The lifting of the wool exports ban by China which accounts for over 70 percent of South Africa’s wool exports was worth being celebrated, according to FNB senior agricultural economist Paul Makube.
He added that a prolonged wait would have had a devastating impact on the profitability of the industry as well as severe losses not only to the producers but to the economy with regard to reduced foreign earnings.
“Much of the wool is produced in the Eastern Cape with a lot of small producers involved, thus a dent in the province’s economy. What is even more interesting is that the ban has been lifted without the imposition of any additional conditions. The protocols that have been negotiated previously have made it possible for the country to be in a better position with good science being the enabler. The industry is looking forward to the resumption of trade and normalization of operations. The Gross producer value of wool in SA is just over R5 billion with exports valued at R4.8 billion per annum,” Makube said.
In a media statement issued on behalf of the Chinese Embassy, the country said that after conducting a full consultation and risk-evaluation process, the General Administration of Customs of China and the Ministry of Agriculture and Rural Affairs of China had lifted the ban on wool and other cloven-hoofed animals' skin products imported from South Africa.
It said that China and South Africa were important economic and trade partners, with a long history of cooperation.
The Chinese Embassy said it would continue to work extensively in South Africa to elevate further the unparalleled bilateral trade and economic cooperation.
“China has been South Africa's largest trading partner for 13 consecutive years. In 2021, the total trade volume between China and South Africa reached US$54.35 billion, with a year-on-year growth of 50.7 percent, of which China's imports from South Africa reached US$33.23 billion, up by 59.6 percent year-on-year.”
In a joint statement, Agri SA Executive Director Christo van der Rheede and the National Wool Growers’ Association of South Africa (NWGA) general manager Leon de Beer said the lifting of China’s ban on local wool brought welcome relief for the local sector.
“We are relieved to learn that the South African government has secured the agreement of the government of China to lift the ban on South African wool exports.”
The pair said that the ban jeopardised more than 35 000 jobs and an additional 4 500 seasonal jobs.
They said that with more 70-80 percent of South Africa’s clip exported to China annually, the impact of the ban could have been devastating.
“We want to thank Minister of Agriculture, Land Reform and Rural Development, Thoko Didiza, and Minister for Trade, Industry and Competition, Ebrahim Patel, as well as the Directors General of these departments for their working in securing this relief. This is an example of what can be achieved through effective partnership between industry and Government,” said the two agricultural organisations.
Last week, the Agricultural Business Chamber(Agbiz) chief economist Wandile Sihlobo said that local agricultural export activity would likely soften this year from last year’s record of US$12.4 billion, due to lower production of key crops, animal disease spread and changes in phytosanitary regulations in key markets such as the EU will all weigh on the export activity this year.
BUSINESS REPORT