Johannesburg — THERE are mixed reactions in South Africa following the decision by Botswana to export live cattle to the neighbouring country as a way of mitigating the impact of drought.
Thousands of cattle have died in Botswana because of the insufficient water sources and pastures.
Boikhutso Rabasha, Botswana Ministry of Agriculture spokesperson, said, "This decision is meant to assist farmers to avert possible loss of cattle due to severe impact of drought."
The beef industry in South Africa is worried this would result in a glut of the product and result in a drop in prices, hence killing competitiveness.
South Africa's Red Meat Producers' Organisation (RPO) has been vocal against the announcement made by the Ministry of Agriculture in Botswana.
Gerhard Schutte, Chief Executive Officer of the RPO, told local media South Africa's beef producers were already under tremendous pressure because of issues such as ongoing drought and ever-decreasing profit margins.
"This unilateral decision by Botswana is, therefore, extremely disappointing," Schutte added.
The executive added that the local beef production industry was already under pressure with Botswana Meat Corporation also in the process of increasing exports of stored beef to South Africa.
RPO has approached the Department of Agriculture, Land Reform, and Rural Development on the matter.
Economists believe this is an understandable concern given that the South African beef industry had lately experienced financial pressures because of the ban on exports earlier this year in the wake of an outbreak of foot-and-mouth disease.
Exports to a couple of markets have resumed since, but the industry has not completely recovered.
The rising feed costs on the back of a poor maize harvest are another challenge.
However, Wandile Sihlobo, Agricultural Business Chamber (AGBIZ), allayed fears of Botswana's decision affecting beef producers in South Africa.
"Firstly, South Africa and Botswana are part of the same trade block, the - Southern African Development Community (SADC) - which means there is a free movement of goods amongst member states," he pointed out.
"Secondly, Botswana's cattle herd is six times smaller than that of South Africa," Sihlobo added.
According to the data from the Food and Agricultural Organisation (FAO) of the United Nations, Botswana's herd is at 2,1 million.
"Lastly, Botswana is generally not a major exporter of live cattle," the economist said.
Over the past five years, the largest exports amounted to US$2,9 million according to data from the Trade Map.
By way of comparison, the value of South Africa's live cattle exports averaged US$19,9 million over the same period.
"My sense is that if Botswana sends some of its live cattle to South Africa, it is conceivable that there might be a blip on cattle and beef prices, but the impact might not be notable as feared. Only time will tell," Sihlobo projected.
He argued South Africa should increase its focus on expanding its export markets.
"This would ensure that there is no supply glut in the domestic market even if Botswana suddenly exports more live cattle to South Africa than we have seen in the past," Sihlobo said.
He said the South Africa red meat industry and government increase investments in biosecurity so that South Africa's beef export zeal was not interrupted as was the case earlier this year.
"So, my personal humble take on this matter is that we should monitor developments in Botswana, while at the same time increasing our efforts on the export expansion for great South African beef," Sihlobo concluded.