beef market value chain profile

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A PROFILE OF THE SOUTH AFRICAN BEEF MARKET VALUE CHAIN

2019

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 2018. ......................................................................... 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 (noncommercial) 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 purposes. Typically, these two informal subsectors are not keeping records of their animal stocks; the buyer and seller enter into mouth-to-mouth agreement, followed by exchange of money and cattle without recording the transactions. These informal subsectors are also known to have less knowledge about animal health, disease 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 2008/09 to 2017/18 is depicted in Figure 1 below. The gross value of beef production is dependent on the number of cattle slaughtered and the prices received by producers from buyers. The gross value of beef production increased from R13.6 billion in 2008/09 to R37 billion in 2017/18. This is an increase of 173% 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 R23.5 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 2017/18 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 20% of the beef produced in 2017/18 followed by Free State, Gauteng, KwaZulu-Natal and North West accounting for 19%, 17%, 10% and 9% respectively.

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. Figure 3 below show the slaughtering of cattle and production of beef during the period 2008/09 until 2017/18.

EASTERN CAPE7%

FREESTATE19%

GAUTENG 17%

KWAZULU NATAL10%

LIMPOPO6%

MPUMALANGA20%

NORTHERN CAPE7%

NORTH WEST 9%

WESTERN CAPE 5%

FIGURE 2: BEEF SLAUGHTERING PER PROVINCE DURING 2017/18

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The total amount of beef produced during the past ten years amounted to 9 million tons. Figure 3 above shows that slaughtering and production of beef followed similar trend from 2008/09 to 2017/18. Beef production and slaughtering were on the trough in 2008/09 and reached peak in 2015/16. The highest slaughtering and production on during 2015/16 was driven by drought experienced in South Africa that led farmers to liquidate their herd. They both experienced declines in 2016/17 and 2017/18 of about 3.6% and 3% for production and 4% and 6% for slaughtering respectively. The lower quantities in these periods emanates from the producers rebuilding of the herds.

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 for the past decade.


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Figure 3: Cattle slaughtering and beef production

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Figure 4: Beef production and consumption

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The figure indicates that South African beef production and consumption have been fluctuating throughout the period under analysis. Moreover, the figure shows that during the past decade, South Africa was self-sufficient regarding beef production apart from 2010/111 to 2012/13, as the production was lower than the consumption. For the past decade production increased by 27.8% whilst consumption increased by 28.3%. This might be due to the increased affordability of consumers, consumer’s diet change from field crops to meat and also population increase. Production and consumption of beef decreased by approximately 3.7% each during the periods 2016/17 and about 3% each in 2017/18. The decline in production comes from farmers not having enough beef cattle to slaughter due to herd recovery. The rebuilding of herd led to high beef prices that in turn affected the demand of beef and beef products. The consumption declined due to higher prices whereby consumers shifted to cheaper meat such as chicken as alternative.

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 2008/09 to 2017/18 are illustrated in Figure 5.


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Figure 5: Average beef producer prices

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Figure 5 above shows that prices of beef increased significantly from 2008/09 to 2017/18 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 R23.70/Kg in 2017/18 compared to 2008/09. The price increase after the drought season are exacerbated by cattle producers battle to rebuild their herds due to increased slaughtering in 2015/16.

2.2. Import – Export Analysis

Figure 6, below compares volumes of imports and exports for beef from 2009 to 2018.

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 2009 and 2013. This made 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 2016 exports shown a sharp increase, because South Africa was declared foot and mouth disease 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. The beef export and import declined in 2017 and remained flat in 2018, following the decline in beef production and the local demand for beef, as prices are high.

2.2.1. Exports

The quantity and value of beef exports from 2009 to 2018 are shown in Figure 7 below. South Africa exported 30 000 tons of beef in 2018 yielding an export value of R1.8 billion. There was a decrease of 6% of quantity of beef exported during the period 2018 as compared to 2017 and export value showed an decrease of 3% during the same period.

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Exports 5 14 19 15 16 28 36 39 32 30

Imports 10 19 27 30 28 24 19 19 15 14

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Figure 6: Exports and imports of beef

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Figure 7, indicates that beef exports quantity was low from 2009 to 2013 and then followed by immense increase in 2014 up to 2016. This was due to South Africa being declared foot and mouth disease free in 2014 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 2009 and its peak in 2016 during the period under analysis. Again, the lower exports in 2017 and 2018 were affected by shortage of cattle to be slaughtered for beef as farmers are focusing on rebuilding their herds. Figure 8 below shows the main importing continents for South African beef during the past decade.


South Africa was mainly exporting beef to Africa and Asia in the continent throughout the period under analysis. Africa commanded the highest exports of beef from South Africa from 2009 to 2014. From 2015 to 2018, 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 143 128 tons of beef from South Africa which accounts for 62% and Asia was the second by 85 477 tons (37%) during the past decade. Oceania commanded the lowest South African beef exports quantity during the period under analysis.

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Quantity 5 14 19 15 16 28 36 39 32 30

Value 185 331 309 399 592 1116 1761 2024 1917 1854

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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. Angola appeared to be the second country to obtain the highest beef exports from South Africa. Mozambique reached a new peak of 4 835 tons of beef from South Africa in 2015. Tanzania was the lowest importer of South African beef within SADC countries. In total, Mozambique commanded 61% of South African beef exports followed at a distance by Angola with 16%. Mauritius followed with 9% and Democratic Republic of Congo 7%. There was a huge decline (39%) on Mozambique’s imports in 2017 and remained flat in 2018.


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Figure 9: Beef export quantities to SADC

Angola DRC Mauritius Malawi Mozambique

Seychelles Tanzania Zambia Zimbabwe

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Figure 10: Beef export quantities to West Africa

Côte d'Ivoire Ghana Liberia Mali

Nigeria Saint Helena Sierra Leone Senegal

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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 from 2015 to 2018. 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. Despite the decline in beef intake within the selected countries, Nigeria is still leading with a share of 54% in 2018.


In Middle, Northern and Eastern Africa, Egypt commanded the highest share of beef exports by South Africa from 2009 to 2018. 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 decline of 41% from 2015 to 2018. Kenya, Uganda and Ethiopia, which are the Eastern Africa countries imported the lowest quantities of South African beef during the past decade.


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

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Figure 12: Beff export quantities to European Union

France United Kingdom Netherlands Germany

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Figure 12 above shows beef exported by South Africa to European Union from 2009 to 2018, 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 as well were not regular importers of South African beef. However, UK commanded the highest share of imported beef from South Africa in 2010, 2011 and 2015 whilst Germany took a lead during 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 in 2017 and remained flat in 2018.


South African beef exports to Asia are shown in Figure 13. Generally, exports of beef to Asia were very minimal during 2009 to 2012 due to the foot and mouth disease outbreak. It is clear that, following South Africa’s declaration on disease free status, the beef exports were regularly going to the United Arab Emirates (UAE), China, HK and Kuwait from 2014 to 2017. In 2018, China’s beef intake shot up and realised a new peak with 7.5 million kg of beef imports from South Africa. This boom follows the agreement between South Africa and China with regards to Inspection, Quarantine and veterinary sanitary protocol that gave South Africa green light for beef exports to China. Bahrain, Qatar and Lebanon are the lowest importers of South African beef within Western and Eastern Asia. Figure 14 below shows destinations for South African beef in 2018.

Source: Trade Map, 2019

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Figure 13: Beef export quantities to Western and Eastern Asia

China China, HK UAE Bahrain Kuwait Lebanon Qatar

China25%

Kuwait12%

Mozambique10%

Eswatini9%

UAE8%

Lesotho8%

Jordan6%

Namibia4%

Angola3%

Mauritius2%

Hong Kong, China2%

Viet Nam2%

Other9%

FIGURE 14: BEEF DESTINATION IN 2018

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The main destinations of South African beef in 2018 was China which commanded 25% of South African beef, followed by Kuwait with 12%, Mozambique with 10%, Eswatini (9%), UAE and Lesotho with 8% each. Values of beef exports from various Provinces of South Africa are presented in Figure 15 below.


Figure 15 indicates that exports of beef in South Africa were mainly from Gauteng. Noteworthy is the fact that the province is one of the main exit points for exports in the country. Furthermore, most exporters of beef are 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. Eastern Cape and Northern Cape Provinces have recorded irregular exports, which made them to be the lowest exporters during this period. In 2018, Gauteng outstripped Mpumalanga and became the highest exporter of beef with exports share of 45%. The following figures (Figures 16 - 23) show the value of beef exports from the various district municipalities in the eight Provinces of South Africa that excludes Northern Cape Province

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Western Cape 38436 19964 24324 35197 65529 164567 277712 380350 265800 195329

Eastern Cape 0 0 141 27 14066 59992 178827 103248 33363 27978

Northern Cape 0 2 672 489 0 0 0 0 0 4

Free State 32710 39394 31687 66235 79681 75873 57318 86351 122114 91125

KwaZulu-Natal 3643 27485 23466 19772 27156 45386 51238 39821 29795 30782

North West 8189 11201 4407 7916 13038 54996 187831 275784 253819 211502

Gauteng 77357 174228 90620 104233 206455 339766 517647 581740 589515 829708

Mpumalanga 24541 60313 133345 163758 186131 375375 489925 553832 621285 467281

Limpopo 7 94 12 918 259 404 987 2549 1253 756

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Figure 15: Value of beef exported by Provinces

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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 R17 million in 2010 and experienced the highest value of R357 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 over 80% share of beef exports during the entire period of analysis.


In the Eastern Cape Province, beef exports were recorded from Buffalo City, Alfred Nzo 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. Buffalo City increased its exports from 2013 to 2015 following the FMD free status then started declining in 2016 to 2018. This area also still battling for herd rebuilding. Alfred Nzo recorded minimal exports during period in analysis. There were no exports record from Eastern Cape Province in 2009 and 2010.

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

City of Cape Town 38431 17199 20975 32510 63053 159714 258614 357973 254123 186448

West Coast 5 0 0 0 0 788 12 0 0 0

Cape Winelands 0 2766 3309 2615 2476 3330 18087 19577 9339 6826

Eden 0 0 39 72 0 736 998 2799 2338 2007

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Figure 16: Value of beef exports from Western Cape Province

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Alfred Nzo 0 0 0 0 190 18 30 53 148 219

Nelson Mandela Bay 0 0 141 27 2 0 371 169 522 330

Buffalo City 0 0 0 0 13874 59922 178403 101785 32691 26201

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Figure 17: Value of beef exported from Eastern Cape Province

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Figure 18 indicates that exports of beef from the Free State province occurred regularly in Mangaung District Municipality but Thabo Mofutsanyane was leading from 2011 to 2018. Thabo Mofutsanyane District has exported beef worth ofmore than R351 million which accounts for 52% of total share from 2009 to 2018 in the Free State. Mangaung followed with beef exports worth about R241 million and this accounted for 36% of total share. Lejweleputswa District Municipality recorded total of R75.7 (11%) million and Xhariep District Municipality recorded lowest exports R7.7 million (1%). In 2018, the exports from the provinces is declining but Thabo Mofutsanyane is still leading with a share of 68%.


In the KwaZulu–Natal Province, beef exports were mainly from eThekwini Metropolitan Municipality. Its lowest exports value was experienced in 2009 and its peak in 2015. Intermittent and minimal export values were recorded in iLembe District Municipalities during the period under review. EThekwini recorded 100% share of beef exports within the Province from 2009 to to 2014 and again in 2018. On other years, the District Municipality accounted for more than 90% beef exports share.

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Xhariep 0 0 0 2361 3277 121 483 1192 2 302

Lejweleputswa 0 190 2 852 1335 6015 15840 14639 27015 9815

Thabo Mofutsanyane 0 16571 20105 32855 45213 41335 25767 43208 64950 61491

Mangaung 32710 22633 11579 27930 27600 26731 15217 26995 30147 19518

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Figure 18: Value of beef exported from Free State Province

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iLembe 0 0 0 0 0 0 188 25 240 0

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Figure 19: Value of beef exports from KwaZulu Natal Province

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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 2018, Dr. Kenneth Kaunda District Municipality has recorded exports in 2013, 2015 to 2018 whilst Bojanala’s record was only in 2014 and 2017 and Ngaka Modiri Molema recorded in 2016 only. Dr. Kenneth Kaunda District Municipality shot up exports and reached the new peak of R245 million in 2017. The district further remained high with a share of 88% in 2018.


Figure 21 shows the value of exports by Gauteng Province from 2009 to 2018. The highest values of beef exported in Gauteng Province were mainly from City of Johannesburg Metropolitan Municipality. Noteworthy is the fact that the biggest abattoir (Karan Beef) in Africa is situated in this Municipality. The City of Johannesburg Metropolitan Municipality commanded the greatest shares for the entire period of analysis. Ekurhuleni, City of Johannesburg and City of Tshwane recorded regular exports of beef while Sedibeng and West Rand recorded intermittent records of beef exports. In 2018, City of Johannesburg Metropolitan Municipality recorded the highest value of R586 million which marks an increase of 69% from the previous year. This was fueled by high demand of beef in China. City of Tshwane and Ekurhuleni District Municipalities followed with value of R201million and R42 million respectively. City of Johannesburg Metropolitan Municipality recorded an average exports share of 80% for the past 10 years.

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Bojanala 0 0 0 270 20 1546 0 0 3922 0

Dr Ruth Segomotsi Mompati 8189 11201 4375 7522 12722 53451 187817 95719 4784 24872

Dr Kenneth Kaunda 0 0 32 0 288 0 14 179941 245113 186534

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Figure 20: Value of beef exported from North West Province

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Sedibeng 0 5220 1835 864 1364 4345 4194 1706 1408 0

West Rand 1461 679 97 760 1560 2798 1301 0 102 98

Ekurhuleni 13185 13816 5050 17943 27067 41412 129994 150772 59334 41990

City of Johannesburg 60592 147851 79047 62068 157612 263536 357882 322151 346081 586253

City of Tshwane 2120 6662 4591 22599 18853 27675 24276 107111 182591 201366

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Figure 21: Value of beef exported from Gauteng Province

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Figure 22 shows the value of exports by Limpopo Province from 2009 to 2018. Irregular exports of beef recorded in Limpopo Province were coming from Capricorn and Waterberg District Municipalities during the period under analysis. The highest export values were recorded from Vhembe in 2016 followed by Waterberg District Municipality. The Waterberg district only recorded beef exports from 2012 to 2018. Vhembe District Municipality accounted for 100% exports share in 2011. On average Vhembe District Municipality recorded highest exports followed by Waterberg then Capricorn for the past decade.

Source: Quantec EasyData Figure 23 shows the value of exports by Mpumalanga Province from 2009 to 2018. In Mpumalanga province, Gert Sibande and Ehlanzeni District Municipalities appeared to be main exports of beef for the past decade. Irregular exports were recorded from Nkangala District Municipality. Gert Sibande commanded the highest market shares during the entire period of analysis. Gert Sibande shown an immense increase of exports from 2014 to 2017. In 2018, the Gert Sibande’s exports declined but still led with an export share of 70% followed by Ehlanzeni with 30%.

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Vhembe 7 32 12 456 5 17 546 1524 759 733

Capricorn 0 62 0 1 16 0 7 7 30 0

Waterberg 0 0 0 462 238 386 435 1018 464 23

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Figure 22: Value of beef exported from Limpopo Province

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Gert Sibande 21252 44527 110252 107903 105331 241753 339978 427536 491670 325601

Nkangala 0 0 0 862 16 0 0 0 0 0

Ehlanzeni 3289 15786 23093 54993 80785 133621 149947 126297 129615 141680

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Figure 23: Value of beef exported from Mpumalanga Province

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2.2.3. Imports

South Africa imported 14 thousand tons of beef worth of R516 million in 2018, thus a decline of respectively 5% in value and 8% in quantity from the previous year. Figure 24 below show the imports of beef from 2009 to 2018. 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. The highest imports of beef were recorded in 2012, since then the beef imports were declining throughout except in 2016. In 2016, imports increased due to the drought experienced in 2015/16. This tremendous decline of 53% in the past six years was attributed by declining consumption of beef in South Africa. The imports of beef comprise of fresh and frozen meat. The chunk of imports were frozen boneless beef which accounted for 73% in total beef imports in 2018.

Source: Quantec EasyData Figure 25 below indicates the main suppliers of beef to South Africa from 2009 to 2018.


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Figure 24: Beef imports quantities and value

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Figure 25: Beef quantities imported from the continents

Africa Americas Asia Europe Oceania

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In 2009, Americas was leading supplier of beef to South Africa. The beef quantity from America decreased from 2010 and remained lower. In 2016, USA attained access to South African beef market following the agreement in AGOA negotiations, hence the imports increased. Africa continent shot up beef exports and took a lead from 2010 to 2018. In total of beef imported from continents, Africa is leading with 153 million Kg (75%), followed at a distance by Oceania with 23 million Kg (12%) and Americas 21 million Kg (11%). Europe and Asia are the smallest suppliers with 3 million Kg and 1 million Kg respectively. The following Figures 26 to 28 indicate the origins of beef in Africa, America and Oceania.


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 in 2009. In 2010 the imports shot up, mainly Namibia with a share of 77% beef imports. From 2010 the Namibia’s 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. Beef from Botswana shown an immense increase in 2012 then started declining until 2015 and slowly decrease further until 2018. During the increase in 2012, Botswana became the highest source of beef imports and took a lead again from 2014 to 2018. In total, Namibia supplied South Africa with 74 million kilograms of beef and Botswana was 79 million kilograms on the entire period under analysis.


0

2000000

4000000

6000000

8000000

10000000

12000000

14000000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Kilo

gra

m

Figure 26: Beef quantities imported from Africa

Botswana Namibia

0

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000

4500000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Kilo

gra

m

Figure 27: Beef quantities imported from Americas

Argentina Paraguay Uruguay Brazil United States

19

Figure 27 shows the beef quantities imported from Americas. Uruguay commanded the greatest shares from 2009 to 2017. In 2018, Brazil outstripped Uruguay and led with a share of 51% of beef imported from Americas. For the period under analysis, Uruguay have commanded 68% share of South African market, followed by Argentina with 14%, Paraguay, Brazil and USA with 8%, 7% and 3% respectively. The figure clearly shows that South African beef imports from Americas are deteriorating, in total they have declined by 61% from 2009 to 2018. 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, the country has been the main import market of beef for South Africa during the period under analysis within Oceania. The Oceania continent reached its peak of 5.3 million Kg during 2011 through Australia. New Zealand commanded the second highest level of beef imports from 2009 to 2018.

Source: Trade map

0

1000000

2000000

3000000

4000000

5000000

6000000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Kilo

gra

ms

Figure 28: Beef quantities imported from Oceania

Australia New Zealand

Botswana49%

Namibia24%

Brazil11%

Uruguay5%

USA5%

Australia5%

Others1%

FIGURE 29: COUNTRIES OF ORIGIN FOR BEEF IMPORTS IN 2018

20

Figure 29 above shows the top suppliers of beef to South Africa during 2018. It is evident that South Africa obtains most of its beef from Botswana and Namibia that are SACU members. Botswana commanded 49% share of South Africa’s import market of beef followed by Namibia commanding up to 24%, Brazil 11%. Uruguay USA and Australia commanded 5% each while the remaining countries together shared 1%.

21

3. BEEF MARKET VALUE CHAIN

Beef market value chain is illustrated on Figure 30.

Figure 30: South African Beef Market Value Chain during 2017/18

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

Affluent consumers

(Premium

beef markets)

1. million tons produced

14 million kg imported

30 million kg exported

Under

Privileged

Consumers

Meat Processors

(430 Abattoirs)

1.0 million tons Consumption

Per capita consumption = 18.02 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%

12 788 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 12.7 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 fueled 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 14 million kilograms while exporting 30 million kilograms. Per capita consumption is around 18.02 kg and number of consumers is around 57 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 Feedlot P O Box 13, Ladanna, 0704

24

No. Name Description Contact Details

VOERKRALE (Pty) Ltd

T : (015) 293 2575 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

mailto:[email protected]

25


20 LIEBENBERGSTROOM VOERKRAAL BPK

Feedlot P O Box 130, Edenville, 9535 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

26


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 delivery to the Witbank Abattoir. It has 22 000 cattle standing at any given time.

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

27


T:082 866 4433 F: 0866 759 451

38 WINDHOEK BOERDERY

Feedlot PO Box 387,Pietersburg,0700 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 2017 and 2018 are shown in Tables 2 and 3. Table 2: Export tariffs of beef (fresh or chilled)

Country Product Code Trade Regime Description

2017 2018

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%

Eswatini 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 2017 and 2018, 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%. Eswatini, Lesotho and Namibia applied a 0% Intra SACU rate to beef originating from South Africa during 2017 and 2018. Mauritius also applied MFN duties of 0% in the same period. Table 3: Export tariffs of frozen beef


2017 2018

Applied Tariffs


Applied Tariffs Total Ad valorem Equivalent Tariff (estimated)

China 02021000; 02022000 & 02023000

MFN duties Applied

0% 0% 0% 0%

Viet Nam 0202100000; 0202200000 & 0202300000

MFN duties Applied

20% 20% 20% 20%

29


2017 2018

Applied Tariffs


Applied Tariffs Total Ad valorem Equivalent Tariff (estimated)

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 2017 and 2018. In the same period, China applied MNF of 0%. Mozambique with a preferential tariff rate of 0% in 2017 and 2018, Lesotho trade free of duty with South Africa through Intra SACU rate. Most of the tariffs applied to South African frozen beef remained the same during the periods 2017 and 2018.

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 2018.

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

0202 Meat of bovine animals, frozen:

30

Rate of Duty

Article Description Statistical unit General EU EFTA SADC MERCOSUR

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: SARS 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 2018.

5.1. Exports.

Table 6: List of importing markets for Beef (fresh or chilled) exported by South Africa in 2018 South Africa’s export represents 0.3% of world export for the Beef (fresh or chilled); its ranking in world exports is 26.

Importers

Indicators

Value exported in 2018 (USD thousand)

Trade balance

2018 (USD thousand)

Share in South

Africa's exports (%)

Quantity exported in

2018

Quantity unit

Unit value (USD/unit)

Growth in exported

value between

2014-2018 (%, p.a.)

Growth in exported quantity between

2014-2018 (%, p.a.)

Growth in exported

value between

2017-2018 (%, p.a.)

Ranking of partner

countries in world

imports

Total imports

growth in value of partner

countries between

2014-2018 (%, p.a.)

Average distance between partner

countries and all their

supplying markets

(km)

Concentration of all supplying

countries of partner

countries

World 73472 70888 100 14045 Tons 5231 9 -2 -18 2

Kuwait 18003 18003 24.5 3015 Tons 5971 22 22 -7 30 10 6525 0.25

United Arab Emirates 14740 14740 20.1 2292 Tons 6431 89 91 -32 18 6 7675 0.16

Jordan 9379 9379 12.8 1585 Tons 5917 8 0 -28 38 -2 9914 0.47

Mozambique 7928 7928 10.8 1987 Tons 3990 -4 -11 29 81 0 872 0.89

Eswatini 7155 7155 9.7 1995 Tons 3586 -7 -14 -19 82 -7 431 1

Qatar 3909 3909 5.3 494 Tons 7913 24 19 69 45 11 10203 0.19

Namibia 3562 1169 4.8 948 Tons 3757 30 28 27 93 32 1339 0.96

Mauritius 2064 2064 2.8 309 Tons 6680 2 2 -7 79 6 6982 0.54

Bahrain 1258 1258 1.7 140 Tons 8986 27 34 3 50 2 7079 0.16

Lesotho 1144 1144 1.6 440 Tons 2600 -26 -35 -68 108 -26 369 1

Angola 927 927 1.3 134 Tons 6918 -19 -18 -32 96 -4 4185 0.34

Egypt 720 720 1 94 Tons 7660 2 -4 -59 51 53 10437 0.88

Viet Nam 414 414 0.6 138 Tons 3000 17 14 202 65 19 7470 0.71

Nigeria 372 372 0.5 40 Tons 9300 21 12 57

Source: ITC calculations based on COMTRADE statistics.

32

Table 6 shows that during 2018 South Africa exported a total of 18 080 tons of beef (fresh or chilled) at an average value of US$ 5 231/unit. The major export destinations for beef (fresh or chilled) originating from South Africa during 2018 were Kuwait, United Arab Emirates (UAE), Jordan and Mozambique. These countries accounted for 24.5%, 20.1%, 12.8% and 10.8% respectively. On average, during the period 2014 and 2018 South Africa’s exports for beef (fresh or chilled) increased by 9% in value and decreased by 2% in quantity. At the same period, Kuwait experienced an increase of 22% in both value and quantity and UAE increased by 81% in value and 91% in quantity South Africa’s exports for beef (fresh or chilled) to the world decreased by 18% during the period between 2017 and 2018. At the same period UAE and Kuwait decreased by 32% and 7% respectively.

33

Figure 31: Growth in demand for fresh beef exported from South Africa in 2018

Source: Trademap, ITC

34

Figure 31 illustrates that between 2014 and 2018, South Africa’s beef (fresh or chilled) exports to Mozambique, Namibia, Egypt, Seychelles, Lesotho, Botswana, 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, Bahrain, UAE and Jordan were growing at a rate that is greater than their imports from the rest of the world during the periods 2014 and 2018. UAE is the biggest South African export market for beef with exports growth of 89%. The most growing demand of South African fresh or chilled beef is in Tanzania with an annual import growth of South African import of 126%.

35

Figure 32: Prospects for market diversification for fresh beef exported by South Africa in 2018


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 20.06% and 24.5% of SA’s beef exports during 2018 respectively. If South Africa wishes to diversify its exports of fresh or chilled beef exports, the biggest market exist in Netherlands with the world import share of 1.7%. Potential market exist in Egypt with annual import growth of 53% per annum. Currently South Africa’s export of beef to Egypt 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 2018. South Africa’s export represents 0.3% of world export for frozen beef; its ranking in world exports is 27.

Importers

Indicators

Value exported in 2018 (USD thousand)

Trade balance

2018 (USD thousand)

Share in South

Africa's exports (%)

Quantity exported in

2018

Quantity unit


Growth in exported

value between

2014-2018 (%, p.a.)

Growth in exported quantity between

2014-2018 (%, p.a.)

Growth in exported

value between

2017-2018 (%, p.a.)

Ranking of partner

countries in world

imports

Total imports


countries between

2014-2018 (%, p.a.)


countries and all their

supplying markets

(km)

Concentration of all supplying


countries

World 65739 28518 100 16215 Tons 4054 3 3 21 1

China 29550 29550 45 7511 Tons 3934 826 305 382 1 33 15133 0.21

Mozambique 5354 5354 8.1 1190 Tons 4499 -7 -10 2 121 -7 1567 0.74

Egypt 3885 3885 5.9 468 Tons 8301 10 -7 35 6 -4 9273 0.77

Angola 3639 3639 5.5 668 Tons 5448 12 9 -32 31 -19 6825 0.22

Lesotho 3013 3013 4.6 1956 Tons 1540 29 46 -17 130 29 369 1

Hong Kong, China 2330 2330 3.5 628 Tons 3710 -17 -17 -75 3 3 14666 0.36

Eswatini 2222 2222 3.4 691 Tons 3216 16 11 134 140 18 1388 0.79

Kuwait 2215 2215 3.4 472 Tons 4693 -36 -35 166 30 -3 8722 0.18

Mauritius 2188 2188 3.3 412 Tons 5311 24 21 -11 83 4 5675 0.51

Viet Nam 1740 1740 2.6 473 Tons 3679 -25 -27 -65 22 25 7911 0.29

Jordan 1585 1585 2.4 222 Tons 7140 20 12 26 33 -3 7871 0.32

Seychelles 1428 1428 2.2 207 Tons 6899 34 28 52 113 11 7420 0.2

United Arab Emirates 1085 1085 1.7 200 Tons 5425 16 16 -41 17 10 8778 0.31

Namibia 981 -8123 1.5 285 Tons 3442 -22 -23 179 146 -28 2545 0.66


38

Table 7 shows that during 2018 South Africa exported a total of 16 215 tons of frozen beef at an average value of US$ 4 054/unit. The major export destinations for frozen beef originating from South Africa during 2018 were China, Mozambique and Egypt. These countries accounted for 45%, 8.1% and 5.9% respectively. Exports of frozen beef exported by South Africa to the world during the periods 2014 and 2018 experienced an increase of 3% in value and an increase of 3% in quantity. During the same periods exports to China increased by 826% in value and 305% in quantity while Mozambique decreased by 7% in value and 10% in quantity. South Africa’s exports of frozen beef to the world between the period 2017 and 2018 increased by 21% in value. At the same period, China increased by 382% and Mozambique increased by 2% during the same periods.

39

Figure 33: Growth in demand for frozen beef exported from South Africa in 2018


40

Figure 33 illustrates that between 2014 and 2018 South Africa’s frozen beef exports to Hong Kong, China, Viet Nam, Kuwait, Mozambique, Qatar, 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, UAE, Egypt, Jordan, Seychelles, Angola and Mauritius were growing at a rate that is greater than their imports from the rest of the world. Namibia, DRC and Botswana represent a loss in a declining markets while Ethiopia represent gain in dynamic markets. China experienced the highest growing demand of South African frozen beef with an annual growth of 826% and share in world imports 20.21%.

41

Figure 34: Prospects for market diversification for frozen beef exported by South Africa in 2018


42

Figure 34 above shows the prospects for market diversification for beef (frozen) exports by South Africa in 2018. South African’s frozen beef was mostly exported to China which commanded SA’s beef exports share of 14.95%. If South Africa is to diversify its frozen beef exports, the most attractive market exists in Ethiopia which experienced an annual import growth of 97%.

43

5.2. Imports.

Table 8: List of supplying markets for the beef (fresh or chilled) imported by South Africa in 2018 South Africa represents 0% of world imports for beef (fresh or chilled); its ranking in world imports is 98.

Exporters

Indicators

Value imported in 2018 (USD thousand)

Trade balance

2018 (USD thousand)

Share in South

Africa's imports (%)

Quantity imported in

2018

Quantity unit


Growth in imported

value between

2014-2018 (%, p.a.)

Growth in imported quantity between

2014-2018 (%, p.a.)

Growth in imported

value between

2017-2018 (%, p.a.)

Ranking of partner

countries in world

exports

Total exports


countries between

2014-2018 (%, p.a.)


countries and all their importing markets

(km)

Concentration of all importing


countries

World 2584 70888 100 814 Tons 3174 -35 -36 16 2

Namibia 2393 1169 92.6 694 Tons 3448 -32 -34 64 41 -16 7686 0.64

Botswana 181 170 7 119 Tons 1521 -50 -45 -76 33 -9 7499 0.33

Australia 10 -10 0.4 1 Tons 10000 1 0 3 1 9957 0.21

Kuwait 18003 79 36 465 0.75

United Arab Emirates 14740 49 13 836 0.46

Jordan 9379 76 -42 2235 0.72

Mozambique 7928 95 6 879 1

Eswatini 7155 63 -36 1237 0.82

Qatar 3909

Source: ITC Trade Map.

44

Table 8 shows that during 2018 South Africa imported a total of 814 tons of beef (fresh or chilled) at an average value of US$ 3 174/unit. The suppliers of beef (fresh or chilled) imported by South Africa during 2018 was Namibia, Botswana and Australia that commanded 92.6%, 7% and 0.4% respectively. South African growth of beef imports during 2014 to 2018 decreased by 35% in value and 36% in quantity. At the same period Namibia decreased by 32% in value and 34% in quantity and Botswana also decreased by 50% in value and 45% in quantity. Between the periods 2017 and 2018 South African beef imports increased by 16% in value. Namibia increased by 64% in value whilst Botswana decreased by 76% 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 2018


46

Figure 35 above shows the prospects for diversification of suppliers for fresh or chilled beef imports by South Africa in 2018. 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 92.61% followed by Botswana with 7% during the year 2018. If South Africa wishes to diversify its imports, the most attractive supplier exists in Nigeria due to its export growth of 230%. This means South Africa can develop a new market in this country because currently South Africa does not import fresh or chilled beef the country.

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Table 9: List of supplying markets for the beef (frozen); imported by South Africa in 2018. South Africa's imports represent 0.2% of world imports for beef (frozen); its ranking in world imports is 49.

Exporters

Indicators

Value imported in 2018 (USD thousand)

Trade balance

2018 (USD thousand)

Share in South

Africa's imports (%)

Quantity imported in

2018

Quantity unit


Growth in imported

value between

2014-2018 (%, p.a.)

Growth in imported quantity between

2014-2018 (%, p.a.)

Growth in imported

value between

2017-2018 (%, p.a.)

Ranking of partner

countries in world

exports

Total exports


countries between

2014-2018 (%, p.a.)


countries and all their importing markets

(km)

Concentration of all importing


countries

World 37221 28518 100 13486 Tons 2760 -5 -8 -7 0

Botswana 19074 -18710 51.2 6960 Tons 2741 -7 -9 -13 29 -5 2513 0.53

Namibia 9104 -8123 24.5 2783 Tons 3271 -12 -18 -27 36 -13 4999 0.35

Brazil 4165 -4165 11.2 1525 Tons 2731 1 -1 14235 0.18

Uruguay 1894 -1894 5.1 707 Tons 2679 7 6 -38 6 5 15152 0.35

United States of America 1654 -1654 4.4 703 Tons 2353 3419 3 5 10570 0.18

Australia 970 -970 2.6 668 Tons 1452 -19 -6 -8 2 -6 9283 0.16

Argentina 162 -162 0.4 52 Tons 3115 -26 7 33 17051 0.55

South Africa 117 -117 0.3 24 Tons 4875 27 3 7627 0.22

New Zealand 48 -48 0.1 43 Tons 1116 5 4 -74 5 -1 11404 0.27

Area Nes 29 -6 0.1 20 Tons 1450

Netherlands 3 -3 0 0 Tons 12 7 1640 0.1

China 29550 57 -53 4299 0.26

Mozambique 5354 112 879 1


48

Table 9 shows that during 2018 South Africa imported a total of 13 486 tons of frozen beef at an average value of US$ 2 760/unit. The major suppliers of frozen beef imported by South Africa during 2018 were Botswana, Namibia, Brazil and Uruguay. The greatest share of South African frozen beef imports were from Botswana which commanded 51.2% during the year 2018 followed by Namibia which commanded 24.5%, Brazil and Uruguay commanded a share of 11.2% and 5.1% respectively. South Africa’s frozen beef imports decreased by 5% in value and 8% in quantity between the periods 2014 and 2018. During the same period, imports of frozen beef from Botswana decreased by 7% in value and 9% in quantity. South Africa’s imports for frozen beef from the world decreased by 7% per annum in value during 2017 and 2018 and Botswana's exports to South Africa decreased by 13% in value during the same periods.

49

Figure 36: Competitiveness of suppliers to South Africa for frozen beef in 2018


50

Figure 36 illustrates that between 2014 and 2018, South Africa’s frozen beef imports from the Australia and Botswana were growing at a rate that is less than their export growth to the world. South Africa’s annual import growth from Australia and Botswana has declined by 19% and 7% respectively during 2018. South Africa’s imports from Uruguay, New Zealand and Namibia is growing at a rate that is greater than its import growth from the world. Uruguay commanded the greatest share of SA’s import market with an annual growth of 7%. Uruguay was the most competitive market during the periods 2014 to 2018 with an annual export growth share of 5%.

51

Figure 37: Prospects for diversification of suppliers for frozen beef imported by South Africa in 2018.


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 Brazil with the world export share of 18.62%. The most attractive market is Argentina due to its highest annual export growth of 33%. Currently Argentina’s share of South African frozen beef imports is low at 0.44%; therefore, South Africa can increase 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. Bureau for Food and Agricultural Policy

www.bfap.co.za

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

http://www.trademap.org/

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

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

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

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

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

beef market value chain profile

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