A PROFILE OF THE SOUTH AFRICAN MUTTON MARKET VALUE CHAIN

Transcription

1 A PROFILE OF THE SOUTH AFRICAN MUTTON MARKET VALUE CHAIN 217 Directorate Marketing Tel: Private Bag X 15 Fax: Arcadia MogalaM@daff.gov.za 7 1

2 1. DESCRIPTION OF THE INDUSTRY PRODUCTION AREAS EMPLOYMENT MARKET STRUCTURE DOMESTIC MARKET AND PRICES EXPORTS OF MUTTON IMPORTS OF MUTTON MARKETING CHANNELS ORGANIZATIONAL ISSUES OPPORTUNITIES CHALLENGES MARKET INTELLIGENCE EXPORT TARIFFS IMPORT TARIFFS COMPETITIVENESS OF THE SHEEP INDUSTRY COMPETITIVENESS OF SHEEP INDUSTRY IN EXPORTS ACKNOWLEDGEMENTS

3 Million Rand 1. DESCRIPTION OF THE INDUSTRY Sheep farming is practiced throughout the country but concentrated in the more arid parts of the country, i.e. Northern Cape, Eastern Cape, Western Cape, Free State and Mpumalanga Provinces. There are approximately 8 commercial sheep farms throughout the country and about 5 8 communal farmers. The estimated number of sheep (Merino, karakul, other wooled sheep and nonwooled sheep) in South Africa is 23.2 million in 216. Sheep farmers are represented by organizations with Dorper Sheep Breeders Society of South Africa and Merino SA being the most prominent. Dorper is a highly successful South African-bred mutton breed developed specially for the more arid areas of South Africa. Today they are widely spread throughout the country. The Dorper s excellent carcass qualities in terms of conformation and fat distribution, generally qualify it for top classification. Other mutton breeds that can also produce wool are Damara, Meatmaster, Ille de France, Dormer, Suffolk, Van Rooy and Vandor. The gross value of mutton production is dependent on the price and quantity of meat produced. Over the past ten years, the average gross production value amounted to R 4.1 billion per annum. The total gross value for the past 1 years amounted to R 41.6 billion. The gross value of mutton production increased continuously from 26/7 until 214/15 and decreased slightly in 215/16. Declining sheep numbers and rapid population growth in South Africa have led to an increase in demand and subsequent shortages in the supply of mutton. The declining of sheep numbers is mainly through the predation and stock theft. Figure 1 below show the gross value of mutton production from 26/7 to 215/ Figure 1: Gross value of mutton production 26'/7 27'/8 28'/9 29'/1 21'/11 211'/12 212'/13 213'/14 214'/15 215'/16 Years Source: Statistics and Economic Analysis, DAFF 1.1. Production Areas Sheep numbers in South Africa is estimated at 23.2 million distributed in all nine provinces. Approximately 3% of the sheep are in Eastern Cape followed by Northern Cape with 25%, Free State 3

4 by 19% and Western Cape by 12%. These four Provinces constitute 85.5% and the other five Provinces share the remaining 14.5% of the country s sheep numbers. Percentage distribution is illustrated in Figure 2. Mpumalanga 7% KwaZulu-Natal 3% Figure 2: Distribution of sheep per Province in 216 Limpopo 1% Gauteng % Western Cape 12% North West 3% Eastern Cape 3% Northern Cape 25% Free State 19% Source: Statistics and Economic Analysis, DAFF 1.2. Production trends Sheep and lamb are slaughtered in abattoirs that are distributed all over South Africa. Slaughtering outside the abattoirs is not easy to record. Most of the mutton produced in South Africa is consumed locally. Figure 3 below shows the comparison between the mutton produced in South Africa and its consumption. 4

5 Thousand tons 25 Figure 3: Production and consumption of mutton /7 27/8 28/9 29/1 21/11 211/12 212/13 213/14 214/15 215/16 Years Production Consumption Source: Statistics and Economic Analysis and Quantec Easydata Figure 3 above shows that the amount of mutton consumed is more than what was domestically produced during the period under review. This shows that South Africa is a net importer of mutton to satisfy the local demand. However, the gap between production and consumption is narrowing, thus South Africa is moving towards self-sufficiency with sheep meat production. The amount of mutton consumed reached its peak of 23 tons during 26/7 and the production peak of tons was reached in 214/15. There was a slight decrease of both mutton production and consumption of 3.7% and 1.5% from 215/16 compared to 214/15 respectively Employment There are approximately 8 commercial sheep farms around the country employing approximately 35 workers. 2. MARKET STRUCTURE 2.1. Domestic market and prices Forces of demand and supply determine the prices. Figure 4 below show the average producer prices of mutton from 26/7 to 215/16. 5

6 Kilograms Rands/Kg 6 Figure 4: Average Producer Prices of Mutton /7 27/8 28/9 29/1 21/11 211/12 212/13 213/14 214/15 215/16 Years Source: Statistics and Economic Analysis, DAFF The average producer prices of mutton increased continuously from 26/7 to 211/12 mainly due to inflation factor, change of consumer s lifestyles and insufficient supply. There was a significant decrease in price of mutton in 212/13, which followed by an increase from 213/14 to 215/16. In 26/7 the average producer price of mutton was R 29.41/Kg. However, in 215/16 the average producer prices increased to R 53.21/Kg and this means in a period of 1 years there was an increase of R 23.79/Kg. This may be due to an increase of international prices trading with South Africa in light of its reliance on imports to meet local demand Exports of mutton Figure 5 below shows the comparison between mutton imports and exports from 27 to Figure 5: Mutton export and import quantities Years Export Quantity Imoprt Quantity Source: Quantec EasyData 6

7 Tons Thousand Rand It is clearly indicated from Figure 5 above that South Africa is the net importer of mutton because the amount of mutton imported is far higher than the amount of mutton exported. This might be due to the low supply of mutton experienced in the country. Despite South Africa being a net importer of sheep meat, the trends are showing a decline of imports and this may be due to the increased international prices. Figure 6 below shows the mutton exports from 27 to Figure 6: Mutton exports Years Quantity Value Source: Quantec EasyData Figure 6 shows levels of fluctuations in both export quantity and value of mutton from 27 to 216. With an exclusion of 21 and 211 export quantity, exports were increasing until 214 and then started decreasing in 215 and 216. The trends show that it was profitable to export mutton over the past decade, except 211, as more quantity was exported for less value. The highest quantities (1 87 tons) of mutton was exported in 211 and highest value of R 73 million was received in 214. This might be due to the global increase in mutton demand that led to the international price increase. In 216, both mutton export value and quantity had similar trends. The figure shows that there was decline of 21% and 31% in mutton export value and quantity respectively in 216. Figure 7 below shows the mutton exports to SADC from 27 to

8 14 Figure 7: Mutton exports to SADC Source: Quantec EasyData Angola DRC Mauritius Malawi Mozambique Seychelles Tanzania Zambia Zimbabwe Figure 7 above shows the South African mutton exports to SADC countries from 27 to 216. The mutton exported to SADC mainly went to Mozambique with a share of 45% followed by DRC and Angola with a share of 23% and 9% respectively. Mozambique had the higher position from 27 to 216. The figure shows that the mutton imports from Mozambique into South Africa attained peak of Kg in 214. Democratic Republic of Congo (DRC) became the second highest commander of mutton from South Africa during 28 to 21 and 212 to 215. Zimbabwe increased its exports to South Africa and took over second position in 216. In total, there was significant decrease of 4% in the mutton exports to SADC from South Africa in 216 as compared to 215 marketing season. Figure 8 below shows the mutton exports to Middle and West Africa from 27 to Figure 8: Mutton exports to Middle and West Africa Source: Quantec EasyData Congo Côte d'ivoire Gabon Ghana Mauritania Nigeria Saint Helena 8

9 Figure 8 above shows that Nigeria was highest importer of mutton from South Africa. Over the past decade, Nigeria commanded 33.8% followed by Gabon with almost 27% of mutton from South Africa. Nigeria commanded the greatest shares of South African mutton during the periods 27 to 29 and again in 211 while Gabon was the greatest in 21 and again in 214. Ghana commanded the greatest shares in 212 and 213. On average, Nigeria commanded 21 tons per annum of mutton from South Africa during the past decade followed by Gabon by 17 tons. Figure 9: Mutton exports destination 216 Source: Trademap Saint Helena 3% Gabon 3% Namibia 4% Viet Nam 5% Mozambique 6% Zimbabwe 2% Kuwait 8% Other 11% Botswana 24% Lesotho 24% Swaziland 1% Figure 9 above shows that Botswana and Lesotho accounted for the largest market share for South African mutton in 216 taking up to 24% each, followed by Swaziland (1%), Kuwait (8%), Mozambique (6%) and Viet Nam (5%). Noteworthy is the fact that most of the exports of sheep meat went to SADC countries. Figures 1 to 18 show the exports of lamb and mutton by provinces. Figure 1 below shows the value of mutton exports from South African Provinces between 27 and

10 Thousand Rand Figure 1: Values of mutton exported by South African Provinces Source: Quantec EasyData Western Cape North West Northern Cape Mpumalanga KwaZulu-Natal Gauteng Free State Eastern Cape Figure 1 show that Gauteng Province dominated the export market and this may be because Gauteng is one of the main exit of exports in South Africa. It recorded high values from 27 to 216. Western Cape Province recorded the second highest values during the same periods except 21, 214 and 215 were KwaZulu-Natal (21) and Free State ( ) took over. Regular mutton exports were also recorded from KwaZulu Natal and Mpumalanga Provinces and fractional exports were recorded in North West, Northern Cape, Free State and Eastern Cape Provinces. The figure shows that the minimum value of mutton exports from Gauteng Province of R was in 28. The figure also shows that the value of exports from Gauteng attained peak of R35 21 in 21. The figure further shows that at least 6 provinces have shown a decrease in mutton exports from 215 to 216. Figure 11 below shows the value of mutton exports from Western Cape Province between 27 and

11 Thousand Rand Figure 11: Value of mutton exported by Western Cape Province Source: Quantec EasyData City of Cape Town West Coast 27 Cape Winelands Figure 11 shows the value of mutton exports from Western Cape Province. The figure shows that the mutton exports were from City of Cape Town Metropolitan Municipality followed by West Coast and Cape Winelands District Municipalities. The value of mutton exports from City of Cape Town Metropolitan Municipality recorded highest value in 215 at R 66 million and declined to R52 million (21%). The intermittent values were recorded from Cape Winelands and West Coast District during period under review. This may be because the City of Cape Town Metropolitan Municipality is the major exit point for the exports in the Province. City of Cape Town Metropolitan Municipality had a 1% share of exports in 27, 21 to 214 and 216, and during the rest of the years, the City had over 9% of mutton export share. Figure 12 below shows the value of mutton exports from Eastern Cape Province between 27 and

12 Thousand Rand Thousand Rands Figure 12: Value of mutton exported by Eastern Cape Province Source: Quantec EasyData Alfred Nzo Nelson Mandela Bay 126 Buffalo City The figure 12 shows that the exports of mutton in the Eastern Cape Province were mainly from Buffalo City District Municipality followed by Nelson Mandela Bay Metropolitan Municipality, and very low intermittent from Alfred Nzo District Municipality. Nelson Mandela Bay Metropolitan Municipality recorded its exports of mutton from only in 27 and had 1% exports share. Alfred Nzo and Buffalo City District Municipalities recorded the export values from 214 to 216. During this period, Buffalo City had a mutton export share of over 9%. Figure 13 below shows the value of mutton exports from Eastern Cape Province between 27 and Figure 13: Value of mutton exported by Northern Cape Province Siyanda, Source: Quantec EasyData 12

13 Thousand Rand Figure 13 shows the value of mutton exports in the Northern Cape Province period under review (27-216). The mutton exports were mainly from Siyanda District Municipality in Northern Cape Province. Siyanda District Municipality recorded highest export values from 214 to 216. The figure shows that Siyanda District Municipality did not export mutton from 27 to 28, 211 and 213. Siyanda District Municipality attained peak in 214 at approximately R3 million. The figure shows that there was slight decrease of 15% in the value of mutton exports from Siyanda District Municipality in 215 as compared to 214 and then a slight increase of 5% in 216. Figure 14 below shows the value of mutton exports from KwaZulu-Natal Province between 27 and 216. Figure 14: Value of mutton exported by KwaZulu-Natal ethekwini Source: Quantec EasyData The figure shows that ethekwini Metropolitan Municipality was the only Municipality in the KwaZulu- Natal Province that exported mutton. This may be due to ethekwini being exit point of exports in KwaZulu-Natal. The figure shows that the value of mutton exports from ethekwini Metropolitan Municipality reached maximum in 21 at approximately of R 3.9 million. The figure shows that the mutton exports from ethekwini Metropolitan Municipality are fluctuating. However, it also shows a steady decrease from 214 to 216 marketing seasons. Figure 15 below illustrates the value of mutton exports from North West Province between 27 and

14 Thousand Rand Thousand Rands Figure 15: Value of mutton eported by North West Province Ngaka Modiri Molema Dr Ruth Segomotsi Mompati Source: Quantec EasyData Figure 15 illustrates the value of mutton exports from North West Province between 27 and 216. The figure illustrates that the main mutton exports are from Dr Ruth Segomotsi Mompati and Ngaka Modiri Molema District Municipalities. However, North West Province recorded intermittent exports of mutton during the period under review. Dr Ruth Segomotsi Mompati District Municipality recorded exports in 21 and again from 212 to 215. The exports of mutton from Ngaka Modiri Molema were reported in 215 and 216.There were no exports of mutton from Ngaka Modiri Molema from 27 to 214. The figure further illustrates that the exports of mutton reached the peak in 21 with R Ngaka Modiri Molema and Dr Ruth Segomotsi Mompati District Municipalities had export shares 86% and 14% respectively in 215. Figure 16 below shows the value of mutton exports from Gauteng Province between 27 and 216. Figure 16: Value of mutton exported by Gauteng Province Sedibeng 26 West Rand 151 Ekurhuleni City of Johannesburg City of Tshwane Source: Quantec EasyData 14

15 Thousand Rands Figure 16 shows the value of mutton exports from Gauteng Province were mainly from City of Johannesburg Metropolitan Municipality, followed by Ekurhuleni District Municipality and City of Tshwane Metropolitan Municipalities. The figure also shows that low values of mutton exports were reported in Sedibeng and West Rand District Municipalities. In Gauteng province, City of Johannesburg Metropolitan Municipality recorded high export values of mutton for the past reviewed years except 215. This may be due to the fact that City of Johannesburg is the main exit of exports within the province. The highest value was recorded in 21 at approximately R33 million. In 215, Ekurhuleni District Municipality recorded high at approximately R1 million. Irregular exports of mutton were recorded from Sedibeng, West Rand and City of Tshwane District Municipalities. The figure further shows that there was decrease on the value of mutton exports in City of Johannesburg of 6% in 215 as compared to 214 then slight increase of 19% in 216 marketing season. City of Johannesburg recorded the highest shares except in 215. Figure 17 below shows the value of mutton exports from Mpumalanga Province between 27 and 216. Figure 17: Value of mutton exported by Mpumalanga Province Gert Sibande Nkangala 49 Ehlanzeni Source: Quantec EasyData The value of mutton exports was mainly through Ehlanzeni District Municipality which recorded the highest value for the entire period under analysis except in 27 were there were no exports. Irregular exports were also recorded from Gert Sibande and Nkangala District Municipalities. There were no records of mutton exports in 27 for all municipalities. The figure shows that the value of mutton exports attained peak in 214 at R4.6 million. The figure further shows that there was a decline of 17% in the value of exports from Ehlanzeni District Municipality in 215 as compared to 214 and a further decline of 14% in 216 marketing season. Figure 18 below shows the value of mutton exports from Free State Province between 27 and

16 Thousand Tons Million Rand Thousand rands Figure 18: Value of mutton exported by Free State Province Xhariep Lejweleputswa Thabo Mofutsanyane Mangaung Source: Quantec EasyData Figure 18 represent the value of exports from Free State Province from 27 to 216. The mutton exports were mainly from Mangaung, Xhariep, Lejweleputswa and Thabo Mofutsanyane District Municipalities. The exports of mutton were recorded from 214 to 216 in the province. Mangaung has been the highest exporter from 214 to 215 with export shares of 85% and 8% respectively, and in 216 Thabo Mofutsanyane outstripped Mangaung and became the highest with an export share of 5%. Mangaung District Municipality experienced a significant decrease of exports of 75% in Imports of mutton South Africa imported an average of 16 tons per annum of mutton during the past decade at a value of R345 million. Figure 19 below show the imports of mutton from 27 to Figure 19: Mutton imports Quantity Value Source: Quantec EasyData 16

17 Tons Import value of mutton have shown an increase from 27 to 28 and reached a peak in 211 of R56 million and then decreased thereafter to the lowest import value in 216. It has been profitable to import mutton during 27 to 29 as more quantities were imported at a low rate and it became expensive to import mutton from 21 to 216 because less quantity was imported with high values. The figure shows that there was 23% increase in the import value and 69% decrease of import quantity of mutton in 216 as compared to 27. Figure 2 presents South Africa s mutton imports from Oceania. 25 Figure 2: Quantity of mutton imported from Oceania Years Australia New Zealand Source: Quantec EasyData South African mutton imports from Oceania were mainly from Australia and New Zealand (see Figure 2). Australia commanded the greatest shares of South African imports throughout the decade except in 21, followed by New Zealand. Australia attained the peak of tons in 27 whilst New Zealand attained peak of South African mutton imports also in 27 with 7 92 tons. The trend of the period under analysis is showing a decline of imports from these two countries. There was 84% and 85% decrease in the South African mutton originated from Australia and New Zealand respectively in 216 as compared to 27 marketing season. South Africa s imports of mutton from SADC are presented in Figure

18 Tons 12 Figure 21: Quantity of mutton imported from SADC Source: Trademap Namibia Botswana 15 From Southern African Development Community (SADC), mutton imports were from Namibia. Namibia commanded the greatest shares from 21 to 216. However, the trend shows that imports from Namibia declined by 6% from 21 to 216. There were no imports of mutton from SADC from 27 to 29. The figure shows that Botswana only exported the mutton meat in 213 for the period under review. There was decrease of 24% mutton imports from Namibia in 216 as compared to 215 marketing season. Figure 21 below show the countries of origin of mutton from the world in 216. Figure 22: Countries of origin for mutton imports in 216 New Zealand 13% Australia 37% Namibia 5% Source: Trademap Figure 22 clearly indicate that the majority of mutton imported by South Africa was from SADC and Namibia commanded the highest quantity of South African sheep meat, with a market share of 5%, followed by Australia with a share of 37% and then New Zealand commanded 13%. 18

19 3. MARKETING CHANNELS The marketing channel (see Figure 23) begins with the farmer who produces sheep and lamb. Most sheep farming practiced in South Africa is for wool and mutton/lamb. After about five to six years of shearing the sheep are sold directly to feedlot (small number) or abattoir; or sold through auctions. Live sheep and lambs can be imported by the farmer or the feedlot or the abattoir. Meat from abattoir is distributed through wholesalers, retailers and butcheries. Some is exported or processed. Imports of meat are done by retailers and wholesalers and processors while exports are mainly by abattoirs. The final stage of the sheep supply chain and marketing channel end with the consumer. 19

20 Figure 23: Sheep Supply Chain Primary Producers - Farmers Imports Feedlots Auctions Abattoirs (meat) Skin & Wool Processors Wholesalers Retailers Butcheries Exports CONSUMERS 2

21 4. ORGANIZATIONAL ISSUES 4.1 EMPOWERMENT PLANS The communal wool farmers are formally represented in all structures of the National Wool Growers Association Board. Sinthema Mafama Wool Brokers is a BEE company affiliated to the Cape Mohair and Wool SA. When BKB (Boere Kooperative Beperk) purchases the wool from the informal producers a portion of the value is allocated to shares in the company. These producers then receive dividends based on the number of shares that they hold. The Sheep Forum of South Africa comprising of the major role players is the body responsible for driving the process for the sheep industry strategy. The following five working groups have been established: Resource Management; Marketing and value adding; Enabling Environment/ Infrastructure Development; Human Resource development/training; and Research and development (Genetic improvement to improve the herd in the communal sector). The three main pillars for the sheep strategy are as follows: Equitable market access and participation; Global competitiveness and profitability; and Sustainable resource management Opportunities Important supplier of quality protein for human health. The A4 lamb carcass according to research is low in fat content and complies with the standards of the Heart Foundation. Industry has tremendous growth potential in the informal sector, which could assist in addressing the shortage of mutton. Niche markets and exports through the use of the South African EU-accredited abattoirs mutton/lamb can be exported to niche markets. 21

22 4.3. Challenges Stiff competition both nationally and internationally. Health, safety and traceability issues. Phytosanitary issues. Climatic conditions. Smaller abattoirs do not comply with the Meat, Health and Safety Acts. Livestock agents are corrupt and are often not part of the organized marketing structure. Stock theft. Research and Development is a problem. Financial constraints. Predators account for large losses in sheep herds. Lack of infrastructure. Veterinary services in South Africa are uncoordinated and insufficient. Insufficient extension services. Safety and Security 22

23 5. MARKET INTELLIGENCE 5.1. Export Tariffs Tariffs of different importing countries applied to mutton and lamb originating from South Africa in 215 and 216 are shown in Table 1. Table 1: Export tariffs for mutton No. Country Product description 1 Lesotho Botswana Swaziland 241 and Trade Regime Description Intra SACU rate Total Ad Applied Total Ad Applied Tariffs Valorem Equivalent Tariffs. Tariffs Valorem Equivalent Tariffs. % % % % 2 Viet Nam 241 and Mozambique 241 and Kuwait 241; 2421; 2422; 2423 and Source: Market Access Map MFN duties 7% 7% 7% 7% Preferential tariff for SA MFN duties % 15% 15% % % 5% % 5% % 5% % 5% Table 1 indicates that in 215 and 216 Lesotho, Botswana and Swaziland applied an Intra SACU rate of % on sheep meat exported from South Africa. Viet Nam applied 7% of MFN duties on products 241 and 2421 in 215 and also in 216 whilst Mozambique reduced a preferential tariff from 15% in 215 to % in 216. South Africa has been charged MFN duties of % and 5% by Kuwait for sheep meat indicated on table 1 above during 215 and

24 5.2. Import Tariffs Tariffs that South Africa applied to imports of mutton originating from all possible countries in 215 and 216 are shown in table 2. Table 11: Import tariffs for mutton N o Country 1 New Zealand and Australia Product code 2421; 2421: 2423 and 243 Trade Regime Description MFN duties Total Ad Applied Tariffs Valorem Equivalent Tariffs. Applied Tariffs 4% or OQTR: 4% 4% or $/Ton $/Ton whichever is the whichever is greater IQTR: 19% the greater IQTR: 19% Total Ad Valorem Equivalen t Tariffs. OQTR: 4% IQTR: 2422 MFN duties 4% or $/Ton whichever is the greater OTQR: 4% ITQR: 13.2% 4% or $/Ton whichever is the greater OQTR: 4% IQTR: 2 Namibia Source: Market Access Map Intra SACU rate % % % % Table 2 indicates that tariffs applied by South Africa on imported mutton for Australia and New Zealand, in 215 tariffs changed from 4% or $173.69/ton whichever is greater and decreased to 4% or $126.63/ton whichever is the greater during 216. The total ad valorem tariff for 215 was at 4%. In order to discourage imports above quota limit in 215 the total ad valorem applied by South Africa to New Zealand and Australia was 4% and 4% for meat of sheep products respectively imported in excess tariff quota but imports within the limit of a quota were at 19% and 13.2% respectively. Namibia has received a % tariff through Intra SACU rate. 24

25 6. COMPETITIVENESS OF THE SHEEP INDUSTRY 6.1. Competitiveness of sheep industry in exports Table 3: List of importing markets for the lamb carcasses and half carcasses, fresh or chilled exported by South Africa in 216 Select your indicators Importers Value exported in 216 (USD thousand) Trade balance 216 (USD thousand) Share in South Africa's exports (%) Quantity exported in 216 Quantity unit Unit value (USD/unit) Growth in exported value between (%, p.a.) Growth in exported quantity between (%, p.a.) Growth in exported value between (%, 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 (%, p.a.) Average tariff (estimated) faced by South Africa (%) World Tons Lesotho Tons Botswana Tons Kuwait Tons Swaziland Tons Mozambique Tons Namibia Tons Gabon Tons Viet Nam Tons Seychelles Tons Zimbabwe Tons Saint Helena Tons DRC Tons Sierra Leone Tons Source: Trademap 25

26 In 216, South Africa s meat of sheep or goat fresh, chilled or frozen exports represented.1% of world exports for meat of sheep or goat fresh, chilled or frozen and its ranking in world export was 36. Table 3 shows that during 216 South Africa exported a total of 964 tons of meat of sheep or goat fresh, chilled or frozen at an average value of US$3 637/unit. South Africa exported greater quantities of meat of sheep or goat fresh, chilled or frozen to Lesotho, Botswana, Kuwait, Swaziland and Mozambique. The greatest share of South African meat of sheep or goat frozen, chilled or frozen exports were destined to Lesotho which commanded 21.2% share during the year 216 followed by Botswana at 17.8%, Kuwait at 1.1% and Swaziland at 9.8%. South Africa s meat of sheep or goat fresh, chilled or frozen export quantity decreased by 3% and the exports value decreased 1% between the periods 212 and 216. Exports of meat of sheep or goat fresh, chilled or frozen to Kuwait increased by 182% in value and 191% in quantity during the period 212 to 216, and during the same period exports to Lesotho have shown a decrease of 17% in value and 8% in quantity. During the period 215 to 216 South Africa s exports to the rest of the world decreased by 15% in value. The exports to Lesotho decreased by 41% whilst those to Botswana increased by 33% in value during the same period. 26

27 Figure 24: Growth in demand for lamb exported by South Africa in 216 Source: Trademap, ITC 27

28 Figure 24 shows that between 212 and 216 South Africa s meat of sheep or goat fresh, chilled or frozen exported to Kuwait, Congo, Seychelles, Gabon, Zimbabwe and Namibia were growing at a rate that is greater than their import growth from the rest of the world. During the same period, South Africa s meat of sheep or goat fresh, chilled or frozen exports to Lesotho, Mozambique, Botswana, Swaziland and Angola were growing at a rate that is less than their imports from the rest of the world. Lesotho, Gabon and DRC, were all representing losses in the declining market. Lesotho s annual import growth has declined drastically by 17%, while that of Swaziland also declined by 9%. The most growing demand of South African meat of sheep or goat fresh, chilled or frozen exists in Namibia. South Africa s meat of sheep or goat fresh, chilled or frozen export growth to Namibia is 31%. 28

29 Figure 25: Prospects for market diversification for lamb exported by South Africa in 216 Source: Trademap, ITC 29

30 During 216, South Africa exported meat of sheep or goat fresh, chilled or frozen to Lesotho, Botswana and Swaziland at a rate greater than what they imported from the world. If South Africa wishes to diversify the imports of meat of sheep or goat fresh, chilled or frozen, the biggest market exist in Namibia with the world market share of %. The advantage is that Namibia s annual import growth increased by 63%. Therefore, the lucrative market for South Africa exist in Namibia. 3

31 6.2. Competitiveness of sheep industry in imports Table 4: List of supplying markets for the sheep carcasses and half carcasses, fresh or chilled imported by South Africa in 216 Importers Trade Indicators Exported value 216 (USD thousand ) Trade balance 216(USD thousand ) Share in South Africa's imports s (%) Exporte d quantity 216 Quantit y unit Unit value (USD/unit ) Importe d growth in value between (%, p.a.) Importe d growth in quantity between (%, p.a.) Importe d growth in value between (%, p.a.) Ranking of partner countrie s in world exports Share of partner countrie s in world exports (%) Total export growth in value of partner countrie s between (%, p.a.) World Tons Namibia Tons Australia Tons New Zealand Tons Area Nes Tons 22 Lesotho 745 Botswana 623 Kuwait Swaziland 344 Mozambiqu e Source: Trademap Tariff (estimated ) faced by South Africa (%) 31

32 In 216, South Africa s exports represented.3% of world imports for meat of sheep or goat fresh, chilled or frozen and its ranking in world export was 36. Table 4 shows that during 216 South Africa imported a total of tons of meat of sheep or goat fresh, chilled or frozen at an average value of US$2 212 /unit. During 216, South Africa imported from Namibia, tons from Australia and tons from New Zealand. South Africa s meat of sheep or goat fresh, chilled or frozen imports growth in value decreased by 25% whilst quantity decreased by 14% respectively during the periods 212 and 216. Between the period 215 and 216 South African s meat of sheep or goat fresh, chilled or frozen decreased by 3% in value from the rest of the world. 32

33 Figure 26: Prospects for market diversification for sheep carcasses exported by South Africa in 216 Source: Trademap, ITC 33

34 Figure 26 above shows that if South Africa wishes to diversify its imports of meat of sheep or goat, fresh, chilled or frozen in 216 the biggest and fastest growing market exist in Namibia. Namibia has South Africa s import market share of 7.8% and its annual import growth was at 27%. South Africa can expand market in Namibia. 34

35 Figure 27: Competitiveness of supplying of meat of sheep or goat, fresh, chilled or frozen imported by South Africa in 216 Source: Trademap, ITC 35

36 Figure 28 above shows the competitiveness of suppliers for meat of sheep or goat, fresh, chilled or frozen imports by South Africa in 216. If South Africa is to diversify its meat of sheep or goat fresh, chilled or frozen imports, Australia will be the possible market because its annual export growth is at a rate of 3% and it has a world share market of 1.7%. 36

37 7. ACKNOWLEDGEMENTS a. National Wool Growers Association (NWGA) b. SAMIC c. Cape Wools d. Department of Agriculture, Forestry and Fisheries e. TradeMap f. Quantec g. Market Access Map. h. NERPO Disclaimer: This document and its contents have been compiled by the Department of Agriculture, Forestry and Fisheries for the purpose of detailing the sheep 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. 37