Market Overview The South Africa agriculture sector is estimated to register a CAGR of 4.5% during the forecast period (2019-2024). It was estimated that in 2018, the price received by the farmers in the country increased by 4.3% and the prices that farmers pay for agricultural inputs increased by 5%.
- The increase in the population level of the country has fueled the demand for cereals. Maize is the staple food in the country, consumed in its direct form, and is used for products, such as sweeteners, bread, and cornmeal. Wheat is also another major staple food in the country, which is mostly imported, as it is economical to import rather than produce it domestically. - The major fruits consumed in the country are apples, pears, litchis, mangoes, plums, peaches, apricots, grapefruit, pineapples, avocados, and lemons. There is also an increasing demand for products derived from fruits, such as fruit juices and jams, in the country that drives the market. Also, more than 1.5 million metric ton of grapes were used every year domestically, in South Africa’s renowned wine industry.
- The most demanded vegetables in the country are lettuce, chicory, pumpkins, tomatoes, and carrots. Apart from these, leafy vegetables, like cleome, amaranth, blackjack, and Jews mallow, which are locally produced, are also consumed in the country
- Most of the country’s oilseed demand is met by domestic production. However, palm oil, a well-in-demand oilseed in the country, is currently imported from Indonesia and Malaysia. In the forecast period, the country is expected to reduce imports to a great extent and become self-sufficient in the production of oilseeds.
Scope of the Report The report defines agricultural products, in terms of the end users. For the purpose of this report, the market scope includes only fresh agricultural products. The production, consumption, import, export, value chain, and pricing analysis have been provided for the South African agriculture market (henceforth, referred to as the market studied). The scope does not include agriculture products processed in any form, such as frozen, freeze-dried, cooked, canned, etc.
Key Market Trends Improved Consumer Spend Towards Fruits and Vegetables
Improved awareness across various social media platforms related to health and well being has boosted demand for various food products and in particular fresh fruits and vegetables. It was estimated that South Africans spend nearly 16% of their incomes on fruits and vegetables. People in the country are discovering the link between healthy food and their well being and switching their alternatives to fruits and vegetables. In addition to this, with the rising health consciousness, there is also an increasing consumption trend towards varieties of off-season fruits, which are usually met by rising imports. For vegetables, like potato, there is a recent trend of growing consumption especially among the middle-income group in South Africa. The crops, such as potatoes, tomatoes, onions, sweet corns, beetroots, apples, citrus, grapes, bananas, litchis, peaches, pineapples, and avocados are some of the major fruits and vegetable crops identified with great market growth potentials in South Africa during the forecast period. Increase in demand for fruits and vegetables was reflected by the rise in the imports of fruits and vegetables.
Food Crops Dominates the Market
South African food crops dominate the agricultural market in the region. Maize is the most important food crop, followed by wheat and barley. South Africa reported a total of 8,950.5 thousand metric ton of maize production in 2016, with free state province accounting for 28.5% of the total maize production in South Africa. In January 2017, the area of cultivation for maize increased by 33% owing to good rainfall. Climatic conditions, coupled with a lack of knowledge about transfer activities is the major limitation to the agriculture sector in South Africa. Government initiatives like the creation of Agri-parks and the introduction of projects like project Khulisa are expected to promote the cultivation of food crops in the country.
Favorable climatic conditions and supportive government policies are expected to drive the South African food crop market. Maize accounts for more than 80% of the local food crop production in South Africa. The South African food crop market has matured considerably since the deregulation of marketing. Producers, traders, and other intermediaries interact freely in the marketing of their produce. The government of South Africa also gives the freedom to the farmers to chose the market where they want to trade their products, and hence, if the farmers don’t get desirable prices for their production, then they can trade their commodities in the international market.
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