Bumper exports to test SA logistics, says Agbiz

Bumper exports to test SA logistics, says Agbiz

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DURBAN – SOUTH AFRICA’s logistics will be put to the test again as the country gears up for another bumper agricultural harvest with large export volumes forecast, especially in the horticulture and field crop sub-sectors, according to the Agricultural Business Chamber (Agbiz).

The chamber’s chief economist, Wandile Sihlobo, said yesterday that a greater focus on this area was required as South Africa moved towards the peak season for exports and imports of major staple commodities such as rice, wheat and palm oil.

“Apart from the near-term demands, the long-term export-oriented growth in South Africa’s agriculture also requires efficient logistics, which could be achieved through co-operation among all stakeholders so that challenges can be efficiently communicated and attended to. In engagements, Transnet is among some of the most important stakeholders,” said Sihlobo.

The success of the Agriculture and Agro-processing Master Plan was also said to be hinged partly on an efficient and cost-effective logistics industry that would facilitate the movement of commodities, not only across South African provinces but also to the export markets.

Last week, Transnet Port Terminals (TPT) said that the movement of fresh citrus fruit in refrigerated containers from South Africa to over 100 countries mainly in the European Union (EU), Russia, US and Mediterranean countries was serious business. It said this season, which began in May every year and ended in October, got TPT annually gearing up for this affair as they handled the movement of refrigerated containers and load them on to vessels destined for the world.

This year, TPT said it anticipated challenges owing to the global shortage of refrigerated containers, which might prevent farmers from fully benefiting off this year’s production. The South African division of shipping line MSC was said to have somehow made means to divert a vessel coming from the Far East headed for Lome in Togo, to drop off 1995 empty refrigerated containers ahead of the season.

Industry estimates already suggested that the country could export 2.80 million tons of maize in 2021/22, which would be the largest volume since the 1994/95 season (compared to an estimated 2.79m tons in the current 2020/21 season).

Moreover, the Citrus Growers’ Association recently noted that the “South African citrus industry would likely break all previous export season records with an estimated 158.7 million cartons in 2021, from 146 million cartons in 2020”.

The estimates from the wine industry also pointed to a slightly larger harvest in 2021 compared to the previous year.

South Africa’s agricultural sector remained a net exporter, with exportable volumes of various commodities growing each year when weather conditions permitted.

The export value of $10.2bn in 2020 was the second largest on record after $10.7bn in 2018. Over and above the regulations and trade agreements that allowed South Africa’s agricultural sector to enjoy this excellent export performance, the logistics industry played a crucial role in the success of the past few years.

The expansion of exports in the past few years spoke to the resilience and dynamism of the country’s logistics sector, from handling facilities, transport (road and rail) to the shipping ports.

Agbiz chief economist Wandile Sihlobo said that the optimism of these few crops and fruits we highlight here mirrored the broader expectations of the sector, although at varying levels in terms of harvest improvement from 2020.

Agbiz said that President Cyril Ramaphosa’s recent visit to the Port of Durban was positive showing the importance of the logistics sector and that attention was being given to various challenges, which include congestion that industry stakeholders have recently raised.

Yesterday (today), President Cyril Ramaphosa said the expansion of infrastructure at the Durban port would require R100 billion in new investment over the next decade to expanding its capacity for container handling from 2.9 million units to more than 11 million units.

“We have made improving the efficiency of our ports a priority of Operation Vulindlela, and have focused on rebuilding Transnet, which is one of our valued state owned enterprises,” he said. “The new management of Transnet and its operating divisions are resolutely focused on turning the performance of the port around.”

The success of the Agriculture and Agro-processing Master Plan was also said to be hinged partly on an efficient and cost-effective logistics industry that would facilitate the movement of commodities, not only across South African provinces but also to the export markets.

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