A PROFILE OF THE SOUTH AFRICAN DAIRY MARKET VALUE CHAIN 2014 Directorate Marketing Private Bag X 15 Arcadia 0007 Tel: 012 319 8455/6 Fax: 012 319 8131 Email: MogalaM@daff.gov.za www.daff.gov.za 1
TABLE OF CONTENTS 1. DESCRIPTION OF THE INDUSTRY... 1 1.1. MILK PRODUCTION AREAS... 1 1.2. PRODUCTION TRENDS... 2 1.3. EMPLOYMENT... 3 2. MARKET STRUCTURE... 3 2.1. DOMESTIC MARKET AND PRICES... 5 2.2. EXPORT AND IMPORT OF DAIRY PRODUCTS... 5 2.2. EXPORTS... 6 2.2.1. Export values of milk and dairy products... 9 2.3. SHARE ANALYSIS...16 2.3.1. Share analysis of milk and dairy products exports...16 2.4. IMPORTS...20 2.5. MARKETING CHANNELS IN THE DAIRY INDUSTRY...24 3. EMPOWERMENT PLANS BY THE INDUSTRY...26 3.1. SUCCESSFUL VENTURES: COMMERCIALLY VIABLE...26 3.2. TRAINING PROGRAMMES...26 3.3. MAGAZINES...26 4. BARRIERS TO THE LEVEL OF PARTICIPATION BY THE EMERGING SECTOR...26 5. OPPORTUNITIES AND WEAKNESSES...27 6. MARKET INTELLIGENCE...28 6.1. EXPORT TARIFFS...28 6.2. IMPORT TARIFFS...32 7. COMPETITIVENESS OF THE DAIRY INDUSTRY...36 7.1. EXPORTS...36 7.1.1. Milk and cream (neither concentrated nor sweetened)...36 7.1.2. Milk and cream, concentrated or sweetened...42 7.1.3. Buttermilk and yoghurt...48 7.1.4. Whey and other natural milk products...54 7.1.5. Butter and other fats and oils derived from milk...60 7.1.6. Cheese and Curd...66 7.2. IMPORTS...72 7.2.1. Milk and cream (neither concentrated nor sweetened)...72 7.2.2. Milk and cream, concentrated or sweetened...78 7.2.3. Buttermilk and yoghurt...84 7.2.4. Whey and other natural milk products...90 7.2.5. Butter and other fats and oils derived from milk...96 14.2.6. Cheese and Curd...102 8. ACKNOWLEDGEMENTS...108 2
Million Rands 1. DESCRIPTION OF THE INDUSTRY The contribution of milk production in South Africa makes approximately 0.5% to the world milk production. There are four major dairy breeds in South Africa namely, Holstein, Jersey, Guernsey and Ayrshire. The industry comprises of number of different economic activities and significant differences exist between farming methods and processing of dairy products. These activities involve the production and marketing of raw milk, pasteurized milk and cream, fermented milk, long-life milk and cream, yoghurt, cheese and its by-product whey, milk powder, sweetened and unsweetened concentrated milk, butter and butter oil (ghee). 14 000 12 000 10 000 8 000 6 000 4 000 2 000 0 Figure 1: Gross value of fresh milk production Source: Statistics and Economic Analysis, DAFF Years The gross value of production for milk is dependent on the quantity produced and prices received by producers. Figure 1 indicates that the gross value of fresh milk has been moving at an increasing rate and reached its new peak of R 11.6 million during 2012/13. There is an exponential increase of 124 % during 2012/12 relative 2003/04. The average gross value of milk produced amounted to R 8.0 million for the past ten years. 1.1. Milk production areas The coastal areas are more suitable areas for milk production because of mild temperatures as well as good rainfall ensuring good quality natural and artificial pastures. The inland production areas are generally climatically less favourable for milk production. Dairy farming in these areas necessitate intensive and high cost feedlot production systems. Figure 2 shows percentage contribution of provinces to milk production in South Africa in 2013. 1
North-West 5% Figure 2: Milk production per province in 2013 Gauteng 3% FreeState 10% Mpumalanga 3% Limpopo 1% WesternCape 26% Kwazulu-Natal 25% EasternCape 27% Source: MPO NorthernCape 0% Eastern Cape contributed 27% of the total milk produced in South Africa followed by Western Cape which took up 26%, KwaZulu Natal took 25%; Free State contributed 10%; Gauteng 3%; Mpumalanga 3%; North West contributed 5% each, Northern Cape and Limpopo provinces shared less than 2% 1.2. Production trends Annual milk production shows a steady linear upward trend over time. Total milk to market for 2013 is 2,817 billion litres, up 2,2% on the previous year. Over the past ten years the number of milk production and dairy cows has been fluctuating throughout the period under review. The number of cows and milk production increased by 118% and 26% respectively as compared to the year 2004.. 2
Million litres No. of cows '000 3 000 2 500 2 000 1 500 1 000 500 0 Figure 3: Milk production and number of cows 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Years 1 800 1 600 1 400 1 200 1 000 800 600 400 200 0 Production Mil Dairy of Cows '000 Source: Statistics and Economic Analysis, DAFF and LACTODATA 1.3. Employment The South African dairy industry is important to the job market with over 1961 milk producers employing 60 000 farm workers and providing 40 000 people with indirect jobs within the value chain like milk processing and milling industry. 2. MARKET STRUCTURE The South African dairy market is divided into 60% liquid and 40% concentrated products. Pasteurized liquid milk and UHT milk are the major liquid products, while hard and semi cheese is the major concentrated product. Different types in each category are shown in Figure 4 and 5. 3
Figure 4: Composition of milk products Flavoured Milk 2% Yoghurt 13% Maas & Buttermilk 5% Pasteurised Milk 51% UHT 29% Source: MPO Figure 4 shows that pasteurized milk has the highest percentages of 52% followed by UHT (long life) by 28%; yoghurt by 13%; mass & buttermilk by 5 percent. Flavoured milk commanded the lowest market share of liquid milk with 2% share. Figure 5: Compostion of concentrated milk products Whey Powder 8% Other Cheese 16% Milk Pwder 19% Butter 11% Hard and Semi Cheese 38% Buttermilk Powder 1% Condensed Milk 7% Source: MPO 4
Million Kilograms Rands/Litres Concentrated milk products consist of 38% of hard and semi cheese followed by Milk powder with 19%; Other cheese is 16%, Butter s share is 11% then Condensed milk is 7% and Whey powder with a percentage is 8. 2.1. DOMESTIC MARKET AND PRICES Local milk consumption and prices is illustrated in Figure 6. 2 050 2 000 1 950 1 900 1 850 1 800 1 750 1 700 1 650 1 600 1 550 1 500 Figure 6: Consumption and price of fresh milk 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 Years Consumption Price Source: Statistics and Economic Analysis, DAFF Figure 6 indicates that milk price started low and stagnant from 2003/04 to 2005/06 then started moving at an increasing rate from 2006/07 to 2009/10 then decrease in 2010/11. Consumption of milk and its price move at increasing rate during Year 2011/12 and 2012/13. During the period 2004/05 2005/06 milk price experienced a decline in prices as processors were positioning themselves for an expected increase in production but this led to a no growth in production that force processors to review their pricing. There is an increase of R1.48/l in 2012/13 compared to 2003/04. Consumption of milk has been moving at an increasing trend throughout the period under review and reached the new peak of 2 million kilograms in 2012/13. 2.2. EXPORT AND IMPORT OF DAIRY PRODUCTS The most important producer of milk internationally are Asia, European Union (EU) and North and Central America. Milk production in South Africa makes a very small contribution (0.5%) to the world production but in terms of the values of agricultural production in South Africa, it is the sixth largest agricultural industry in the world. 5
Million Rands Milk is produced much more cheaply in New Zealand and certain parts of the world than in South Africa. Imported milk from the EU and US is cheaper than in South Africa because of subsidies in these countries. Dairy companies in those countries are paid a guaranteed floor price for designated quantities of dairy products. Dairy companies in both countries are given a subsidy to bridge the gap between the supported domestic price and world market price. In the EU dairy farmers are paid subsidies for the use of certain inputs. The annual imports and exports of dairy products from 2004 to 2013 are shown in Figure 8. Figure 8: Export and import quantities of milk and dairy products 120 100 80 60 40 20 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Years Exports quantity Imports quantity Source: Quantec EasyData Figure 8 showed that South Africa became a net exporter of milk and dairy products during the periods 2004, 2008, 2009, 2011 and 2013 and became a net importer during 2005 to 2007, 2010 and 2012. The increase in exports in 2008, 2009 and 2011 was due to the attractive international price of milk which encouraged more exports. 2.2. EXPORTS The dairy industry is also an important earner of foreign exchange. In 2012 only, exports of dairy products amounted to 71 million kilograms valued at over R 1 101 million. There was a significant increase of 200% in quantity and 360% in value of milk and dairy products exported to the world in 2013 compared to 2004. Figure 9 below shows the exports of dairy products from 2004 to 2013. 6
Million Kilograms Million Rands Figure 9: Exports of milk and dairy products 80 70 60 50 40 30 20 10 1 200 1 000 800 600 400 200 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Years 0 Quantity Value Source: Quantec EasyData From Figure 9, exports quantity fluctuated throughout the period under analysis. Exports of milk and dairy products experienced the lowest exports during the periods 2004 to 2007 before increasing substantially in 2008 and fluctuated at an increasing trend during the following years. The decrease experienced in 2010 was due to the low production in the local market. Both quantity and value almost followed the same trend throughout the period under analysis. 7
Figure 10: Milk and dairy products destinations during 2013 Zimbabwe 27% Angola 16% DRC 1% Ghana 1% Japan 2% Comoros 1% Mauritius 1% Zambia 6% Malawi 1% Mozambique 39% Tanzania 5% Source: Quantec EasyData Figure 10 shows that during 2013 Mozambique commanded the greatest market share of South African milk and dairy products exports accounting for 39% followed closely by Zimbambwe with 27% and Angola with 16%. Tanzania commanded 5% and Zambia 6% shares. The smallest shares of 2% and 1% were commanded by Malawi and Japan. 8
Thousand Kilograms 35 000 30 000 25 000 20 000 15 000 10 000 5 000 Figure 11: Quantities of milk and dairy products exported by South Africa 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Years Milk and Cream,not Concentrated nor Sweetened Milk and Cream,Concentrated or Sweetened Buttermilk,Curdled Milk, Cream and Yogurt Whey Source: Quantec EasyData Figure 11 shows that milk and cream (not concentrated nor sweetened) dominated the export market of milk and dairy products and commanded the highest shares from 2003 to 2012. Milk and cream (concentrated or sweetened) commanded the second highest level during the periods 2003 to 2005 and again during 2007 to 2010. Buttermilk commanded the second greatest shares during 2011 to 2012. Butter, other fats and oils commanded the lowest quantities exported during the past decade. 2.2.1. Export values of milk and dairy products Figures 12 21 shows the export of milk and dairy products from provinces and district municipalities. 9
Thousand Rands Figure 12: Values of milk and dairy products from provinces 700 000 600 000 500 000 400 000 300 000 200 000 100 000 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Western Cape 39 153 38 059 54 299 68 701 117 280 154 568 117 199 83 627 102 350 135 739 Eastern Cape 1 609 3 714 3 768 8 339 16 433 19 619 10 612 18 172 30 206 36 441 Northern Cape 0 0 0 0 0 0 0 0 1 0 Free State 0 0 0 0 0 1 665 1 655 2 574 10 729 7 550 Kwazulu-Natal 6 338 12 556 7 974 7 581 14 527 12 539 9 121 18 868 24 520 60 950 North West 0 6 3 298 391 6 841 1 117 3 517 10 362 10 818 Gauteng 189 500 89 300 111 873 130 960 254 610 357 458 281 903 382 278 500 300 653 057 Mpumalanga 1 146 6 189 25 136 14 042 11 118 3 299 19 448 33 044 52 907 118 302 Limpopo 1 270 160 367 1 875 4 525 1 177 28 019 41 539 37 850 77 760 Source: Quantec EasyData Figure 13 illustrates that Gauteng province played a major role in the exports of milk and dairy products from 2003 to 2013 with the new peak value of R 653 million in 2013. This may be due to the fact that Gauteng is the main exit point to the SADC region as most of these exports were destined to SADC region. Western Cape Province commanded the second level of milk and dairy products exports throughout the period under review. Averagely Gauteng commanded R 2950 million followed by followed by Western Cape by R91 million, then Mpumalanga and Limpopo provinces which commanded R28 million and R19 million respectively. The lowest value of milk and dairy products were recorded in Free State and Northern Cape provinces with R2 million and R128 000 respectively. Northern Cape recorded fractional exports in 2005 and 2012 only. 10
Thousand Rands Thousand Rands Figure 13: Values of milk and dairy products exported from Western Cape province 120 000 100 000 80 000 60 000 40 000 20 000 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 City of Cape Town 30 991 32 767 39 883 48 585 79 168 98 415 112 710 80 818 97 348 54 214 West Coast 0 105 500 457 464 1 017 0 310 0 0 Cape Winelands 8 158 5 184 13 515 19 659 37 511 54 267 1 530 1 324 1 493 74 462 Overberg 1 3 1 0 0 0 0 0 0 0 Eden 4 1 400 0 137 869 2 959 1 175 3 509 6 451 Central Karoo 0 0 0 0 0 0 0 0 0 612 Source: Quantec EasyData In Western Cape Province, City of Cape Town metropolitan municipality played an important role in the export of milk and dairy products throughout the period under analysis with the highest export value of R 113 million recorded in 2010. Regular exports of milk and dairy products were also recorded in Cape Winelands and Eden district municipalities. Fractional exports were recorded from West Coast and Overberg district municipalities. There was a drastic increase of export value of milk and dairy products from cape Winelands which amounted to R74 million. Central Karoo emerges with the value of export amounting to R 612 thousand. Figure 14: Values of milk and dairy products exported from Eastern Cape province 40 000 35 000 30 000 25 000 20 000 15 000 10 000 5 000 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Cacadu 849 3 687 3 761 5 653 7 468 14 984 9 552 17 514 30 173 36 409 Amatole 219 15 1 333 0 0 5 0 25 0 Nelson Mandela 541 12 6 2 354 8 964 4 635 1 055 657 8 32 Source: Quantec EasyData 11
Thousand Rands In Eastern Cape Province, high milk and dairy products exports values have been recorded from Cacadu district municipality which commanded the highest values during the past decade except in 2008 followed by Nelson Mandela metropolitan municipality which reached its peak of R 9 million in 2008. Irregular exports of milk and dairy products were recorded in the Amatole district municipality. Figure 15: Values of milk and dairy products exported from Free State province 25 000 20 000 15 000 10 000 5 000 Source: Quantec EasyData 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Xhariep 0 0 0 0 0 0 0 0 5 124 8 453 Motheo 0 0 0 0 2 818 13 402 10 800 3 120 18 502 20 279 Thabo Mofutsanyane 0 0 0 0 0 0 0 0 10 38 Northern Free State 0 0 0 0 0 1 665 374 0 0 0 Intermittent values were recorded from Free State Province from four district municipalities (Xhariep, Motheo Thabo Mofutsanyane and Northern Free State). Motheodistrict municipality recorded a highest value of R 20 million in 2013 and Xhariep recorded the second highest values in 2013 12
Rands Thousand Rands Figure 16: Values of milk and dairy products exported from KwaZulu Natal province 70 000 60 000 50 000 40 000 30 000 20 000 10 000 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Ugu 2 0 14 0 0 63 0 0 0 0 Umgungundlovu 749 1 199 15 5 0 10 1 236 280 42 Uthukela 0 0 0 0 0 8 19 10 9 1 067 Uthungulu 0 1 45 0 0 0 7 0 0 0 ilembe 0 0 0 0 994 786 1 113 0 0 0 ethekwini 5 588 11 357 7 900 7 576 13 533 11 672 7 982 18 621 24 231 59 841 Source: Quantec Easy data In KwaZulu Natal Province, high milk and dairy products export values have been recorded at ethekwini metropolitan Municipality throughout the period of analysis. Other municipalities (Ugu, Umgugundlovu, Uthukela, Amajuba, Uthungulu and ilembe) recorded intermittent exports of milk and dairy products during the past decade. 12 000 000 10 000 000 Figure 17: Values of milk and dairy products exported from North West province 8 000 000 6 000 000 4 000 000 2 000 000 Source: Quantec EasyData 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Bojanala 0 5 659 0 0 0 0 128 044 0 9 730 0 Central 0 0 0 297 525 0 0 0 0 78 0 Bophirima 0 0 0 0 0 0 0 0 847 0 Southern 0 0 2 517 170 391 436 6 840 50 988 567 3 517 45 10 351 1 10 818 1 Intermittent values were recorded in North West Province from three district municipalities (Bojanala, Central, Bophirima and Southern). Southern district municipality recorded a sharp 13
Thousand Rands increase of R 6.8 million in 2009 and decreased substantially in 2010 before experiencing a sharp increase from 2011 to 2013. Figure 18: Values of milk and dairy products exported from Gauteng province 600 000 500 000 400 000 300 000 200 000 100 000 Source: Quantec EasyData 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Sedibeng 69 0 141 1 15 27 14 517 495 11 616 Metsweding 2 0 0 0 429 67 0 0 49 2 West Rand 1 735 79 79 655 1 050 6 121 1 445 3 153 12 074 14 360 Ekurhuleni 6 486 6 344 8 876 15 401 25 690 39 080 38 399 67 124 84 728 109 591 City of Johannesburg 178 128 82 022 101 756 112 811 223 385 290 881 228 964 284 821 389 476 510 505 City of Tshwane 3 080 854 1 021 2 092 4 041 21 282 13 081 26 663 13 477 6 983 In Gauteng province, high milk and dairy products export values have been recorded for the past ten years at the City of Johannesburg metropolitan municipality with the new peak in 2013 valued at R 510 million. Ekurhuleni district municipality commanded the second level following City of Johannesburg at a distance. Fractional exports of milk and dairy products were recorded in Metsweding district municipality. Sedibeng, West Rand, Ekurhuleni, City of Johannesburg and City of Tshwane recorded regular exports of milk and dairy products. 14
Thousand Rands Thousand Rands Figure 19: Values of milk and dairy products exported from Mpumalanga province 120 000 100 000 80 000 60 000 40 000 20 000 Source: Quantec EasyData 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Gert Sibande 305 534 0 120 0 536 1 0 288 18 685 Nkangala 0 0 0 0 0 1 84 68 49 0 Ehlanzeni 841 5 655 25 136 13 922 11 118 2 762 19 364 32 975 52 569 99 617 In Mpumalanga Province, outstanding exports value of milk and dairy products were recorded at Ehlanzeni district municipality which recorded exports regularly during the past decade. Irregular exports of milk and dairy products were recorded from Gert Sibande and Nkangala district municipalities. 60 000 Figure 20: Values of milk and dairy products exported from Limpopo province 50 000 40 000 30 000 20 000 10 000 Source: Quantec EasyData 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Mopani 9 0 0 0 3 0 0 7 0 1 213 Vhembe 1 076 0 332 1 766 4 522 1 122 7 981 11 028 15 596 26 278 Capricorn 184 160 34 109 0 55 3 447 2 409 1 462 9 Waterberg 0 0 0 0 0 0 16 591 28 095 20 792 50 261 Limpopo Province recorded minimal exports of milk and dairy products during 2004 to 2013 from Mopani, Vhembe, Capricorn and Waterberg district municipalities. Vhembe district municipality recorded exports regularly and experienced the highest exports during 2004 and 2006 to 2009. Waterberg district municipality took over the highest position from 2010 to 2013. Fractional exports were recorded from Mopani, Capricorn and Waterberg district municipalities. 15
Rands Figure 21: Values of milk and dairy products exported from Northern Cape province 1200 1000 800 600 400 200 Source: Quantec EasyData 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Namakwa 0 0 0 0 0 0 0 0 40 0 Siyanda 0 70 0 0 0 0 0 0 76 0 Frances Baard 0 0 0 0 0 0 0 0 1 096 0 Northern Cape Province has not been recording any exports except in 2005 and in 2012. Siyanda district was the only district in Northern Cape which exported milk and dairy products and again in 2012 together with Namakwa and Frances Baard district municipalities. Frances Baard district municipality commanded the highest value during 2012. 2.3. SHARE ANALYSIS 2.3.1. Share analysis of milk and dairy products exports Table 1 presents the contributions of the various provinces to total exports value for milk and dairy products of South Africa during the past ten years. Table 1: Share of provincial milk and dairy products to the total RSA milk and dairy products exports (%). Years 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Provinces Western Cape 16.38 25.38 26.69 29.64 28.00 27.74 24.99 14.33 13.31 12.33 Eastern Cape 0.67 2.48 1.85 3.60 3.92 3.52 2.26 3.11 3.93 3.31 Northern Cape 0 0 0 0 0 0 0 0 01 0 Free State 0 0 0 0 0 0.30 0.35 0.44 1.39 0.69 KwaZulu-Natal 2.65 8.37 3.92 3.27 3.47 2.25 1.94 3.23 3.19 5.54 North West 0 0 0 0.13 0.09 1.23 0.24 0.60 1.35 0.98 Gauteng 79.28 59.54 55.00 56.50 60.78 64.16 60.10 65.50 65.04 59.34 Mpumalanga 0.48 4.13 12.36 6.06 2.65 0.59 4.15 5.66 6.88 10.75 Limpopo 0.53 0.11 0.18 0.81 1.08 0.21 5.97 7.12 4.92 7.07 16
Years 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Provinces Total 100 100 100 100 100 100 100 100 100 100 Source: Quantec EasyData Table 1 show that Gauteng province commands the greatest share of South African milk and dairy products exports followed by Western Cape Province. This is in spite of the fact that Western Cape and Eastern Cape provinces are the major milk producing provinces. This may be due to the fact that Gauteng and Western Cape provinces are the exit points for milk and dairy products to the SADC regions. Eastern Cape, KwaZulu Natal, Gauteng, Mpumalanga and Limpopo provinces reported regular exports of milk and dairy products. Northern Cape, North West and Free State provinces recorded intermittent export shares of milk and dairy products. Northern Cape Province received a share of less than a percent in 2005 and 1 (one) percent in 2012. Table 2: Share of district milk and dairy products to the total Western Cape provincial milk and dairy products exports (%). Years 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Districts City of Cape Town 79.1 5 86.0 9 73.4 5 70.7 2 67.5 0 63.6 7 96.1 7 96.6 4 95.1 1 39.9 4 West Coast 0 0.27 0.92 0.66 0.40 0.66 0 0.37 0 0 Cape Winelands 20.8 4 13.6 2 24.8 9 28.6 2 31.9 8 35.1 1 1.31 1.58 1.46 54.8 6 Overberg 0 0.01 0 0 0 0 0 0 0 0 Eden 0.01 0 0.74 0 0.12 0.56 2.52 1.41 3.43 4.75 Central Karoo 0 0 0 0 0 0 0 0 0 0.45 Total 100 100 100 100 100 100 100 100 100 100 Source: Quantec EasyData The City of Cape Town metropolitan municipality has commanded the greatest share of milk and dairy products exports in the Western Cape Province from 2004 to 2013 followed by Cape Winelands. Fractional exports of milk and dairy products occurred in the West Coast, Overberg and Eden district municipalities. Table 3: Share of district milk and dairy products to the total Eastern Cape provincial milk and dairy products exports (%). Years 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Districts Cacadu 52.75 99.27 99.81 67.78 45.45 76.38 90.02 96.38 99.89 99.91 Amatole 13.63 0.41 0.03 3.99 0 0 0.04 0 0.08 0 Nelson Mandela 33.61 0.32 0.16 28.22 54.55 23.62 9.94 3.62 0.03 0.09 Total 100 100 100 100 100 100 100 100 100 100 Source: Quantec EasyData Cacadu district municipality has commanded the greatest share of milk and dairy products exports in the Eastern Cape Province. Regular exports were also recorded in Nelson Mandela Metropolitan Municipality and irregular exports were recorded in Amatole district municipality. 17
Table 4: Share of district milk and dairy products to the total Free State provincial milk and dairy products exports (%). Years 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Districts Xhariep 0 0 0 0 0 0 0 0 21.68 29.38 Motheo 0 0 0 0 100 88.95 96.65 100 78.28 70.48 Thabo Mofutsanyane 0 0 0 100 0 0 0.00 0 0.04 0.13 Northern Free State 0 0 0 0 0 11.05 3.35 0 0 0 Total 0 0 0 100 100 100 100 100 100 100 Source: Quantec EasyData Free State Province experienced fractional exports of milk and dairy products from Xhariep, Motheo, Lejweleputswa, Thabo Mofutsanyane and Northern Free State district municipalities. Motheo district municipality commanded the highest share of milk and dairy products during the periods 2008 to 2013. Thaba Mofutsanyane district municipality commanded the highest exports value in 2007.. Table 5: Share of district milk and dairy products to the total KwaZulu Natal provincial milk and dairy products exports (%). Years 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Districts Ugu 0.03 0 0.17 0 0 0.50 0 0 0 0 Umgungundlovu 11.81 9.55 0.19 0.06 0 0.08 0.01 1.25 1.14 0.07 Uthukela 0 0 0 0 0 0.06 0.21 0.05 0.04 1.75 Uthungulu 0 0 0 0 6.85 6.27 12.20 0 0 0 ilembe 88.16 90.45 99.07 99.94 93.15 93.09 87.51 98.69 98.82 98.18 ethekwini 0.03 0 0.17 0 0 0.50 0 0 0 0 Total 100 100 100 100 100 100 100 100 100 100 Source: Quantec EasyData ILembe district municipality has commanded the greatest shares of milk and dairy products exports in the KwaZulu Natal Province from 2004 to 2013 and it was consistence during the past decade. Fractional exports of milk and dairy products occurred in Ugu, Umgungundlovu, Uthukela, Amajuba UThungulu and ethekwini district municipalities. Table 6: Share of district milk and dairy products to the total North West provincial milk and dairy products exports (%). Years 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Districts Bojanala 0 100 0 0 0 0 11.47 0 0.09 0 Central 0 0 0 99.94 0 0 0 0 0.00 0 Bophirima 0 0 0 0 0 0 0 0 0.01 0 Southern 0 0 100 0.06 100 100 88.53 100 99.90 100 Total 0 100 100 100 100 100 100 100 100 100 Source: Quantec EasyData 18
Intermittent milk and dairy exports in North West Province were recorded from Bojanala, Central, Bophirima and Southern district Municipalities from 2005 to 2013. Bojanala district municipality commanded 100% shares during 2005 and Southern district municipality has commanded 100% shares of milk and dairy products exports during 2006, 2008 to 2009, 2011 and 2013 and 99.9% in 2012. Table 7: Share of district milk and dairy products to the total Gauteng provincial milk and dairy products exports (%). Years 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Districts Sedibeng 0.04 0 0.13 0 0.01 0.01 0 0.14 0.10 1.78 Metsweding 0 0 0 0 0.17 0.02 0 0 0.01 0 West Rand 0.92 0.09 0.07 0.50 0.41 1.71 0.51 0.82 2.41 2.20 Ekurhuleni 3.42 7.10 7.93 11.76 10.09 10.93 13.62 17.56 16.94 16.78 City of Johannesburg 94.00 91.85 90.96 86.14 87.74 81.37 81.22 74.51 77.85 78.17 City of Tshwane 1.63 0.96 0.91 1.60 1.59 5.95 4.64 6.97 2.69 1.07 Total 100 100 100 100 100 100 100 100 100 100 Source: Quantec EasyData The City of Johannesburg municipality has commanded the greatest share of milk and dairy products exports in Gauteng province from 2004 to 2014 followed at a vast distant by Ekurhuleni district municipality. City of Tshwane metropolitan, West Rand, City of Johannesburg metropolitan and Ekurhuleni district municipalities reported regular exports throughout the period under analysis. Fractional exports of milk and dairy products occurred in the Sedibeng and Metsweding district municipalities. Table 8: dairy products (neither concentrated nor sweetened) to the total Mpumalanga provincial milk and dairy products exports (%) Years 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Districts Gert Sibande 26.59 8.63 0 0.85 0 16.25 0 0 0.55 15.79 Nkangala 0 0 0 0 0 0.04 0.43 0.21 0.09 0 100.0 Ehlanzeni 73.41 91.37 0 99.15 100 83.71 99.56 99.79 99.36 84.21 Total 100 100 100 100 100 100 100 100 100 100 Source: Quantec EasyData Ehlanzeni district municipality has commanded the greatest shares of milk and dairy products exports in Mpumalanga Province from 2004 to 2013. Irregular exports of milk and dairy products occurred in the Gert Sibande district and Nkangala district. Table 9: Share of district milk and dairy products to the total Limpopo provincial milk and dairy products exports (%) Years 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Districts Mopani 0.75 0 0 0.01 0.07 0 0 0.02 0 1.56 Vhembe 84.74 0 90.65 94.18 99.93 95.31 28.48 26.55 41.20 33.79 19
Capricorn 14.52 100 9.35 5.80 0 4.69 12.30 5.80 3.86 0.01 Waterberg 0 0 0 0 0 0 59.21 67.64 54.93 64.64 Total 100 100 100 100 100 100 100 100 100 100 Source: Quantec EasyData Intermittent exports of milk and dairy products were recorded in Limpopo Province. Vhembe and Capricorn district municipalities dominated the export market during the past decade. Capricorn district municipality commanded the greatest shares of milk and dairy products exports during 2005, Vhembe district municipality commanded the greatest shares during 2004 and 2006 to 2009 while Waterberg district municipality got the greatest shares from 2010 to 2013. Table 10: Share of district milk and dairy products to the total Northern Cape provincial milk and dairy products exports (%). Years 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Districts Namakwa 0 0 0 0 0 0 0 0 3.30 0 Siyanda 0 100 0 0 0 0 0 0 6.27 0 Francis Baard 0 0 0 0 0 0 0 0 90.43 0 Total 0 100 0 0 0 0 0 0 100 0 Siyanda district municipality commanded 100% shares during 2005 then diminished thereafter then indicate some exports in 2012 and 2013. Namakwa and Francis Baard district municipalities started recording exports of milk and dairy products in 2012 and 2013 and Francis Baard district municipality commanded the greatest share of 90.4% during2012. 2.4. IMPORTS South Africa is an importer of dairy products. The average imports quantity and value over the past ten years amounted to 654 million kilograms at a value of R 7.6 billion over the past 10 years. Figure 22 present the imports of milk and dairy products from 2003 to 2012. 20
Million Kilograms Million Rands Figure 22: Imports of milk and dairy products 120 100 80 60 40 20 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Years 1 600 1 400 1 200 1 000 800 600 400 200 0 Quantity Value Source: Quantec Easydata Figure 22 above shows that imports of milk and dairy products fluctuated in both quantity and value throughout the period under analysis. The imports quantity of milk and dairy products reached the new peak of over 59 million kilograms during 2012 and the value of milk and dairy products imported reached a new peak of over R 1.4 billion in 2012. The amount of imports quantity and its value dropped significantly in 2013. This might be due to the weaker South African Rand. Figure 23 below shows the different types of milk and dairy products imported from 2004 to 2013 in terms of quantity. 21
Million Kilograms Figure 23: Quantities of milk and dairy products imported by South Africa 18 16 14 12 10 8 6 4 2 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Years Milk and cream, not concentrated nor sweetened Buttermilk, curdled milk, cream and yogurt Butter, other fats and oils Milk and cream, concentrated or sweetened Whey Cheese and curd Source: Quantec EasyData Figure 22 shows that milk and cream (concentrated or sweetened), whey and milk & cream (not concentrated nor sweetened) were among the most imported quantities of milk and dairy products in South Africa during the period under analysis. Milk & cream (not concentrated nor sweetened) took a dive in 2013 from being the highest in 2012. Milk and cream (concentrated or sweetened) commanded the greatest quantities of the imports market in 2005 to 2007. Milk & Cream (not concentrated nor sweetened) dominated the imports market from 2008 to 2010 and again in 2012 whereas Whey recorded the highest quantities imported during 2004 and 2011 and 2013. Figure 24 below shows the different types of milk and dairy products imported from 2004 to 2013 in terms of value. 22
Million Kilograms 600 Figure 24: Values of milk and dairy products imported by South Africa 500 400 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Years Milk and cream, not concentrated nor sweetened Buttermilk, curdled milk, cream and yogurt Butter, other fats and oils Source: Quantec Easydata Milk and cream, concentrated or sweetened Whey Cheese and curd Figure 24 above indicate that milk and cream (concentrated and sweetened) & cheese and curd commanded the greatest share of milk and dairy products imported by South Africa during 2004 to 2012 before they took a dive in 2013. On average Cheese and Curd commanded a share of R 247 million per annum followed by Milk and Cream (concentrated and sweetened) by R 201 million then Whey by R 157 million during the period under review. Figure 24 shows the origin of milk and dairy products imported to South Africa in 2013. 23
Figure 25: Countries of origin for milk and dairy products in 2013 United States 5% Ukraine 1% Poland 4% New Zealand 17% Uruguay 11% Argentina 3% Austria 1% Australia 2% Belgium 1% Germany 11% Denmark 6% Estonia 1% France 22% Netherlands 2% Morocco 1% Lithuania 1% Source: Quantec EasyData Italy 2% Ireland 7% United Kingdom 2% Figure 25 above shows that the main supplier of milk and dairy products to South Africa in 2013 was France which had an import market share of 22% followed by New Zealand which exported 17% and German together with Uruguay imported 11% of milk and dairy products to South Africa. Plenty of countries imported minimal amount of milk and dairy products to south African import market sharing between 1% and 2%. 2.5. MARKETING CHANNELS IN THE DAIRY INDUSTRY Milk production in South Africa is mainly by two sectors; Commercial Producers, and Small and Medium size Producers (see Figure 25). Commercial Producers sell milk to Dairy Processors. Small and medium size producers sell most of their milk directly to consumers and some to processors. Dairy Processors buys milk from farmers and import milk concentrates and produces dairy products for primary distribution to retailers, exports and for further processing. 24
Figure 25: Marketing Channels. Commercial Dairy farms Small and Medium Dairy Farms Bulk collection Imports Dairy Processors Dairy Products (Cheese, Butter, etc) Secondary dairy products Exports Primary Distribution Retailers Small and informal trade Institutions Consumers 25
3. EMPOWERMENT PLANS BY THE INDUSTRY The following is a list of ventures/projects/programmes. Media releases were arranged for the dairy industry. The MPO, in conjunction with the provincial departments and municipalities and other relevant stakeholders were responsible for these empowerment plans. 3.1. Successful ventures: Commercially viable Fort Hare Dairy Trust outside Alice in Eastern Cape started in 2004 and the first cow was milked in October 2007. The trust started between a partnership between 70 white farmers from the Tsitsikamma and the Underberg area through their company Amandlelo Agri and University of Fort Hare. The University donated land and the cost of the project was R 22 million (R 2 million donated by University, R 5 million by Amandlelo and 15 million by Land Bank of which 7.5 million is loan). The farmers signed on an empowerment company Vuwa Investments which was given 35% stake in the company. The farmers kept 49 % and the rest was shared among 600 workers from the 70 dairy farms. Today Fort Hare Dairy Trust is a state-of-the-art commercial dairy farm. It has 800 cow rotary parlor that produces approximately 10 000 litres of milk a day much of which is supplied to Clover milk company. The farm that requires 600 tons of maize is sourced from farmers in the Alice area. Every year Amandlelo takes between 10 and 15 black interns. Some of them are sent to Fort Hare Dairy Trust. Farmers are rewarded with cattle as they pass through different stages. This will enable them to start their own full time dairy farming (Pretoria News, 17 June 2009). 3.2. Training Programmes Agri SETA accredited farm worker training. Agri SETA accredited emerging farmer training. Workers training funded by MILK SA. Training of Extension officers of Department of Agriculture in North West Province and Free State. 3.3. Magazines Ubisi Mail and Dairy Mail are distributed free of charge to emerging farmers. 4. BARRIERS TO THE LEVEL OF PARTICIPATION BY THE EMERGING SECTOR The low profitability of milk production is the major barrier to entry for the emerging farmers. Access to credit facilities and financial package specially structured to their needs also plays a role. The volatility of the market and the effect of imports in depressing producer prices make it difficult for the emerging farmers to enter the industry. The dynamics of pricing in the dairy industry as well as the shelf life of the products is such that the farmers are squeezed to accept whatever price that the producers/processors offer them to dispose of their products. 26
The market is dominated by 4 major processors in the milk industry making it extremely difficult for the emerging farmers to make inroads in the dairy processing industry. They lack the necessary capital to invest in dairy equipment. The volume of milk produced may not be sufficient to invest in capital equipment. To form a cooperative would assist in increasing the volume through the collection of milk from several small farms. However the infrastructure and the underdeveloped roads and the great distances between farms could be inhibiting factors to go this route. Smaller processors tend to pay higher raw milk prices than the larger processors during periods of seasonal milk shortages because they lack the bargaining power that the larger processors have. During periods of surpluses the large producers dump their products in the retail sector at very low prices making it difficult for the small processors to compete. The big players in the market have facilities to convert raw milk into milk powder, butter, cheese or long-life milk which can be stored for longer periods of time. This facility is capital intensive and for the volumes of raw milk produced by the emerging farmers it is not really worth it in the long term. The farmers/producers lack the expertise, equipment to pasteurize milk. Transport and the quantity are major deterrents for small farmers to get their products to the big processors. The big processors/buyers find it not worth the effort to access these farmers due to the road infrastructure and small inconsistent and small volumes of milk produced. 5. OPPORTUNITIES AND WEAKNESSES Success in the dairy market depends on two factors namely: quality products and the support of processors. Successful advertising, exports and the development of new products are also important. Some consumers like to buy fresh milk direct from producers because the origin of the milk is known. A strong relationship can be built between producer/s and consumers. Producers can sell direct to small cafes and street vendors shortening the value chain cutting out some transaction costs resulting in an increase in profits. This channel will require higher capital and involves more risks. A sound relationship needs to be in place between the sellers and the buyers. Since deregulation the number of smaller milk producers has increased dramatically and processors are willing to receive milk from the smaller producers. However this supply channel will require a high level control measures on hygiene and the producer has to comply with the required standards. High demand of value added products such as sour milk, yoghurt and cheese can be a market to be explored. However to go this route would require high investment, market knowledge and the necessary training. Packaging to promote brand identification can open an opportunity but this would require market research and knowledge, training and investment. 27
6. MARKET INTELLIGENCE 6.1. Export Tariffs Tariffs that different importing countries applied to milk and dairy products originating from South Africa in 2011 and 2013 are shown in table 10 to 15. Table 10: Milk and cream (neither concentrated nor sweetened) Country Product Code Trade 2012 2013 Regime Applied Tariffs Total Ad Applied Total Ad Description valorem Tariffs valorem Equivalent Tariff (estimated) Equivalent Tariff (estimated) Comoros 04011000 5% 5% DRC 040111000; 04012000 & 04013000 040111000; Malawi 04012000 & 04013000 040111000; Mauritius 04012000 & 04013000 04011000 & Mozambique 04012090 United Republic Tanzania Zimbabwe of 040111000; 04012000 & 04013000 040111000; 04012000 & 04013000 Source: Market Access Map MFN duties 5% 5% 5% 5% Preferential tariff for SA 10% 10% 10% 10% MFN duties 0% 0% 0% 0% Preferential tariff for SA 15% 15% 15% 15% MFN duties 60% 60% 60% 60% MFN duties 40% 40% 40% 40% Mauritius allowed the importation of milk and cream (not concentrated or sweetened) from South Africa duty free during 2012 and 2013. The most protected market exists in United Republic of Tanzania which applied the MFN duties of 60% in 2012 and 2013 followed by Zimbabwe by 40% MFN duties applied. Mozambique continued with preferential tariff of 15%. Democratic Republic of Congo applied the MFN duties of 5% and Malawi applied 10% to South African milk and cream (not concentrated nor sweetened) during 2012 and 2013. 28
Table 11: Milk and cream (concentrated or sweetened) Country Product code Trade Regime 2012 2013 Description Applied Tariffs Total Ad Angola 04021000; 04022100; 04029100 & 04029900 Applied Total Ad valorem Equivalent Tariff (estimated) Tariffs valorem Equivalent Tariff (estimated) MFN duties 2% 2% 2% 2% DRC 04021000 MFN duties 5% 5% Malawi 04021000; 04022100 & 04022900 MFN Duties 10% 10% 10% 10% Mozambique 04021010 MFN Duties 0% 0% 0% 0% Zambia 04021010 MFN duties 0% 0% Zimbabwe 04021010 MFN duties 20% 20% 20% 20% Source: Market Access Map Mozambique and Zambia has applied a MFN duties of 0% for exports of milk and cream (concentrated or sweetened) from South Africa during 2012 and 2013. Angola, Democratic Republic of Congo and Malawi applied a reasonable MFN duties to South African milk and cream (concentrated and sweetened) of 2%, 5% and 10% respectively during 2012. Zimbabwe s market of Milk and Cream (Concentrated & sweetened) is the highest protected market with the MFN duties of 20% during the period under review. Table 12: Buttermilk, cream, yoghurt, etc Country Product Code Trade Regime Description Angola DRC 04031000 & 04039000 04031000 2012 2013 Applied Tariffs Total Ad valorem Equivalent Tariff (estimated) Applied Tariffs MFN duties 10% 10% 10% 10% MFN duties 10% 10% 10% 10% Malawi 04031000 & MFN duties 10% 10% 10% 10% 04039000 04031000 Preferential 15% 15% 15% 15% Mozambique tariff for South Africa Zambia 04031000 & Preferential 0% 0% 0% 0% Total Ad valorem Equivalent Tariff (estimated) 29
Country Product Code Trade Regime Description 2012 2013 Applied Tariffs Total Ad valorem Equivalent Tariff (estimated) Applied Tariffs 04039000 tariff for South Africa 04031000; MFN duties 40% 40% 40% 40% Zimbabwe 04039000; 04039010 & 04039090 Source: Market Access Map Total Ad valorem Equivalent Tariff (estimated) South African exports its buttermilk, cream and yoghurt to Zambia received a preferential free duty during the past two years. Angola, Democratic Republic of Congo and Malawi applied the MFN duties of 10% during 2012 and 2013. Zimbabwe applies the highest MFN duties of 40% to buttermilk, curdled milk, cream and yoghurt originating from South Africa in 2012 and 2013. Table 13: Whey and natural milk products Country Product code Trade Regime Description Angola 04041000 2012 2013 Applied Tariffs Total Ad valorem Equivalent Tariff (estimated) Applied Tariffs MFN duties 2% 2% DRC 04041000 MFN duties 5% 5% Mozambique & Zambia Malawi Zimbabwe 04041000 Source: Market Access Map 04041000 & Preferential 0% 0% 0% 0% 04049000 tariff for SA 04041000 MFN duties 10% 10% MFN duties 5% 5% 5% 5% Total Ad valorem Equivalent Tariff (estimated) Mozambique and Zambia allowed importation of whey from South Africa at a preferential rate of 0% in 2012 and 2013. Angola, Democratic Republic of Congo and Zimbabwe applied the MFN tariff of 2%, 5% and 5% respectively in 2013. Malawi s import market was the most protected market of whey origination from South Africa with applied MFN tariff of 10% during 2013. 30
Table 14: Butter and other fats and oils derived from milk Country Product Trade Regime 2012 2013 code Description Applied Tariffs Applied Tariffs Japan 040510129; 040520090; Republic of Korea Malaysia Lebanon 0405200000 04051000 04051000 04051000; Zambia 04052000 & 04059000 04051000; Zimbabwe 04052000 & 04059000 Source: Market Access Map MFN duties 29.80% + 9371.25 $/Ton Total Ad valorem Equivalent Tariff (estimated) 311.76% 29.80%+ 12058.37 $/Ton MFN duties 8% 8% 8% 8% MFN duties 0% 0% 0% 0% MFN duties 0% 0% 0% 0% Preferential tariff for SA Total Ad valorem Equivalent Tariff (estimated) 29.8% 0% 0% 0% 0% MFN duties 40% 40% 40% 40% Zambia, Malaysia and Lebanon allowed importation of whey from South Africa duty free in 2012 and 2013. Japan accepted South African butter and other fats with the MFN duties of 29.80% + 12058.37 $/Ton during 2013. The most protected market exists in Zimbabwe with the total ad valorem equivalent tariff estimated at 40% during 2012 and 2013. Table 15: Cheese and curd Country Product code Trade Regime Description DRC Malawi 04061000; 04062000; 04063000; 04064000 & 04069000 04061000; 04062000; 04063000; 04064000 & 04069000 2012 2013 Applied Tariffs Total Ad valorem Equivalent Tariff (estimated) Applied Tariffs MFN duties 20% 20% 20% 20% MFN duties 25% 25% 25% 25% Mauritius 04061000 MFN duties 0% 0% Total Ad valorem Equivalent Tariff (estimated) Mozambique 04061000; 04062000; Preferential tariff for SA 15% 15% 15% 15% 31
Country Product code Trade Regime Description 04063000; 04064000 & 04069000 04061000; 04062000; Zambia 04063000; 04064000 & 04069000 04061000; 04062000; Zimbabwe 04063000; 04064000 & 04069000 Source: Market Access Map Preferential tariff for SA 2012 2013 Applied Tariffs Total Ad valorem Equivalent Tariff (estimated) Applied Tariffs 0% 0% 0% 0% MFN duties 40% 40% 40% 40% Total Ad valorem Equivalent Tariff (estimated) Zambia and Mozambique applied a preferential tariff of 0% to South African cheese and curd during 2012 and 2013. Mozambique applied a preferential of 15% to South Africa while Democratic Republic of Congo applied the MFN duties of 20% during the past two years. Malawi was the most protected market for South African exports of cheese and curd with the MFN duties of 25% during 2012 and 2013. 6.2. Import tariffs Tariffs that South Africa applied to imports of milk and dairy products originating from all possible countries in 2011 and 2012 are shown in Table 16 to 21. Table 16: Milk and cream, neither concentrated nor sweetened Country Product code Trade Regime 2012 2013 Description Applied Tariffs Total Ad Applied Tariffs Total Argentina; France; Germany; Brazil; United Kingdom; Uruguay 04011007; 04011009; 04011090; 04012007; 04012009; 04012090; 04014007; 04014009; 04014090; 04015007; valorem Equivalent Tariff (estimated) valorem Equivalent Tariff (estimated) MFN duties 0% 0% 0% 0% Ad 32
Country Product code Trade Regime Description 04015009 & 04015090 Applied Tariffs 2012 2013 Total Ad Applied Total valorem Tariffs valorem Equivalent Equivalent Tariff Tariff (estimated) (estimated) Ad Source: Market Access Map South Africa applies 0% MFN duties to all top exporters of milk and cream (neither concentrated nor sweetened) to the country during 2012 and 2013. The South African top exporters are Argentina, France, Germany, Brazil, United Kingdom and Uruguay, Table 17: Milk and cream, concentrated or sweetened Country Belgium; France; Germany; Ireland; Lithiania & Netherlands Product code Source: Market Access Map Trade Regime Description 04021010 MFN duties Applied Tariffs 96.00% or 540.00 $/Ton whichever is the lower 2012 2013 Total Ad valorem Equivalent Tariff (estimated) 26.47%% 96.00% OR 540.00$/Ton whichever is lower Applied Tariffs Total Ad valorem Equivalent Tariff (estimated) OTQR: 14.02% ITQR: 19.2% Table 17 indicates that South Africa applied a total ad valorem equivalent tariff for milk and cream (concentrated or sweetened) of 26.47% to imports from Belgium, France, Germany, Lithiania and Netherlands in 2012 and applied the Inside Tariff Quota Rate (ITQR) of 19.2% and the Outside Tariff Quota Rate (OTQR) of 14.02% during 2013 to imports from the mentioned countries. 33
Table 18: Buttermilk, cream, yoghurt, etc Country Product code Trade Regime Description Belgium; France; Germany; Ireland; New Zealand & United Kingdom Source: Market Access Map Applied Tariffs 2012 2013 Total Ad Applied Total Ad valorem Tariffs valorem Equivalent Equivalent Tariff Tariff (estimated) (estimated) 04031000 MFN duties 0% 0% 0% 0% Table 18 indicates that South Africa applied 0% MFN duties of buttermilk, cream and yoghurt from Belgium, France, Germany, Ireland, New Zealand and United Kingdom during 2011 and 2012.. Table 19: Whey and other natural milk products Country Product code Trade Regime Description Applied Tariffs Argentina; France; 04041000 MFN duties 96.00% or Germany; Ireland; 540.00 New Zealand & $/Ton United States of whichever America is the lower Source: Market Access Map 2012 2013 Total Ad Applied Total valorem Tariffs Equivalent Tariff (estimated) 18.24% 96.00% or 540.00$/Ton whichever is the lower valorem Equivalent Tariff (estimated) Ad OTQR:18.24% ITQR: 19.2% Table 19 indicates that South Africa s MFN duties applied during 2012 and 2013 remained the same to imports of whey and other natural milk products from Argentina, France, Germany, Ireland, New Zealand and United States America at a total ad valorem equivalent tariff of 18.24%. 34
Table 20: Butter and other fats and oils derived from milk Country Product Trade 2012 2013 code Regime Description Applied Tariffs Total Ad Applied Tariffs Total Australia; Argentina; Denmark Ireland; New Zealand & United States of America Source: Market Access Map 04051000 MFN duties 79.00% or 600.00 &/Ton whichever is lower valorem Equivalent Tariff (estimated) 17.32% 79.00% or 600.00$/Ton whichever is lower valorem Equivalent Tariff (estimated) Ad OTQR: 17.32% ITQR: 15.8% Table 20 indicates that South Africa applied the MFN duties of 79% or 600 $/Ton whichever is the lower in 2012 and 2013. The main exporting countries of butter and other fats and oils to South Africa was Australia, Argentina, Denmark, Ireland, New Zealand and United States of America. Table 21: Cheese and curd Country Product code Argentina; France; Germany; Ireland; New Zealand &United States of America Source: Market Access Map Trade Regime Description Applied Tariffs 04061000 MFN duties 95.00% or 600.00 $/Ton whichever is the lower 2012 2013 Total Ad valorem Applied Total Ad Equivalent Tariff Tariffs valorem (estimated) Equivalent Tariff (estimated) 7.16% 96.00% or OTQR: 540.00$/Ton 18.24% whichever is ITQR: 19.2% lower Table 21 indicates that South Africa applied a total ad valorem equivalent tariff of 7.16% in 2012 and the Outside Tariff Quota Rate (OTQR) of 18.24% and the Inside Tariff Quota Rate of 19.2% during 2012 to imports of cheese and curd from Argentina, France, Germany, Ireland, New Zealand and United States of America. 35
7. COMPETITIVENESS OF THE DAIRY INDUSTRY 7.1. Exports 7.1.1. Milk and cream (neither concentrated nor sweetened) Table 22: List of importing markets for the product exported by South Africa in 2013 South Africa s exports represent 0.71% of world exports for Milk and cream, (not concentrated or sweetened), its ranking in world s exports is 25. Importers Exported value 2013 (USD thousand) Trade balance 2013 (USD thousand) Share in South Africa's exports (%) Exported quantity 2013 Quantity unit Trade Indicators Unit value (USD/unit) Exported growth in value between 2009-2013 (%, p.a.) Exported growth in quantity between 2009-2013 (%, p.a.) Exported growth in value between 2012-2013 (%, p.a.) Ranking of partner countries in world imports Share of partner countries in world imports (%) Total import growth in value of partner countries between 2009-2013 (%, p.a.) Tariff (estimated) faced by South Africa (%) World 62662 59502 100 86740 Tons 722 33 39 117 100 9 Lesotho 14091 13569 22.5 14173 Tons 994 57 0.2 0 Zimbabwe 12373 12373 19.7 15249 Tons 811 17 19-25 56 0.2 16 40 Botswana 8299 8299 13.2 17891 Tons 464 69 0.1-22 0 Mozambique 7844 7837 12.5 8190 Tons 958 26 16-2 91 0 7 9.1 Swaziland 7672 7672 12.2 12168 Tons 631 45029 75 0.1 0 Namibia 6864 6864 11 13607 Tons 504 13628 71 0.1 17 0 Tanzania, United Republic of 2333 2333 3.7 2974 Tons 784 15 14-3 66 0.1 21 60 Angola 794 794 1.3 457 Tons 1737 4-13 416 39 0.3 21 2 Zambia 563 563 0.9 405 Tons 1390-32 -31 196 156 0 29 0 Malawi 435 435 0.7 356 Tons 1222 14 10 37 154 0-7 0 Comoros 360 360 0.6 438 Tons 822-1 2-1 144 0 21 0 Source: ITC Trademap. 36
Table 22 shows that during 2013, South Africa exported a total of 86 740 tons of milk and cream (not concentrated or sweetened) at an average value of US$ 1 024/unit. South Africa exported greater quantities of milk and cream (not concentrated or sweetened) to Zimbabwe, Mozambique and United Republic of Tanzania. The greatest share of South African milk and cream (not concentrated or sweetened) exports were destined to Lesotho which commanded 22.5.9% share during the year 2013 followed by Zimbabwe (19.7%) then Botswana by 13.2%. South Africa s milk and cream (not concentrated or sweetened) exports increased by 33% in value and 39% in quantity between the periods 2009 and 2013. During the same period, exports of milk and cream (not concentrated or sweetened) to Zimbabwe increased by 17% in value while quantity increased by 19%; and Mozambique increased by 26% in value and decreased by 16% in quantity. Between the periods 2012 and 2013 South Africa s exports of milk and cream (not concentrated or sweetened) increased by 33% in value. During the same period, Zimbabwe and Mozambique increased by 17% and 26% respectively in value. 37
Figure 26: Growth in demand for milk and cream exports by South Africa in 2013 Source: ITC Trademap 38
Figure 26 illustrates that South Africa s exports of milk and cream (not concentrated or sweetened) represent 0.71% of world exports. Between 2009 and 2013 South Africa s milk and cream, not concentrated or sweetened to Zimbabwe,, Saint Helena, United Republic of Tanzania, Ghana, Zambia, Angola, Comoros and Seychelles were growing at a rate that is less than their import growth from the world. This means that South Africa is losing the market in the mentioned countries. During the same period, South Africa s milk and cream (not concentrated or sweetened) exports to, Mauritius,, Mozambique and Malawi were growing at a rate that is greater than their imports from the rest of the world. Therefore South Africa is gaining the market share in those countries. Mauritius, Malawi and Mozambique represent loses in the declining market. Mozambique experienced the highest growth in demand of milk and cream not concentrated nor sweetened imports during the periods 2009 to 2013. Annual growth of exports to Zimbabwe was 26%. 39
Figure 27: Prospects for market diversification for milk and cream exported by South Africa in 2013 Source: ITC Trademap 40
South Africa is currently exporting large quantities of milk and cream, not concentrated nor sweetened to Zimbabwe, and it has a market share on 19.7% of South Africa s exports (see Figure 27). South Africa exports to Zimbabwe are greater than that of the world. South Africa can penetrate Seychelles import market because its annual growth stands at 46%.. If South Africa wishes to diversify its exports of milk and cream (not concentrated or sweetened), Zambia is the second fastest growing market with an annual imports growth of 29%. Malawi is the small market but its imports from the South Africa are greater than its imports from world. 41
7.1.2. Milk and cream, concentrated or sweetened Table 23: List of importing markets for the product exported by South Africa in 2013 South Africa's exports represent 0.36% of world exports for milk and cream (concentrated or sweetened), its ranking in world exports is 26. Importers Exported value 2013 (USD thousand) Trade balance 2013 (USD thousand) Share in South Africa's exports (%) Exported quantity 2013 Quantity unit Unit value (USD/unit) Trade Indicators Exported growth in value between 2009-2013 (%, p.a.) Exported growth in quantity between 2009-2013 (%, p.a.) Exported growth in value between 2012-2013 (%, p.a.) Ranking of partner countries in world imports Share of partner countries in world imports (%) Total import growth in value of partner countries between 2009-2013 (%, p.a.) Tariff (estimated) faced by South Africa (%) World 84201 56541 100 65229 Tons 1291 31 56 294 100 17 Botswana 28608 28525 34 39305 Tons 728 476700 70 0.1 15 0 Mozambique 15401 15401 18.3 10292 Tons 1496 28 57 77 100 0.1 19 7.2 Namibia 10253 10245 12.2 4100 Tons 2501 102430 123 0-7 0 Swaziland 8666 8643 10.3 3854 Tons 2249 28787 129 0 41 0 Zambia 8198 8198 9.7 2019 Tons 4060 8 8 71 90 0.1 21 0 Lesotho 5124 5037 6.1 1448 Tons 3539 148 0 0 Zimbabwe 4753 4753 5.6 1760 Tons 2701-11 -11 5 78 0.1 28 30.2 Malawi 1068 1068 1.3 262 Tons 4076-7 -9 23 125 0-3 0 Angola 782 782 0.9 841 Tons 930 26 19-17 36 0.6 14 2 Mauritius 347 347 0.4 396 Tons 876 142 197 369 54 0.3 8 0 Democratic Republic of the Congo 297 297 0.4 364 Tons 816-7 18-44 58 0.3 3 5 Mali 171 171 0.2 57 Tons 3000 285 32-12 73 0.1 8 7.3 Source: ITC calculations based on COMTRADE statistics. 42
Table 23 shows that during 2013 South Africa exported a total of 65 229 tons of milk and cream (concentrated or sweetened) at an average value of US$ 1 291/unit. South Africa exported greater quantities of milk and cream (concentrated or sweetened) to Mozambique, Namibia and Botswana. The greatest share of South African milk and cream (concentrated or sweetened) exports were destined to Botswana which commanded 34% share during the year 2013 followed by Mozambique (18%) then Zimbabwe by 12%. South Africa s milk and cream (concentrated or sweetened) exports increased by 31% in value and 56% in quantity between the periods 2009 and 2013. During the same period, exports of milk and cream (concentrated or sweetened) to Mauritius increased by 197% in value and 369% in quantity and increased by 28% in value and 57% in quantity to Mozambique during the period 2009 to 2013. Between the periods 2012 and 2013, South Africa s exports of milk and cream (concentrated or sweetened) Increased by 294% in value. 43
Figure 28: Growth in demand for sweetened milk and cream exported by South Africa in 2013 Source: ITC Trademap 44
Figure 28 illustrates that South Africa s exports of milk and cream (concentrated or sweetened) represent 0.36% of world exports. Between 2009 and 2013 South Africa s milk and cream (concentrated or sweetened) was losing the market share in Zimbabwe, Zambia, Kenya, Malawi, democratic republic of Congo, Tanzania and Ghana because imports from South African were growing at a rate that is less than their imports growth from the world. During the same periods, South Africa was gaining the market shares of milk and cream (concentrated or sweetened) exports to Mozambique, Mali, Uganda, Saint Helena, Congo, Angola,, l, and Madagascar because imports from South African were growing at a rate that is greater than their imports from the rest of the world. Countries which has the most imports growing demand of Milk and Cream (Concentrated and sweetened) are Mali and Mauritius with the annual imports growth of 285% and 142% respectively. 45
Figure 29: Prospects for market diversification for sweetened milk and cream exported by South Africa in 2013 Source: ITC Trademap 46
Most of South African milk and cream (concentrated and sweetened) destined in Mozambique this country imported more from the South Africa than the rest of the world. (see Figure 29). South Africa can either penetrate Botswana import market or diversify to kenya. Angola is the biggest market of milk and cream (concentrated or sweetened) in the world, with the world s imports market share of 0.6%. 47
7.1.3. Buttermilk and yoghurt Table 24: List of importing markets for Buttermilk and yoghurt exported by South Africa in 2013 South Africa s exports represent 1.21% of world exports for Buttermilk and yoghurt, its ranking in world exports is 19. Importers Exported value 2013 (USD thousand) Trade balance 2013 (USD thousand) Share in South Africa's exports (%) Exported quantity 2013 Quantity unit Trade Indicators Unit value (USD/unit) Exported growth in value between 2009-2013 (%, p.a.) Exported growth in quantity between 2009-2013 (%, p.a.) Exported growth in value between 2012-2013 (%, p.a.) Ranking of partner countries in world imports Share of partner countries in world imports (%) Total import growth in value of partner countries between 2009-2013 (%, p.a.) Tariff (estimated) faced by South Africa (%) World 54986 49111 100 42000 Tons 1309 53 66 106 100 6 Angola 21686 21686 39.4 10374 Tons 2090 63 60 28 23 1 14 10 Mozambique 9618 9618 17.5 6763 Tons 1422 35 44 59 79 0.1 37 6.8 Botswana 8744 8744 15.9 9065 Tons 965 57 0.2 7 0 Namibia 4781 4780 8.7 6969 Tons 686 73 0.1 9 0 Swaziland 2911 2898 5.3 2716 Tons 1072 22292 92 0.1 0 Lesotho 2704 2704 4.9 3744 Tons 722 96 0.1 0 Zimbabwe 1115 1115 2 751 Tons 1485-3 -3-12 105 0.1 20 40 Singapore 984 984 1.8 370 Tons 2659 29 0.9 15 0 Zambia 767 767 1.4 561 Tons 1367 39 57-2 124 0 48 0 Nigeria 322 322 0.6 143 Tons 2252 6-3 38 42 0.4 23 20 Democratic Republic of the Congo 305 305 0.6 99 Tons 3081 59 60-6 119 0 18 10 Malawi 288 288 0.5 176 Tons 1636-15 -9 2 142 0-7 0 Congo 195 195 0.4 3 Tons 65000 1119 130 0 23 30 Seychelles 176 176 0.3 63 Tons 2794 75 80-34 129 0 0 50 Source: ITC Trademap. 48
Table 24 shows that during 2013 South Africa exported a total of 42 000 tons of buttermilk and yoghurt at an average value of US$ 1 309/unit. South Africa exported greater quantities of buttermilk and yoghurt to Angola, and Botswana. The greatest share of South African buttermilk and yoghurt exports were destined to Angola which commanded 39% share during the year 2013 followed at a distance by Mozambique with 17.5. South Africa s buttermilk and yoghurt exports have increased by 53% in value and 66% in quantity between the periods 2009 and 2013. During the same period, exports of buttermilk and yoghurt to Angola increased by 63% in value and 60% in quantity; Mozambique increased by 35% in value and 44% in quantity. Between the periods 2012 and 2013, South Africa s exports of buttermilk and yoghurt increased by 106% in value. During the same period, Angola and Mozambique increased by 28% and 59% respectively in value. 49
Figure 30: Growth in demand for buttermilk and yogurt exported by South Africa in 2013 Source: ITC Trademap 50
Figure 30 illustrates that South Africa s exports of buttermilk and yoghurt represent 1.21% of the world exports between 2009 and 2013. South Africa was losing the market share of buttermilk and yoghurt in Malawi, Zimbabwe, Nigeria, Mozambique, Zambia and Ghana, because its exports were growing at a rate that is less than their import growth from the rest of the world. During the same periods, South Africa s buttermilk and yoghurt exports to Democratic Republic of Congo Angola, Seychelles and Mauritius were growing at a rate that is greater than their imports from the rest of the world. Therefore South Africa is gaining the market share in these countries. The fastest growing market of South African buttermilk and Yogurt exist in Seychelles and Angola with the annual South African exports of 63% and 75% respectively. 51
Figure 31: Prospects for market diversification for buttermilk and yogurt exported by South Africa in 2013 Source: ITC Trademap 52
South Africa s exports of buttermilk and yoghurt are dominant in Angola but if South Africa wishes to diversify its exports the most attractive market will be Zambia (see Figure 31). The smallest possible market is at Zimbabwe. South Africa is currently exporting 2.03% of buttermilk and yogurt to Zimbabwe and its annual import growth is at 20%. Zimbabwe is still importing more buttermilk and yoghurt from the rest of the world than from South Africa. 53
7.1.4. Whey and other natural milk products Table 25: List of importing markets for whey and natural milk exported by South Africa in 2013 South Africa's exports represent 0.14% of world exports for whey and natural milk, its ranking in world exports is 37. Importers Exported value 2013 (USD thousand) Trade balance 2013 (USD thousand) Share in South Africa's exports (%) Exported quantity 2013 Quantity unit Trade Indicators Unit value (USD/unit) Exported growth in value between 2009-2013 (%, p.a.) Exported growth in quantity between 2009-2013 (%, p.a.) Exported growth in value between 2012-2013 (%, p.a.) Ranking of partner countries in world imports Share of partner countries in world imports (%) Total import growth in value of partner countries between 2009-2013 (%, p.a.) Tariff (estimated) faced by South Africa (%) World 7904-25465 100 4542 Tons 1740 23-7 396 100 22 Namibia 1504 1504 19 417 Tons 3607 50033 98 0 67 0 Japan 1365 1365 17.3 1266 Tons 1078 3-14 110 12 2.5 11 29 Lesotho 1129 1120 14.3 434 Tons 2601 103 0 0 Swaziland 721 707 9.1 1005 Tons 717 35950 105 0 0 Zambia 652 652 8.2 360 Tons 1811 118 102 57 111 0 110 0 Botswana 565 565 7.1 210 Tons 2690 6963 119 0 85 0 Zimbabwe 560 560 7.1 280 Tons 2000 74 70 489 118 0 90 6.5 Ghana 481 481 6.1 115 Tons 4183 176 175 54 0.1 29 20 Mozambique 277 277 3.5 129 Tons 2147 4-6 465 120 0 24 0 Cameroon 191 191 2.4 41 Tons 4659 110 0 28 30 United Arab Emirates 104 104 1.3 20 Tons 5200 153 43 0.2 36 5 Taipei, Chinese 83 83 1.1 76 Tons 1092-22 -7 39 0.3 9 13.2 Malaysia 64 64 0.8 76 Tons 842 21 4 5.1 58 0 Kenya 62 62 0.8 13 Tons 4769 128 0 82 25 Source: ITC Trademap. 54
Table 25 shows that during 2013 South Africa exported a total of 4542 tons of whey and natural milk products at an average value of US$ 1 740/unit. South Africa exported greater quantities of whey and natural milk products to Japan, Lesotho and Swaziland. The greatest share of South African whey and natural milk products exports were destined to Namibia which commanded 19 % share during the year 2013 followed by Japan taking 17.3% and Lesotho by 14.3%. South Africa s whey and natural milk products exports increased by 23% in value and decreased by 7% in quantity between the periods 2009 and 2013. During the same periods, exports of whey and natural milk products to Japan increased by 3% in value and decreased by 14% in quantity and Ghana experienced the highest increased of 176% in quantity and 175% in value; while Zambia increased by 118% in value and 102% in quantity. Between the periods 2012 and 2013, South Africa s exports of whey and natural milk products increased by 396% in value. During the same period, Japan increased by 110%; Zambia increased by 57% and Republic of Korea decreased by 25% respectively in value. 55
Figure 32: Growth in demand for whey exported by South Africa in 2013 Source: ITC Trademap 56
Figure 32 illustrates that that South Africa s exports of whey and natural milk products represent 0.14% of the world exports. Between 2009 and 2013 South Africa s whey and natural milk products exported to Taipei china, Republic of Korea, Japan, Mozambique, and Zimbabwe were growing at a rate that is less than their import growth from the rest of the world. Therefore, South Africa is losing the market share in the mentioned countries. During the same period, South Africa is gaining the market shares of whey and natural milk products exports in Democratic Republic of Congo, United Arab Emirates and Ghana because their imports from South Africa were growing at a rate that is greater than their imports from the rest of the world. United Arab Emirates annual demand growth imports of whey and a natural milk product is the highest at 153% rate. 57
Figure 33: Prospects for market diversification for whey exported by South Africa in 2013 Source: ITC Trademap 58
The chart illustrates that Namibia is the biggest importer of South African whey and natural milk products with a world market share of 19.03% (see Figure 33). The biggest market exists in Malaysia with the world import share of 5%%. South Africa might look on developing a new market in Malaysia especially that its annual import growth is at 58%. The fastest growing markets although small exist in Zambia and Malawi. Zambia s annual import growth is at 110% followed by Malawi by 91%. Therefore these two markets might be the most attractive markets for South Africa s diversification. 59
7.1.5. Butter and other fats and oils derived from milk Table 26: List of importing markets for butter and other fats and oils derived from milk exported by South Africa in 2013 South Africa s export represent 0.15% of world export for butter and other fats and oils derived from milk, its ranking in world exports is 33. Importers Exported value 2013 (USD thousand) Trade balance 2013 (USD thousand) Share in South Africa's exports (%) Exported quantity 2013 Quantity unit Trade Indicators Unit value (USD/unit) Exported growth in value between 2009-2013 (%, p.a.) Exported growth in quantity between 2009-2013 (%, p.a.) Exported growth in value between 2012-2013 (%, p.a.) Ranking of partner countries in world imports Share of partner countries in world imports (%) Total import growth in value of partner countries between 2009-2013 (%, p.a.) Tariff (estimated) faced by South Africa (%) World 11893 509 100 4530 Tons 2625 24 24 152 100 12 Namibia 5538 5538 46.6 2677 Tons 2069 83 0.1 0 0 Mozambique 1670 1670 14 417 Tons 4005 18 21 19 120 0 32 0 Zimbabwe 946 946 8 237 Tons 3992-2 -20-21 122 0 28 40 Botswana 906 906 7.6 439 Tons 2064 131 0-15 0 Mauritius 639 639 5.4 162 Tons 3944-10 -12-1 79 0.1 8 0 Zambia 603 603 5.1 119 Tons 5067 15 6-19 149 0 14 0 Lesotho 439 434 3.7 147 Tons 2986 161 0 0 Swaziland 395 395 3.3 73 Tons 5411 19650 164 0 0 Malawi 198 198 1.7 52 Tons 3808-5 -8 11 139 0 13 15 Tanzania, United Republic of 125 125 1.1 28 Tons 4464 55 65 30 162 0 10 25 Democratic Republic of the Congo 107 107 0.9 24 Tons 4458-5 -24-28 114 0-4 20 Sources: ITC Trademap. 60
Table 26 shows that during 2013 South Africa exported a total of 4 530 tons of butter and other fats derived from milk at an average value of US$ 2 625/unit. South Africa exported greater quantities of butter and other fats derived from milk to Namibia, Mozambique, Zimbabwe and Botswana. The greatest share of South African butter and other fats derived from milk exports were destined to Namibia which commanded 46.6% share during the year 2013 followed by Mozambique (14%) then Zimbabwe received a share of 8%. South Africa s butter and other fats derived from milk exports increased by 24% in value and increased by 24% in quantity between the periods 2009 and 2013. During the same periods, exports of butter and other fats derived from milk to Namibia increased by 0% in value and decreased by 0% in quantity; Mozambique increased by 18% in value and 21% quantity and Zimbabwe decreased by 2% in value and 20% in quantity. Between the periods 2012 and 2013, South Africa s exports of butter and other fats derived from butter and other fats and oils increased by 152% in value. During the same periods, Namibia stays at 0% and Mozambique increased by 19% in value. 61
Figure 34: Growth in demand for butter exported by South Africa in 2013 Source: ITC Trademap 62
Figure 34 illustrates that that South Africa s exports of butter and other fats and oils represent 0.14% of the world exports. Between 2009 and 2013 South Africa s butter and other fats exported to Mauritius, Mozambique,, Zimbabwe,, Uganda, Ghana, Democratic Republic of Congo (DRC), Malawi and Angola were growing at a rate that is less than their export growth to the rest of the world. During the same period, South Africa s butter and other fats exports to Zambia and Seychelles were growing at a rate that is greater than their exports to the rest of the world. Seychelles represent gains in the declining market while Zambia represent gains in the dynamic market. The most growing demand of butter and other fats and oils exist in Mozambique with annual imports growth of 32% per annum during the periods 2009 to 2013. 63
Figure 35: Prospects for market diversification for butter exported by South Africa in 2013 Source: ITC Trademap 64
Figure 35 illustrates that South Africa is currently exporting most of its butter and other fats to Mozambique and Zimbabwe but if South Africa has to diversify its export market, the biggest market exist in United Arab emirates with a world import share of 1.3% and annual import growth of 20%. Saint Helena is the small market but its annual import growth of 29% is attractive.. 65
7.1.6. Cheese and Curd Table 27: List of importing markets for the product exported by South Africa in 2013 South Africa s exports represent 0.11% of world exports of cheese and curd, its ranking in world exports is 46. Importers Exported value 2013 (USD thousand) Trade balance 2013 (USD thousand) Share in South Africa's exports (%) Exported quantity 2013 Quantity unit Trade Indicators Unit value (USD/unit) Exported growth in value between 2009-2013 (%, p.a.) Exported growth in quantity between 2009-2013 (%, p.a.) Exported growth in value between 2012-2013 (%, p.a.) Ranking of partner countries in world imports Share of partner countries in world imports (%) Total import growth in value of partner countries between 2009-2013 (%, p.a.) Tariff (estimated) faced by South Africa (%) World 32948-12451 100 8591 Tons 3835 37 40 171 100 8 Namibia 11023 11023 33.5 3061 Tons 3601 93 0.1 7 0 Botswana 5063 5063 15.4 1605 Tons 3155 16777 121 0 4 0 Mozambique 4422 4422 13.4 1124 Tons 3934 12 17 8 130 0 19 12.5 Zambia 3346 3346 10.2 711 Tons 4706 30 25 22 135 0 29 0 Zimbabwe 2837 2837 8.6 514 Tons 5519 20 11 8 142 0 20 40 Swaziland 2466 2465 7.5 730 Tons 3378 148 0 0 Lesotho 1173 1173 3.6 219 Tons 5356 167 0 0 Angola 505 505 1.5 115 Tons 4391 3-2 17 78 0.1 8 10 Malawi 476 476 1.4 104 Tons 4577-6 -7 8 176 0-4 15 Democratic Republic of the Congo 429 429 1.3 98 Tons 4378 4-4 40 141 0 10 20 Ghana 266 266 0.8 69 Tons 3855 24 23 31 126 0 18 20 Nigeria 244 244 0.7 66 Tons 3697 30 29-38 129 0-1 20 Sources: ITC Trademap. 66
Table 27 shows that during 2013 South Africa exported a total of 8 591 tons of cheese and curd at an average value of US$ 3 835/unit. South Africa exported greater quantities of cheese and curd to Namibia, Botswana and Mozambique. The greatest share of South African cheese and curd exports were destined to Namibia which commanded 33.5% share during the year 2013 followed by Botswana with 15.4% then Mozambique by 13.4%. South Africa s exports of cheese and curd increased by 37% in value and 40% in quantity between the periods 2009 and 2013. During the same period, exports of cheese and curd to Namibia increased by 0% in value and 0% in quantity; Botswana increased by 0% in value and 0% in quantity and Mozambique increased by 12% in value and quantity by 17%. Between the periods 2012 and 2013, South Africa s exports of cheese and curd increased by 171% in value. During the same period, Namibia increased by 0%,Botswana increased by 16 777% each and Mozambique increased by 8%. 67
Figure 36: Growth in demand for cheese and curd from South Africa in 2013 Source: ITC Trademap 68
Figure 36 illustrates that that South Africa s exports of cheese and curd represent 0.1% of the world exports. Between 2009 and 2013 South Africa is losing the market share of cheese and curd exports to Seychelles,, Angola, United Republic of Tanzania, Mozambique and Malawi because its exports were growing at a rate that is less than their import growth from the rest of the world. During the same period, South Africa is gaining the market share of cheese and curd exports to Zambia, Nigeria, Mauritius,, United Arab Emirates and Saint Helena were growing at a rate that is greater than their imports from the rest of the world. The most growing demand for cheese and curd exist in Zambia with an annual import growth of 29%. 69
Figure 37: Prospects for market diversification for cheese and curd exported by South Africa in 2013 Source: ITC Trademap 70
Figure 37 show that Namibia, Botswana and Mozambique are the world s greatest importer of South African cheese and curd. They have a share in South African market of 33.46%, 15.37% and 13.42% respectively. If South Africa wishes to diversify United Arab Emirates is the biggest market with a world import market share of 0.7% and its annual import growth is at 17%. Although it is the biggest market it might be difficult for South Africa to develop its market there but the small and fastest growing market is at Swaziland. Swaziland s annual import growth is at 125% rate. This is the most lucrative market for South Africa. 71
7.2. Imports 7.2.1. Milk and cream (neither concentrated nor sweetened) Table 28: List of supplying markets for the product imported by South Africa in 2013 South Africa s imports represent 0.04% of world imports for milk and cream (not concentrated nor sweetened), its ranking in world imports is 101. Exporters Imported value 2013 (USD thousand) Trade balance 2013 (USD thousand) Share in South Africa's imports (%) Imported quantity 2013 Quantity unit Trade Indicators Unit value (USD/unit) Imported growth in value between 2009-2013 (%, p.a.) Imported growth in quantity between 2009-2013 (%, p.a.) Imported growth in value between 2012-2013 (%, p.a.) Ranking of partner countries in world exports Share of partner countries in world exports (%) Total export growth in value of partner countries between 2009-2013 (%, p.a.) Tariff (estimated) applied by South Africa (%) World 3160 59502 100 5602 Tons 564-10 -10-69 100 9 Uruguay 2008-2008 63.5 3760 Tons 534 90 87-78 38 0.2 59 0 Lesotho 522 13569 16.5 1325 Tons 394 77 0 0 United Kingdom 231-231 7.3 141 Tons 1638 56 43 23 6 4.4 6 0 Ukraine 116-116 3.7 204 Tons 569 57 0.1-23 0 Belgium 77-77 2.4 9 Tons 8556 114 3 9.8 13 0 Poland 76-76 2.4 102 Tons 745 8 3.2 11 0 France 64-64 2 13 Tons 4923 291-69 2 10.1 7 0 Germany 19-19 0.6 6 Tons 3167 83 11-95 1 19.2 3 0 Ireland 10-10 0.3 11 Tons 909 19 1.5 14 0 Slovenia 10-10 0.3 11 Tons 909-87 16 1.7 11 0 United States of America 10-10 0.3 5 Tons 2000 23 0.8 9 0 Mozambique 7 7837 0.2 3 Tons 2333 0 Netherlands 2-2 0.1 1 Tons 2000 4 6.5 1 0 Source: ITC Trademap. 72
Table 28 shows that during 2013 South Africa imported a total of 5 602 tons of milk and cream (not concentrated nor sweetened), at an average value of US$ 564/unit. South Africa imported greater quantities of milk and cream, (not concentrated or sweetened) from Uruguay, Lesotho and United Kingdom The greatest share of South African milk and cream (not concentrated or sweetened) imports originated from Uruguay which commanded 63.5% share during the year 2012 followed at a distance by Lesotho with 16.5% and united kingdom with 7.3%. South Africa s milk and cream (not concentrated or sweetened) imports decreased by 10% in value and 10% in quantity between the periods 2009 and 2013. During the same period, imports of milk and cream (not concentrated or sweetened) from Uruguay increased drastically by 92% in value and 87% in quantity, United Kingdom increased in value and quantity by 56% and 43% respectively. Between the periods 2012 and 2013 South Africa s imports of milk and cream (not concentrated or sweetened) decreased by 69% in value. During the same period imports of milk and cream (not concentrated or sweetened) from Uruguay to South Africa decreased by 78% and Lesotho imports increased by 0% in value. 73
Figure 38: Competitiveness of suppliers to South Africa for unsweetened milk and cream in 2013 Source: ITC Trademap 74
Figure 38 illustrates that South Africa s imports between 2009 and 2013 represent 0.04% of the world s imports of milk and cream, not concentrated or sweetened During the same period, South Africa is gaining the market share of milk and cream, not concentrated or sweetened imports from Uruguay, United Kingdom, France and Germany because South Africa s import growth were growing at a rate that is greater than Uruguay s exports to the rest of the world. The most competitive market is Uruguay because its annual export growth rate was at 59% during the periods 2009 to 2013, but the biggest market exists in Germany with the world share of 18.5%. 75
Figure 39: Prospects for diversification of suppliers for unsweetened milk and cream imported by South Africa in 2013 Source: ITC Trademap 76
Figure 39 illustrates that Belarus is not a big supplier of South Africa s market for milk and cream (not concentrated or sweetened) but it is the world s greatest exporter of milk and cream (not concentrated or sweetened) over the period 2009 to 2013. Belarus annual export growth is the highest at 49%. South Africa can easily diversify to Belarus for market development. The second attractive market exists in Italy with the annual export growth of 16%. 77
7.2.2. Milk and cream, concentrated or sweetened Table 29: List of supplying markets for the product imported by South Africa in 2013 South Africa s imports represent 0.12% of world imports for milk and cream (concentrated or sweetened), its ranking in world imports is 82. Exporters Imported value 2013 (USD thousand) Trade balance 2013 (USD thousand) Share in South Africa's imports (%) Imported quantity 2013 Quantity unit Trade Indicators Unit value (USD/unit) Imported growth in value between 2009-2013 (%, p.a.) Imported growth in quantity between 2009-2013 (%, p.a.) Imported growth in value between 2012-2013 (%, p.a.) Ranking of partner countries in world exports Share of partner countries in world exports (%) Total export growth in value of partner countries between 2009-2013 (%, p.a.) Tariff (estimated) applied by South Africa (%) World 27660 56541 100 7119 Tons 3885 24 13-36 100 17 France 8797-8797 31.8 2183 Tons 4030 61 43-18 5 4.9 12 14.9 Germany 4140-4140 15 1019 Tons 4063 80 60-35 3 7.8 16 14.9 New Zealand 3021-3021 10.9 948 Tons 3187 19 10-67 1 30 25 14.9 United States of America 1818-1817 6.6 495 Tons 3673 54 60 83 2 9.7 33 14.9 Italy 1654-1654 6 287 Tons 5763 17 8 72 42 0.1 0 14.9 Belgium 1531-1531 5.5 353 Tons 4337 15 10-16 6 4.7 11 14.9 Ireland 1498-1498 5.4 392 Tons 3821-1 -37 15 1.4 6 14.9 Australia 1275-1275 4.6 341 Tons 3739-7 -19 59 8 3.9 6 14.9 Argentina 1194-1194 4.3 346 Tons 3451 3-1 15 7 4 26 14.9 Netherlands 765-765 2.8 180 Tons 4250 31 17-87 4 7.4 8 14.9 United Kingdom 601-594 2.2 147 Tons 4088-19 -29 342 13 1.6 16 14.9 Lithuania 434-434 1.6 100 Tons 4340-77 23 0.5 11 14.9 Source: ITC calculations based on COMTRADE statistics. 78
Table 29 shows that during 2013 South Africa imported a total of 7 119 tons of milk and cream (concentrated or sweetened), at an average value of US$ 3 885/unit. South Africa imported greater quantities of milk and cream, (concentrated or sweetened) from France, New Zealand and Germany. The greatest share of South African milk and cream (concentrated or sweetened) imports originated from France which commanded 31.8% share during the year 2013 followed by Germany by 15% and New Zealand by 10.9%. South Africa s milk and cream (not concentrated or sweetened) imports increased by 24% in value and 13% in quantity between the periods 2009 and 2013. During the same period, imports of milk and cream (concentrated or sweetened) from France also increased by 61% in value and 43% in quantity; and Germany increased in value and quantity by 80-% and 60% respectively. Between the periods 2012 and 2013, South Africa s imports of milk and cream (concentrated or sweetened) decreased by 36% in value. During the same period, France s milk and cream (concentrated or sweetened) exports to South Africa decrease 18% in value and Germany decreased by 35% in value during the same periods. 79
Figure 40: Competitiveness of suppliers to South Africa for sweetened milk and cream in 2013 Source: ITC Trademap 80
Figure 40 illustrates that between 2009 and 2013 South Africa s milk and cream (concentrated or sweetened) imported from Argentina, Australia, United Kingdom, Poland and New Zealand were growing at a rate that is less than their export growth to the rest of the world. During the same period, South Africa s milk and cream, concentrated or sweetened imports from Belgium, Netherlands, France, Italy,, Germany, New Zealand, Switzerland, Ukraine and United States of America were growing at a rate that is greater than their exports to the rest of the world. New Zealand is the biggest competitive market with a world market share of 29.1% and an annual growth of 25%. 81
Figure 41: Prospects for diversification of suppliers for sweetened milk and cream imported by South Africa in 2013 Source: ITC Trademap 82
Figure 41 illustrates that New Argentina is not a big supplier of South Africa s market for milk and cream (concentrated or sweetened) but it is the main world exporter and its exports were growing at 26% per annum over the period 2009 to 2013. Argentina is therefore the biggest prospective supplier for South Africa s milk and cream (concentrated or sweetened). The chart also shows that New Zealand is the second prospect import market due to its annual exports growth rate of 25% during 2009 to 2013. It represents a small possible supplier for South Africa s milk and cream (concentrated or sweetened). 83
7.2.3. Buttermilk and yoghurt Table 30: List of supplying markets for the product imported by South Africa in 2013 South Africa s imports represent 0.13% of world imports for Buttermilk and yoghurt, its ranking in world s imports is 70. Exporters Imported value 2013 (USD thousand) Trade balance 2013 (USD thousand) Share in South Africa's imports (%) Imported quantity 2013 Quantity unit Trade Indicators Unit value (USD/unit) Imported growth in value between 2009-2013 (%, p.a.) Imported growth in quantity between 2009-2013 (%, p.a.) Imported growth in value between 2012-2013 (%, p.a.) Ranking of partner countries in world exports Share of partner countries in world exports (%) Total export growth in value of partner countries between 2009-2013 (%, p.a.) Tariff (estimated) applied by South Africa (%) World 5875 49111 100 1612 Tons 3645 25 8-3 100 6 Germany 2161-2161 36.8 569 Tons 3798 78 49 221 1 22 6 0 New Zealand 1326-1326 22.6 393 Tons 3374 19 5-12 6 3.9 18 13.6 France 1217-1217 20.7 294 Tons 4139 22 1-36 2 17.9 4 0 United Kingdom 590-589 10 171 Tons 3450 26 10 28 12 2.2 5 0 Netherlands 193-193 3.3 47 Tons 4106-25 -37 10 8 2.9 20 0 Italy 115-115 2 12 Tons 9583 400 29 0.4 4 0 Belgium 79-79 1.3 24 Tons 3292 15 0-71 3 7.1-4 0 Ireland 79-79 1.3 32 Tons 2469-21 -92 18 1.5 11 0 United States of America 73-73 1.2 43 Tons 1698 7 54 204 15 1.7 44 13.6 Spain 20-20 0.3 1 Tons 20000 5 4.2 1 0 Swaziland 13 2898 0.2 21 Tons 619 101 0 0 Greece 9-9 0.2 2 Tons 4500 350 9 2.4 15 0 China 1-1 0 1 Tons 1000 72 0-22 13.6 Source: ITC calculations based on COMTRADE statistics. 84
Table 30 shows that during 2013 South Africa imported a total of 1 612 tons of buttermilk and yoghurt, at an average value of US$ 3 645/unit. South Africa imported greater quantities of milk and cream, (concentrated or sweetened) from Germany, New Zealand and France. The greatest share of South African buttermilk and yoghurt imports originated from Germany which commanded 78% share during the year 2013 followed by New Zealand by 19% and France by 22%. South Africa s buttermilk and yoghurt imports increased by 25% in value and increased by 8% in quantity between the periods 2009 and 2013. During the same period, imports of buttermilk and yoghurt from Germany also increased by 78% in value and 49% in quantity; and imports from New Zealand increased by 19% in value and 5% in quantity during the same periods. Between the periods 2012 and 2013, South Africa s imports of buttermilk and yoghurt decreased by 3% in value. During the same period, Germany s buttermilk and yoghurt exports increased by 221%, New Zealand decreased by 121% while France decreased by 36%. 85
Figure 42: Competitiveness of suppliers to South Africa for buttermilk and yogurt in 2013 Source: ITC Trademap 86
Figure 42 illustrates that between 2009 and 2013 South Africa s buttermilk and yoghurt imported from United States of America (USA) and Netherland were growing at a rate that is less than their export growth to the world. During the same period, South Africa s buttermilk and yoghurt imports from New Zealand, Belgium, France, Germany and United Kingdom were growing at a rate that is greater than their exports to the rest of the world. Germany is the most competitive market during the periods 2009 and 2013 due to its world share market of 20.9% followed by France with the world market share of 17%. 87
Figure 43: Prospects for diversification of suppliers for buttermilk and yogurt imported by South Africa in 2013 Source: ITC Trademap 88
Germany is the biggest supplier of buttermilk and yoghurt and has a share of 36.78% of South African s imports (see Figure 43). Germany has an annual export growth of 6% which is a limiting factor for South Africa to penetrate the market. South Africa can diversify to the fastest growing markets of buttermilk and yoghurt at Belarus with an annual export growth of 46%. 89
7.2.4. Whey and other natural milk products Table 31: List of supplying markets for the product imported by South Africa in 2013 South Africa s imports represent 0.56% of world s imports for whey and natural milk products; its ranking in world imports is 33. Exporters Imported value 2013 (USD thousand) Trade balance 2013 (USD thousand) Share in South Africa's imports (%) Imported quantity 2013 Quantity unit Trade Indicators Unit value (USD/unit) Imported growth in value between 2009-2013 (%, p.a.) Imported growth in quantity between 2009-2013 (%, p.a.) Imported growth in value between 2012-2013 (%, p.a.) Ranking of partner countries in world exports Share of partner countries in world exports (%) Total export growth in value of partner countries between 2009-2013 (%, p.a.) Tariff (estimated) applied by South Africa (%) World 33369-25465 100 11195 Tons 2981 18 15 27 100 20 France 12898-12898 38.7 4161 Tons 3100 11 4 13 3 13.2 20 2.9 United States of America 6723-6723 20.1 1123 Tons 5987 42 26 79 1 17 21 14.5 Ireland 2493-2493 7.5 836 Tons 2982 34 21 60 8 3.2 17 2.9 Argentina 2374-2374 7.1 680 Tons 3491 52 28 7 9 2.7 28 14.5 New Zealand 2352-2352 7 547 Tons 4300-1 -5-29 5 9.1 12 14.5 Germany 2027-2027 6.1 665 Tons 3048 40 62 23 2 13.8 14 2.9 Poland 1706-1706 5.1 1129 Tons 1511 6 4.6 32 2.9 Denmark 1475-1475 4.4 1534 Tons 962 163 422 8 11 2.1 17 2.9 Estonia 362-362 1.1 209 Tons 1732 31 0.2 30 2.9 Australia 319-319 1 40 Tons 7975-69 -49 15 1.4 5 14.5 Switzerland 224-224 0.7 36 Tons 6222 23 0.5 20 14.5 Netherlands 174-174 0.5 86 Tons 2023 13 21 2 4 9.5 21 2.9 Belgium 130-130 0.4 93 Tons 1398-53 12 1.9 30 2.9 Source: ITC Trademap. 90
Table 31 shows that during 2013 South Africa imported a total of 11 195tons of whey and natural milk products, at an average value of US$ 2 981/unit. South Africa imported greater quantities of whey and natural milk products from France, United States of America and Ireland. The greatest share of South African whey and natural milk products imports originated from France which commanded 38.7% share during the year 2013 followed by United States of America with 20.1% and New Zealand with 7.5%. South Africa s whey and natural milk products imports increased by 18% in value and 15% in quantity between the periods 2009 and 2013. During the same period, imports of whey and natural milk products from France increased by 11% each in value and 4% in quantity. Imports from United States of America increased by 42% in value and 26%% in quantity. Ireland experienced an increase of 34% in value and 21% in quantity during 2008 to 2012. Between the period 2012 and 2013 South Africa s imports of whey and natural milk products experienced a increase of 27% in value. During the same period, France whey and natural milk products exports to South Africa increased by 13% in value while imports from United States of America an increased by 79% in value. 91
Figure 44: Competitiveness of suppliers to South Africa for whey in 2013 Source: ITC Trademap 92
Figure 44 illustrates that between 2009 and 2013 South Africa s whey and natural milk products imported from Netherlands, Australia United Kingdom, France and New Zealand were growing at a rate that is less than their export growth to the rest of the world. During the same period, South Africa s whey and natural milk products imported from Argentina, Germany, Denmark, United state of America and Ireland were growing at a rate that is greater than their exports to the rest of the world. The most competitive supplier of whey and natural milk products is Argentina which has an annual import growth of 28% followed by Netherlands by 24% and United States of America by 21%. 93
Figure 45: Prospects for diversification of suppliers for whey imported by South Africa in 2013 Source: ITC Trademap 94
South Africa is already importing from the biggest exporters of whey and natural milk products which are USA, France and New Zealand. USA has a world market share of 16.8%, France has13% while New Zealand has a world market share of 8.9% during 2012. They have a share of South Africa s imports market share of 20.15%, 38.65% and 7.05% respectively. If South Africa wishes to diversify, it can develop a new market at China because China is the fastest growing market with an annual export growth of 69% and South Africa is not importing whey and natural milk products from this country yet. 95
7.2.5. Butter and other fats and oils derived from milk Table 32: List of supplying markets for the product imported by South Africa in 2013 South Africa s imports represent 0.14% of world imports for butter and other fats and oils derived from milk, its ranking in world s imports is 62. Exporters Imported value 2013 (USD thousand) Trade balance 2013 (USD thousand) Share in South Africa's imports (%) Imported quantity 2013 Quantity unit Trade Indicators Unit value (USD/unit) Imported growth in value between 2009-2013 (%, p.a.) Imported growth in quantity between 2009-2013 (%, p.a.) Imported growth in value between 2012-2013 (%, p.a.) Ranking of partner countries in world exports Share of partner countries in world exports (%) Total export growth in value of partner countries between 2009-2013 (%, p.a.) Tariff (estimated) applied by South Africa (%) World 11384 509 100 3126 Tons 3642 15 10-49 100 10 New Zealand 8315-8315 73 2645 Tons 3144 104 91-32 1 23.5 14 13.6 Ireland 2123-2123 18.6 308 Tons 6893 11 1-52 2 10.6 18 13.6 Denmark 644-644 5.7 109 Tons 5908 11 2-26 9 3.1-2 13.6 Belgium 134-134 1.2 17 Tons 7882-8 -24-32 5 9.2 4 13.6 Australia 133-128 1.2 41 Tons 3244-48 -54-63 11 2.5 1 13.6 France 17-17 0.1 3 Tons 5667-10 -26-81 6 5.5 9 13.6 United Kingdom 6-6 0.1 0 Tons 35-63 10 2.9 23 13.6 Lesotho 5 434 0 1 Tons 5000 107 0 0 Netherlands 3-3 0 0 Tons -25 3 9.4 3 13.6 Germany 1-1 0 1 Tons 1000-72 -49 4 9.3 16 13.6 India 1-1 0 0 Tons -13 19 0.6 9 13.6 Source: ITC calculations based on COMTRADE statistics. 96
Table 32 shows that during 2013 South Africa imported a total of 3 126 tons of butter and other fats, at an average value of US$ 3 642/unit. South Africa imported greater quantities of butter and other fats from New Zealand, Ireland and Denmark. The greatest share of South African butter and other fats imports originated from New Zealand which commanded 73% share during the year 2013 followed by Ireland by 18.6% and USA by 5.7%. South Africa s butter and other fats imports increased by 15% in value and inclined by 10% in quantity between the periods 2009 and 2013. During the same period, imports of butter and other fats from New Zealand increased by 104% in Value and 91% in quantity while Ireland increased by 11% in value and decreased by 1% in quantity. Denmark increases by 11% in value and 2% in quantity. Between the periods 2012 and 2013, South Africa s imports of butter and other fats decreased by 49% in value. During the same period, New Zealand s butter and other fats exports to South Africa increased by 32% in value while imports from Ireland decreased by 52%. 97
Figure 46: Competitiveness of suppliers to South Africa for butter in 2013 Source: ITC Trademap 98
Figure 46 illustrates that between 2009 and 2013 South Africa s butter and other fats imported from Ireland, United States of America, India, France, Germany Belgium and Australia were growing at a rate that is less than their export growth to the rest of the world. During the same period, South Africa s butter and other fats imports from Denmark, New Zealand and United Kingdom were growing at a rate that is greater than their exports to the rest of the world. New Zealand is the most competitive supplier of butter and other fats because its world market share is 22% and its annual exports growth increased by 14% and it imported a share of 104% of butter and other fats to South Africa. 99
Figure 47: Prospects for diversification of suppliers for butter imported by South Africa in 2013 Source: ITC Trademap 100
Figure 47 illustrates that New Zealand is the main supplier of world s butter and other fats. If South Africa wishes to diversify from New Zealand, Ethiopia will be the prospective supplier due to its exports annual growth of 50%. It is a small market with a world market share of 0% but South Africa might have a chance to develop a new market. The biggest market is Netherlands with the world share market of 14.0%. South Africa and also penetrate this market. 101
14.2.6. Cheese and Curd Table 33: List of supplying markets for the product imported by South Africa in 2013 South Africa s imports represent 0.23% of world imports for Cheese and curd, its ranking in world imports is 56. Exporters Imported value 2013 (USD thousand) Trade balance 2013 (USD thousand) Share in South Africa's imports (%) Imported quantity 2013 Quantity unit Trade Indicators Unit value (USD/unit) Imported growth in value between 2009-2013 (%, p.a.) Imported growth in quantity between 2009-2013 (%, p.a.) Imported growth in value between 2012-2013 (%, p.a.) Ranking of partner countries in world exports Share of partner countries in world exports (%) Total export growth in value of partner countries between 2009-2013 (%, p.a.) Tariff (estimated) applied by South Africa (%) World 45399-12451 100 8431 Tons 5385 19 18-29 100 8 Germany 7632-7632 16.8 1678 Tons 4548 42 37 72 1 16.8 9 8.5 France 7498-7498 16.5 1251 Tons 5994 26 40-2 2 13 3 8.5 New Zealand 6600-6600 14.5 1548 Tons 4264 8 5 24 7 3.7 8 8.5 Italy 5675-5675 12.5 558 Tons 10170 12 9 3 4 8.9 8 8.5 Ireland 4428-4428 9.8 963 Tons 4598 32 25-60 9 3.2 9 8.5 Denmark 3025-3025 6.7 492 Tons 6148 1 2-7 5 5.2 3 8.5 Netherlands 2133-2129 4.7 301 Tons 7086 24 16-43 3 11.3 6 8.5 Australia 1764-1764 3.9 321 Tons 5495 4-6 -57 12 2.2 6 8.5 Morocco 1713-1713 3.8 343 Tons 4994 6 10-7 27 0.5 10 8.5 Austria 1232-1232 2.7 450 Tons 2738 76 119 65 15 2 4 8.5 United Kingdom 1128-1127 2.5 109 Tons 10349 18 5-79 11 2.3 11 8.5 Lithuania 681-681 1.5 105 Tons 6486 74 59 45 20 1.2 9 8.5 United States of America 674-674 1.5 164 Tons 4110 13 7-89 6 4.4 32 8.5 Source: ITC Trademap. 102
Table 33 shows that during 2013, South Africa imported a total of 8 431 tons of cheese and curd, at an average value of US$ 5 385/unit. South Africa imported greater quantities of cheese and curd from Germany France and New Zealand. The greatest share of South African cheese and curd imports originated from Germany which commanded 16.8% share during the year 2013 followed by France by 16.5% and New Zealand by 14.5%. South Africa s imported cheese and curd increased by 19% in value and 18% in quantity between the periods 2009 and 2013. During the same period, imports of cheese and curd from Germany increased by 42% in value and 37% in quantity; imports from France increased by 26% in value and 40% in quantity; and imports from New Zealand increased by 8% in value and by 5% in quantity. Between the periods 2012 and 2013, South Africa s imports of cheese and curd decreased by 29% in value. During the same period, German s cheese and curd exports to South Africa increased by 72% in value and imports from France decreased by2% in value while those from New Zealand also increased extremely by 24%. 103
Figure 48: Competitiveness of suppliers to South Africa for cheese and curd in 2013 Source: ITC Trademap 104
Figure 48 illustrates that between 2008 and 2012 South Africa s cheese and curd imported from Switzerland, United State of America, Australia, New Zealand and Morocco were growing at a rate that is less than their export growth to the rest of the world. During the same period, South Africa s cheese and curd imports from Portugal, Netherlands, Germany, Lithuania, Belgium Austria, Spain, Denmark, France, Italy, Greece, I and United Kingdom were growing at a rate that is greater than their exports to the rest of the world. The most competitive suppliers of cheese and curd are Spain, Lithuania and Austria with the annual growth import share of 76%, 74% and 64% respectively during the period 2009 to 2013. 105
Figure 49: Prospects for diversification of suppliers for cheese and curd imported by South Africa in 2013 Source: ITC Trademap 106