SA is flush with barley and needs to find new export markets for it
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The SA barley industry is set to face a demand slump emanating from the coronavirus-induced alcohol ban, when there is a predicted record 2020/2021 farm production harvest. SA could produce about 505,215 tonnes of barley in 2020/2021, up 46% from the previous season. This is a result of increased area plantings and expected higher yields following favourable rainfall in the Western Cape.
Such a harvest means SA will likely be a net exporter of barley. The key export markets for SA’s barley over the past five years were on the African continent, primarily Uganda, Namibia, Zambia, Botswana, Lesotho and Togo.
Meanwhile, the 2020/2021 marketing season has also been affected by the Covid-19 lockdown regulations, which led to bans on alcohol sales between March 27 and June 1, and again between July 12 and August 17. These bans could lead to a lower intake of barley by the domestic beer industry.
The irony of a historically large barley output amid a predicted fall in demand from processors creates new market uncertainty — where are farmers going to sell their barley? SA might have to explore export opportunities for its surplus beyond traditional markets. It would be worth considering key barley importing countries in the global market such as China, Iran, Saudi Arabia, the Netherlands and Belgium.
Data trends show that SA hasn’t exported barley to any of the world’s largest importing countries. The country has, nonetheless, exported various agricultural commodities to these countries such as maize, citrus, beef and wine. So there is existing agricultural trade movement between SA and these countries. However, the existence of trade flows of other agricultural products is not a sufficient predictor of whether barley exports could follow a similar path.
Barley producers and exporters could consider key additional factors such as tariff and non-tariff barriers associated with exporting to these countries. The full scope of the latter is a matter that requires further analysis and technical support from the department of agriculture, land reform and rural development, which will provide perspectives around the plant health regulations that would need to be met to access these markets.
From a tariff perspective, SA barley exports to the EU (mainly the Netherlands, Belgium, Germany and Spain) remain duty free under the SADC.economic partnership agreement preferential trade arrangement. The picture for the other markets — from the Middle East and Far East markets — is mixed. SA barley exporters ...
Such a harvest means SA will likely be a net exporter of barley. The key export markets for SA’s barley over the past five years were on the African continent, primarily Uganda, Namibia, Zambia, Botswana, Lesotho and Togo.
Meanwhile, the 2020/2021 marketing season has also been affected by the Covid-19 lockdown regulations, which led to bans on alcohol sales between March 27 and June 1, and again between July 12 and August 17. These bans could lead to a lower intake of barley by the domestic beer industry.
The irony of a historically large barley output amid a predicted fall in demand from processors creates new market uncertainty — where are farmers going to sell their barley? SA might have to explore export opportunities for its surplus beyond traditional markets. It would be worth considering key barley importing countries in the global market such as China, Iran, Saudi Arabia, the Netherlands and Belgium.
Data trends show that SA hasn’t exported barley to any of the world’s largest importing countries. The country has, nonetheless, exported various agricultural commodities to these countries such as maize, citrus, beef and wine. So there is existing agricultural trade movement between SA and these countries. However, the existence of trade flows of other agricultural products is not a sufficient predictor of whether barley exports could follow a similar path.
Barley producers and exporters could consider key additional factors such as tariff and non-tariff barriers associated with exporting to these countries. The full scope of the latter is a matter that requires further analysis and technical support from the department of agriculture, land reform and rural development, which will provide perspectives around the plant health regulations that would need to be met to access these markets.
From a tariff perspective, SA barley exports to the EU (mainly the Netherlands, Belgium, Germany and Spain) remain duty free under the SADC.economic partnership agreement preferential trade arrangement. The picture for the other markets — from the Middle East and Far East markets — is mixed. SA barley exporters ...