- Category: Blog
- Published: Saturday, 03 November 2018 00:44
- Written by Jack Wilbur
- Hits: 494
Africa is a vast continent of untapped potential, containing around 15 percent of the world's population. However, many agribusinesses still treat it with a sense of trepidation. South Africa, a country on the southern tip of the continent, serves as the perfect entry point to doing business in the Sub-Saharan African region. Southern Africa is one of the fastest growing regions for U.S. agricultural exports, driven by a strong economic outlook, a growing middle class and surging demand for consumer-oriented foods.
In the words of Lew Cramer, former president of World Trade Center Utah, “the most important distance you can go in international trade is the final three feet to shake a hand and begin speaking to someone.” Therefore, the Utah Department of Agriculture and Food (UDAF) chose to go those final three feet in Southern Africa by participating on a trade mission organized by the USDA’s Foreign Agriculture Service (FAS) and led by the U.S. Under Secretary of Agriculture for Trade and Foreign Agricultural Affairs, Ted McKinney.
Our mission focused on expanding export opportunities for our farmers, ranchers and other food producers by encouraging free, fair, and reciprocal trade. We visited Johannesburg, Pretoria and Cape Town, South Africa. We met with businesses from not only South Africa but also Botswana, Lesotho, Madagascar, Mauritius, Mozambique, Namibia, Swaziland, Zambia, and Zimbabwe in Johannesburg. In Pretoria we interacted with South African national government officials and trade organizations in the agriculture and food sector as well as in international trade and business development. In Cape Town we visited with provincial leaders in agriculture and saw first hand what consumers are purchasing at their local grocery stores.
In this time of trade uncertainty around the world, Utah businesses must look to diversify. Southern Africa presents Utah agriculture and food producers with exciting possibilities to do just that. South Africa alone imported $7.0 billion in agricultural and food products in 2016. In 2017, Utah exported over $1.7 million in misc. edible food prep products to South Africa.
English is spoken in much of the region, so communication is not an issue when doing business in much of Southern Africa. In fact, over 500 U.S. companies are already doing business in South Africa alone.
Opportunities abound for Utah’s agriculture and food businesses to compete and increase the seven percent market share that the U.S. currently has in South Africa. The European Union has a free trade agreement with South Africa, which gives them preferential tariff treatment. So, it comes as no surprise that our largest competitors are the Europeans with the Chinese close behind.
Don’t let competition deter you from entering the market though, because consumer demand for high quality Americans products is significant. The ever-growing middle class in South Africa is placing an increasingly high value on choice, and U.S. products are highly regarded. At the same time, consumers are becoming more health conscious. Utah’s specialty foods and high-end retail products could do quite well amongst the wealthy in Cape Town and Johannesburg. As in much of the world, U.S. branded goods enjoy a strong reputation in the region. Additionally, Utah’s food prep companies, meat producers, livestock genetics businesses and animal feed and fodder farmers could excel in the region.
The U.S. is late to the game on the African continent, but there is still ample opportunity for Utah’s agribusinesses to meet the demands of the growing consumer base in southern Africa, particularly South Africa.
If you are interested in learning more about opportunities for your agribusiness in South Africa contact the Utah Department of Agriculture and Food today. Together we can explore potential opportunities for your business and help connect you with FAS staff in the region.