SA economist: “Resumption of wool exports to China comes at an opportune time”

Chief economist at Agricultural Business Chamber Wandile Sihlobo says the resumption of wool exports comes at an opportune time considering the wool season which has just started. 
 
Sihlobo argues that the resumption and suspension of the import ban by China will benefit the South African economy. 
 
China recently announced a four-month ban on wool coming from the country but decided to overturn the move in the past few days. 
 
This came as China is South Africa’s primary wool export market, accounting for an average of 70 percent of exports.  
 
Independent Online Media says other South African wool industry markets include the Czech Republic, Italy, India, Bulgaria, Germany, the US, Malaysia, Japan, and Mexico, however, these were relatively small. 
 
As these countries cannot be compared to the Asian nation, this means they could not absorb the volume usually destined for China over the past couple of months. 
 
“The hope is that the European market could remain vibrant as the Chinese market also opens up to South African wool,” Sihlobo said. 

“Notably, the FMD outbreak has been specific to cattle farms, not sheep farming. Hence, industry role players were appropriately dismayed when China suspended wool imports from South Africa, citing this reason. 
 
“The cooperation between government, industry, and organised agriculture during the wool ban challenges is yet another example of the approach that should be used to deal with challenges facing the sector.  
 
“For example, foot-and-mouth disease, which continues to affect the livestock industry, needs industry and regulators’ view on assembling a plan for the sector.  
 
“On 16 August 2022, the Department of Agriculture, Land Reform and Rural Development aptly decided to restrict the movement of cattle for 21 days, reviewable weekly.” 
 
The seasoned economist also explained that South Africa and China had agreed on this protocol following the 2019 outbreak, which weighed on exports. 
 
He said China might have faced capacity constraints during the ravaging Covid-19 lockdowns in recent months, possibly leading to delays in activating the protocol. 
 
In addition, the daily newspaper reports that the wool production sector is amongst the agricultural sub-sectors with a large share of new entrant black farmers, who it was feared would experience financial pressures if the ban had continued for longer.  
 
At the same time, the National Agricultural Marketing Council estimates indicate that black farmers account for 18 percent, 13 percent, and 34 percent of wool, mohair, and cattle production, respectively. 
 
Main Image: SA Sheep/Farmers Weekly