Chinese authorities have suspended SA’s wool imports because of a foot-and-mouth disease outbreak, leaving the agricultural sector reeling.
Wool is ranked the sixth largest exportable commodity in the agricultural sector in 2018 after oranges, grapes, wine and apples. In the same year, wool accounted for 4% of SA’s agricultural exports of $10.6bn, the Agricultural Business Chamber (Agbiz) said.
Foot-and-mouth disease broke out in Limpopo in January, resulting in the World Organisation for Animal Health temporarily suspending SA’s foot-and-mouth disease-free zone status.
Neighbouring countries including Zimbabwe, Botswana, Namibia, eSwatini and Mozambique announced a complete ban on importing SA meat pending the containment of the disease.
In a market update on Monday, Wandile Sihlobo, the head of agribusiness research at Agbiz, said what made the Chinese decision particularly concerning was its significant contribution to exports. Over the past five years China accounted for an average of 71% of SA’s wool exports in value terms. China is the world’s leading wool importer, taking in more than two-thirds of the world’s wool imports in 2017.
“So, if the current trade friction is not soon resolved, the SA wool industry could be negatively affected as over 90% of production is exported either as greasy wool or in semi-processed form as scoured and wool top. Under such a scenario the impact would ultimately be reflected in the agricultural trade balance,” said Sihlobo.
The other markets for SA wool include Czech Republic, Italy, India, Bulgaria, Germany and the US.
Sihlobo said SA wool exports to China were suspended in 2011 because of a foot-and-mouth disease outbreak, but the effect on exports then was minimal as the matter was resolved within a few months.
“We will closely monitor the developments on the current suspension in the coming weeks in order to ascertain its impact on the agricultural trade balance,” said Sihlobo.
Earlier in February, the government said it was negotiating to reopen markets as the disease had been contained.
“There has also been good progress with negotiations to reopen markets for deboned matured beef, processed dairy products and processed hides and skins to the other African countries, the Middle East and the Far East,” agriculture, forestry and fisheries minister Senzeni Zokwana said at the time.
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