U.S. Department of Agriculture undersecretary for trade and foreign agricultural affairs Ted McKinney will lead a trade mission to southern Africa Oct. 29-Nov. 2, joined by U.S. business and state government leaders seeking to expand agricultural export opportunities in the region. South Africa is seen as a promising region for growing U.S. agricultural exports and increasing the trade relationship.
The mission will be based in Johannesburg and Cape Town, South Africa, but participants will also have the opportunity to engage with potential customers from Angola, Botswana, eSwatini, Lesotho, Madagascar, Mauritius, Mozambique, Namibia, Zambia and Zimbabwe. The region is home to 167 million people.
Two-way agricultural trade between the U.S. and Southern Africa has grown significantly in the past decade, reaching a record $1.5 billion in 2017. The region imported $14 billion in agricultural and related products last year, and the potential for U.S. export growth is strong, given that many of these are products that the U.S. produces competitively.
“This trade mission is part of USDA’s continuing effort to tap into new markets for U.S. agricultural products,” McKinney said. “The southern Africa region is typically a net importer of agricultural goods, but the majority of those imports currently come from Europe, Asia and elsewhere in Africa. We are excited about the potential to grow the United States’ market share and cultivate new customers for high-quality, cost-competitive U.S. food and farm products.”
Mission participants include leaders from the Arizona, Georgia, Kansas, Nevada, North Dakota and Utah departments of agriculture, as well as representatives from companies and organizations that include the National Pork Board, Schaumburg, Ill.-based Livestock Exporters Assn., Mt. Horeb, Wis.-based U.S. Livestock Genetics Export Inc. and the U.S. Soybean Export Council.
A report from USDA’s Foreign Agricultural Service (FAS) explained that, in recent years, imports have been largely driven by demand for diverse food and agricultural products and the changing tastes and preferences of a more connected, global society. Increased urbanization is driving demand for convenient and ready-to-eat foods. “As a result, the number of restaurants, bars and cafes (including U.S. and local fast-food chains) is growing as dining out becomes more popular throughout the region, especially in South Africa,” FAS said in a recent summary of the trade potential for the region.
U.S. agricultural exports to southern Africa have fluctuated between $372 million and $766 million over the past 10 years. This fluctuation is caused primarily by drought-related variations in local corn production and competition from other wheat suppliers. South Africa and Angola are the largest importers of U.S. agricultural products in the region, accounting for 90% of U.S.-origin imports in 2017.
FAS noted that, for the last five years, poultry meat and products (excluding eggs) have topped the list of U.S. agricultural exports to southern Africa, with sales primarily to South Africa and Angola. Exports of chicken legs to South Africa have fared well despite a quota of 65,000 tons (at the most-favored-nation tariff rate of 37%) and prohibitively high antidumping tariff rates above the quota.
In May 2018, Namibia opened its market to U.S. poultry, and FAS projects that Namibia's broiler meat imports could increase by about 3.5% this year to reach approximately 30,500 tons in 2018, driven by local demand that cannot adequately be met by local supply. Broiler meat is relatively affordable and is becoming an increasingly important protein source in the diets of many Namibians.
Another new opportunity in the region is the opening of South Africa to imports of U.S. table and hatching eggs. While South Africa was previously self-sufficient in egg production, the local egg industry is now recovering from highly pathogenic avian influenza (H5N8) outbreaks in 2017. FAS projects that South African table egg imports could reach 75 tons in 2018.
Strong U.S. corn exports in 2016 and 2017 were a result of drought conditions in the sub-Saharan Africa region, and demand for U.S. corn is expected to revert to pre-2016 levels as domestic yields rebound.
Across the southern Africa region, there has recently been strong growth in imports of liquor (whiskey and bourbon), animal feed, plant and animal genetics and consumer-oriented products, FAS noted.
In 2017, the U.S. provided only 4% of southern Africa’s agricultural imports. Major competitors for market share are the European Union, with 27%, followed by African countries with 26%, Asian countries with 24% and the Mercosur countries with 13%. This can be explained, in part, by the preferential trade relationships and free trade agreements that the region has with the EU, other African countries and Mercosur.