A PROFILE OF THE SOUTH AFRICAN BEEF MARKET VALUE CHAIN 2011

Directorate Marketing Private Bag X 15 Arcadia 0007 Tel: 012 319 8455/6 Fax: 012 319 8131 Email: MorokoloB@daff.gov.za

1.
1.1. 1.2. 1.3. 1.4.

DESCRIPTION OF THE INDUSTRY

Production Areas Production Trends Local Consumption Employment

3
4 5 5 7

2.
2.1.

MARKET STRUCTURE
Domestic Market

7
7 8 9 19 22

2.2. Import Export Analysis 2.2.1. Exports 2.2.2. Share Analysis. 2.2.3. Imports.

3. 4.
4.1. 4.2.

BEEF MARKET VALUE CHAIN MARKET INTELLIGENCE.

Export tariffs. Import tariffs.

25 32
32 33

5.
5.1. 5.2.

PERFORMANCE OF SOUTH AFRICAN BEEF INDUSTRY IN 2010.

Exports. Imports.

35
35 47

6.

ACKNOWLEDGEMENTS/ REFERENCES

57

1.

DESCRIPTION OF THE INDUSTRY

The livestock sector is one of the best growing parts of the agricultural economy, driven by income growth and supported technological and structural change. This sector contributes 40 percent of global value of agricultural output and supports the livelihoods and food security of almost billion people. Beyond their role in generating food and income, livestock are a valuable asset, serving as a store of wealth, collateral for credit an essential security net during calamitous times. Globally, livestock contribute 15 percent of total food energy and 25 percent of dietary protein. In South Africa, stock farming is the only viable agricultural activity in a large part of the country. Approximately 69% of South African agricultural land is used for extensive grazing. Cattle production have increased by nearly 1 million heads from 12.6 million in 1994 to 13.5 million in 2004 and areas for grazing declined owing to expanding human settlements and other activities such as mining, crops, forestry and conservation. Beef cattle producers vary from highly sophisticated commercial (who rely on high technology) to communal subsistence producers (who rely on indigenous knowledge and appropriate technology). Three major groups of beef cattle farmers co-exist in South Africa. The commercial beef producer (mostly white farmers) where production is relatively high and comparable to developed countries. Their production is generally based on synthetic breeds and/or crossbreeding, using Indicus / Sanga types and their crosses as dams. The emerging black beef cattle farmer who own or lease land (LRAD beneficiaries). Their cattle generally consist of indigenous crossbred or exotic type of animals. The communal beef cattle farmer who farm on communal grazing land. Their cattle are mostly of indigenous types. 60% of the 14.1 million cattle available in South Africa are owned by commercial farmers and 40% by emerging and communal farmers. The gross value of beef production is dependent on the number of cattle slaughtered and the prices received by producers from abattoirs. The average gross value of beef produced during the period 2000/01 until 2009/10 amounted to R 8, 880,844. Figure 1 below show the gross value of cattle and calves slaughtered during the period 2000/01 until 2009/10.

16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0

/0 1 00

Figure 1: Gross Value of cattle and calves slaughtered

R'000

/0 2

/0 3

/0 4

/0 5

/0 6

/0 7

/0 8

/0 9 08 20

01

02

03

04

05

06

07

20

20

20

20

20

20

20

20

Years

Source: Statistics and Economic Analysis. 1.1. Production Areas

Beef is produced throughout South Africa. The amount of beef produced depends on the infrastructure such as feedlots and abattoirs, not necessarily by the number of cattle available in those areas. South Africa has highly developed transport infrastructure that allows movement of cattle and calves from one area to another, even from other countries such as Namibia. For these reasons, Mpumalanga commands the greatest share of beef production in South Africa accounting for 22% of the beef produced in 2010 followed by Free State, Gauteng and North West accounting for 19%, 13% and 12% respectively. Figure 2 below shows the beef production per province during 2010 production year.
Figure 2: Beef Production per Province 2010 Mpumalanga 22% Eastern Cape 6% Gauteng 13%

Kwazulu-Natal 11% Free State 19%

Western Cape 5% Limpopo 6% North West 12% Northern Cape 6%

Source: Red Meat Levy Admin

20

09

/1 0

1.2.

Production Trends

South Africa has approximately 495 abattoirs. Approximately 40% of all slaughtering are performed by abattoirs that may slaughter an unlimited number of animals (Class A) and approximately 60% of cattle are slaughtered by highly regulated abattoirs (Class A & B). Most of these abattoirs have linkages with feedlots. Over the past ten years the number of cattle slaughtered has significantly increased by 26% leading to 59% increase in beef production. This may be due to increasing demand. Figure 3 below show the slaughtering of cattle and production of beef during the period 2000/01 until 2009/10.
Figure 3: Cattle slaughtering and beef production

1,000,000,000 800,000,000 Kilograms 600,000,000

4,000,000

2,000,000 400,000,000 200,000,000 0

20 00 /0 1 20 01 /0 2 20 02 /0 3 20 03 /0 4 20 04 /0 5 20 05 /0 6 20 06 /0 7 20 07 /0 8 20 08 /0 9 20 09 /1 0

1,000,000

Years Production Slaughtering

Source: Statistics and Economic Analysis. Figure 3 above shows that slaughtering and production of beef follows the same trend. Both increased significantly in 2005/06 to 2006/07 but declined in 2007/08 and increased again during 2009/10. This decline might have been caused by global economic meltdown. An increase of 59% in production and 589,000 of number of cattle slaughtered was experienced in 2009/10 compared to 2000/01. 1.3. Local Consumption

Figure 4 shows the local consumption of beef comparing it to total production for each year to determine if the country is self-sufficient in terms of beef production.

Cattle per head

3,000,000

Figure 4: Beef production vs consumption 1,000,000,000 800,000,000 Kilograms 600,000,000 400,000,000 200,000,000 0

/0 1

/0 2

/0 3

/0 4

/0 5

/0 6

/0 7

/0 8

/0 9 08 20 20

00

01

02

03

04

05

06

20

20

20

20

Production

20

Years Consumption

Source: Statistics and Economic Analysis. Figure 4 indicates that South Africa is not self- sufficient because beef consumption was higher than beef production throughout the period under analysis. Both production and consumption followed the same trend, they moved on an increasing trend from 2000/01 to 2006/07 and decreased during 2007/08. The declined during 2007/08 to 2008/09 was due to the global economic meltdown which led to a decreased disposable income of larger number of consumers. During 2009/10 beef production and consumption experienced some increases because the global economic meltdown started to ease and it is also due to the FIFA world cup which was hosted in South Africa. There was an increase of 54% in consumption during 2009/10 compared to 2000/01. Table 1 below shows that South Africa does not produce enough beef for the domestic market even if the number of cattle slaughtered has increased considerably from 2000/01 to 2009/10. Table 1: Total cattle slaughtering, production and consumption of beef Cattle Slaughtering Production Year Head Kilograms 2000/01 2,302,000 525,000,000 2001/02 2,510,000 574,000,000 2002/03 2,535,000 610,000,000 2003/04 2,599,000 632,000,000 2004/05 2,671,000 672,000,000 2005/06 2,972,000 769,500,000 2006/07 3,077,000 830,700,000 2007/08 2,781,000 750,600,000 2008/09 2,910,000 787,800,000 2009/10 2,891,000 835,200,000 Source: Statistics and Economic Analysis. Consumption Kilograms 554,000,000 602,000,000 643,000,000 675,000,000 723,000,000 810,000,000 849,000,000 767,000,000 791,000,000 853,000,000

20

20

20

07

09

/1 0

1.4.

Employment

Commercial farmers are estimated at 50 000, emerging farmers at 240 000 and communal farmers 3 million. There are approximately 70 feedlots in South Africa and 495 abattoirs. Beef industry is a major employer with 500 000 people employed and 2 125 000 dependent on the livestock industry for their livelihood.

2. 2.1.

MARKET STRUCTURE Domestic Market

The red meat industry evolved from a highly regulated environment to one that is totally deregulated today. Various policies, such as the distinction between controlled and uncontrolled areas, compulsory levies payable by producers, restrictions on the establishment of abattoirs, the compulsory auctioning of carcasses according to grade and mass in controlled areas, the supply control via permits and quotas, the setting of floor prices, removal scheme, etc., characterised the red meat industry before deregulation commenced in the early 1990s. Since the deregulation of the agricultural marketing dispensation in 1997, the prices in the red meat industry are determined by demand and supply forces. Average producer prices of beef from 2000/01 to 2009/10 are illustrated in Figure 5.
Figure 5: Average beef producer prices

25.00 20.00 Rands/kg 15.00 10.00 5.00 0.00

/0 1 /0 2

/0 3

/0 4

/0 5

/0 6

/0 7

/0 8

20 00

20 01

20 02

20 03

20 04

20 05

20 06

20 07

Years

Source: Statistics and Economic Analysis. Figure 5 shows that prices of beef increased significantly from 2000/01 to 2009/10 mainly due to increased consumption caused by rising living standards of larger number of consumers and low domestic production. There was an increase of R13.79/Kg in 2009/10 compared to 2000/01. The market players in the beef industry are vertically integrated. They have their own feedlots, abattoirs, processors and distributors. Figure 6 below is a graphical representation of the market players.

20 08

20 09

/0 9

/1 0

Figure 6: M arket share in the beef industry Chalmar 5% SMMES's / Emerging / Subsistence 23% Beefcor 4% Beef Master 10% SIS 8% Karan Beef 25% Bull Brand 12%

EAC Group 6% Sparta Beef 7%

Source: SAMIC The chart shows that 77% of the beef market share is in the hands of 8 suppliers. The remaining 23% is owned by small, medium and micro enterprises. Karan Beef is the largest supplier commanding 25% of the total market share and Bull Brand is second with 12% market share. 2.2. Import Export Analysis

Figure 7 compares volumes of imports and exports for beef from 2001 to 2010.
Figure 7: Beef exports and imports quantities
25,000,000

20,000,000

Kilograms

15,000,000

10,000,000

5,000,000

20 06

20 04

20 01

20 02

20 03

20 05

Years
Export quantities Import quantities

Source: Quantec EasyData.

20 07

20 08

20 09

20 10

Figure 7 indicates that South Africas exports of beef were higher than imports in 2001 and 2002. This was due to weaker Rand that stimulated exports of beef from South Africa and neighboring countries to the European Union and Asia. There was a decrease of 59% in the year 2010 compared to 2001. From 2003 to 2010 imports of beef were far greater than exports. This was triggered by the increased domestic demand. 2.2.1. Exports South Africa exported 3,986,948 million kilograms of beef in 2010 yielding an export value of R 156 million. There was a decrease of 59% of quantity of beef exported and an increase of 54% of export value in 2010 compared to 2001. The quantity and the value for exports of beef are shown in Figure 8 below.
Figure 8: Beef exports
12,000,000 10,000,000 200,000,000 180,000,000 160,000,000 140,000,000 120,000,000 6,000,000 4,000,000 2,000,000 0 100,000,000 80,000,000 60,000,000 40,000,000 20,000,000 0

8,000,000

20 01

20 02

20 03

20 04

20 05

20 06

20 07

20 08

20 09

Years
Export Quantity Export Value

Source: Quantec EasyData. Figure 8 indicates that the beef exports quantity increased significantly in 2002 and continued decreasing in a fluctuating trend and reached its deep decrease in 2005. The export value of beef fluctuated from 2001 to 2005 before moving in an increasing trend from 2006 to 2009. Figure 9 below shows the main export market to different continents.

20 10

Value (Rands)

Quantity (Kg)

Figure 9: Beef export quantities to the continents

8,000,000 7,000,000 6,000,000 Kilograms 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0

20 01

20 03

20 04

20 05

Years Africa Americas Asia Europe

Source: Quantec EasyData. South Africa was mainly exporting to Africa, mainly SADC and European Union (EU) throughout the period under analysis. EU commanded the highest exports of beef from South Africa from the year 2001 to 2004 and from 2005 to 2010 Africa commanded the highest beef exports quantity. Americas commanded the lowest beef exports quantity during the period under analysis. The following figure 10 to 14 gives an indication of where within the continents (Africa, Europe, Asia and Oceania) is beef from South Africa obtained.

10

20 06

20 07

20 08

20 09

20 10

20 02

Figure 10: Beef export quantities to SADC

1,800,000 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0
20 06 20 07 20 04 20 03 20 01 20 02 20 05 20 08 20 09 20 10

Kilograms

Years
Angola Mauritius Mozambique United Republic of Tanzania Zimbabwe Democratic Republic of the Congo Malawi Seychelles Zambia

Source: Quantec EasyData Figure 10 displays that beef produced in South Africa was mainly exported to Mozambique which has commanded the highest beef exports throughout the decade except in 2002 and 2008 only. During those periods (2002 & 2008) Angola took the lead, which made it the second country to obtain the highest beef exports from South Africa.
Figure 11: Beef export quantities to Western Africa
180,000 160,000 140,000

Kilograms

120,000 100,000 80,000 60,000 40,000 20,000 0

20 01

20 02

20 03

20 04

20 05

20 06

20 07

20 08

20 09

Years
Cte d'Ivoire Ghana Nigeria Saint Helena

Source: Quantec EasyData. It is clearly indicated from figure 11 above that South African beef is exported to Nigeria in the western Africa followed by Ghana and Saint Helena throughout the decade. In 2003 both Nigeria and Ghana reached a peak of 154 000 Kg and 44 000 Kg of South African beef respectively.

11

20 10

Figure 12: Beef export quantities to Middle and North Africa

350,000 300,000

Kilograms

250,000 200,000 150,000 100,000 50,000 0

20 00

20 01

20 02

20 03

20 04

20 05

20 06

20 07

20 08

20 09
20 09

Years
Congo Egypt Gabon

Source: Quantec EasyData. In the Middle and Eastern Africa, Gabon commanded the highest beef from South Africa from 2000 to 2008 and its quantity exported was depreciating. During the same periods Congo commanded the second highest of beef exported from South Africa. Egypt which is from Northern Africa experienced a sharp increase and became the highest commander of beef exports quantity from South Africa during 2009 to 2010.

Figure 13: Beef export quantities to EU

1,800,000 1,600,000 1,400,000

Kilograms

1,200,000 1,000,000 800,000 600,000 400,000 200,000 0

20 05 20 06 20 02 20 01 20 03 20 04 20 07 20 08 20 10

Years
Belgium Germany Netherlands

Source: Quantec EasyData. It is clearly indicated from figure 13 above that, from 2001 to 2004 and also in 2007 to 2008 beef from South Africa was mainly exported to Germany in the European Union countries. Netherlands commanded the highest exports during 2009 to 2010. There were some intermittent exports to Belgium during the period under analysis

12

20 10

Figure 14: Beef export quantities to Asia

500,000 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0
20 01 20 03 20 04 20 05 20 06 20 08 20 09 20 02 20 07 20 10
Qatar

Kilograms

Years
United Arab Emirates Bahrain Hong Kong Kuw ait

Source: Quantec EasyData. Kuwait commanded the highest share during the periods 2001 to 2003 and 2009 followed by United Arab Emirates which commanded the highest beef exports from 2004 to 2008. There were some intermittent beef exports among Bahrain, Hong Kong and Qatar throughout the period under analysis and Qatar experienced the highest commander during 2010. Generally, exports of beef to Asia were very minimal during 2010.

Figure 15: Beef exports destinations in 2010

Mozambique 36% Ghana 3% Gabon 3% Egypt 8% Democratic Republic of the Congo 12% Angola 18%

Nigeria 4% Netherlands 5% Zimbabwe 4% Not allocated 7%

Source: Quantec EasyData. The main destination of South African beef is in Mozambique which commanded 36% of South African beef during 2010 followed by Angola with 18% then Democratic Republic of Congo with 12%. The three SADC countries are the net importers because together they constitute 66%, the other six countries share 27% and 7% is unallocated. Values of beef exports from various provinces of South Africa are presented in Figure 16. 13

Figure 16: Value of beef exports by Provinces

180,000 160,000

Thousand Rands

140,000 120,000 100,000 80,000 60,000 40,000 20,000 0

20 01

20 02

20 03

20 04

20 05

20 06

20 07

Years
Western Cape North West Eastern Cape Gauteng Northern Cape Mpumalanga Free State Limpopo Kwazulu-Natal

Source: Quantec EasyData. Figure 16 indicates that Gauteng have recorded high export values of beef between the periods 2001 and 2010. This is mainly due to the fact that most exporters of beef are situated in Gauteng Province and the greatest proportion of beef was exported to neighboring countries and Gauteng Province is the main exit point. Exports of beef were also recorded in Western Cape, Northern Cape, Mpumalanga, Mpumalanga and Northern Cape provinces. The following figures (Figures 17 - 25) show the value of beef exports from the various district municipalities in the nine provinces of South Africa.
Figure 17: Value of beef exports from Western Cape Province 90,000,000 80,000,000 70,000,000 60,000,000
Rands

50,000,000 40,000,000 30,000,000 20,000,000 10,000,000

Years
West Coast Cape Winelands Eden

2001

2002

2003

2004

2005

2006

2007

20 08

2008

20 09

2009

20 10
2010 0 0 46 0 0 0

City of Cape Tow n 38,836,192 30,710,406 25,770,894 20,038,961 11,916,499 34,190,690 23,908,967 57,692,806 81,773,297 38,121,020 0 0 0 0 191,574 61,948 5,628 0 0 2,000 0 0 0 0 0 0 0 0 2,488,088 20,311 0 0

5,533,776 2,075,610

Source: Quantec EasyData.

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In the Western Cape, regular exports of beef were recorded mainly in the City of Cape Town metropolitan municipalities. City of Cape Town metropolitan municipality recorded high export values throughout the period under analysis with the lowest level of approximately R 12 Million in 2005 and experienced the highest value of R 82 million during 2009. This is due to the fact that the City of Cape Town is the main exit point in the province.
Figure 18: Value of beef exports from Eastern Cape
9,000,000 8,000,000 7,000,000 6,000,000 Rands 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 Years
Cacadu 2001 2002 2003 2004 0 2005 159,004 2006 0 1,018 2007 0 230,263 2008 0 0 2009 0 308 2010 0 0

1,459,724 7,467,499 975,239

Nelson Mandela 3,029,943

400,026 2,297,462 8,539,123 1,992,090

Source: Quantec EasyData. In the Eastern Cape Province, beef exports were recorded from Cacadu district municipality and Nelson Mandela metropolitan municipality. The highest export value was recorded in Cacadu district municipality during 2002 and from Nelson Mandela metropolitan municipality during 2003 to 2007 and experienced the peak during 2004.
Figure 19: Value of beef exports from Northern Cape Province
70,000,000 60,000,000 50,000,000

Rands

40,000,000 30,000,000 20,000,000 10,000,000 0

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Years
Siyanda

Pixley ka Seme 4,253,909 25,178,94 12,326,77 59,176,14 779,864 5,976,317 17,059,11 6,351,411 65,420,84 10,463,22 68,786 0 855,138 13,528 7 0 0 0 0 0

Source: Quantec EasyData.

15

The Northern Cape Province has recorded beef exports from two district municipalities namely, the Pixley ka Seme and Siyanda. Pixley ka Seme district municipality dominated the export values of beef from 2001 to 2010.
Figure 20: Value of beef exports from Free State Province
800,000 700,000 600,000

Rands

500,000 400,000 300,000 200,000 100,000 0

Years
Lejw eleputsw a Thabo Mofutsanyane

2001 0 0

2002 0 18,833

2003 0 0

2004 0 0

2005 0 0

2006 147,279 0

2007 0 0

2008 0 0

2009 0 0

2010 752,394 0

Source: Quantec EasyData Figure 20 indicates that exports of beef from the Free State Province occurred in Lejweleputswa district municipality in 2006 and 2010 while in Thabo Mofutsanyane district municipality exports were recorded only in 2002.
Figure 21: Value of beef exports from KwaZulu-Natal Province
30,000,000 25,000,000 20,000,000

Rands

15,000,000 10,000,000 5,000,000

Years
Ugu Uthukela Uthungulu

2001 0 67,197 0

2002

2003

2004

2005

2006 1,694 0 0

2007 0 0 0

2008 0 0 0

2009 0 0 0

2010 0 0 0

461,540 1,187,792 199,597 229,306 20,017 0 0 0 0 809,898 0 1,241

eThekw ini 2,850,051 8,787,344 12,759,71 1,392,410 7,364,043 14,049,40 21,419,73 6,322,718 7,285,145 27,609,56

Source: Quantec EasyData In the KwaZuluNatal Province, beef exports were mainly from eThekwini metropolitan municipality showing increases in a fluctuation mode from 2001 until 2010 Its lowest exports value was experienced in 2004 and its peak in 2010. Ugu district municipality recorded beef export values from 2002 to 2006. Tiny export values were recorded in Uthukela and Uthungulu district municipalities during 2001 to 2005. 16

Figure 22: Value of beef exports from North West Province

18,000,000 16,000,000 14,000,000 12,000,000

Rands

10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0

Years
Bojanala Bophirima Southern

2001 11,103 0 0

2002 676,277 0 0

2003 0 0 0

2004 0 0 0

2005 0 0 0

2006 0 0 0

2007 0 0 0

2008 0 0 0

2009 0

2010 0

16,377,271 16,672,268 54,667 122,407

Source: Quantec EasyData In North West Province beef exports recorded through Bojanala, Bophirima and Southern district municipalities. Bojanala district municipality recorded the beef exports value during 2001 to 2002, while Bophirima and Southern district municipalities recorded their beef exports values during 2009 to 2010 and during those periods Bophirima district commanded the highest shares. There were no exports value of beef recorded from North West province from 2003 to 2008.

Figure 23: Value of beef exports from Gauteng Province 160,000,000 140,000,000 120,000,000
Rands

100,000,000 80,000,000 60,000,000 40,000,000 20,000,000

Years
Sedibeng Metsw eding West Rand Ekurhuleni

2001 0 0

2002 97,870 0

2003

2004

2005

2006

2007

2008 0 0

2009 1,394,482 0

2010 63,085 71,319

10,828,590 18,031,243 5,980,048 2,241,123 1,990,597 0 0 0 0 0

21,404,982 30,172,922 30,598,166 1,591,145 56,613,765 49,627,197 45,411,449 1,325,623 5,732,873 10,564,589 13,732,923 7,009,957 11,723,514 14,501,768 7,486,148 21,258,608 31,061,511 26,830,641 26,315,823 27,517,368

City of Johannesburg 51,571,381 48,458,351 32,033,894 63,993,951 43,111,236 42,340,732 64,007,177 139,780,93 114,888,37 80,420,608 City of Tshw ane 34,167,946 82,935,171 20,703,686 41,438 208,759 757,808 1,494,102 0 1,427,949 7,877,535

Source: Quantec EasyData Exports of beef in Gauteng Province were fluctuating among City of Johannesburg, City of Tshwane, West Rand, Ekurhuleni and Sedibeng district municipalities. From 2001 to 2010, all the districts experienced fluctuations in the value of beef exports with City of Johannesburg, City of Tshwane and West Rand competing for dominance.

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Figure 24: Value of beef exports from Mpumalanga Province

80,000,000 70,000,000 60,000,000

Rands

50,000,000 40,000,000 30,000,000 20,000,000 10,000,000

Years
Nkangala Ehlanzeni

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Gert Sibande 24,033,14318,369,72437,514,88769,552,434 3,411,820 3,828,349 2,889,031 33,128,92342,504,03835,017,217 8,910 990,055 19,458 0 0 0 0 112,002 106,021 0 176,998 1,630,903 6,401,618 54,371,061

857,618 10,405,712 3,386,427 6,061,318

406,088 2,459,927

Source: Quantec EasyData. In Mpumalanga Province, Gert Sibande, Nkangala and Ehlanzeni district municipalities have played an important role in the export of beef during the period under review. Gert Sibande commanded the highest market shares during the periods 2001 to 2004, 2005 and 2008 to 2009. Ehlanzeni district commanded the highest market shares during 2005 and 2010. Irregular exports were recorded from Nkangala district municipality.

Figure 25: Value of beef exports from Limpopo Province

300,000 250,000 200,000

Rands

150,000 100,000 50,000 0

Years
Mopani Vhembe Capricorn Waterberg

2001 0 0 0 0

2002 0 0 0 250,834

2003 21,864 0 0 253,082

2004 0 0 0 0

2005 4,880 0 0 0

2006 0 0 0 0

2007 0 0 0 0

2008 0 0 0 0

2009 0 14,615 0 0

2010 0 42,862 123,928 0

Source: Quantec EasyData. Irregular exports of beef in the Limpopo Province fluctuated among Mopani, Vhembe, Capricorn and Waterberg district municipalities from 2001 to 20010. The highest export values were recorded from Waterberg district municipality during the period 2002 to 2003. There were no exports of beef recorded from Limpopo province during the periods 2001, 2004 and 2006 to 2008.

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2.2.2. Share Analysis.

Table 2: Share of provincial beef exports by South Africa (%) Year 2001 2002 2003 2004 2005 2006 Province Western Cape 21.96 12.42 12.36 7.67 8.20 19.56 Eastern Cape 2.22 2.98 1.55 3.27 1.48 0.00 Northern Cape 2.14 9.54 6.26 22.65 0.54 3.42 Free State 0.00 0.01 0.00 0.00 0.00 0.08 KwaZulu-Natal 1.44 3.51 6.63 0.92 5.23 8.04 North West 0.01 0.26 0.00 0.00 0.00 0.00 Gauteng 59.83 63.90 50.30 37.57 78.03 66.48 Mpumalanga 12.39 7.29 22.76 27.92 6.52 2.42 Limpopo 0.00 0.10 0.13 0.00 0.00 0.00 Total 100 100 100 100 100 100 Source: Calculated from Quantec EasyData.

2007 12.30 0.11 7.95 0.00 9.98 0.00 67.11 2.55 0.00 100

2008 21.25 0.00 2.34 0.00 2.33 0.00 61.84 12.24 0.00 100

2009 22.11 0.00 17.69 0.00 1.97 4.44 40.50 13.27 0.00 100

2010 12.24 0.00 3.36 0.24 8.87 5.39 40.62 29.23 0.05 100

From Table 2 above, Gauteng Province commands the greatest share of South Africas beef exports followed by Western Cape Province. This is mainly due to the fact that most exporters of beef are situated in Gauteng Province and the greatest proportion of beef was exported to neighboring countries and Gauteng Province is the main exit point. Northern Cape, KwaZuluNatal, Eastern Cape and Mpumalanga provinces were regular exporters while Free State, North West and Limpopo registered fractional exports of beef. The following Tables 3 to 11 shows a share of the various district municipalities beef exports to the various provincial beef exports. Table 3: Share of district beef exports to the total Western Cape provincial beef exports (%) Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 District City of Cape Town 87.53 93.67 99.00 99.99 100 100 90.57 99.96 100 West Coast 0.00 0.00 0.74 0.00 0.00 0.00 0.00 0.04 0.00 Cape Winelands 0.00 0.00 0.24 0.00 0.00 0.00 0.00 0.00 0.00 Eden 12.47 6.33 0.02 0.01 0.00 0.00 9.43 0.00 0.00 Total 100 100 100 100 100 100 100 100 100 Source: Calculated from Quantec EasyData.

2010 100 0.00 0.00 0.00 100

City of Cape Town district municipality has commanded the greatest share of beef exports in Western Cape Province during the period 2001 and 2010. During the same period, Eden, West Coast and Cape Winelands district municipalities recorded intermittent exports of beef.

Table 4: Share of district beef exports to the total Eastern Cape provincial beef exports (%) Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 District Cacadu 33 95 30 0 7 0 0 0 0 0 Nelson Mandela 67 5 70 100 93 100 100 0 100 0 Total 100 100 100 100 100 100 100 0 100 0 Source: Calculated from Quantec EasyData.

19

In Eastern Cape Province exports of beef were recorded from Cacadu district municipality and Nelson Mandela metropolitan municipality. There were no exports reported from Eastern Cape during the periods 2008 and 2010. Table 5: Share of district beef exports to Northern Cape provincial beef exports (%) Year 2001 2002 2003 2004 2005 2006 2007 2008 District Pixley ka Seme 98.41 100 93.51 99.98 100 100 100 100 Siyanda 1.59 0.00 6.49 0.02 0.00 0.00 0.00 0.00 Total 100 100 100 100 100 100 100 100 Source: Calculated from Quantec EasyData. 2009 100 0.00 100 2009 100 0.00 100

From Northern Cape Province, Pixley ka Seme district municipality commanded the greatest shares of beef exports. From 2005 to 2010 it commanded 100%. Siyanda recorded some beef exports during the periods 2001 and 2003 to 2004 and diminished thereafter. Table 6: Share of district beef exports to the total Free State provincial beef exports (%) Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 District Lejweleputswa 0 0 0 0 0 100 0 0 0 100 Thabo Mofutsanyane 0 100 0 0 0 0 0 0 0 0 Total 0 100 0 0 0 100 0 0 0 100 Source: Calculated from Quantec EasyData. Table 6 shows that exports of beef in Free State Province occurred from the Lejweleputswa district municipality in 2006 & 2010 and Thabo Mofutsanyane district municipality in 2002 only. Table 7: Share of district beef exports to the total KwaZuluNatal provincial beef exports (%) Year 2001 2002 2003 2004 2005 2006 2008 2008 2009 2010 District Ugu 0.00 4.98 8.52 8.31 3.02 0.01 0 0 0 0 Uthukela 2.30 0.22 0.00 0.00 0.00 0.00 0 0 0 0 Uthungulu 0.00 0.00 0.00 33.72 0.02 0.00 0 0 0 0 eThekwini 97.70 94.80 91.48 57.97 96.96 99.99 100 100 100 100 Total 100 100 100 100 100 100 100 100 100 100 Source: Calculated from Quantec EasyData From KwaZulu-Natal province, eThekwini district municipality has commanded the greatest share of beef exports from 2001 to 2010. Intermittent beef exports also occurred in Ugu district municipality in 2002 to 2006 and in Uthukela district from 2001 to 2002. Uthungulu district municipality exported beef from 2004 to 2005 and diminished thereafter. Table 8: Share of district beef exports to the total North West provincial beef exports (%) Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 District Bojanala 100 100 0 0 0 0 0 0 0 Southern 0 0 0 0 0 0 0 0 99.67 Bophirima 0 0 0 0 0 0 0 0 0.33 Total 100 100 0 0 0 0 0 0 100 Source: Calculated from Quantec EasyData. 2010 0 99.27 0.73 100

20

Bojanala district municipality in the North West Province commanded 100% share of all beef exports from 2001 to 2002. From 2003 to 2008 exports of beef diminished entirely from the North West Province and were recorded again in 2009 to 2010 from Southern and Bophirima district municipalities. Table 9: Share of district beef exports to the total Gauteng provincial beef exports (%) Year 2001 2002 2003 2004 2005 2006 2007 2008 District Sedibeng 0.00 0.06 10.23 18.37 5.27 1.93 1.38 0.00 Metsweding 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 West Rand 17.71 17.89 28.90 1.62 49.92 42.70 31.54 0.79 Ekurhuleni 11.36 4.16 11.07 14.77 6.60 18.29 21.58 15.98 City of Johannesburg 42.66 28.73 30.25 65.19 38.02 36.43 44.46 83.23 City of Tshwane 28.27 49.17 19.55 0.04 0.18 0.65 1.04 0.00 Total 100 100 100 100 100 100 100 100 Source: Calculated from Quantec EasyData. 2009 0.93 0.00 3.83 17.57 76.72 0.95 100 2010 0.05 0.06 8.35 21.75 63.57 6.23 100

In Gauteng Province beef exports occurred mainly through the City of Johannesburg, Ekurhuleni, West Rand and City of Tshwane district municipalities. Fractional exports were recorded from Metsweding and Sedibeng district municipalities. City of Johannesburg commanded more than 50% during the periods 2004 and 2008 to 2010. Table 10: Share of district beef exports to the total Mpumalanga provincial beef exports (%) Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 District Gert Sibande 96.01 95.44 78.29 95.36 36.02 90.41 52.90 99.68 86.60 Nkangala 0.04 0.10 0.00 0.00 0.00 0.00 2.05 0.32 0.36 Ehlanzeni 3.96 4.46 21.71 4.64 63.98 9.59 45.05 0.00 13.04 Total 100 100 100 100 100 100 100 100 100 Source: Calculated from Quantec EasyData. 2010 38.47 1.79 59.74 100

From Mpumalanga Province, Gert Sibande district municipality has commanded the greatest share of beef exports from 2001 to 2010 followed by the Ehlanzeni district municipality. Fractional exports of beef were recorded from Nkangala district municipality during the year 2001 to 2002 and 2007 to 2010.

Table 11: Share of district beef exports to the total Limpopo provincial beef exports (%) Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 District Mopani 0 0 7.95 0 100 0 0 0 0 Vhembe 0 0 0 0 0 0 0 0 100 Capricorn 0 0 0 0 0 0 0 0 0 Waterberg 0 100 92.05 0 0 0 0 0 0 Total 0 100 100 0 100 0 0 0 100 Source: Calculated from Quantec EasyData.

2010 0 25.70 74.30 0 100

From Limpopo Province, exports of beef occurred during the periods 2002 to 2003 from Mopani and Waterberg district municipalities, 2005 from Mopani district municipality and 2009-2010 from the Vhembe and Capricorn district municipalities.

21

2.2.3. Imports. South Africa imported approximately 6 million kilograms of beef in 2010 at an estimated value of R 87 million. The import quantity showed a significant decline of 39% in 2010 compared to 2009. These declines might have been caused by global economic meltdown that occurred from August 2008. Figure 26 below show the imports of beef from 2001 to 2010.
Figure 26: Beef imports
25,000,000 20,000,000 250,000,000 200,000,000

Kilograms

10,000,000 5,000,000 0
20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10

100,000,000 50,000,000 0

Years
Quantity Value

Source: Quantec EasyData. The imports value and quantity of beef followed the same trend throughout the previous decade. Both reached the lowest level in 2001 and 2002 before increasing steadily from 2003 to 2007. In general beef imports increased by 10% in 2010 compared to 2001. Figure 27 below show the main suppliers of beef from other continents during the period 2001 to 2010.

22

Rands

15,000,000

150,000,000

Figure 27: Quantity of beef imported from Continents

25,000,000

20,000,000

Kilograms

15,000,000

10,000,000

5,000,000

20 08

20 05

20 01

20 04

Years
Africa Americas Asia Europe Oceania

Source: Quantec EasyData. Figure 27 above indicates that the main supplier of beef to South Africa is America from 2002 to 2010. The beef quantity from America has been increasing from the year 2002 to 2005; it remained the main supplier though it decreased from 2006 to 2010. There were some recorded intermittent imports of beef among Asia, Oceania, Europe, and Africa during the period under review. The following Figures 28 to 29 indicate the origins of beef in America and Oceania.
Figure 28: Quantity of beef imported from South America
12,000,000 10,000,000

Kilograms

8,000,000 6,000,000 4,000,000 2,000,000 0

20 02 20 04 20 05 20 01 20 03 20 06 20 07 20 08 20 09 20 10

Years
Argentina Brazil Paraguay Uruguay

Source: Quantec EasyData. Figure 28 clearly indicates that the highest quantities of beef imports in South America originated from Brazil, Uruguay, Argentina and Paraguay and have been competing for dominance throughout the period under analysis. Brazil reached the peak in 2005, Uruguay in 2006 and Paraguay in 2007.

23

20 06

20 07

20 02

20 03

20 09

20 10

Figure 29: Quantity of beef imported from Oceania

3,500,000 3,000,000

Kilograms

2,500,000 2,000,000 1,500,000 1,000,000 500,000 0

20 01

20 03

20 05

20 02

20 06

20 04

20 07

20 08

Years
Australia New Zealand

Source: Quantec EasyData. In Oceania, Australia has been the main importer of beef to South Africa during the period under analysis and it reached its peak of 3 million kg during 2006. New Zealand commanded the second highest level of beef imports from 2001 to 2010.

Figure 30: Countries of origin for beef imports in 2010

Argentina 4% Uruguay 36% Australia 38%

Paraguay 9%

New Zealand 6%

Ireland 7%

Source: Quantec EasyData. Figure 30 above shows the share of various suppliers of beef to South Africa in 2010. Australia commanded 38% share of South Africas import market of beef followed by Uruguay commanding up to 36%, Paraguay 9%, Ireland 6%, New Zealand 6% and Argentina 4%.

24

20 09

20 10

3.

BEEF MARKET VALUE CHAIN Beef market value chain is illustrated on Figure 31. Figure 31: South African Beef Market Value Chain
48.6 million Consumers Per capita consumption = 17.29 kg / year

Affluent consumers (Premium beef markets)

8 352 million kg produced 46 million kg imported 4 million kg exported

Under Privileged Consumers

Meat Processors (495 Abattoirs)

Local Markets Butchers Auctions Festivities 18% 41% 35%

Feedlot sector (65 to 70% of cattle slaughtered) Sanga types Zebu types British types Dairy / other 29% 11% 26% 27% 7% 87 000 with potential to commercialize

Previously Disadvantaged Groups 240 000 emerging farmers 3 million subsistence farmers

European types -

50 000 Commercial Producers 11 million cattle 5, 69 million cattle

Source: ARC and Statistics & Economic Analysis It is estimated that there are approximately 50 000 commercial farmers currently farming with livestock. This includes producers that keep livestock as their main enterprise and those that keep livestock as a secondary

25

enterprise. They own around 8.2 million cattle. There are 240 000 small-scale farmers and 3 million subsistence farmers that own around 5.69 million cattle. The beef supply chain has become increasingly vertically integrated. This integration is mainly fuelled by the feedlot industry where most of the large feedlots own their own abattoirs, or at least have some business interest in certain abattoirs. In addition, some feedlots have integrated further down the value chain and sell directly to consumers through their own retail outlets. Some abattoirs have also started to integrate vertically towards the wholesale level. Under the previous marketing regime, wholesalers mostly bought carcasses through the auction system. Currently, many wholesalers source live slaughter animals (not weaners) directly from farmers or feedlots on a bid and offer basis, i.e. they take ownership of the animal before the animal is slaughtered. The animal is then slaughtered at an abattoir of the wholesalers choice, where after the carcass is distributed to retailers. In some instances, the public can also buy carcasses directly from wholesalers. The abattoir industry has expanded tremendously in number and in capacity. In this regard, it is important to note that this industry can be divided into those abattoirs that (i) are linked to the feedlot sector and the wholesale sector, or are owned by municipalities and (ii) those that are mainly owned by farmers and SMMEs. The former abattoirs are mainly class A and B abattoirs, whereas the latter are usually classified as C, D and E class abattoirs. The beef industry produces around 808 800 tons of meat and imports around 7 059 tons while exporting 3 537 tons. Per capita consumption is around 20.87 kg and number of consumers is around 48.6 million. Table 12 below shows the industry role players.

26

Table 12: Industry role players No. Name 1 2 3 AUSTIN EVANS FEEDLOT ADAM AGRI BEEFCOR

Description Feedlot

Contact Details

BEEFMASTER

Bull Brand

6 7

BRAAMS VOERKRALE BK CB FEEDLOT

P O Box 397, Somerset East, 5850 T : (042) 243 2076 F : (042) 243 1356 Feedlot PO Box 75, Colesberg, 9795 T: (051) 753 1301 F: (051) 086 5021182 It is situated east of Pretoria. It owns and operates the Bayview Feedlot, P O Box 187, Bronkhorstspruit, 1020 Boskop Ranch and Beefcor Wholesale. The feedlot carries 25 000 head T : (013) 932 7000 and markets between 80 000 and 90 000 head annually, most of which F : (013) 392 7100 are distributed in Gauteng. The company also has a 20% share in Hidskin Processors and a 25% share in Chamdor Abattoir. It is a private, family owned business situated 10 km from Christiana, in P O Box 425, Christiana, 2680 the North-West province. The feedlot carry around 20 000 cattle standing T : (053) 441 9100 at any given time. It currently supplies approximately 10% of the F : (053) 441 2791 countrys beef and with its geographic position delivers to all nine provinces within 24 hours. It is owned by Bull Brand - integrated Meat Company situated in Krugersdorp. It has fresh meat production process-abattoir, deboning, added value department and canning. They own two feedlots in Potchefstroom and Magaliesberg and they both carry 40 000 heads of cattle at any point in time. Feedlot P O Box 158, Durbanville, 7551 T : (021) 976 3053 F : (021) 976 7690 Feedlot P O Box 44, Reitz, 9810 T: (058) 863 1460 F : (058) 863 1460 It is situated in Bronkhorspruit. Its feedlot carries 15 000 head of cattle P O Box 914-1144, Wingate Park, 0153 standing at any given time. When the new abattoir and de-boning facility T : (011) 964 1049 opened for business in 2003, Chalmar beef became fully integrated. F : (011) 964 1514 27

CHALMAR BEEF

No. 9 10 11

Name D C LOUW FEEDLOT DOORNBULT VOERKRALE (Pty) Ltd EAC Group

Description Feedlot Feedlot Started by Claassen 40 years back. In 1986, joined the force with two shareholders and started Midland meat factory. They have distribution network in KwazuluNatal. Four modern abattoirs operate from Wolwehoek, Harrismith, Vereeniging and Frankfort. All three feedlots are situated in the calf weaner and lamb weaner producing areas and they carry 35 000 cattle at any specific time. The feedlots thus form an ideal marketing channel for weaner producers. It is situated 12 km north-west of Frankfort, Free State. It is a beautiful farm (2.925 ha) and the capacity of the feedlot is about 6000 weaners of Bonsmara or Bonsmara-cross per annum. Feedlot Feedlot

Contact Details P O Box 56, Adelaide, 5760 T : (046) 684 0700 F : (046) 684 0706 P O Box 13, Ladanna, 0704 T : (015) 293 2575 F : (015) 293 2064

12

FORTRESS BONSMARAS

13 14 15

KAMEELDRIFT VOERKRAAL KANHYM ESTATES LTD. Karan Beef

16 17

KELLERMAN BOERDERY KLEYNFAAN FEEDLOT

It is a family business situated at Heidelberg, south of Johannesburg. It operates feedlot, feed mill, abattoir and meat processing. The feedlot accommodates over 120 000 head of cattle - making the Karan Beef feedlot the largest in Africa. The abattoir has the capacity to process up to 1 600 head of cattle every day. Feedlot P O Box 74,Koringberg,7312 T : 083 300 8134 F: (021) 854 5069 Feedlot P O Box 169, Vryheid, 3100 28

P O Box 630, Frankfort, 9830 T : (011) 394 2810 F : (011) 394 2471 F : 058 813 3947 PO Box 15648, Kameeldrift Oos T: 082 375 1826 F: 012 808 5986 P O Box 89, Middelburg, 1050 T : (013) 249 7852/3 F : (013) 246 6211 PO Box 53, Heidelberg, 1438, RSA Tel: +27 16 342 1214 Fax: +27 16 342 1212 E-mail: feedlot@karanbeef.com

No.

Name

Description

Contact Details T : (034) 981 5421 F : 086 675 0574 P O Box 275, Stella, 8650 T : 083 441 5909 F : 083 457 2809 PO Box 58893, Karenpark, 0118 T : 012 549 2840 F : 012 549 2840 P O Box 130, Edenville, 9535 T : (056) 631 0120 F : (056) 631 0120 P O Box 1052, Nigel, 1490 T : (011) 819 2882 F : (011) 819 2801/3/4 F : (011) 819 1889 P O Box 1050,Louis Trichardt,0920 T : (015) 516 4464 F : (015) 516 1441 / 086 689 4693 PO Box 357, Bultfontein, 9670 T: 051 853 2257 F: 051 853 2257 Postnet Suite 327, Private Bag x 2020 Isando, 1600 T: 011 974 0309 F: 011 974 0464 C: 083 3752596 P O Box 357, Koster, 0348 T : (014) 543 2388 F : (014) 543 8904 P O Box 848, Louis Trichardt, 0920 T : (015) 516 0843 F : (015) 516 4150 29

18 19 20 21

KOODOOLAKE KOREM FARM LIEBENBERGSTROOM VOERKRAAL BPK MANJOH RANCH

Feedlot Feedlot Feedlot Feedlot

22 23 24

MADIKOR MIKRON BOERDERY MLEKI`S BEEF

Feedlot Feedlot Feedlot

25 26

MUSHLENDOW MVB FEEDERS

Feedlot Feedlot

No. 27 28 29

Name PIET WARREN PLASE POPPIELAND TRUST RANCH ESTATES

Description Feedlot

Contact Details

30

SIS FARMING

31 32

SKS BOERDERY SPARTA BEEF

33

TAAIBOSCHBULT

P O Box 1, Gravelotte, 0895 T : (015) 318 4469 F : (015) 318 4301 Feedlot P O Box 9, Bultfontein, 9670 T : (051) 853 1129 F : (051) 853 4002 Feedlot P O Box 1270, Delmas, 2210 T : (013) 667 9023 F : (013) 667 9033 R : (011) 804 2320 Is located in the Bethal/Ermelo region of the Mpumalanga escarpment. It P O Box 201, Bethal, 2310 purchases weaners from other farmers to fatten for subsequent sale and T (013) 291 5600 delivery to the Witbank Abattoir. It has 22 000 cattle standing at any F : (013) 291 5611 given time. Feedlot P O Box 348, Middelburg, 1050 T : (013) 243 8154 F : (013) 243 8151 It is a family-owned and operated cattle feedlot and farming concern. The P O Box 64, Marquard, 9610 feedlot has around 40 000 cattle standing at any time. The present T : (051) 991 9200 operation was established on the farm "Sparta", a sub-division of the F : (051) 991 9274 farm "Middel " in the Marquard district, during the 1960's. The farm R : (051) 991 9241 "Middel", has been in the family for over 100 years and since inception, farmed as a family business. Originally mixed farming - cattle, sheep, pigs, plus various crops, such as maize (corn), wheat, oats and potatoes - was practiced on the farm. Sparta Beef expanded its horizons by entering into a joint venture where it tans cattle hides in Butterworth, Eastern Cape. Later, in January 1999, it acquired a large abattoir in Welkom, Northern Free State, with Black Empowerment and other local business interests now known as Sparta Foods (Pty) Ltd. At the beginning of 2001, it started a wholesale department called Sparta Foods in Benoni (Gauteng). Owned by Bull Brand P O Box 2092, Potchefstroom, 2520 30

No.

Name Pty Ltd

Description

Contact Details T : (018) 291 1035 F : (018) 291 1439 Elsonstraat 84, Pretoriawes, 0183 T : (012) 327 5040 F : (012) 327 5048 P O Box 1723, Dundee, 3000 T: (034) 212 3716 F: (034) 218 1334 C: 083 653 2145 P O Box 749, Ladanna, 0704 T : (015) 293 2150 F : (015) 293 2579 C : 083 626 0319 PO Box 245,Stella,8650 T:082 866 4433 F: 0866 759 451 PO Box 387,Pietersburg,0700 T: 082 460 4432 F: 015 297 4350 PO Box 1034, Heilbron,9650 T: 058 852 3701/2/3 F: 058 852 3700

34 35

THERON BOERDERY TRIPLE C FEEDLOT

Feedlot feedlot

36

VENCOR

Feedlot

37 38 39

VERCUIEL WINDHOEK BOERDERY VERGEZIGHT FEEDLOT

Feedlot Feedlot Feedlot

Source: SA feedlot Association.

31

4. 4.1.

MARKET INTELLIGENCE. Export tariffs.

Tariffs that different importing countries applied to beef originating from South Africa in 2010 are shown in Table 13 and 14. Table 13: Export tariffs of beef (fresh or chilled) Country Product Code Trade Regime Description Applied Tariffs 02011000 (Carcasses or half-carcasses of bovine animals, fresh or chilled) 02011000 Egypt (Carcasses or half-carcasses of bovine animals, fresh or chilled) Gabon 02011000 (Carcasses or half-carcasses of bovine animals, fresh or chilled) Mozambique 02011000 (Carcasses or half-carcasses of bovine animals, fresh or chilled) Nigeria 02011000 (Carcasses or half-carcasses of bovine animals, fresh or chilled) Source: Market Access Map Angola MFN duties Applied 10.00% 2010 Total Ad valorem Equivalent Tariff (estimated) 10.00%

MFN duties Applied

0.00%

0.00%

MFN duties Applied

20.00%

20.00%

Preferential tariff for South Africa

15.00%

15.00%

MFN duties Applied

20.00%

20.00%

Table 13 indicates that Gabon from Middle Africa and Nigeria from Western Africa applies the highest tariff rate of 20.00% on beef, fresh or chilled originating from South Africa followed by Mozambique with 15%, Angola with 10% and Egypt which is situated in the North of Africa is the lowest with 0%.

32

Table 14: Export tariffs of frozen beef Country Product Code

Trade Regime Description Applied Tariffs

Angola Democratic Republic Congo Egypt Ghana Mozambique

02021000 (Frozen carcasses MFN duties and half carcasses) Applied 02021000 (Frozen carcasses MFN duties of and half carcasses) Applied

10.00% 10.00%

2010 Total Ad valorem Equivalent Tariff (estimated) 10.00% 10.00% 0.00% 20.00% 15.00%

02021000 (Frozen carcasses MFN duties 0.00% and half carcasses) Applied 02021000 (Frozen carcasses MFN duties 20.00% and half carcasses) Applied 02021000 (Frozen carcasses Preferential tariff 15.00% and half carcasses) for South Africa MFN duties Applied 20.00%

20.00%

Source: Market Access Map Table 14 above shows that Ghana and Mozambique applies the highest tariff rate of 20.00% on frozen beef of South Africa followed by Mozambique with 15%, Angola and Democratic Republic of Congo with 10%. Egypt does not apply any tariff rate for South African frozen beef. Tables 13 and 14 show that Western Africas beef market is highly protected relative to other neighboring countries. 4.2. Import tariffs.

South Africa applies the MFN import tariff of 40.00% or $ 318.84/ton whichever is the greater to all imports of beef excluding Namibia which is a member of SADC. Namibia receives an Intra SACU tariff rate of 0.00% when exporting fresh or chilled beef carcasses and half carcasses to South Africa. South Africa also applies a preferential tariff rate of 0.00% to SADC. Table 15 and 16 below has details. Table 15: Import tariffs of beef, fresh or chilled Country Product Code Trade Regime Description Applied Tariffs Argentina 02011000 (Carcasses or MFN duties half-carcasses of bovine Applied animals, fresh or chilled) 02011000 (Carcasses or MFN duties half-carcasses of bovine Applied animals, fresh or chilled) 02011000 (Carcasses or MFN duties half-carcasses of bovine Applied 40.00% 314.42$/Ton whichever is greater 40.00% 314.42$/Ton whichever is greater 40.00% 314.42$/Ton 2010 Total Ad valorem Equivalent Tariff (estimated) or 40.00% the or 40.00% the or 40.00%

Australia

Austria

33

Country

Product Code

Trade Regime Description Applied Tariffs whichever greater 0.00% is

animals, fresh or chilled) Namibia 02011000 (Carcasses or Intra SACU rate half-carcasses of bovine animals, fresh or chilled) Netherlands 02011000 (Carcasses or MFN duties half-carcasses of bovine Applied animals, fresh or chilled) Source: Market Access Map

2010 Total Ad valorem Equivalent Tariff (estimated) the 0.00% or 40.00% the

40.00% 314.42$/Ton whichever is greater

Table 16: Import tariffs of beef, frozen Country Product Code

Trade Regime Description Applied Tariffs

Argentina

02021000 (Frozen carcasses MFN duties and half carcasses) Applied 02021000 (Frozen carcasses MFN duties and half carcasses) Applied 02021000 (Frozen carcasses MFN duties and half carcasses) Applied 02021000 (Frozen carcasses MFN duties and half carcasses) Applied & 02021000 (Frozen carcasses MFN duties and half carcasses) Applied

Australia

Ireland

New Zealand

Paraguay Uruguay

2010 Total Ad valorem Equivalent Tariff (estimated) 40.00% or 40.00% 314.42 $/Ton whichever is the greater 40.00% or 40.00% 314.42 $/Ton whichever is the greater 40.00% or 40.00% 314.42 $/Ton whichever is the greater 40.00% or 40.00% 314.42 $/Ton whichever is the greater 40.00% or 40.00% 314.42 $/Ton whichever is the greater

Source: Market Access Map Table 16 above shows the import tariffs applied by South Africa to the exporting countries of frozen beef. Argentina, Australia, Ireland, New Zealand, Paraguay and Uruguay receive the applied tariff of 40% or 314.42$/ton whichever is the greater. Most of South Africas frozen beef is from South America and Oceania and the same rate applies.

34

5. 5.1.

PERFORMANCE OF SOUTH AFRICAN BEEF INDUSTRY IN 2010. Exports.

Table 17: List of importing markets for Beef (fresh or chilled) exported by South Africa in 2010 South Africas export represents 0.07% of world export for the Beef (fresh or chilled); its ranking in world exports is 37. Trade Indicators Share Exported Trade in value balance Exported South Quantity Unit value quantity 2010 2010 Africa's unit (USD/unit) (USD (USD 2010 exports thousand) thousand) (%) 12288 3721 3095 11855 3721 3095 100 30.3 25.2 2217 930 386 Tons Tons Tons 5543 4001 8018 8779 6788 6356 5220 5826 Exported growth in value between 20062010 (%, p.a.) 10 70 34 42 13 36 306 Exported Exported growth Ranking Share of growth in of partner in value quantity partner countries between between countries in world 20092006in world imports 2010 (%, 2010 (%, imports (%) p.a.) p.a.) 9 25 26 57 5 30 142 11 113 85 63 65 38 -8 -85 112 74 41 99 107 6 100 0 0 0.1 0 0 7.3 Total import Tariff growth in (estimated) value of faced by partner South countries between Africa (%) 20062010 (%, p.a.) 4 52 15 26 10 20 0 20 62.3

Importers

World Mozambique Angola

Nigeria 834 834 6.8 95 Tons Egypt 801 801 6.5 118 Tons Gabon 642 642 5.2 101 Tons Ship stores and bunkers 428 428 3.5 82 Tons Netherlands 402 396 3.3 69 Tons Source: ITC calculations based on COMTRADE statistics.

17 35 8

35

Table 17 shows that during 2010 South Africa exported a total of 2 217 tons of beef (fresh or chilled) at an average value of US$ 5 543/unit. The major export destinations for beef (fresh or chilled) originating from South Africa during 2010 were Mozambique, Angola, Nigeria and Egypt. Mozambique and Angola are the leading markets for beef (fresh or chilled), accounting for 30.3% and 25.2% respectively of South Africas export market. On average, during the period 2006 and 2010 South Africas exports for beef (fresh or chilled) to Mozambique experienced a 70% and 25% increase in value and quantity respectively per annum. During the period 2009 and 2010 its value increased by 113%. Similarly those to Angola increased by 34% in value and 26% in quantity during the period 2006 and 2010. South Africas exports for beef (fresh or chilled) to the world increased in value and in quantity by 10% and 9% respectively during the period 2006 to 2010 and increased by 11% in value between 2009 and 2010.

36

37

The above chart illustrates that between 2006 and 2010 South Africas beef (fresh or chilled) exports to United Republic of Tanzania, Gabon, Mauritius and Congo were growing at a rate that is less than their import growth from the rest of the world. Congo and Mauritius represents losses in the declining market with an annual South African export growth of -1% and -10% respectively. Their import growth is -1% and 2% respectively. Republic of Tanzania and Gabon represent gains in the dynamic markets of South Africa fresh or chilled beef exports. South Africas beef (fresh or chilled) exports to Netherlands, Mozambique, Democratic Republic of Congo (DRC), Angola, Kuwait, Seychelles and Ghana were growing at a rate that is greater than their imports from the rest of the world during the periods 2006 and 2010. Netherlands, DRC, Mozambique, Kuwait and Angola represent gains in dynamic markets and Seychelles & Ghana represent gains in the declining market of South African fresh or chilled beef exports. Generally Netherlands is the most growing in demand of South African fresh or chilled beef with an annual growth of 306%

38

39

The chart above indicates that South Africas fresh or chilled beef has been mainly exported to Netherlands with a share of 3.27% during 2010. If South Africa wishes to diversify its exports of fresh or chilled beef exports, Zimbabwe due to its annual import growth of 233% and DRC with 103% are the alternative markets. South Africa can glance in penetrating these markets because their shares of South African beef exports are both not impressive with 0.53% for Zimbabwe and 2.93% for DRC.

40

Table 18: List of importing markets for the Beef (frozen) exported by South Africa in 2010. South Africas export represents 0.07% of world export for frozen beef; its ranking in world exports is 36. Trade Indicators Total import Exported Exported Exported Share Share of growth in growth in growth in growth in Ranking Exported Trade in partner value of Exported value quantity value of partner value balance South Quantity Unit value countries partner quantity between between between countries 2010 (USD 2010 (USD Africa's unit (USD/unit) in world countries 2010 200620062009in world thousand) thousand) exports imports between 2010 (%, 2010 (%, 2010 (%, imports (%) (%) 2006p.a.) p.a.) p.a.) 2010 (%, p.a.) 9014 -2464 100 1812 Tons 4975 20 0 -17 100 9 1670 1670 18.5 369 Tons 4526 20 -16 70 156 0 -16 Tons Tons Tons Tons Tons Tons Tons Tons Tons Tons Tons Tons Tons Tons 4242 4172 5847 6280 6787 4195 5655 9057 2949 3658 9217 7000 5143 6400 77 -6 1 94 76 -3 2 2 -8 62 15 94 2 316 72 255 37 134 132 88 -36 18 152 -30 1326 -32 -92 353 173 96 -7 122 36 103 6 109 16 107 14 169 12 119 120 100 0 0.4 0 5.5 0 1.7 0 1.8 0 2.1 0 0 0 52 3 0 -10 8 17 2 267 5 -5 14 1

Importers

World Mozambique Democratic Republic of the Congo 1298 1298 14.4 306 Angola 1093 1093 12.1 262 Ship stores and bunkers 918 918 10.2 157 Egypt 898 898 10 143 Ghana 638 638 7.1 94 Germany 365 365 4 87 Mauritius 328 328 3.6 58 Nigeria 317 317 3.5 35 Netherlands 289 289 3.2 98 Zimbabwe 267 267 3 73 Italy 212 212 2.4 23 Seychelles 175 175 1.9 25 Congo 108 108 1.2 21 Gabon 96 96 1.1 15 Source: ITC calculations based on COMTRADE statistics.

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Table 18 shows that during 2010 South Africa exported a total of 1 812 tons of frozen beef at an average value of US$ 4 975/unit. The major export destinations for frozen beef originating from South Africa during 2010 were Mozambique with a share of 18.4% followed by DRC with a share of 14.4%. Exports of frozen beef exported by South Africa during the periods 2006 and 2010 experienced an increase of 20% in value and 0% in quantity. During the same periods exports to Mozambique also increased by 20% in value but decreased by 16% in quantity. Between the period 2009 and 2010, South Africas exports of frozen beef decreased by 17% in value and Mozambique increased by 70%.

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The chart illustrates that between 2006 and 2010 South Africas frozen beef exports to Angola was growing at a rate that is less than its import growth from the world. Angola also represents losses in declining market of South African frozen beef. During the same period, South Africas frozen beef exports to Zambia, Democratic Republic of Congo (DRC), Saint Helena, Mauritius, Gabon, Seychelles, Ghana and Mozambique were growing at a rate that is greater than their imports from the rest of the world. Gabon experienced the highest growing demand of South African frozen beef at a 255% rate followed by Zambia with 193%.

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The figure shows the prospects for market diversification for beef (frozen) exports by South Africa in 2010. South Africans frozen beef was mostly exported to Mozambique which commanded market share of 18.53%. If South Africa is to diversify its frozen beef exports, the most attractive market exists in Malawi and Zimbabwe which are the smallest markets in the world but its annual growths are the highest at a rate of 323% and 167% respectively.

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5.2.

Imports.

Table 19: List of supplying markets for the beef (fresh or chilled) imported by South Africa in 2010 South Africa represents 0% of world imports for beef (fresh or chilled); its ranking in world imports is 115. Trade Indicators Importe Importe Importe d growth d growth d growth in Unit value in value in value quantity (USD/unit between between between ) 2006200920062010 (%, 2010 (%, 2010 (%, p.a.) p.a.) p.a.) 5551 4906 6917 -5 -21 5 900 2 Total export growth in value of partner countrie s between 20062010 (%, p.a.) 5 -2 11 3 3 10 4 -13 0 10 4 1 7

Exporters

Imported value 2010 (USD thousand )

Trade balance 2010 (USD thousand )

Share in South Africa's import s (%)

Importe d quantity 2010

Quantit y unit

Ranking of partner countrie s in world exports

Share of partner countrie s in world exports (%)

Tariff (estimated ) applied by South Africa (%)

World 433 11855 Australia 260 -260 Namibia 166 -166 Netherland s 6 396 Argentina Austria Belgium Brazil Canada Denmark France Ireland Italy Source: ITC Trade Map.

100 60 38.3 1.4

78 53 24 0

Tons Tons Tons Tons

4 26 1 9 14 10 12 7 15 6 5 17

100 9.2 0.3 11.9 3.8 2.3 3.5 2.7 6 2.1 6.8 8.8 2.1

50.7 0 50.7 50.7 50.7 50.7 50.7 50.7 50.7 50.7 50.7 50.7

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Table 19 shows that during 2010 South Africa imported a total of 78 tons of beef (fresh or chilled) at an average value of US$ 5 551/unit. The major origin for beef (fresh or chilled) imported by South Africa during 2010 was Australia which commanded 60% share of the total imports followed by Namibia with a market share of 53%. South Africas beef (fresh or chilled) imports decreased by 5% in value and 21% in quantity between the periods 2006 and 2010 and increased by 5% between the periods 2009 and 2010 in value.

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The figure above shows the prospects for diversification of suppliers for fresh or chilled beef imports by South Africa in 2010. The analysis shows that Australia commanded the greatest market share of South Africas fresh or chilled beef imports followed by Namibia during the year 2010. If South Africa is to diversify its imports, the most attractive supplier exists in Paraguay and United Kingdom due to their export growth of 38% and 30% respectively. This means South Africa can develop a market in this country because currently South Africa does not export fresh or chilled beef from it.

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Table 20: List of supplying markets for the beef (frozen); imported by South Africa in 2009. South Africa's imports represent 0.09% of world imports for beef (frozen); its ranking in world imports is 70. Trade Indicators Share Imported Trade in Imported value balance South Quantity Unit value 2010 2010 quantity Africa's unit (USD/unit) 2010 (USD (USD imports thousand) thousand) (%) 1979 2099 1774 2252 2251 1774 1944 1920 2846 Imported growth in value between 20062010 (%, p.a.) -22 -24 1 -38 -2 -23 -27 -64 Imported Imported growth Ranking Share of growth in of partner in value quantity partner countries between between countries in world 20092006in world exports 2010 (%, 2010 (%, exports (%) p.a.) p.a.) -25 -28 -1 -42 -7 -28 -1 -63 -29 -34 63 -47 627 -91 1100 825 5 2 8 15 4 7 25 1 6 3 65 100 6.5 17.2 2.9 1 8.9 3.1 0.3 25.6 5.4 11.5 0 Total export Tariff growth in value of (estimated) partner applied by South countries between Africa (%) 20062010 (%, p.a.) 9 8 60.2 2 60.2 11 60.2 -9 60.2 3 4 18 6 10 59 52 60.2 60.2 60.2 60.2 60.2 60.2 0 60.2

Exporters

World 11478 -2464 100 5799 Tons Uruguay 4450 -4450 38.8 2120 Tons Australia 3796 -3796 33.1 2140 Tons Paraguay 1169 -1169 10.2 519 Tons Ireland 961 -961 8.4 427 Tons New Zealand 603 -603 5.3 340 Tons Argentina 414 -414 3.6 213 Tons United Kingdom 48 -47 0.4 25 Tons Brazil 37 -37 0.3 13 Tons India United States of America Angola 1093 Bahrain 6 Source: ITC calculations based on COMTRADE statistics.

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Table 20 shows that during 2010 South Africa imported a total of 5 799 tons of frozen beef at an average value of US$ 1 917/unit. The major origins for frozen beef imported by South Africa during 2010 were Uruguay, Australia and Paraguay. The greatest share of South African frozen beef imports were from Uruguay which commanded 38.8% during the year 2010 followed by Australia which commanded 33.1% and together they constitute 71.9% of South African frozen beef imports. South Africas frozen beef imports decreased by 22% in value and 25% in quantity between the periods 2006 and 2010. During the same period, imports of frozen beef from Uruguay also decreased by 24% in value and 28% in quantity. South Africas imports for frozen beef decreased by 29% per annum in value during 2009 and 2010. Frozen beef imported from Uruguay decreased by 34% while those from Australia increased by 63% in value during the period 2009 and 2010. United Kingdom experienced the highest frozen beef import growth of 1100% during 2009 and 2010.

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The chart illustrates that between 2006 and 2010 South Africas frozen beef imports from the Brazil, Paraguay, United Kingdom, Uruguay, Argentina, New Zealand and Australia were growing at a rate that is less than their export growth to the world. Their annual import growth to South African decreased by 64%, 38% 27%, 24%, 23% and 2% respectively and Australia increased by 1%. Brazil is the biggest market of frozen beef with the world share of 25.6% but it is not the most competitive market but United Kingdom become the most competitive market thought its world share market is at 0.3% but its annual import growth is the highest at a rate of 18%.

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The figure above shows the prospects for diversification of suppliers for frozen beef imports by South Africa in 2010. If South Africa is to diversify its frozen beef imports from Uruguay and Australia, the biggest supplier exists in Brazil but its export growth (6%) is not impressive. Therefore, the most attractive market is Ethiopia due to its highest annual export growth of 281%. Since South Africa is not importing frozen beef from Ethiopia, there are chances that it can develop a new market in this country.

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6. 1. 2.

ACKNOWLEDGEMENTS/ REFERENCES Agricultural Research Council. www.arc.agric.za Bull Brand Tel: 011-953 2334/48 Fax: 011-660 1596/2380 www.bullbrand.co.za International Trade Center www.trademap.org/ Karan Beef Tel: 011-613 1851 Fax: 011-613 1809 www.karanbeef.com. Nerpo Tel:012-361 9127 Fax: 012-361 4430 www.nerpo.org.za Quantec www.Quantec.co.za/ Red Meat Abattoir Association Tel: 012-349 1237/8/9 Fax: 012-349 1240 www.rmaa.co.za SAMIC www.SAMIC.co.za South African Feed Lot Association www.safeedlot.co.za Vleissentraal Tel: 051-448 9347/8 Fax: 051-447 3964 www.vleissentraal.co.za

3. 4.

5.

6. 7.

8. 9. 10.

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Disclaimer: This document and its contents have been compiled by the Department of Agriculture, Forestry and Fisheries for the purpose of detailing the beef/ bovine industry. The views expressed in this document are those of the Department of Agriculture, Forestry and Fisheries with regard to agricultural industry, unless otherwise stated and, therefore the Department of Agriculture, Forestry and Fisheries does not accept responsibility for any errors in such information and anyone acting on such information does so entirely at his or her own risk.

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