SA’s honey imports keep rising

Honey on toast, honey on oats, honey in tea. This is becoming the new regime in many South African households as the benefits of honey  become better known.

According to industry experts, South Africans consume approximately 4 000 tons of honey annually, while local production of the commodity falls far behind at only 2 000 tons a year.

The low production is due mainly to the lack of forage (‘food supply’ for bees) and the high cost of honey production versus its bulk selling price. This is according to South African Bee Industry Association (Sabio) chair Mike Miles, who says that in recent years it has become cheaper for South Africa to import honey than to produce it locally.

China is South Africa’s largest supplier of honey, with data from Trade Map showing that SA imported roughly 4 463 tons of natural honey from China in 2017, compared with the 824 tons back in 2008. 

Agricultural economist and head of research at Agbiz, Wandile Sihlobo, says the surge in consumption has led to an increased need to import it from other nations – and that a large part of the honey that is imported comes in at a lower price than it takes to produce honey in South Africa.

South Africa’s economy is big, and while honey plays a small role in its macroeconomics, as far as small businesses are concerned, the industry is under duress.

The more bees the better

Agis Holdings director Rolf Endres says that a threat to South African honey apiaries is also a threat to South African agriculture.

“South African honey has to compete with significant local and international honey adulteration,  or ‘fake honey’ production,” he says. “This threatens the financial viability of South African apiaries, and thus jobs, as adulterated honey can be sold much cheaper than real honey.”

Endres says if South African agriculture wants to remain competitive, it needs to realise that beekeeping and pollination is essential to the enabling of the agricultural industry. He points out that ‘pollination services’, which are provided by the same beekeepers who manufacture our honey, can increase the yields of some crops by more than 50%.

Investing in honey

Business and financial services provider Fedgroup has developed an innovative ‘Impact Farming’ concept to help boost local production. Investors purchase a beehive (or a solar panel or a blueberry bush) via the Impact Farming app and watch as both their earnings and their harvest grow.

Read: Everyone loves a side hustle

Fedgroup chair Grant Field tells Moneyweb that since the platform’s launch about eight weeks ago, investors have responded enthusiastically: within the first five weeks, the app – which has been trending at No 1 on both Android and Apple app stores – had attracted about R10 million in investments.

Investors can purchase a beehive for R4 000, a blueberry bush for R300 or a solar panel for R5 000 via the app and monitor its performance over time.

Field says there’s an element of convenience in that the harvest as well as the sales and insurance aspects are cared for on the investor’s behalf, with these aspects included in the purchase price. The investor then earns an income biannually from the sale of their produce.

Fedgroup doesn’t own the harvests: it acts as the agent, putting investors in touch with local buyers (of honey, blueberries or solar energy). Field says Fedgroup signs agreements with potential buyers on behalf of the investor, and these buyers receive their orders from the Impact Farming suppliers.

An investment in honey can deliver returns of between 10% and 15%, mainly because the investment option cuts out many of the layers of a traditional funding model.

Field says the company wants to remove all the layers and create a raw platform where, if the sun is shining and the weather is good, you’ll do well (and if not, you won’t).

This is far more tangible way of investing in agricultural and energy resources, he says. “You put your money into something that you buy, it’s your side hustle, and then you know exactly what’s going on. It might not always be good; if there’s a bad crop, you’re not always going to do so well.”

Sihlobo says anything that helps farmers to lower their production costs and deliver honey at a fair price is welcomed. He says it should open up opportunities for investors to participate and contribute to the supply of honey at a relatively competitive price.

However, Sabio’s Miles argues that such an investment will have little to no impact on the bee industry. He says it takes capital, time and expertise to set up a profitable honey operation, and points out that honey production is seasonal.

In addition, he says, most commercial beekeepers don’t rely on honey production; it has become a sideline to pollination services which are becoming the more profitable income generator.