A case for SA’s beef exports to Saudi Arabia

A case for South Africa’s beef exports to Saudi Arabia The Kingdom of Saudi Arabia has not featured prominently in South Africa’s beef export markets in the past, with only small volumes last exported in the early 2000s. The renewed access to this market since the start of 2024 is critical to South Africa’s ambition to expand beef exports. The Saudi beef market is sizable, with annual imports worth around US$647 million. About 62% of the Saudi beef imports were frozen beef, while 38% were chilled or fresh beef imports. Some leading suppliers to Saudi Arabia include Brazil, Australia, Pakistan, The US, New Zealand, and Canada. Beyond beef, the Saudi meat market is large, with all meat imports valued, on average, at US$1,9 billion annually over the past five years. This means over time, as South Africa increases its production in other meat value chains, Saudi Arabia could remain a strategic country for growing exports. This positive news of export market development provides some relief when the South African beef industry has faced a challenging operational environment for several reasons. One of the significant challenges was the rise in feed prices since 2020, especially for maize and soybeans. The rise in animal feed prices coincided with a worsening financial strain on consumers due to the COVID-19 pandemic’s damaging effects. Thus, we saw a decline in the demand for red meat products as consumers opted for relatively cheaper forms of protein. Moreover, the spread of foot-and-mouth disease to six of South Africa’s nine provinces for the first time in history was another challenge for the industry. This brought temporary bans in specific export markets, extending to auctions and livestock movement, mainly cattle, for some time in 2022. Fortunately, the feed prices have now softened somewhat. This is in response to large domestic maize and soybean harvests and the easing of global grain prices (irrespective of lingering worries about the Black Sea Grain Deal). Therefore, opening beef export opportunities to the Kingdom of Saudi Arabia adds to this improving operational environment in the future. Despite the foot-and-mouth disease challenge, South African beef exports did not collapse. Some markets remained open, although with strict controls. This is evident in South Africa’s beef exports for 2022, which amounted to 28 422 tonnes (albeit down 12% from 2021). This is only mildly below the ten-year average. Overall, the broadening of South Africa’s beef export markets is a welcome development and shows the possibilities the country could achieve through collaboration and aligned interests between the government and private sector. These efforts of opening key markets such as the Kingdom of Saudi Arabia should extend to other commodities, mainly fruits and wine, that are eager to expand the export markets while retaining the existing markets in the EU, the African continent, Asia and the Americas, amongst other regions. Addressing the daily challenges at the ports, roads, and municipalities is equally essential for the success of this export initiative. WANDILE SIHLOBO Pretoria July 12, 2024