A PROFILE OF THE SOUTH AFRICAN PORK MARKET VALUE CHAIN

Transcription

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

2 1. DESCRIPTION OF THE INDUSTRY Production areas Production trends Local consumption Employment MARKET STRUCTURE Domestic market Import-export analysis South African export and import analysis Exports for pork Imports MARKETING CHANNELS / VALUE CHAIN OPPORUNITIES AND CHALLENGES STRENGTHS AND WEAKNESSES MARKET INTELLIGENCE Export tariffs Import tariffs PERFORMANCE ANALYSIS OF SOUTH AFRICAN PORK INDUSTRY IN Exports Imports ACKNOWLEDGEMENTS

3 Million Rands 1. DESCRIPTION OF THE INDUSTRY Pork is one of the smallest industries in terms of overall South African agricultural sector. It contributes around 2.1% to the primary agricultural sector. The gross value of production of pork is dependent on the quantity produced and the price received by farmers. The trend in gross value follows a pattern of prices since the industry is characterized by volatile prices. The average gross value of pigs slaughtered over the past 1 years amounted to R 3.5 billion per annum. The contribution of pork to the gross value of agricultural production increased steadily from 26/7 to 215/16.This is mainly due to an increase in prices caused by increased consumption of pork Figure 1: Gross Value of Pigs Slaughtered 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 Pork is produced throughout South Africa, however the area where pork is produced is not necessarily were the animals are populated. Figure 2 below shows the number of pigs population per province during year 216. The figure clearly shows that Limpopo and North West provinces were the largest producers accounting for 24% and 21% respectively. Western Cape followed with a share of 11% and Gauteng and KwaZulu-Natal accounted for 1% each. The province with lowest animal numbers is Northern Cape with 2% share. 3

4 Figure 2: Distribution of Pigs per Province in 216 North West 21% Western Cape 11% Northern Cape 2% Free State 8% Gauteng 1% Eastern Cape 6% KwaZulu-Natal 1% Limpopo 24% Mpumalanga 8% Source: Statistics and Economic Analysis, DAFF There are approximately 4 commercial producers and 19 stud breeders in South Africa. Pig numbers are estimated at million for the year 216; this is a decrease of 1.6% compared to 215. Noteworthy is the fact that the pig numbers in South Africa has been decreasing for the previous few years, this may be due to the fact that the consumption of pork meat is increasing Production trends With the response to the increasing consumption and/or demand for pork products, the pork production has been increasing over the past decade so as the number pigs slaughtered. Figure 3 shows the production trend in relation to number of pig slaughtered for the previous decade. 4

5 1 t Kg Thousand tons Slaughtered (1 ) 3, Figure 3: Pork production and Pig slaughtered , 2, 15, 1, 5,, Production Slaughterings Source: Statistics and Economic Analysis, DAFF During the past decade, above 26 million pigs were slaughtered yielding more than 2 million tons of pork meat. On average, 2.6 million pigs were slaughtered and produced an average of tons per year for the period under analysis. As illustrated, from 26/7 to 27/8 the slaughtering shown a decreasing trend and from 28/9 to 215/16 the trend was increasing this shows that there may be improvements on the pork production efficiency Local consumption Figure 4 below depicts local consumption of pork comparing it to the total production for the past decade to determine if the country is self-sufficient in terms of pork production. 3, 25, 2, 15, 1, 5,, Figure 4: Pork Production, Consumption and Per capita consumption 26/727/828/929/121/11 211/12212/13213/14 214/15215/16 Production Consumption Per Capita Consumption 5 4,8 4,6 4,4 4,2 4 3,8 3,6 5

6 Rands per Kg Source: Statistics and Economic Analysis, DAFF It is clear from the figure that South Africa consumes more than they produce which makes the country net importer of pork meat. This has been the case for the period 26/7 to 212/13. During 213/14, South Africa became self-sufficient by producing tons which became more than the consumption of 236 tons and consumption had slightly decreased during the period of 213/14. This may be due to price increased in this period, which made the pork meat to be relatively expensive to other meat in South Africa. In 214/15 and 215/16, the consumption outstripped the production. This had caused South Africa to import pork to meet local demand. The per capita consumption has shown an increasing trend from 29/1 to 215/16 except in 213/14 which is in line with the decrease in consumption. The increased per capita consumption may be due to the increasingly urbanised consumers with the increased per capita income Employment Commercial pig farmers are estimated at 4, stud farmers at 19 and smallholder farmers at 1. The total number of sows is estimated at 125 sows (1 sows commercial and 25 smallholder farmers). The industry is estimated to employ about 1 workers, comprising of about 4 farm workers and 6 workers in the processing and abattoir sectors. 2. MARKET STRUCTURE 2.1. Domestic market The pork industry evolved from a highly regulated environment to one that is totally deregulated today. Since the deregulation of the agricultural marketing dispensation in 1997, the prices in the red meat industry are determined by demand and supply forces. The local market for pork is split into the fresh meat market and the processing meat market, where 45% goes to fresh market and about 55% goes to processing meat market. Average producer prices of pork from 26/7 to 215/16 are illustrated in Figure 5. 25, 2, Figure 5: Average Pork Producer Price 15, 1, 5,, 26/7 27/8 28/9 29/1 21/11 211/12 212/13 213/14 214/15 215/16 Years 6

7 Tons Source: Statistics and Economic Analysis, DAFF The price of pork in South Africa is vulnerable to international markets and price shifts of beef or chicken as they are considered substitutes. The average producer price of pork has shown an overall increasing trend for the period under consideration. The new peak price of R 22.3 per Kg was reached during 214/15 and the lowest price of R 13. was experienced in 26/7. For the past ten years, the pork producer price increased by R 9.3/ Kg and on average, the pork producer price had been increasing by R17.4 per annum Import-export analysis Figure 6 compares volumes of imports and exports for pork from 27 to Figure 6: Pork exports and imports quantities Exports Year Imports Source: Quantec EasyData Figure 6 indicates that from 27 to 216, South Africa s pork exports were far less than the imports. It was only in 211 were exports increased substantially and reached almost 2 tons. This also confirms that South Africa is a net importer of pork. Both Import and export trends shows instability movements during the period under review, however from 212 to 214 the imports are showing a steady decrease whilst exports are increasing. In 215, the imports shown an immense increase of 7% and exports increased by 32% from the previous year of 214. They both decreased again in 216 by 23% and 24% respectively. Most imported pork products are processed where pork ribs are predominant imported product. 2.3 South African export and import analysis Exports for pork Despite the fact that South Africa is a net importer of pork, there are other pork products that are exported. South Africa exported approximately tons of pork from 27 to 216, yielding an export value of approximately R 1.5 billion over the same period. The quantity and the value for exports of pork are shown in Figure 7 below. 7

8 Tons Thousand rand Figure 7: Pork exports Exports Years Value Source: Quantec EasyData Figure 7 indicates that exports value of pork was slightly fluctuating at an increasing trend from 27 to 21 then followed by a sharp increase from 21 to 211. From the period of 212 to 215, the value of exports showed a steady increase which indicates the worth to export pork meat in this period, followed by a slight decrease in 216. According to figure 7 shows that quantity of pork exports remained lower over the past decade excluding the year 211, which displayed outlier at approximately 2 tons. From 26 to 28 and worst 211, the export quantity were high whilst export value remained low that indicates that the profits were under pressure in exporting pork than any other years. The highest profits for exporting pork were experienced in 215. The export value of pork increased from R19.6 million in 27 to R 266 million in 216. Figure 8 presents volumes of pork exports to SADC during the past ten years. 8

9 Kilograms 3 Figure 8: South African pork exports to SADC Angola DRC Mauritius Malawi Mozambique Seychelles United Republic of Tanzania Zambia Zimbabwe Source: Quantec EasyData South African pork is mainly exported to SADC countries. The highest exports of pork experienced in 28 and 215 were mainly exported to Malawi and Mozambique respectively. Mozambique demanded the greatest share of pork exported by South Africa during the period under analysis followed by Malawi and Zimbabwe. United Republic of Tanzania and Seychelles recorded the lowest shares of South Africa pork exports during the period under review. During 216, Mozambique has decreased its intake of South African pork by 18% within SADC from previous year. However, it commanded a share of 82% followed by DRC and Zambia with a share of 7% and 4.7% respectively. The rest of the countries within SADC shared the remaining 6%. 9

10 Kilograms Figure 9: Pork exports to Middle, Western and Eastern Africa Years Congo Côte d'ivoire Ethiopia Ghana Kenya Nigeria Saint Helena Uganda Source: Quantec EasyData Figure 9 displays that pork produced in South Africa was mainly exported to Nigeria in Western Africa. In total, Nigeria demanded the greatest share of South African pork for the past ten years followed by Saint Helena and Congo at a distance. Ethiopia is the smallest importer of South African pork but it demanded its highest quantity during 214 only. All the countries presented for this region, their imports had decreased from 214 to 216. During 216, Saint Helena was the leading importer of pork, followed by Nigeria and Congo then the rest of the countries. 1

11 Hong Kong, China 2% Figure 1: South African pork destination in 216 Zambia 2% Zimbabwe 1% Other 4% Swaziland 6% DRC 2% Namibia 29% Botswana 12% Lesotho 15% Mozambique 27% Source: Trade Map It is noted that South African pork is exported within the continent, mostly to SADC countries, which constitutes 94% of the total pork exports. Namibia is the greatest commander of South African pork, leading by 29% followed by Mozambique with 27%, Lesotho with 15%, Botswana and Swaziland with 12% and 6% respectively. Values of pork exports from various provinces of South Africa are presented in Figure

12 Thousand Rand Figure 11: Value of port exports by Province Western Cape Eastern Cape Northern Cape Free State KwaZulu-Natal North West Gauteng Mpumalanga Limpopo Source: Quantec EasyData Gauteng Province dominated pork exports for the entire period under consideration followed by Western Cape and Kwa-Zulu Natal Province. This is due to the fact that these provinces are main exit points for pork exports in South Africa and due to infrastructure developments that facilitate trade. Gauteng Province experienced its greatest exports from 21 to 216. Western Cape shows immense increase of its exports of pork from 212 to 215. Other provinces such as Mpumalanga, Eastern Cape and KwaZulu-Natal have shown a decrease of their export during period of 215 and 216. With the total exports of pork from the country, Gauteng has an export share of 7% followed at a distance by Western Cape with 13%. The following figures (Figures 12-19) show the value of pork exports from the various districts within 9 (nine) Provinces of South Africa. 12

13 Thousand Rands Thousand Rands Source: Quantec EasyData Figure 12: Values of pork exports from Western Cape Province City of Cape Town Cape Wineland Overberg 272 Figure 12 indicates that City of Cape Town Metropolitan Municipality were a biggest exporter during the past decade and experienced sharp increases from 27 to 21 and also from 213 to 215. This might be due to the fact that City of Cape Town district is the main exit point for exports in the Western Cape. Overberg District Municipality recorded exports during 216 only. Cape Winelands indicated its irregular export of pork during the period under review. However, in 214, the district had a highest record of exports with a share of 8% of the total exports within the province. City of Cape Town have recorded a 1% share of exports from 27 to 29 and in 211 and 213. The district further recorded over 9% export shares for the other years. This clearly shows that City of Cape Town is the main exporter within the Province. Figure 13: Value of pork exports from Eastern Cape Province Chris Hani 51 Alfred Nzo Nelson Mandela Bay Joe Gqabi Buffalo City 222 Source: Quantec EasyData. From Eastern Cape Province, there were no records of pork exports during the period from 27 to 211. Nelson Mandela District Municipality recorded exports from 212 to 215, which was the highest exports from the Province. Alfred Nzo District Municipality recorded exports from 214 to 216. Chris Hani and Buffalo City District Municipalities recorded exports only in 216. Nelson Mandela District Municipality took a lead by exporting a share of more than 9% during its exporting years. 13

14 Thousand Rands Thousand Rands Source: Quantec EasyData Figure 14: Values of pork exports from Free State Province Xhariep Lejweleputswa Thabo Mofutsanyane Mangaung From Free State Province, Thabo Mofutsanyane District Municipality recorded exports of pork during the period 28 to 29 and again from 214 to 216. Xhariep District Municipality recorded its exports from 212 to 216. Mangaung District Municipality recorded exports of pork from 214 to 216. During 216, Thabo Mofutsanyane had a highest export share of 66%, followed by Mangaung with 29%. Lejweleputswa and Xhariep District Municipalities had a share of 5% and 1% respectively in the same year Source: Quantec EasyData Figure 15: Values of Pork exports from KwaZulu-Natal Province Uthukela ethekwini ilembe Exports of pork from KwaZulu-Natal occurred mainly in ethekwini District Municipality. Uthukela District Municipality has shown irregular pork exports during the period under analysis. ilembe District Municipality exported pork only in 215 and 216 for the past ten years. ethekwini District Municipality dominated the export with the highest values recorded in 21 and 215. This is because ethekwini District is the main 14

15 Thousand Rands Thousand Rands exit point in KwaZulu Natal Province for exports. On average, ethekwini had more than 9% share of pork exports within the province in the past decade. Source: Quantec EasyData Figure 16: Values of pork export from North West Province Bojanala Dr Ruth Segomotsi Mompati 7 Dr Kenneth Kaunda 1295 Ngaka Modiri Molema From North West Province, District Municipalities have recorded irregular exports for pork during the period under analysis. There were no export recorded from 27 to 28, 21 to 211 and 214. Bojanala District Municipality recorded exports of pork during 212, 213 and 215. Dr Ruth Segomotsi Mompati District Municipality exported only in 213 whilst Dr Kenneth Kaunda recorded in 29 and it was the highest pork exports for North West for this reviewed period. In 215, Bojanala and Ngaka Modiri Molema had 78% and 22% share respectively. Ngaka Modiri Molema recorded exports in 216 and recorded 1% share of total pork exports from the Province in 216. Figure 17: Values of pork export from Gauteng Province Sedibeng West Rand Ekurhuleni City of Johannesburg City of Tshwane

16 Thousand Rands Source: Quantec EasyData From Gauteng Province, pork exports occurred mainly in City of Johannesburg, City of Tshwane, Sedibeng and Ekurhuleni District Municipalities. On average, City of Johannesburg dominated the pork exports for the entire period under review. It recorded the highest exports during the period 21 to 213. However, in 214 there was decline of 85%. Noteworthy is the fact that City of Johannesburg is the main exit point for exports in South Africa. Sedibeng District Municipality has shown a steady increase of exports from 27 until 29 as it reached its first peak with an export value of more than R 23 million. The highest peak was reached in 215 were the district recorded exports valued at R 93 million. These records boosted the average values of Sedibeng District Municipality to be the second highest exporter during the past decade following City of Johannesburg Metropolitan Municipality. From 214 to 216, Sedibeng took a lead and had the highest share (64%, 59% and 59% respectively) of total exports from the province, followed by City of Johannesburg with 14%, 19% and 2% respectively Source: Quantec EasyData Figure 18: Values of pork export from Mpumalanga Gert Sibande Ehlanzeni, Figure 18 shows that the District Municipalities in Mpumalanga Province that participated in pork exports during the past decade were Ehlanzeni and Gert Sibande. However, Ehlanzeni District Municipality dominated the export market within the Province. In 216 Ehlanzeni recorded pork exports worth more than R18 million which is a decrease from R37.7 million. Gert Sibande District Municipality recorded exports during 29, 212, 214 to 216. On average, Ehlanzeni is the highest exporter of pork meat. The district had a share of 99% pork exports in 216. In 212, Gert Sibande took a lead with pork exports share of 54%. 16

17 Thousand Rand Thousand Rands Figure 19: Values of pork exports from Limpopo Province Vhembe Capricorn Waterberg Source: Quantec EasyData Limpopo Province is one of the lowest exporters of pork meat. Figure 19 shows the export trend for the past decade. Limpopo Province reached its peak with R1.6 million in 211 through exports from Vhembe District Municipality. Vhembe District Municipality recorded exports of pork during 21 to 211 and 215 and 216. Capricorn District Municipality have recorded exports from 214 to 216 while Waterberg District Municipality have recorded pork exports in 214 and 216. In 216, Vhembe District Municipality had a pork export share of 56.3%, followed by Capricorn and Waterberg with shares of 33.3% and 1.3% respectively. There were no pork exports from Limpopo Province from 27 to 29 and again in 212 and 213. Figure 2: Values of pork exports from Northern Cape Province Source: Quantec EasyData Namakwa 176 Siyanda Frances Baard 4 From Northern Cape Province, Siyanda District Municipality recorded pork export in 215 and 216 while Namakwa and Francis Baard District Municipalities recorded only in 215. Siyanda District Municipality had 17

18 Tons Million Rands a share of 97% of pork export from the province in 215, followed by Namakwa and Frances Baard District Municipalities with 2.7% and.1% respectively. In 216, Siyanda reduced its exports by half from 215. However, the District Municipality had a share of 1% in Imports South Africa imported approximately tons of pork in 216 at an estimated value of R885 million. Figure 21 below show the imports of pork from 27 to Figure 21: Pork imports Import Value Source: Quantec EasyData Figure 21 shows that pork imports (quantity & value) have been fluctuating however showing an increasing trend from 27 to 212. In 216, the quantity and value of imports decreased by 24% and 5% respectively from 215. The most imported product is frozen ribs, which accounted for 63% of total pork imports. The highest imports were recorded during 212. This is mostly driven by the increased demand of pork ribs in South Africa. Figure 22 presents pork imports from the European Union member states during the last decade. 18

19 Tons Tons Figure 22: Pork imports from European Union Source: Quantec EasyData Belgium Germany Denmark Spain France United Kingdom Hungary Ireland Netherlands Pork imports in South Africa during the past decade were dominated by Germany and France. France was the biggest supplier from 27 to 28. Germany took over as the highest supplier from 29 to 215 and in 216 Spain took a lead. Denmark was the second greatest supplier in 27. Spain became the second highest supplier during 28, 211 to 213 and 215. In 216, Spain outstripped Germany and became the biggest supplier of pork to South Africa. In total, Germany was the highest exporter of pork meat to South Africa within the European Union countries, followed at a distance by France and Spain. Figure 23 presents imports of pork for North American Free Trade Agreement (NAFTA) countries. 14 Figure 23: Pork imports from South America and NAFTA Canada United States Brazil Chile Source: Quantec EasyData 19

20 It can be observed from Figure 23 above that Canada demanded the highest share of pork imports during the period under analysis, followed at a distance by United States, Brazil and Chile. However, in 216, Brazil increased their supply to South Africa and took a lead with an export share of 57%. On average, South African pork imports from NAFTA and South America shows that Canada accounted for 93% share, followed by United State (3%), Brazil (3%) and Chile with 1%. Intermittent imports of pork were recorded from the three countries hence the lowest shares. United Kingdom 6% Figure 24: Country of origin for pork imports in 216 Belgium 5% France 5% Brazil 6% Canada 4% Other 6% Germany 31% Spain 37% Source: Quantec EasyData Figure 24 presents the various sources of South African pork imports during 216. The figure indicates that in 216, Spain commanded the greatest share of pork imports of South Africa accounting for 37% followed by Germany which obtained 31%, and Brazil and United Kingdom with 6% each. It is clear that most of pork imports are from the European Union, which accounted for 85% collectively. 3. MARKETING CHANNELS / VALUE CHAIN Previous studies conducted on the ground indicates that the pork value chain operates on varying levels of horizontal and vertical intergration which makes the chain a dificult structure. Other organisations functions in the many levels on the chain. The pork value chain is presented in Figure 25. Thechain starts at the Input suppliers, value will be added until the product reaches the final consumer. For the year 215/16, tons of pig feed have been sold which is a 12% growth from the year 214\15. The feed for pigs mainly includes grains, fish meal, bran and premixes. The input suppliers sell the stock to primary producers and also to breeders however breeders still sells to the primary producers too. The primary producers are mainly farmers. Farmers grow the pigs and incure the cost of production which includes Feed, Medicine and Labour which accounts for 8% of total cost. The pigs are slaughtered at abattoirs but the farmer also sells to butcheries and final consumers. There are 15 abbatoirs that 2

21 slaughters pigs. The abattoirs sells meat to the butchers/wholesalers/retailers/processors. The meat can be bought by consumers directly from abattoirs and/or butcheries and/or wholesalers and/or retailers. In some cases the consumer buys live pig and perform processing activities him/herself. 21

22 Figure 25: Pork Marketing Channels Input Supplier Breeder Imports Primary Producers Farmers Exports Abattoirs Processors Wholesalers Retailers Butcheries CONSUMERS 22

23 4. OPPORUNITIES AND CHALLENGES Table 1 presents opportunities and challenges applicable to the pork industry in South Africa. Table 1: Opportunities and Challenges OPPORTUNITIES Supplier of quality protein for human health Industry with tremendous Growth Potential Pro-active in addressing consumer requirements and doing promotions Dedicated social development training programme CHALLENGES Very susceptible to world conditions and cheap imports Stiff competition both nationally and internationally Health and safety issues Phytosanitary issues Outbreak of diseases such as swine fever and Foot and Mouth Disease (FMD) 5. STRENGTHS AND WEAKNESSES Strengths The turnaround production time is quicker than red meat production. It is becoming a meat of choice. Piggeries can be established in relatively small areas. Feed costs are much lower than other meat production costs. The demand for pork meat has increased significantly over the years due to the high prices and unavailability of red meat substitutes. Weaknesses The industry is susceptible to diseases. Health, safety and phyto-sanitary issues can be inhibitive in terms of growth. Shortage of water could affect the cleaning of pens and this could be a challenge in terms of meeting the safety requirements. It is more labour intensive than the red meat industry. 23

24 6. MARKET INTELLIGENCE 6.1. Export tariffs Tariffs that different importing countries applied to pork originating from South Africa in 215 and 216 are shown on Table 1. Table 1: Pork export tariffs Country Namibia; Lesotho; Botswana and Swaziland Product Code 2311; 2312; 2319; 2321; 2322; 2329 Trade regime description Intra SACU rate Applied tariffs Total ad valorem equivalent tariff (estimated) Applied tariffs % % % % Total valorem equivalent tariff (estimated) ad Mozambiqu e; 23119; 2312; 2319; 2322; 23219; 2329; 2329 Preferential tariff for SA 15% 15% % % & MFN duties 7.5% 7.5% 7.5% 7.5% DRC 2311; 2312; 23191; 2321; 2322; 2329 MFN duties 1% 1% 1% 1% Source: Market Access Map Table 1 indicates that most of the applied tariffs in 215 remained the same as in 216. Except Mozambique, the country provided South Africa with preferential tariff rate of 15% for 215 and % in 216 for pork exports of specified products in Table 1 above. DRC applied MFN duties of 1% during 215 and 216. Lastly, Botswana, Lesotho, Namibia and Swaziland applied free trade through Intra SACU trade during the same period. 24

25 6.2. Import tariffs Tariffs that South Africa applied to imports of pork originating from all possible countries in 215 and 216 are shown on Table 2 below. Table 2: Pork import tariffs Country Germany ;Canada; Spain; United Kingdom and Belgium Product Code 2311; 2312; 23199; 2321; 2322 & 23299; & Trade regime descrip tion MFN duties MFN duties Applied tariff 15.% or $/Ton whichever is the greater Total ad valorem equivalent Applied tariffs tariff (estimated) OTQR:15% ITQR: 7.4% 15.% or $/Ton whichever is the greater % % % % Total ad valorem equivalent tariff (estimated) OTQR:15% ITQR: 7.4% Source: Market Access Map Table 2 shows that South Africa applied MFN duties tariff rates to all indicated exporting countries of 15% or $/Ton whichever is the greater in 215 and reduced to 15% or $/Ton whichever is the greater in 216 to HS codes 2311; 2312; 23199; 2321; 2322; & Further South Africa applied MFN duties of % to and which are fresh/chilled and frozen ribs. 25

26 7. PERFORMANCE ANALYSIS OF SOUTH AFRICAN PORK INDUSTRY IN Exports Table 4: List of importing markets for pork, fresh, chilled or frozen exported by South Africa in 216 South Africa s exports represent.4% of world exports for this Pork, fresh, chilled or frozen, its ranking in world exports is 31. 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 distance between partner countries and all their supplying markets (km) Concentration of all supplying countries of partner countries Average tariff (estimated) faced by South Africa (%) World Tons Namibia Tons Mozambique Tons Lesotho Tons Botswana Tons Swaziland Tons DRC Tons Zimbabwe Tons Malawi Tons Zambia Tons Area Nes Tons Saint Helena Tons Hong Kong, China Tons Source: ITC calculations based on COMTRADE statistics. 26

27 Table 4 presents the trade indicators of importing market of pork from South Africa in 216. During this year, South Africa exported a total of tons of pork (fresh, chilled or frozen) that valued at US$ 18.4 million. The major export destinations for pork (fresh, chilled or frozen) originating from South Africa during 216 were Namibia, Mozambique, Lesotho, Botswana and Swaziland. The greatest share of South African pork (fresh, chilled or frozen) exports were exported to Namibia which commanded 27% followed by Mozambique which commanded 23%, Lesotho with 16%. It is clear from the table that almost 95% of South African exports went to SADC countries in 216. This may be due to the benefits of regional trade agreement with South Africa which is % tariff. South Africa s pork (fresh, chilled or frozen) exports increased by 6% in value and 12% in quantity during the period of 212 and 216. During the same period, exports of pork (fresh, chilled or frozen) to Namibia, the top market had increased by 1% in value and increased by 5% in quantity. Mozambique increased by 54% in value and 71% in quantity. Lesotho increased by 4% in value and 12% in quantity and Botswana increased by 8% in value and increased by 5% in quantity during the same periods. Between the period 215 and 216, South African exports of pork (fresh, chilled or frozen) to the world decreased by 18%. During the same periods, the exports to Namibia decreased by 43%, Mozambique and Lesotho increased by 5%,and 69% respectively whilst Botswana and Swaziland decreased by 12% and 32% respectively in value. 27

28 Figure 26: Growth in demand for pork, 216 Source: ITC Trademap 28

29 Growth in demand for South African pork in 216 is depicted in Figure 26. The figure illustrates that between 212 and 216; South Africa s pork (fresh, chilled or frozen) exports to, Angola, United Arab Emirates (UAE), Mauritius, Lesotho and Swaziland were growing at a rate that is less than their import growth from the rest of the world. Angola is the biggest market with a world share of.19%. Its annual imports decreased by 21%. At the same period, South Africa s pork (fresh, chilled or frozen) exports to Democratic Republic of Congo (DRC), Congo, Botswana, Namibia, Zambia, Seychelles and Saint Helena were growing at a rate that is greater than their imports from the rest of the world. Mozambique and Congo represent gains in dynamic market and Angola, Zimbabwe and Swaziland represent losses in the declining market of South Africa pork (fresh, chilled or frozen) exports. Mozambique experienced the most growing demand of pork with South Africa s export annual growth of 54% and Mozambique s imports increased by 24%. 29

30 Figure 27: South African pork s prospects for market diversification in 216 Source: ITC Trademap 3

31 Figure 27 shows the prospects for market diversification for pork (fresh, chilled or frozen) exports by South Africa in 216. The analysis on the figure above shows that Namibia commanded the greatest shares of South Africa s pork (fresh, chilled or frozen) exports of 27.29% during the year 216, followed by Mozambique with 23.33%. If South Africa is to diversify its pork (fresh, chilled or frozen) exports, the biggest market exists in Congo due to its annual import growth of pork (fresh, chilled or frozen) of 22%. 31

32 7.2. Imports. Table 4: List of supplying markets for the Pork (fresh, chilled or frozen) imported by South Africa in 216 South Africa s imports represent.2% of world exports for this Pork, fresh, chilled or frozen, its ranking in world exports is 42. Exporters Value imported in 216 (USD thousand) Trade balance 216 (USD thousand) Share in South Africa's imports (%) Quantity imported in 216 Quantity unit Unit value (USD/unit) Growth in imported value between (%, p.a.) Select your indicators Growth in imported quantity between (%, p.a.) Growth in imported value between (%, p.a.) Ranking of partner countries in world exports Share of partner countries in world exports (%) Total exports growth in value of partner countries between (%, p.a.) World Tons Average distance between partner countries and all their importing markets (km) Concentration of all importing countries of partner countries Average tariff (estimated) applied by South Africa (%) Spain Tons Germany Tons Brazil Tons France Tons United Kingdom Tons Belgium Tons Canada Tons Netherlands Tons Ireland Tons Denmark Tons Hungary Tons USA Tons Italy Tons Namibia Tons Portugal 2-2 Tons Source: ITC calculations based on COMTRADE statistics. 32

33 Table 4 provides a list of supplying nations for pork imported by South Africa in 216. South Africa s imports represent.2% of world imports for pork (fresh, chilled or frozen) and its ranking in world imports is 42. Table 4 shows that during 216 South Africa imported a total of tons of pork (fresh, chilled or frozen) that worth US$ The major origins for pork (fresh, chilled or frozen) imported by South Africa during 216 were Spain, Germany, Brazil and France. These four countries constituted 8.4% of South African pork imports during 216. South Africa s pork (fresh, chilled or frozen) imports decreased by 6% both in value and quantity between the periods 212 and 216. During the same period, imports for pork (fresh, chilled or frozen) from Spain increased by 23% in value and 26% in quantity and imports from Germany decreased by 1% in value 11% in quantity. Between the year 215 and 216, South Africa s imports of pork (fresh, chilled or frozen) decreased by 18% in value. During the same period, imports of pork (fresh, chilled or frozen) from Spain increased by 16% whilst Germany decreased by 36%. 33

34 Figure 28: Competitiveness of suppliers of South Africa s pork imports in 216 Source: ITC Trademap 34

35 Figure 28 depicts the competitiveness of suppliers to South Africa for pork in 216. The figure illustrates that South Africa s pork (fresh, chilled or frozen) imports from Germany, Canada, France, and United States of America (USA), Denmark and Ireland were growing at a rate that is less than their export growth to the rest of the world. It can also be noticed that South Africa s annual growth of imports from the mentioned countries have decreased. At the same time, South Africa s pork (fresh, chilled or frozen) imports from Spain, Belgium, United Kingdom, Netherlands, Italy and Brazil were growing at a rate that is greater than their exports to the rest of the world. The most competitive market is Germany due to its world biggest share of 15.92% and Namibia with its annual export growth of 33%. 35

36 Figure 29: Prospects for market diversification of suppliers of pork imported by South Africa in 216 Source: ITC Trademap 36

37 Figure 29 illustrates prospects for diversification of suppliers of pork imported by South Africa in 216. The analysis shows that Spain and Germany commanded the greatest shares of South Africa s pork (fresh, chilled or frozen) imports during the year 216. Spain is the biggest supplier of pork (fresh, chilled or frozen) with a share of 36.33% in South African import market followed by Germany with 31.89%. Germany remains the biggest market of pork imports with the world market share of 15.92%, followed by USA with world import of 15.47%. Germany is the biggest supplier of pork to the world. Therefore, South Africa can increase its imports if it wishes to diversify because South Africa s growth is less than Germany s export growth to the world. Another opportunity lies in Portugal due to its highest export growth of 11%. This makes Portugal the fastest growing market in the world and it can be a target for South African pork imports. 37

38 8. ACKNOWLEDGEMENTS The following organizations are acknowledged: Directorate: Statistics and Economic Analysis. Quantec Easydata ITC Market Access Map ITC Trade Map Disclaimer: This document and its contents have been compiled by the Department of Agriculture, Forestry and Fisheries for the purpose of detailing the Pork value chain. Anyone who uses the information as contained in this document does so at his/her own risk. The views expressed in this document are those of the Department of Agriculture, Forestry and Fisheries with regard to the industry, unless otherwise stated. The Department of Agriculture, Forestry and Fisheries therefore accepts no liability that can be incurred resulting from the use of this information. 38