Transformations in South Africa’s Agri-food Exports to the European Union

Melissa Van der Merwe, Ivo Zdráhal and Francois Lategan

No 344687, IAAE 2024 Conference, August 2-7, 2024, New Delhi, India from International Association of Agricultural Economists (IAAE)

Abstract: Despite the free trade agreement, South Africa’s agri-food exports to the European Union (EU) are declining. Without intervention, we expect this trend to persist. The paper aims to interrogate the change in South Africa’s agri-food exports to the EU by applying the Constant Market Share (CMS) model to study South African agri-food exports to the four EU sub-regions over 20 years. This allows us to analyse the impact of trade liberalisation and the slowdown of global value chain activity on agri-food trade. To our knowledge, this is the first attempt to understand the competitiveness of South African agri-food exports to the EU using the CMS model over a longer period. The agri-food products are grouped into four categories: bulk commodities, processed intermediate goods, horticulture products and consumer-ready goods. We find that South African agri-food exports were responsive to changes in the EU market demand for agri-food imports. However, South African agri-food exports were not competitive over the long period. This is because South Africa focused on slower-growing markets and agri- food commodities that show lower-than-average growth rates. South Africa is competitive in exporting specific agri-food commodities to specific markets with increasing demand. We recommend that South Africa focus on exporting commodities for which demand is growing quicker to fast-growing EU markets and invest in key priority areas to compete with other sources of supply available to the EU.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Date: 2024-08-27
New Economics Papers: this item is included in nep-afr, nep-agr, nep-int and nep-inv
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Persistent link: https://EconPapers.repec.org/RePEc:ags:cfcp15:344687

DOI: 10.22004/ag.econ.344687

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