The Beefmaster Group said yesterday that the South African beef industry’s future was now optimistic following favourable trade discussions with China.
The company, which supplies beef products globally, attended the South African state business forum event in Beijing, China.
Louw van Reenen, the executive chairperson of the Beefmaster Group board, said although South Africa already exported beef to China, the deepening relationship between South Africa and China could unlock an additional 50% more beef exports within the next year.
“This mission was crucial for us to assist in increasing beef export opportunities between the two markets, ensuring that all role-players – especially our primary producers – benefit from enhanced trade agreements during these challenging economic times. Livestock farmers are struggling given present constrained economic conditions,” Van Reenen said.
The company, part of the South African business delegation and a guest of the South African government, is accompanying President Cyril Ramaphosa on an official state visit to China to strengthen economic ties between the nations.
Last year, South Africa’s bilateral trade reached $34 billion (R607bn), with exports totalling $12bn. Thanks to increased global market access, in the first six months of this year, the South African beef industry exported more beef than any corresponding period in the past eight years, recent data by the Red Meat Producers Organisation showed.
By June this year, 23 295.3 tons of beef had left South African shores, compared with only 15 330.88 tons in the same period last year and 16 109.64 tons the year before.
The increase in beef exports was attributed to new trade agreements reached between the Middle East and South Africa recently.
Van Reenen said exports and market access for SA beef were key levers to stimulate economic growth. “We are proud to play a vital role in global food security by supplying China with our world-class beef products. We thank the government for its laser focus on building and harnessing trade relationships with China.”
Beef consumption in China – the world’s second-largest market – was set to rise moderately next year, according to the latest report from the USDA’s Foreign Agricultural Service (FAS).
Although China's beef market has been growing in both output and consumption, with the country producing 7.5 million tons of beef last year and increasing imports to match the rising demand (11 million tons), demand was expected to grow by 0.4% this year.
Van Reenen said even a slight uptick in demand would be extremely favourable for South Africa. “We are already seeing signs that there is a turnaround on the demand side from China.”
The current discussions boded well for unlocking future opportunities, given that the country needed more exports to lift the SA beef industry out of the doldrums.
Beefmaster Group exports products to various areas throughout the world, and said that this visit built on the success of similar deals announced in recent years. In October 2022, a landmark deal was signed between South Africa and Saudi Arabia, allowing the import of beef to this Middle Eastern market, and giving the SA beef industry a welcomed boost.
After a robust expansion of 13.5% quarter-on-quarter (seasonally adjusted) in the first quarter of this year, South Africa’s agricultural gross value added contracted by 2.1% in the second quarter.
Wandile Sihlobo, the chief economist at the Agricultural Business Chamber of SA, said this was unsurprising considering that local agriculture had gone through the severe impact of the El Niño-induced drought in February and March, which then weighed on crop yield. “For example, South Africa's 2024/25 summer crop harvest is down 22% from the previous season, estimated at 15.69 million tons.”
Sihlobo said the livestock industry, which accounts for nearly half the sector’s value, faced relatively higher feed costs and lingering animal diseases (particularly foot-and-mouth disease), which all explained the underperformance this quarter.
BUSINESS REPORT