This past week, the Kingdom of Saudi Arabia was mentioned as one of the countries that are set to join BRICS in January 2024. This is a major development and one that offers another avenue for diversifying the geographic destinations of South Africa’s agricultural exports.

There is no doubt that South Africa’s agriculture stands to benefit enormously from close cooperation with Saudi Arabia. As chair of the 15th BRICS Summit, South Africa championed the need to deepen trade and investments among the BRICS countries, a point that other members overwhelmingly supported.

The agribusiness working group of the BRICS Business Council, in particular, raised the trade aspect and the need to resolve non-tariff barriers that would distort agricultural trade among BRICS countries.

Initially, South African agribusinesses had their eyes on China and India as countries with reasonably higher tariffs on some agricultural products and a range of non-tariff barriers. With the inclusion of Saudi Arabia in BRICS, South Africa would now look at three significant markets to broaden agricultural exports.

Read more in Daily Maverick: The promises and acute problems of BRICS+

It is important for a country like South Africa to push for geographic diversification of trade, especially in light of intensifying geoeconomic tensions and growing protectionism in traditional markets.

The original BRICS countries are already an important agricultural market. According to data from Trade Map, they collectively imported about $320-billion of agricultural products from the world market in 2022. About 74% of the group’s agricultural imports come from China, 12% from India, 8% from Russia, 4% from Brazil and 3% from South Africa.

Notably, South Africa is generally a net exporter of some of the products mentioned above that Saudi Arabia imports from the world, albeit mainly concentrated in European, African and Asian markets.

The key agricultural products the BRICS grouping imports are soybeans, palm oil, beef, maize, berries, wheat, cotton, poultry, pork, apricots and peaches, sorghum, rice and sugar. These are produced at scale by some BRICS countries. Yet, intra-BRICS trade remains low because of tariffs and non-tariff barriers.

Saudi Arabia is a major agricultural importer. Over the past five years it imported, on average, $21-billion of agricultural products. The dominant suppliers of farm products to Saudi Arabia are Brazil, India, the US, the United Arab Emirates, Germany, France, Turkey and Egypt. The top imported agricultural products were meat and edible offal, rice, barley, milk and cream, cigars, cheese, live sheep and goats, sugar cane, maize, chocolate, citrus, palm oil, oilcake, bananas, tea, vegetables and fruit juices.

Read more in Daily Maverick: BRICS+ countries with contrasting, opposing values and political systems may see cooperation falter

South Africa is a minor player in the Saudi Arabian agricultural market, accounting for less than 2% of all the imports. The essential exportable products to the Saudi kingdom were oranges, lemons, pears, grapes, mandarins, apples, plums, grapes and avocados. An additional product likely to join this list in the coming months will be beef as South Africa recently established market access for exports to Saudi Arabia.

Notably, South Africa is generally a net exporter of some of the products mentioned above that Saudi Arabia imports from the world, albeit mainly concentrated in European, African and Asian markets. Therefore, the possibility of close cooperation and deepening of agricultural trade through the BRICS+ forum from early 2024 will benefit South Africa.

Crucial markets cannot be overshadowed

Again, this is not to minimise South Africa’s close relationship with the EU, the US, the African continent and other regions. These current markets remain strategically crucial to South Africa’s agriculture.

For example, South Africa exported a record $12.8-billion agricultural products in 2022. The African continent was the leading market, accounting for 37% of South Africa’s agricultural exports in 2022; Asia was the second-largest agricultural market, accounting for 27% of exports; followed by the EU, the third-largest market (19%). The Americas region was the fourth-largest (7%) and the remaining 10% went to the rest of the world. The UK was one of the leading markets within the “rest of the world” category.

Read more in Daily Maverick: Key takeaways from 15th BRICS Summit – and the human rights alarm bell ringing over bloc’s new members

So, crucial markets such as these cannot be overshadowed by the BRICS+ possibilities. The enthusiasm around BRICS+ is not at the expense of these key markets, but an addition. South Africa is driven to expand and diversify its agricultural export markets. This is a view or ambition of the South African government and the private sector. Therefore, the possibility of accessing new markets serves this national ambition. DM

Wandile Sihlobo, chief economist at the Agricultural Business Chamber of SA (Agbiz) and a senior lecturer at Stellenbosch University’s Department of Agricultural Economics, is the author of Finding Common Ground: Land, Equity, and Agriculture.