The wage dispute at parastatal Transnet posed a major risk for South Africa's food, fibre and beverages sector, Agricultural Business Chamber (Agbiz) chief economist Wandile Sihlobo warned yesterday.
The fourth quarter of the year was as busy as any other quarter with regards to trade and for this reason, stoppages would negatively affect both imports and export activities, he said.
“The actual costs of it, however, will depend on the duration of the strike. We hope a solution is found quickly between Transnet and the labour unions to minimise disruptions to trade,” Sihlobo said.
Exports of food, fibre and beverages in the last quarter of 2021 were at $2.8 billion, which was 23% of the total value of exports last year, Agbiz said.
Some of the products that dominated the export activity were citrus, maize, apples and pears, wine, grapes, nuts and berries, wool, soybean oil, apricots, cherries and peaches.
“Not all these exports were facilitated through Transnet. Still ... the fourth quarter of each year is a high export activity quarter. Given that agricultural production has generally been resilient, we expect that there are substantial volumes of exports of various products scheduled for this month,” Sihlobo said.
On the other hand, South Africa imports a range of food products in the fourth quarter of the year.
For example, last year during this period, the country saw imports of wheat, palm oil, rice, spirits, poultry meat, sunflower oil, and soybean oilcake, among various products.
Sihlobo said total imports of food, fibre and beverages in the last quarter of 2021 amounted to $1.9bn.
“In the same way as with exports, labour-related disruptions would disrupt this import activity.”
Sihlobo said Agbiz was not outlining these trade values to signal that this would be the direct loss if there was a strike.
“Instead, we are outlining the importance of trade in South Africa's food, fibre and beverages sector. Any costs would ultimately depend on the scale and time frame of disruptions. The focus should be on supporting both parties to find common ground. Indeed, the whole logistics industry is the bloodline of South Africa's export-oriented agriculture or food, fibre and beverages sector,” Sihlobo said.
Justin Chadwick, the CEO of the Citrus Growers Association (CGA), said last week that the CGA would continue joining the daily Transnet port operations meetings and would provide regular updates when it learnt more,
Meanwhile, in its weekly review on Monday, the Bureau For Economic Research (BER) said that the Transnet strike and higher oil prices could hurt the local trade balance.
“The strike also holds the risk of intensified load shedding as it could undermine coal deliveries to power stations that receive coal via rail, while agricultural exports are also set to be badly hurt by a strike. A possible strike in the automotive industry would have a similar negative impact on SA. Outside of the industrial sectors of the economy, the public sector may also be hit by a wage strike. More news on this front is expected this week,” the BER said.
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