SA must get bigger share from food exports, says Davies

THE food-processing industry needed to extract more value from exports as gains by retailers overseas were too high, Trade and Industry Minister Rob Davies said on Monday in a keynote address at the biannual world conference of the processed deciduous fruit industry, held in Stellenbosch.

He said a strong and globalised buyers’ market meant 40%-45% of the final price of fruit products sold abroad was captured outside South Africa. This was too high and there ought to be more equitable gain-sharing.

Supermarkets, agents and logistics companies were capturing the value that should accrue to South African producers.

Mr Davies suggested that producers examine their marketing channels and remove third-party agents. They also needed to engage more robustly with foreign retailers and diversify their markets, particularly into Africa.

South African manufacturers also had to face high subsidies provided by foreign governments to producers, and high tariff barriers.  

The minister met the CEOs and representatives of various food-processing companies at the weekend to discuss the state of an industry facing many challenges such as competition on the export market, loss of market, and the unstable currency and exchange rate. Yet it had enormous potential, he said.

"South Africa’s agro-processing sector has the potential to become an industrial impetus that can create jobs and answer some of the macroeconomic questions such as the trade deficit generated by too much imports against low export volumes. An analysis of our imports points to glaring opportunities in articles such as wheat, soy bean, vegetable oils, red meat, tomato concentrate and industrial starch," Mr Davies said.  READ MORE

Source: BusinessDay Live. #IFAMAFRICA