SA’s agricultural sector expected to benefit from BRICS Summit

South Africa’s agricultural sector is expected to gain new export markets from some of the agreements concluded during the BRICS Summit next week.

China and Brazil have shown big interest in South Africa’s agricultural commodities in recent months.

The BRICS Summit taking place next week will see over 50 heads of state and 500 delegates attend the event.

Several sectors of the economy could benefit from investment opportunities and partnerships through this conference.

Stavros Nicolaou on economic benefits for South Africa as part of BRICS

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The event also offers the country a chance to seek solutions to some of its challenges.

Chief Economist of the Agricultural Business Chamber of South Africa, Wandile Sihlobo says, “As we push trade and expansion of agriculture, we are trying to address three problems of South Africa in general; unemployment as well as poverty. So, we are asking ourselves a question, to say how can agriculture and Agribusiness fight to address some of these problems in South Africa, at least in the rural community side, which is why we talk about export demand and all of these things. It is really to fight to address those core problems at a much more level of it.”

Over the past decade, South Africa has only exported about 8% of its agricultural exports to the BRICS nations, which is a small share.

Sihlobo adds, “South Africa exports about half of what it produces in value terms. And going into 2030, we are expecting our production to improve by anywhere between 15 and 30% and given that annual consumption domestically is usually increasing about 1 or 2% on a year-on-year basis. Then we’ll have a lot of products which then we have to put into the export markets. And within the BRICS, we see potential there, particularly in China and in India, of saying how can we increase our exports there.”

However, in order to grow from an export perspective, the agricultural sector is hoping for leniency on tariffs to enter the BRICS nations.

Sihlobo says negotiations on tariffs often come with conditions.

“The South African farmers have long been interested in China and in India and of course, the difficulty with China is that there’s a tendency to negotiate trade by product by product and that takes a long time. You’ll be trying to get avocados, it could take you four/five years but right now, we are saying instead of striking a trade agreement, is there some form of cooperation to deal with the tariffs because that’s one part of saying can you lower the tariffs and secondly, anything phytosanitary barriers that are blocking products SA products from entering the Chinese market because we know the demand is there.”