in 2011 whilst Cacadu recorded in 2012 and Buffalo City in 2013. There were no exports records from Eastern Cape Province in 2008, 2009 and 2010. No regular exports recorded from the Eastern Cape Province from 2008 to 2017.


Figure 18 indicates that exports of beef from the Free State province occurred regularly in Thabo Mofutsanyane, Letsweleputswa and Mangaung District Municipality. The district has exported beef worth more than R116 million which accounts for 31% of total share from 2008 to 2017 in the Free State. Followed byThabo Mofutsanyane with exports records from 2014 to 2017 worth about R137 million and this accounted for 37% of total share. Lejweleputswa District Municipality recorded beef exports in 2010, 2015 to 2017 which added up to R117 million and Xhariep District Municipality recorded exports from 2013 to 2016 which were R630 thousand. Both Xhariep and Fezile Dabi have accounted for 1% share of the Free State beef exports for the entire period of analysis. Mangaung led beef exports from 2008 to 2013 with an exports share ranging from 97% to 100%. Thabo Mofutsanyane took a lead in 2014 with a share of 53%, 2015 (51%) and in 2016 (52%) and 2017(37%).

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Xhariep 0 0 0 0 0 38 0 150 442 0

Lejweleputswa 0 0 0 0 0 0 7232 30842 29730 49538

Thabo Mofutsanyane 0 0 0 0 0 0 5140 35446 41185 58009

Fezile Dabi 0 0 0 0 0 0 0 0 0 0

Mangaung 4657 60003 11610 0 0 645 5149 7947 9846 16481

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Figure 18: Value of beef exported from Free State Province

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In the KwaZulu–Natal Province, beef exports were mainly from eThekwini Metropolitan Municipality showing increases in a fluctuation mode from 2008 until 2017. Its lowest exports value was experienced in 2008 and its peak in 2015. Umzinyathi District Municipality recorded beef export values only in 2016. Intermittent and minimal export values were recorded in Umgugundlovu, Uthukela and iLembe District Municipalities during the period under review. eThekwini recorded 100% share of beef exports within the Province from 2008 to to 2014. On other years the District Municipality accounted for more than 90%.


In North West Province, beef exports were recorded from all District Municipalities. Dr. Ruth Segomotsi Mompati District Municipality has shown regular beef exports from 2009 to 2016, Dr. Kenneth Kaunda District Municipality has recorded exports in 2013, 2015 to 2017 whilst Bojanala’s record was only in 2014 and 2017 and Ngaka Modiri Molema recorded in 2016 only. There were no records of exports in the Province from in 2008. Dr Ruth Segomotsi Mompati District Municipality recorded highest value of exports of R 187 million in

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

UMgungundlovu 0 0 0 0 0 0 0 5 0 0

Uthukela 0 0 0 0 0 0 0 0 71 59

Umzinyathi 0 0 0 0 0 0 0 0 0 0

Umkhanyakude 0 0 0 0 0 0 0 0 0 0

iLembe 0 0 0 0 0 0 0 102 43 480

eThekwini 5114 6416 35623 35495 19792 24607 70941 96805 70322 52082

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Figure 19: Value of beef exports from KwaZulu Natal Province

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Bojanala 0 0 0 0 0 0 3081 0 0 7844

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

Dr Ruth Segomotsi Mompati 0 16377 4992 0 1464 9200 44543 130095 76219 0

Dr Kenneth Kaunda 0 0 0 0 0 576 0 27 104103 91358

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Figure 20: Value of beef exported from North West Province

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2015. The district further accounted for a 100% share of exports from 2009 to 2012 and above 90% from 2013 to 2015. In 2016 Dr Kenneth Kaunda shot up its exports and took a lead with a share of 65% beef exports.


Figure 21 shows the value of exports by Gauteng Province from 2008 to 2017. The highest values of beef exported in Gauteng Province were mainly from City of Johannesburg Metropolitan Municipality. City of Johannesburg Metropolitan Municipality commanded the greatest shares from 2008 to 2017 . Ekurhuleni, City of Johannesburg and City of Tshwane recorded regular exports of beef while Sedibeng and West Rand recorded intermittent records of beef exports. During the past decade the City of Johannesburg Metropolitan Municipality recorded the highest value of R2.1 billion followed by Ekurhuleni and City of Tshwane District Municipalities with value of R199 million and R181 million respectively. City of Johannesburg Metropolitan Municipality recorded a average exports share of 80% for the past 10 years. In 2017, City of Johannesburg recorded exports share of 85% followed by Ekurhuleni with 8% and City of Tshwane with 7%.


2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Sedibeng 0 0 1560 0 0 0 72 6801 3253 186

West Rand 513 2154 763 0 765 0 0 0 0 0

Ekurhuleni 4852 3544 3101 955 6923 15404 24241 29101 51525 59922

City of Johannesburg 68053 51537 121361 105207 141126 247677 317426 290892 375270 463438

City of Tshwane 0 3414 11776 6221 14922 11037 24413 32823 35771 40981

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Figure 21: Value of beef exported from Gauteng Province

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Vhembe 0 0 0 12 0 0 0 210 665 232

Capricorn 0 0 7 0 0 0 0 6 11 32

Waterberg 0 0 0 0 0 0 45 188 1791 883

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Figure 22: Value of beef exported from Limpopo Province

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Figure 22 shows the value of exports by Limpopo Province from 2008 to 2017. Irregular exports of beef recorded in Limpopo Province were from Vhembe, Capricorn and Waterberg District Municipalities during the period under analysis. The highest export values were recorded from C District Municipality in 2016 followed by Vhembe district. There were no exports of beef recorded from Limpopo province during the period 2008 and 2009. The Waterberg district only recorded beef exports from 2014 to 2017. Vhembe district municipality accounted for 100% exports share in 2011, Capricorn District Municipality in 2012 and 2013, lastly Waterberg in 2014. On average Vhembe District Municipality recorded highest exports followed by waterberg then Capricon for the past decade. In 2016, Waterberg shot up its exports and took a lead with a share of 73% beef exports and decreased in 2017 but still the leading exporter of beef.

Source: Quantec EasyData Figure 23 shows the value of exports by Mpumalanga Province from 2008 to 2017. In Mpumalanga province, Gert Sibande and Ehlazeni District Municipalities appeared to be main exportes of beef for the past decade. Irregular exports were recorded from Nkangala District Municipality. Gert Sibande shown an immense increase of exports from 2014 to 2017. Gert Sibande, Nkangala and Ehlanzeni District Municipalities have played an important role in the exports of beef during the period under review. Gert Sibande commanded the highest market shares during the periods 2008 to 2009 and again from 2014 to 2017. Ehlanzeni District Municipality commanded the highest exports shares within the Province during, 2010 to 2013.

2.2.3. Imports.

Figure 24 below show the imports of beef from 2008 to 2017. South African beef imports have been fluctuating for the past decade. The import values and quantities of beef followed the same trend throughout the previous decade.

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Gert Sibande 6998 14077 22955 12716 6163 33777 129305 151943 204929 225580

Nkangala 0 0 0 0 894 0 0 0 0 0

Ehlanzeni 0 6402 7956 945 7712 14744 42036 73966 31597 33949

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Figure 23: Value of beef exported from Mpumalanga Province

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Source: Quantec EasyData During 2017 compared to 2008 there was an increase of 102% on imported beef quantity and beef value increased by 405% during the same period. South Africa imported approximately 28 000 tons of beef in 2017 at an estimated value of R1.0 billion. The import quantity decreased by 22 in 2017 compared to 2016. More than half of the beef imports are boneless, carcasses and half carcasses.


Figure 25 above indicates the main suppliers of beef to South Africa from 2008 to 2017. The Americas have been the main supplier from 2008 to 2009, and then Africa took a lead from 2010 to 2017. The beef quantity from America decreased from 10 million kilograms to 1.4 million kilogram during the past decade. Oceania has been a regular supplier of beef though it was relatively smaller quantities. There were intermittent imports of beef recorded from Asia during the period under review. The following Figures 26 to 28 indicate the origins of beef in Africa, America and Oceania.

0

200

400

600

800

1000

1200

1400

1600

0

10

20

30

40

50

60

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Mill

ion

Ran

ds

Th

ou

san

d t

on

s

Figure 24: Beef imports quantities and value

Quantity Value

0

5000000

10000000

15000000

20000000

25000000

30000000

35000000

40000000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Kilo

gra

ms

Years

Figure 25: Beef quantities imported from the continents

Africa Americas Asia Europe Oceania

19


The beef imports from African continent to South Africa are mainly from Botswana and Namibia. Figure 26 above clearly indicate that the imports were very low from 2008 to 2009. In 2010 the imports shot up, mainly Namibia with a share of 77% beef imports. From 2010 the Namibian beef imports was fluctuating between 10 and 12 million kilograms until 2014. South Africa imposed high standards to Namibia in 2014 hence the huge decrease of imports in 2015, 2016 and 2017. Beef from Botswana shown an immense increase in 2012 then started declining until 2015 and decrease slightly between 2016 and 2017. During the increase in 2012, Botswana became the highest source of beef imports and took a lead again from 2014 to 2017. In total, Namibial supplied South Africa with 66 million kilograms of beef and Botswana was 63.8 million kilograms on the entire period under analysis.


Figure 27 shows the beef quantities imported from Americas. Uruguay commanded the greatest shares from 2008 to 2017. For the period under analysis, Uruguay have commanded 55% share of South African market, followed by Paraguay with 31%, Argentina and Brazil with 12% and 0.8% respectively. The figure clearly shows that South African beef imports from Americas are detoriarating, in total they have declined by 85% from 2008 to 2017.

0

5000000

10000000

15000000

20000000

25000000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Kilo

gra

m

Figure 26: Beef quantities imported from Africa

Botswana Namibia

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

To

ns

Years

Figure 27: Beef quantities imported from Americas

Argentina Paraguay Uruguay Brazil

20

Figure 28 below present beef quantities imported from Oceania. The South African imports from Oceania continent were mainly coming from Australia and New Zealand.


Australia is known as one of the top producers of beef in the world, within Oceania, the country has been the main import market of beef for South Africa during the period under analysis and it reached it’s peak of 5 368 tons during 2011. New Zealand commanded the second highest level of beef imports from 2008 to 2017.

Source: Trade map

Figure 29 above shows the top supplliers of beef to South Africa during 2017. It is evident that South Africa obtains most of its beef from Botswana and Namibia which are SACU members. Botswana commanded 54% share of South Africa’s import market of beef followed by Namibia commanding up to 30% , Uruguay 8%, Australia and Germany commanded 4% and 2% respectively.

0

2000

4000

6000

8000

10000

12000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

To

ns

Years

Figure 28: Beef quantities imported from Oceania

Australia New Zealand

Botswana54%

Namibia30%

Uruguay8%

Australia4%

Germany2%

Others2%

FIGURE 29: COUNTRIES OF ORIGIN FOR BEEF IMPORTS IN 2017

21

3. BEEF MARKET VALUE CHAIN

Beef market value chain is illustrated on Figure 30.

Figure 30: South African Beef Market Value Chain

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

Affluent consumers

(Premium

beef markets)

1. million tons produced

15 million kg imported

32 million kg exported

Under

Privileged

Consumers

Meat Processors

(430 Abattoirs)

1.0 million tons Consumption

Per capita consumption = 18.46 kg / year

87 000 with potential to

commercialize

Local Markets

Butchers - 18%

Auctions - 41%

Festivities - 35%

Previously Disadvantaged Groups

240 000 emerging

farmers

3 million

subsistence farmers

Sanga types - 29%

Zebu types - 11%

British types - 26%

European types - 27%

Dairy / other - 7%

13.319 million cattle

5. 69 million cattle

Feedlot sector (65 to 70% of

cattle slaughtered)

50 000 Commercial Producers

22

It is estimated that there are approximately 22 000 commercial farmers currently farming with livestock. This includes producers that keep livestock as their main enterprise and those that keep livestock as a secondary enterprise. They own around 13.3 million cattle. There are 240 000 small-scale farmers and 3 million subsistence farmers that own around 5.69 million cattle. The beef supply chain has become increasingly vertically integrated. This integration is mainly fuelled by the feedlot industry where most of the large feedlots own their own abattoirs, or at least have some business interest in certain abattoirs. In addition, some feedlots have integrated further down the value chain and sell directly to consumers through their own retail outlets. Some abattoirs have also started to integrate vertically towards the wholesale level. Under the previous marketing regime, wholesalers mostly bought carcasses through the auction system. Currently, many wholesalers source live slaughter animals (not weaners) directly from farmers or feedlots on a bid and offer basis, i.e. they take ownership of the animal before the animal is slaughtered. The animal is then slaughtered at an abattoir of the wholesaler’s choice, where after the carcass is distributed to retailers. In some instances, the public can also buy carcasses directly from wholesalers. The abattoir industry has expanded tremendously in number and in capacity. In this regard, it is important to note that this industry can be divided into those abattoirs that (i) are linked to the feedlot sector and the wholesale sector, or are owned by municipalities and (ii) those that are mainly owned by farmers and SMME’s. The former abattoirs are mainly class A and B abattoirs, whereas the latter are usually classified as C, D and E class abattoirs. The beef industry produces around 1. million tons of meat and imports around 15 million kilograms while exporting 32 million kilograms. Per capita consumption is around 18.46 kg and number of consumers is around 55 million. Table 10 below shows the industry role players.

23

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

1 AUSTIN EVANS FEEDLOT

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

2 ADAM AGRI

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

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

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

4 BEEFMASTER

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

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

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

6 BRAAMS VOERKRALE BK

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

7 CB FEEDLOT

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

8 CHALMAR BEEF

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

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

9 D C LOUW FEEDLOT

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

10 DOORNBULT VOERKRALE (Pty) Ltd

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

24

No. Name Description Contact Details

F : (015) 293 2064

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

12 FORTRESS BONSMARAS

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

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

13 KAMEELDRIFT VOERKRAAL

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

14 KANHYM ESTATES LTD.

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

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

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

16 KELLERMAN BOERDERY

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

17 KLEYNFAAN FEEDLOT

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

18 KOODOOLAKE

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

19 KOREM FARM

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

20 LIEBENBERGSTROOM Feedlot P O Box 130, Edenville, 9535

mailto:[email protected]

25


VOERKRAAL BPK

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

21 MANJOH RANCH

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

22 MADIKOR

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

23 MIKRON BOERDERY

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

24 MLEKI`S BEEF

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

25 MUSHLENDOW

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

26 MVB FEEDERS

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

27 PIET WARREN PLASE

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

28 POPPIELAND TRUST

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

29 RANCH ESTATES

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

30 SIS FARMING

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

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

26


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

31 SKS BOERDERY

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

32 SPARTA BEEF

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

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

33 TAAIBOSCHBULT Pty Ltd

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

34 THERON BOERDERY

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

35 TRIPLE C FEEDLOT

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

36 VENCOR

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

37 VERCUIEL

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

38 WINDHOEK Feedlot PO Box 387,Pietersburg,0700

27


BOERDERY

T: 082 460 4432 F: 015 297 4350

39 VERGEZIGHT FEEDLOT

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

Source: SA feedlot Association.

28

4. MARKET INTELLIGENCE.

4.1. Export tariffs.

Tariffs that different importing countries applied to beef originating from South Africa in 2016 and 2017 are shown in Tables 2 and 3. Table 2: Export tariffs of beef (fresh or chilled)

Country Product Code Trade Regime Description

2016 2017

Applied Tariffs

Total Ad valorem Equivalent Tariff (estimated)

Applied Tariffs


United Arab Emirates, Kuwait and Jordan

02011000; 02012000 & 02013000

MFN duties Applied 0% 0% 0% 0%

Mozambique 02011000; 02012000 & 02013000

Preferential tariff for South Africa

0% 0% 0% 0%

Swaziland, Lesotho and Namibia

02011000; 02012000 & 02013000

Intra SACU rate 0% 0% 0% 0%

Mauritius 02011000; 02012000 02013000

MFN duties Applied

0% 0% 0% 0%

Source: Market Access Map

Table 2 indicates that during 2016 and 2017 United Arab Emirates, Kuwait and Jordan applied MFN duties of 0% exports of fresh or chilled beef. During the same period, Mozambique applied preferential tariff for South Africa of 0%. Swaziland, Lesotho and Namibia applied a 0% Intra SACU rate to beef originating from South Africa during 2016 and 2017. Mauritius also applied MFN duties of 0% in the same period. Table 3: Export tariffs of frozen beef


2016 2017

Applied Tariffs


Applied Tariffs Total Ad valorem Equivalent Tariff (estimated)

China, Hong Kong

02021000; 02022000 & 02023000

MFN duties Applied

0% 0% 0% 0%

Viet Nam 0202100000; 0202200000 & 0202300000

MFN duties Applied

20% 20% 20% 20%

02021000; 02022000; 02023010 &

MFN duties Applied

0% 0% 0% 0%

29


2016 2017

Applied Tariffs


Applied Tariffs Total Ad valorem Equivalent Tariff (estimated)

02023090

Lesotho

02021000 02022000 02023010 02023090

Intra SACU rate

0% 0% 0%

0%

Mozambique

02021000; 02022000 & 02023000

Preferential tariff for South Africa

0%

0%

0%

0%

Source: Market Access Map

Table 3 above shows that Viet Nam applied the highest tariff rate of 20% on frozen beef to South Africa in 2016 and 2017. In the same period, China, Hong Kong applied MNF of 0%. Mozambique with a preferential tariff rate of 0% in 2016 and 2017, Lesotho trade free of duty South Africa through Intra SACU rate. Most of the tariffs applied to South African frozen beef remained the same during the periods 2016 and 2017 except Mozambique.

4.2. Import tariffs

Tables 4 below shows the import tariffs that South Africa applied to imports of beef originating from all possible countries in 2017.

Rate of Duty

Article Description Statistical unit General EU EFTA SADC MERCOSUR

02.01 Meat of bovine animals, fresh or chilled:

0201.10 Carcasses and half-carcasses

Kg 40% or 240c/kg

40% or 240c/kg

40% or 240c/kg

free 40% or 240c/kg

0201.20 Other cuts with bone in:

0201.20.10 Wagyu beef Kg 40% or 240c/kg

40% or 240c/kg

40% or 240c/kg

free 40% or 240c/kg

0201.20.90 Other Kg 40% or 240c/kg

40% or 240c/kg

40% or 240c/kg

free 40% or 240c/kg

0201.30 Boneless


40% or 240c/kg

40% or 240c/kg

free 40% or 240c/kg

0201.30.90 Other Kg 40% or 240c/kg

40% or 240c/kg

40% or 240c/kg

free 40% or 240c/kg

30

Rate of Duty

Article Description Statistical unit General EU EFTA SADC MERCOSUR

0202 Meat of bovine animals, frozen:

0202.10 Carcasses and half-carcasses

Kg 40% or 240c/kg

40% or 240c/kg

40% or 240c/kg

free 40% or 240c/kg

0202.20 Other cuts with bone in:


40% or 240c/kg

40% or 240c/kg

free 40% or 240c/kg

0202.20.90 Other Kg 40% or 240c/kg

40% or 240c/kg

40% or 240c/kg

free 40% or 240c/kg

0202.30 Boneless


40% or 240c/kg

40% or 240c/kg

free 40% or 240c/kg

0202.30.90 Other Kg 40% or 240c/kg

40% or 240c/kg

40% or 240c/kg

free 40% or 240c/kg

Source: Market Access Map Table 5 above indicate the tariff duties applied by South Africa to trade agreement members of EU, EFTA, SADC, MERCOSUR and General members on sub products of beef, fresh, chilled or frozen. South Africa applied tariff of 40% or 240c/Kg to trade agreements (EU, EFTA, MERCOSUR and General member of WTO) and duty free for SADC members.

31

5. PERFORMANCE OF SOUTH AFRICAN BEEF INDUSTRY IN 2017.

5.1. Exports.

Table 6: List of importing markets for Beef (fresh or chilled) exported by South Africa in 2017 South Africa’s export represents 0.4% of world export for the Beef (fresh or chilled); its ranking in world exports is 24.

Importers

Indicators

Value exported in 2017

(USD thousand)

Trade balance

2017 (USD

thousand)

Share in South

Africa's exports

(%)

Quantity exported in 2017

Quantity unit

Unit value (USD/unit)

Growth in exported

value between

2013-2017 (%,

p.a.)

Growth in exported quantity between

2013-2017 (%,

p.a.)

Growth in exported

value between

2016-2017 (%,

p.a.)

Ranking of partner countries in world imports

Share of partner

countries in world imports

(%)

Total imports

growth in value of partner

countries between

2013-2017 (%,

p.a.)

Average distance between partner

countries and all their

supplying markets

(km)

Concentration of all

supplying countries of

partner countries

Average tariff

(estimated) faced by

South Africa (%)

World 89456 87234 100 18080 Tons 4948 23 14 23 100 0

United Arab Emirates 21768 21768 24.3 4052 Tons 5372 201 44 19 1.4 8 7699 0.16 0

Kuwait 19378 19378 21.7 3087 Tons 6277 33 40 58 28 0.5 14 6115 0.25 0

Jordan 13105 13105 14.6 2321 Tons 5646 372 428 -14 37 0.3 0 10003 0.32 7.6

Eswatini 8887 8887 9.9 2519 Tons 3528 -4 -7 25 69 0.04 -3 434 1 0

Mozambique 6123 6123 6.8 1776 Tons 3448 -5 -5 -15 80 0.02 15 866 0.95 0

Lesotho 3520 3520 3.9 1237 Tons 2846 -19 -25 27 89 0.02 -11 369 1 0

Namibia 2796 1333 3.1 657 Tons 4256 91 102 1 94 0.01 100 1511 0.91 0

Qatar 2316 2316 2.6 348 Tons 6655 37 58 128 43 0.2 6 10331 0.2 0

Mauritius 2227 2227 2.5 357 Tons 6238 10 17 6 73 0.04 9 6852 0.5 0

Egypt 1762 1762 2 247 Tons 7134 35 35 79 77 0.03 142 5848 0.73 0

China 1479 1479 1.7 307 Tons 4818 21029 36 0.3 13 8539 0.81 13.3

Angola 1356 1356 1.5 257 Tons 5276 -8 -1 0 93 0.01 -15 3277 0.42 10

Bahrain 1227 1227 1.4 138 Tons 8891 25 40 84 55 0.09 0 8876 0.15 0

Source: ITC calculations based on COMTRADE statistics.

32

Table 6 shows that during 2017 South Africa exported a total of 18 080 tons of beef (fresh or chilled) at an average value of US$ 4 948/unit. The major export destinations for beef (fresh or chilled) originating from South Africa during 2017 were United Arab Emirates (UAE), Kuwait, Jordan and Swaziland. These countries accounted for 24.3%, 21.7%, 14.6% and 9.9% respectively. On average, during the period 2013 and 2017 South Africa’s exports for beef (fresh or chilled) increased by 23% in value and increase by 14% in quantity. At the same period UAE experienced an increase of 201% in quantity per annum and Kuwait increased by 33% in value and 40% in quantity South Africa’s exports for beef (fresh or chilled) to the world increased by 23% during the period between 2016 and 2017. At the same period UAE and Kuwait increased by 44% and 58% respectively whilst Eswatini decreased by 14%.

33

Figure 31: Growth in demand for fresh beef exported from South Africa in 2017

Source: Trademap, ITC

34

Figure 31 illustrates that between 2013 and 2017, South Africa’s beef (fresh or chilled) exports to Mozambique, Namibia, Egypt, Seychelles, Lesotho, Eswatini and DRC were growing at a rate that is less than their import growth from the rest of the world. South Africa’s beef (fresh or chilled) exports to Kuwait, Qatar, Hong Kong China, Bahrain, Mauritius and Jordan were growing at a rate that is greater than their imports from the rest of the world during the periods 2013 and 2017. Jordan is the biggest South African export market for beef with exports growth of 372%. The most growing demand of South African fresh or chilled beef is in Egypt and Namibia with an annual import growth of 142% and 100% respectively.

35

Figure 32: Prospects for market diversification for fresh beef exported by South Africa in 2017


36

Figure 32 above indicates that South Africa’s fresh or chilled beef has been mainly exported to UAE and Kuwait with a share of 24.33% and 21.66% of SA’s beef exports during 2017 respectively. If South Africa wishes to diversify its exports of fresh or chilled beef exports, the potential market exist in Egypt and Namibia with annual import growth of 142% and 100% per annum. Currently South Africa’s export of beef to Egypt and Namibia is less than their imports from the world. South Africa may consider increasing the market.

37

Table 7: List of importing markets for the Beef (frozen) exported by South Africa in 2017. South Africa’s export represents 0.2% of world export for frozen beef; its ranking in world exports is 26.

Importers

Indicators

Value exported in 2017 (USD thousand)

Trade balance

2017 (USD thousand)

Share in South

Africa's exports (%)

Quantity exported in

2017

Quantity unit


Growth in exported

value between

2013-2017 (%, p.a.)

Growth in exported quantity between

2013-2017 (%, p.a.)

Growth in exported

value between

2016-2017 (%, p.a.)

Ranking of partner

countries in world

imports

Share of partner

countries in world

imports (%)

Total imports


countries between

2013-2017 (%, p.a.)

Average tariff

(estimated) faced by

South Africa (%)

World 54394 14413 100 13808 Tons 3939 20 26 -16 100 -1

Hong Kong, China 9435 9435 17.3 2456 Tons 3842 29 37 6 3 9.3 1 0

China 6133 6133 11.3 1419 Tons 4322 116 177 21048 1 15.1 28 12.2

Angola 5364 5364 9.9 901 Tons 5953 13 15 -3 31 0.4 -27 10

Mozambique 5273 5273 9.7 1355 Tons 3892 -4 1 24 117 0.02 -6 0

Viet Nam 4906 4906 9 1452 Tons 3379 183 162 -71 23 0.9 35 14.5

Lesotho 3636 3636 6.7 2377 Tons 1530 24 57 76 127 0.02 28 0

Egypt 2878 2878 5.3 349 Tons 8246 34 42 -1 6 5.2 2 0

Mauritius 2448 2448 4.5 484 Tons 5058 41 43 -3 82 0.07 4 0

United Arab Emirates 1825 1825 3.4 344 Tons 5305 49 33 21 1 -1 5

Sudan 1428 1428 2.6 299 Tons 4776 -18 145 0

Jordan 1260 1260 2.3 228 Tons 5526 -4 543 34 0.3 -5 9.6

DRC 1093 1093 2 333 Tons 3282 3 13 69 96 0.04 -11 10

Eswatini 948 948 1.7 357 Tons 2655 -6 2 85 153 0 -1 0


38

Table 7 shows that during 2017 South Africa exported a total of 13 808 tons of frozen beef at an average value of US$ 3 939/unit. The major export destinations for frozen beef originating from South Africa during 2017 were Hong Kong China, China, Angola and Mozambique. These countries accounted for 17.3%, 11.3%, 9.9% and 9.7% respectively. Exports of frozen beef exported by South Africa to the world during the periods 2013 and 2017 experienced an increase of 20% in value and an increase of 26% in quantity. During the same periods exports to Hong Kong China increased by 29% in value and 37% in quantity. South Africa’s exports of frozen beef to the world between the period 2016 and 2017 decreased by 16% in value. At the same period, Hong Kong China increased by 6% whilst China increased significantly by 21 048%% during the same periods.

39

Figure 33: Growth in demand for frozen beef exported from South Africa in 2017


40

Figure 33 illustrates that between 2013 and 2017 South Africa’s frozen beef exports to Lesotho and Eswatini were growing at a rate that is less than its import growth from the world. During the same period, South Africa’s frozen beef exports to China, Viet Nam, Hong Kong China, Egypt, Qatar, Seychelles, Kuwait, Angola, Mauritius and Maldives were growing at a rate that is greater than their imports from the rest of the world. Mozambique, DRC and Angola represent a loss in a declining markets while Viet Nam represent gain in a Dynamic markets. China experienced the highest growing demand of South African frozen beef with an annual growth of 116% and share in world imports 15.06.

41

Figure 34: Prospects for market diversification for frozen beef exported by South Africa in 2017


42

Figure 34 above shows the prospects for market diversification for beef (frozen) exports by South Africa in 2017. South African’s frozen beef was mostly exported to Hong Kong, China which commanded SA’s beef exports share of 17.35%. If South Africa is to diversify its frozen beef exports, the most attractive market exists in Nigeria which experienced an annual import growth of 166%.

43

5.2. Imports.

Table 8: List of supplying markets for the beef (fresh or chilled) imported by South Africa in 2017 South Africa represents 0% of world imports for beef (fresh or chilled); its ranking in world imports is 96.

Exporters

Indicators

Value imported in 2017 (USD thousand)

Trade balance

2017 (USD thousand)

Share in South

Africa's imports (%)

Quantity imported in

2017

Quantity unit


Growth in imported

value between

2013-2017 (%, p.a.)

Growth in imported quantity between

2013-2017 (%, p.a.)

Growth in imported

value between

2016-2017 (%, p.a.)

Ranking of partner

countries in world

exports

Share of partner

countries in world

exports (%)

Total exports


countries between

2013-2017 (%, p.a.)

Average tariff

(estimated) applied by

South Africa (%)

World 2222 87234 100 819 Tons 2713 -41 -37 -38 100 0

Namibia 1463 1333 65.8 562 Tons 2603 -37 -32 -54 39 0.1 -14 0

Botswana 752 -352 33.8 252 Tons 2984 -49 -47 98 33 0.2 -3 0

Special categories 6 -6 0.3 5 Tons 1200

United Arab Emirates 21768 50 0.02 -18 40

Kuwait 19378 76 0 40

Source: ITC Trade Map.

44

Table 8 shows that during 2017 South Africa imported a total of 819 tons of beef (fresh or chilled) at an average value of US$ 2 713/unit. The major suppliers of beef (fresh or chilled) imported by South Africa during 2017 was Namibia and Botswana which commanded 65.8% and 33.8% respectively. South African growth of beef imports during 2013 to 2017 decreased by 41% in value and 37% in quantity. At the same period Namibia decreased by 37% in value and 32% in quantity and Botswana also decreased by 49% in value and 47% in quantity. Between the periods 2016 and 2017 South African beef imports decreased by 38% in value. Namibia decreased by 54% in value whilst Botswana increased by 98% during the same period.

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Figure 35: Prospects for diversification of suppliers for fresh or chilled beef imported by South Africa in 2017


46

Figure 35 above shows the prospects for diversification of suppliers for fresh or chilled beef imports by South Africa in 2017. The figure above shows that Namibia commanded the greatest market share of South Africa’s fresh or chilled beef imports with an annual share of 65.84% followed by Botswana by 33.84% during the year 2017. If South Africa is to diversify its imports, the most attractive supplier exists in Egypt due to its export growth of 41%. This means South Africa can develop a new market in this country because currently South Africa does not import fresh or chilled beef from them.

47

Table 9: List of supplying markets for the beef (frozen); imported by South Africa in 2017. South Africa's imports represent 0.2% of world imports for beef (frozen); its ranking in world imports is 46.

Exporters

Indicators

Value imported in 2017 (USD thousand)

Trade balance

2017 (USD thousand)

Share in South

Africa's imports (%)

Quantity imported in

2017

Quantity unit


Growth in imported

value between

2013-2017 (%, p.a.)

Growth in imported quantity between

2013-2017 (%, p.a.)

Growth in imported

value between

2016-2017 (%, p.a.)

Ranking of partner

countries in world

exports

Share of partner

countries in world

exports (%)

Total exports


countries between

2013-2017 (%, p.a.)

Average tariff

(estimated) applied by

South Africa (%)

World 39981 14413 100 14188 Tons 2818 -12 -10 1 100 -2

Botswana 22010 -21676 55.1 7789 Tons 2826 -8 -4 3 29 0.2 -10 0

Namibia 12514 -12163 31.3 3898 Tons 3210 -19 -18 10 34 0.09 -16 0

Uruguay 3048 -3048 7.6 1272 Tons 2396 2 6 -33 6 5.1 4 40

Australia 1054 -1054 2.6 591 Tons 1783 -33 -29 -16 3 15.7 -4 40

Germany 693 -693 1.7 339 Tons 2044 14 1 -6 40

Argentina 218 -218 0.5 78 Tons 2795 7 2.9 15 40

New Zealand 182 -182 0.5 135 Tons 1348 -4 -2 -64 5 8.1 3 40

Special categories 166 -137 0.4 58 Tons 2862

United Kingdom 49 -49 0.1 24 Tons 2042 -31 -87 23 0.4 -2 40

United States of America 47 247 0.1 3 Tons 15667 38 -43 -13 4 12.7 3 40

Hong Kong, China 9435 20 0.4 -5 40

China 6133 42 0.04 -31 40


48

Table 9 shows that during 2017 South Africa imported a total of 14 188 tons of frozen beef at an average value of US$ 2 818/unit. The major suppliers of frozen beef imported by South Africa during 2017 were Botswana, Namibia, Uruguay and Australia. The greatest share of South African frozen beef imports were from Botswana which commanded 55.1% during the year 2017 followed by Namibia which commanded 31.3%, Uruguay and Australia commanded a share of 7.6% and 2.6% respectively. South Africa’s frozen beef imports decreased by 12% in value and 10% in quantity between the periods 2013 and 2017. During the same period, imports of frozen beef from Botswana decreased by 8% in value and 4% in quantity. South Africa’s imports for frozen beef from the world increased by 1% per annum in value during 2016 and 2017 and Botswana's exports to South Africa increased by 3% in value during the same periods.

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Figure 36: Competitiveness of suppliers to South Africa for frozen beef in 2017


50

Figure 36 illustrates that between 2013 and 2076, South Africa’s frozen beef imports from the Australia, New Zealand, Uruguay and Namibia were growing at a rate that is less than their export growth to the world. South Africa’s annual import growth from Australia, New Zealand and Namibia has declined by 33%, 3% and 19% respectively during 2017. South Africa’s imports from United State of America (USA) and Botswana is growing at a rate that is greater than it’s import growth from the world. USA commanded the greatest share of SA’s import market with an annual growth of 38%. Uruguay was the most competitive market during the periods 2013 to 2017with a annual export growth share of 4%.

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Figure 37: Prospects for diversification of suppliers for frozen beef imported by South Africa in 2017.


52

Figure 37 above shows the prospects for diversification of suppliers for frozen beef imports by South Africa. The country imports most frozen beef from Botswana but if South Africa is to diversify its frozen beef imports, the biggest supplier exists in Australia with the world export share of 15.65%. The most attractive market is Viet Nam due to its highest annual export growth of 178%. Currently South Africa is not importing frozen beef Viet Nam; therefore South Africa can develop a new import market in this country.

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6. ACKNOWLEDGEMENTS/ REFERENCES

1. International Trade Center

www.trademap.org/ 2. Quantec

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

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

www.rmaa.co.za 4. SAMIC

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

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

www.bfap.co.za

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

http://www.trademap.org/

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

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

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

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

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

BEEF MARKET VALUE CHAIN PROFILE · 6 Production and consumption of beef decreased by 4% each during...

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