World meat industry news

South Africa is keen to improve its Russian market share amid sanctions on Russia’s traditional food trading partners – and the food sector looks set to facilitate this expansion.

Rob Davies, South African Trade and Industry Minister, has been quoted by Sputnik news as saying: “If there are opportunities arising from the fact that others imposed sanctions on Russia and we can step in and strengthen our cooperation, we will be really happy to do that.” So, with this co-operative spirit in mind, which foodstuffs does Russia import from South Africa and what opportunities are to be had in the Russian market for South African companies?

Sensational citrus

A news item from Fresh Plaza revealed that, in October 2015, South Africa became the main supplier of citrus fruits to Russia. Approximately a quarter of all oranges on the Russian market are now sourced from South Africa. The citrus trade between the two countries has been a long and productive partnership, stretching back 20 years. Mikhail Fateev, head of the Russia-RSA Business Council, noted that during this period not a single shipment of South African fruit to Russia had been rejected on phytosanitary grounds.

The first reefer-shipment of South African food arrived in St. Petersburg in March 2015. This was the first such shipment of its kind for that season. 4,000 tons of various fruits, including citrus, apples and pears. This is typical of South African fruit shipments to Russia, showing the huge quantities Russia desires each week – and a gap to exploit for South African fruit companies.

Other fruitful South African shipments

According to Tatar Inform, South African fresh fruit imports grew by 15% over the first half of 2015. 87.6 thousand tons of produce was imported by Russia from South Africa. The total value of these shipments stood at $73.75 million – an increase of 8% compared with the previous year. Canned fruit, vegetable and nut imports from South Africa amounted to 8.4 thousand tons during this period with a total value of $6.9 million.

Groundnuts are another market that could look healthy. Grain SA, an association of South African grain farmers, identified Russia as one of the key markets for their produce. In 2014, Russia spent $110 million on importing groundnuts.

South African produce offers a taste of the exotic

As part of a commitment to supply over $200 million of agro-products to Russia, South Africa is looking to export more exotic fare. The Klein Karoo Company began exporting ostrich meat to the Russian market in 2015. Dempsey Rice, Klein Karoo’s sales representative, stated that, after their initial operations, the company has shipped 72 tons of meat to clients in Moscow, and new partners are ready to make orders.

While ostrich meat appears to be taking flight, South Africa is still working to obtain permission from Russian authorities to begin supplying more conventional meats. Once permission has been attained, South African companies will be able to begin exporting beef, pork and lamb to Russia.

Bounty of the sea – South African seafood in Russia

One notable market that has opened for the first time in nearly two decades due to the various trade sanctions is seafood. In November 2014, Russia gave 12 South African firms the rights to supply the Russian market with canned and frozen fish. "Since the late 1990s, this is the first time South African fish will be exported to Russia on a commercial basis," Felix Ratheb, chief executive of the Cape Town-based Sea Harvest, said at the time in an interview with Reuters. Ratheb said Sea-Harvest’s first exports to Russia were expected in early 2015 and would begin at about 500 tonnes with a worth of between $2 million and $3.5 million.

South African wine exports to Russia

Wine is another key area of export for South Africa. According to a report from Russia Beyond the Headlines, South African products accounted for 1.15% of all of Russia’s wine imports in 2014. Due to economic factors, a slump in imported wines and grapes for domestic production has resulted in a slow down on wine imports in 2015. This does, however, present ample opportunities for suppliers once the economy begins to turn around. Andre van der Veen is the Chairman of KWV, an internationally renowned South African wine and beverage company, and he is certainly optimistic and keen to target Russia for long-term growth. "We have a way to go in Russia, but the country has a great affinity for South African products… and is less inclined to European and US products," van der Veen was quoted as saying by Business Day Live.

A land of opportunity for South African businesses

Russia is a strong market for South African companies – particularly fruits. With an already established trade network and as a member of the BRICS community, expanding into Russia can be seen as a profitable venture for South African firms. Exhibiting at WorldFood Moscow gives South African companies a platform to demonstrate their products to the Russian food industry’s key decision makers. At 2015’s show, firms from South Africa exhibited a number of different foodstuffs, from exotic fruits, herbs and spices to tea, wine and much more. The South African embassy in Moscow, which took several exporters to WorldFood Moscow in 2015, was very impressed with the business opportunities the show offers. “For us, WorldFood Moscow is the primary event in Russia,” said Vusi Mweli, the embassy’s Minister Counsellor. “It is the strategic event where we can meet all the importers and distributors not only in Russia but also Ukraine, Kazakhstan and the surrounding regions. Our companies meet a whole range of suppliers.”