Minister John Steenhuisen on agriculture’s strategic role in addressing trade deficit

The Minister of Agriculture, Mr John Steenhuisen, stated today that while the agricultural sector cannot solve the country’s trade balance issues alone, it is uniquely positioned to be a driving force in stabilising and rebuilding it through its ability to generate rural employment, drive inclusive growth, and earn foreign exchange.

According to the South African Reserve Bank’s balance of payments report, released this week, the country’s trade surplus narrowed from R211,0 billion to R177,1 billion between the first and second quarters. The decline in the value of goods exports outpaced the rise in imports and was largely driven by a slowdown in shipments of mining and agricultural commodities. Within the agricultural category, the decline was most pronounced in vegetable products, particularly maize, whose export value dropped notably over the period under review.

Maize has long been one of South Africa’s strategic export commodities, providing not only a buffer for our national grain reserves but also serving as a crucial foreign currency earner, especially in regional markets. “The observed decline in maize export value during the second quarter reflects a combination of volume constraints, softer international prices, and rising trade frictions globally. This is not only a concern for the balance of payments, but also for the farmers, agribusinesses, and rural communities whose livelihoods depend on stable and expanding export demand,” Minister Steenhuisen said.

Resilient sector

Despite these national figures, South Africa’s agricultural sector continues to show resilience.

“As noted in August, with a big push to take advantage of the window before the 30% United States (US) tariff kicked in, South Africa's agricultural exports totalled US$3,71 billion in quarter, up 10% from the same period a year ago. This was mainly owing to exports of citrus, apples and pears, maize, wine, nuts, fruit juices, dates, pineapples, avocados, grapes, and wool, among other products.”

The sector’s continued positive contribution to South Africa’s gross domestic product (GDP) is also testament to its resilience.

The latest figures by Statistics South Africa indicate that agriculture grew by 2,5% in the second quarter of 2025, hinting at a current recovery phase. The expansion was primarily due to increased economic activity in horticulture and animal products.

Tariffs

The worsening current account position demonstrates that agriculture’s contribution is not immune to external shocks, particularly when combined with declining commodity prices, protectionist measures, and logistical challenges.

One such external shock is the imposition of a 30% tariff on South African agricultural exports to the United States of America, announced as part of a broader set of global trade restrictions under the current US administration. While mining commodities were exempted, high-value agricultural exports have been directly affected. These new tariffs place undue strain on citrus growers, macadamia exporters, and wine producers who had invested in building market share in the United States over the past decade.

For many emerging exporters that have only recently entered global value chains, these barriers risk undoing years of transformation gains and enterprise development.

The Department of Agriculture is working to urgently mitigate these risks. “We are intensifying engagements with the Department of Trade, Industry and Competition and the Department of International Relations and Cooperation to defend market access for our producers, and to strengthen South Africa’s trade diplomacy through multilateral platforms. In parallel, the department is accelerating efforts to diversify our export portfolio.”

“New bilateral phytosanitary agreements are being finalised to open or expand access to markets such as China for avocados, India for fresh produce, Japan for grain products, and the Middle East for beef.

“These efforts are backed by strategic investments in cold chain infrastructure, export compliance systems, and the biosecurity capabilities required to maintain our international reputation for safe, high-quality produce,” Minister Steenhuisen highlighted.

Enquiries:
Ms Joylene van Wyk
Director: Media Liaison, Ministry
Cell: 083 292 7399
E-mail: Joylenev@nda.gov.za

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