Exporting

Introduction

Farmers in the 21st Century are greatly influenced by international commodity markets, the exchange rates, and the flow of produce between countries. The domestic price of commodities in most countries is very close to import parity (the landed price of an imported product) as farmers compete with each other for markets.

A growth in exports will be crucial to this country meeting its job creation goals and balancing its trade deficit (when we import more than we export).

As long as the global economic system creates countries that are better able to produce products more efficiently (and cheaper) than others, the world trade system – and exporting – will continue unabated.

Contents

Contents

International business environment
Trade terms (Incoterms)
Export tips
South African Revenue Service (SARS)
The Department of Trade, Industry and Competition (the dtic)
Department of Agriculture, Land Reform and Rural Development (DALRRD)
Other government departments and state bodies
Other role players
Publications
Websites

International business environment

a) The following are included in the trade agreements to which South Africa is party:

  • Southern African Development Community (SADC) (FTA),
  • SADC-European Union (EU) Economic Partnership Agreement (EPA),
  • SACU/Mozambique-United Kingdom (UK) EPA,
  • The African Continental Free Trade Area (AfCFTA),
  • SACU-MERCOSUR Preferential Trade Agreement (PTA)
  • USA Africa Growth and Opportunity Act (AGOA)

Further reference:

 

Find information on the trade agreements on websites like www.thedtic.gov.za,  www.sars.gov.za, www.sacu.int and www.agbiz.co.za.

 

Visit the Trade Law Centre (Tralac) website at www.tralac.org for Trade Data Analysis on the different African countries, and various reports and publications.

 

Read the African Development Bank African Economic Outlook page at www.afdb.org/en/knowledge/publications/african-economic-outlook/

 

Find articles on the progress of AfCFTA under the “Some articles” sub-heading at the bottom of this page.

 

 

South Africa: imports and exports

 

General

Namibia and Botswana are amongst South Africa’s most important global trading partners. When looking at intra-Africa trade, it is notable that more than 50% of that intra-trade takes place within SACU, and more than 60% takes place among the member states of the Southern African Development Community (SADC). South Africa is a clear driver of intra-Africa trade.

Over the past two decades, an important structural shift in South Africa’s trade relations has taken place – China has come into the picture as (now) South Africa’s most important export destination and import source (looking at individual countries rather than trade blocs such as the European Union, which remains most important).

TRALAC Newsletter, Issue 9, 2019.

 

Agricultural

The top ten exportable products by value were citrus, grapes, wine, apples and pears, maize, nuts, sugar, wool and fruit juices. Top imports were rice, wheat and palm oil (Agbiz, 2021).

 

Trade data is given on www.sars.gov.za (see the “Customs and Excise” menu option). Included are overviews on the country’s trade agreements. See also www.thedtic.gov.za and the web pages of the Directorate International Trade at www.dalrrd.gov.za.

 

Trade terms (Incoterms)

Incoterms are standard trade definitions most commonly used in international sales contracts. Devised and published by the International Chamber of Commerce, they are at the heart of world trade.

Incoterms include:

CIF Cost, Insurance and Freight
CPT Carriage paid to
DDU Delivered Duty Unpaid
EXW Ex Works
FOB Free On Board

Visit the website of the International Chamber of Commerce for more information – www.iccwbo.org/incoterms.

Export tips

Avoid not having a written contract in place – whether it is with a supplier or receiver. This contract is to state the payment and delivery terms.

To avoid fraud and being tricked out of money, when you are pursuing a new deal it is vital for you to:

  • Check the credentials of the company – in most countries, businesses must register and be licensed before they can operate. You can check with the companies’ registry in the relevant country. Check that the contact details exist and belong to the relevant company.
  • Consider shipping your goods only after receiving money in your account, especially for new deals. Check the authenticity of bank documents. If payment is by Letter of Credit, request confirmation from your bank.
  • Avoid sending too much of stock as samples. For high-value products, request payment for samples and/or payment of shipping costs. Invest in a proper and detailed brochure as a substitute for samples.
  • Ask your potential clients as many questions as possible; their registration, licence number, physical address, banker, their affiliation to any trade body or association in their country. A serious buyer usually doesn’t mind answering such questions.
Source: Advice from the Africa Desk at Wesgro (the official trade and investment promotion agency of the Western Cape).

South African Revenue Service (SARS)

Find the SARS page for exporters at www.sars.gov.za/customs-and-excise/registration-licensing-and-accreditation/exporters/.

All importers and exporters in South Africa are required to register with the Commissioner of the South African Revenue Service (SARS). Forms are to be submitted to the SARS office closest to the area in which the applicant’s head office is situated. Upon registration, applicants are issued with a unique customs code number. The registration process normally takes about two to three weeks. Contact details of head office, Revenue Branch Offices (provincial), Customs Offices and more are on the website, www.sars.gov.za.

Find notes on the legislative framework (the Customs and Excise Act, 1964 (Act 91 of 1964), on the website.

The Department of Trade, Industry and Competition (the dtic)

The Department of Trade, Industry and Competition (the dtic) has played a critical role in the promotion of economic development and in increasing exports in selected target markets.  In partnership with the Provincial Investment Promotion Agencies (PIPAs) (see “Providers of financial services” page), it undertakes export promotion activities, specifically in markets that are aligned to South Africa’s international relations and co-operation agreements.

Find the “Sectors and Service” and “Trade and Export” options on the website, www.thedtic.gov.za

International Trade Administration Commission (ITAC)

www.itac.org.za

Find export application forms on the website.

 

Department of Agriculture, Land Reform and Rural Development (DALRRD)

In terms of the regulations and the Agricultural Produce Standards Act, 1990, approval must first be sought and obtained before agricultural produce can be exported from South Africa.

The regulations set out:

  • The approval process that must be followed in order to obtain necessary consent for export
  • Details pertaining to the pre-export inspection, including the inspection procedure and laboratory testing requirements
  • The fees relating to inspection and analysis
  • The appeals process offences and penalties

For various notes on exports, look under the “Import and export services” option on www.dalrrd.gov.za. For notes on the different directorates, click on “Branches”. The following directorates are of particular interest to this page:

Directorate: International Trade

The directorate works closely with the dtic. It is responsible for agricultural input for trade policy. It participates in trade negotiations and implementation of trade agreements, trade research and trade intelligence. The directorate also puts out various publications (like the Step-by-step Export Manual for the South African Fruit Industry) to help people enquiring about exporting.

 

Directorate: Animal Health

This Directorate controls and certifies the health status of animals/animal products for import or export, including the provision of quarantine facilities. It also negotiates protocols on the import and export of animals/animal products.

 

Directorate: Plant Health

This Directorate ensures compliance with international plant health obligations and responsibilities, thereby creating an environment for safe imports and exports. Find the Import and export notes under the Plant health option at www.dalrrd.gov.za.

NPPOZA (National Plant Protection Organisation of South Africa) www.nda.agric.za/docs/npposa/page_e.htm

 

Directorate: Marketing 

 

Directorate: Food Safety and Quality Assurance

Find the various Export certification procedures under the Food Safety and Quality Assurance option at www.dalrrd.gov.za.

 

Directorate: Food Import and Export Standards

All food business operators (FBOs) of legislated agricultural products of plant origin intended for export are required to register with DALRRD. The purpose of these registrations is to ensure that producers, packers, processors and freight forwarders are in line with the internationally set traceability requirements. Visit www.dalrrd.gov.za/Branches/Agricultural-Production-Health-Food-Safety/Food-Safety-Quality-Assurance/Food-Business-Operator-Registration.

The Agricultural Trade Forum (ATF), established by the National Department of Agriculture, facilitates the entire agricultural industry with regard to international trade. It is housed under the Chief Directorate: Economic Development, Trade and Marketing.

Look for the government gazette notices under the “Resource Centre” and “Publications” options at www.dalrrd.gov.za.

Other government departments and state bodies

  • National Agricultural Marketing Council (NAMC) www.namc.co.za The NAMC is involved in several ways here, from export promotion activities to supporting new agribusinesses in their endeavours to export their products. Read about the different divisions on the website.
  • Perishable Products Export Control Board (PPECB) www.ppecb.com The PPECB provides a comprehensive service to exporters, which includes the inspection and approval of equipment such as containers, specialised reefer vessels and cold stores; monitoring loading processes and the en-route temperature management of produce. The PPECB was the implementing agent for the South African Pesticide Initiative Programme (SA PIP) and SA PIP 2. Smallholder farmers were trained on responsible pesticide use, food safety, agricultural practices and legislation. This was to introduce these producers to expectations of exporting to the EU. They constitute only a small percentage of those who export fruit and vegetables and so there is huge potential here.
  • Some provincial departments of agriculture work to identify export markets for agricultural produce in the province.
  • Reserve Bank www.resbank.co.za Several relevant contact details are available on the website
  • South African Bureau of Standards (SABS) www.sabs.co.za

The global Halal food and beverage market was valued at US$1.3 trillion in 2019, and forecast to reach US$1.38 trillion by 2024 (USDA, 2021). The Middle East and in particular the United Arab Emirates and Saudi Arabia, which import 80% of their food requirements, represents the greatest potential market for South African Halal Certified products. Another market is European countries with large Muslim communities (e.g. UK, France and Germany). The WESGRO document “Halal FAQ’s for food and beverage exporters” included contact details of halal certifying bodies. The Western Cape Department of Agriculture has information on the halal value chain. See www.elsenburg.com.

 

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Other role players

Associations and NGOs

  • Many Agricultural Business Chamber (Agbiz) members are agricultural exporters. Find useful information on trade relations, trade agreements etc. at www.agbiz.co.za. Several documents specifically look at agricultural exports.
  • Agbiz is a member of Business Unity South Africa (BUSA). See www.busa.org.za.
  • Some Chambers are geared towards trade between two countries e.g. the French South African Chamber – www.fsacci.co.za; the Southern African German Chamber of Commerce – www.germanchamber.co.za; Southern Africa-Switzerland – www.scsa.ch; South African-Netherlands – www.sanec.co.za etc.
  • The Fairtrade movement aims “to enhance trading conditions for small scale businesses, improve labour conditions for employees and empower communities through ethical and sustainable trade”. Read about Fairtrade South Africa at www.fairtrade.org.za.
  • Find a list of fruit exporters at http://fpef.co.za, website of the Fresh Produce Exporters’ Forum (FPEF).
  • NEDLAC www.nedlac.org.za
  • The Farm Animal Unit of the National Council of SPCAs monitors the export of live animals from East London and Durban harbours. Visit www.nspca.co.za.
  • Responsible Packaging Management Association (RPMASA) http://rpmasa.org.za

South African Association of Freight Forwarders (SAAFF) www.saaff.org.za

 

The role of the freight forwarder, alternatively called the ‘shipping and forwarding’ or ‘clearing and forwarding’ agent, is to ensure that cargo is transported across international boundaries in the most efficient and economical way.

 

The agent should be able to advise the exporter on the following aspects:

  • the best mode of transport for the goods, whether by sea, air, rail, road or a combination of these;
  • schedule and transit times of the various transport services;
  • the most suitable packing; rates and insurance premiums;
  • freight rates; costing for export; compliance with maritime and other statutory obligations;
  • marking of cargo; and
  • all technical aspects of international forwarding.

Agents also handle customs clearance, including related documentation needs and exchange control requirements, and any other permits required by law. Most agents have an international network of branch offices or associates, which enables them to give advice on the importing country’s regulations.

  • South African Association of Ship Operators and Agents (SAASOA) www.saasoa.co.za
  • South African Chamber of Commerce and Industry (SACCI) www.sacci.org.za
  • Find “Export advice & info” at www.saflec.co.za, website of the South African Footware & Leather Export Council (SAFLEC).

 

Export councils

In partnership with the dtic, Export Councils have been given a forum to address all obstacles and proposals that may affect their ability to export successfully. This takes the form of a National Export Advisory Council, chaired by the Minister. The export council’s database may be found on www.thedti.gov.za. Included are organisations like the Fresh Produce Exporters’ Forum, Farmed Abalone Export Council, South African Flower Export Council, Wines of South Africa (WOSA), South African Ostrich Business Chamber and the SA Fruit and Vegetable Exporters’ Council.

Various industry associations and Joint Action Groups are also involved. Find all contact details on www.thedti.gov.za.

 

Finance

Commercial banks assist with export credits, guarantees and letters of credit. The Credit Guarantee Insurance Corporation of South Africa administers an export credit insurance scheme on behalf of the dtic. Also involved are regional and province-specific state role players e.g. WESGRO and Tshwane Economic Development Agency (TEDA). Find details of these on the “Providers of financial services” page.

African Renaissance and International Cooperation Fund
c/o Department of International Relations and Co-operation
www.dirco.gov.za

 

Coface
www.cofaceza.com

Credit insurance products

 

Credit Guarantee
www.creditguarantee.co.za

Find the export credit insurance under the “Products and services” menu. The purpose of the scheme is to finance small to medium-sized businesses which lack the financial resources to execute export orders. The scheme enables the prospective exporter to obtain finance from a number of participating banks.

 

The Export Credit Insurance Corporation of South Africa Limited (ECIC) located within the Department of Trade and Industry
www.ecic.co.za

A project can qualify for 85% finance if a South African content of at least 50% of the total project value is achieved.

 

Industrial Development Corporation (IDC)
www.idc.co.za

 

JSE Limited
www.jse.co.za

If you are an exporter, foreign exchange is one of your top risks. A rand futures market exists allowing agribusinesses and farmers to hedge themselves against negative movements in the exchange rate, reducing risks and uncertainty.

 

Lombard Insurance Group
www.lombardins.com

Credit insurance products

 

Prestige Credit Insurance Consultants
www.prestigecredit.co.za

Credit insurance for protection on your dealings with exports debtors

 

Santam Marine
www.associatemarine.co.za/index.html

 

SASFIN Bank
www.sasfin.com

Import/export trade finance experts

 

Logistics and transport

 

Training and research

AgriAcademy SA www.agriacademy.co.za The export readiness training course is an agriculture-focused distance learning course for the producer who plans to start exporting.

Business Unity South Africa (BUSA) facilitates training workshops for SMMEs interested in exporting. Visit www.busa.org.za.

The chamber movement addresses all issues affecting the business community, including exporting. Find out how your nearest Chamber of Commerce can help you. We list some of these below:

Customs Services (Pty) Ltd www.customsservices.co.za

The Department of Trade, Industry & Competition (the dtic) runs the Global Export Passport Initiative, a training programme for companies and small exporters.

Freight Training (Pty) Ltd www.freighttraining.co.za

Top of the Class (TOC) is a well-known training programme for the fruit industry, initiated by the Fresh Produce Exporters’ Forum (FPEF) more than ten years ago. Find details on www.fpef.co.za.

Global Maritime Legal Solutions (GMLS) www.gmls.co.za Training and consulting in exporting

Human Sciences Research Council (HSRC) BRICS Research Centre www.hsrc.ac.za/en/departments/brics-research-centre

International Trade Institute of South Africa (ITRISA) www.itrisa.co.za Short courses and distance education: Certificate in International Trade, Advance Certificate in International Trade as well as National Diploma in Export/Import Management.

Maritime, Ports, Transport and Logistics Academy (MPTLA) www.sun.ac.za/english/faculty/economy/logistics/Pages/MPTL%20Academy/MPTL-Academy.aspx Offers short courses and management development programmes

North-West University School of Economics https://commerce.nwu.ac.za/es/internationaltrade Visit the website to see the offerings in International Trade.

The Perishable Products Export Control Board (PPECB) is involved in programmes to build capacity. The Agri Export Technologist Programme is one of these. Find more at https://ppecb.com.

Skills Development Specialists www.sdstraining.co.za

The South African Board of Standards (SABS) offers training courses for GlobalG.A.P. Find contact details under “Other government departments and state bodies” heading.

South African Institute of International Affairs (SAIIA) www.saiia.org.za

TIPS www.tips.org.za

TMS Training Services www.hochfeld.co.za Training courses include Ships Chartering, Trade Finance and Forex for better Business.

Trade Law Centre for Southern Africa (TRALAC) www.tralac.org “Building capacity to help Africa trade better”

TRADE Research Advisory (Trade and Development) Wilma.viviers [at] nwu.ac.za Research niche areas – focusing research on export promotion and identifying South Africa’s export opportunities. See https://commerce.nwu.ac.za/trade/research-and-commercial-projects.

The University of Cape Town runs an “Import and Export Management” short course. Take a look at www.getsmarter.co.za or call 021 447 7565 for more information.

University of South Africa (UNISA) Centre for Business Management Tel: 012 429 4376 www.unisa.ac.za/cbm A 12-month, distance education certificate course in exporting is offered.

 

Consultants and other services

The various umbrella bodies like the South African Table Grapes Industry offer exporters information and services.
 
  • AgriBusiness Systems international (ABSi) www.absi.co.za
  • Agrihub provides real time shipping information for the fruit industry. See www.agrihub.co.za.
  • The Agricultural and Industrial Marketing Company secures trade and finance instruments from banks, finds logistics solutions for communities, does project management and more. Visit www.theaimco.com.
  • Bamic Enterprises provides covers and equipment for containers. See http://bamicenterprises.com/
  • Biozone https://biozone.co.za prolong the lifespan of products in storage and in transit
  • BMI Research www.bmi.co.za Market research activities
  • Customs Services (Pty) Ltd www.customsservices.co.za
  • DFM Technologies https://dfmtechnologies.co.za (For software that allows the user to create chemical and fertiliser instructions required for GLOBALG.A.P., Nature’s Choice and the export market).
  • Euromonitor Cape Town www.euromonitor.com Market research activities
  • Expand Into Africa www.expandintoafrica.com
  • Hilton Lambert www.hiltonlambert.com Trade law specialists
  • Nielsen Company South Africa www.nielsen.com/za/en.html market research activities
  • The Perishable Products Export Control Board (PPECB) offers various services to exporters. Find contact details under “Other government departments and state bodies” heading.
  • TRADE (Trade and Development) Wilma.viviers [at] nwu.ac.za (research niche areas – focusing research on export promotion and identifying South Africa’s export opportunities).
  • Veterinary Import-Export Authority (VIEA) helps solve issues relating to agricultural products. See http://vetimportexport.com.

 

 

Provincial Government support

All provinces have trade and investment promotion agencies. Find their details on the “Providers of financial services” page.
 

 

International trade organisations

 

 

 

Publications

 

Websites

Visit websites of role players mentioned on this page.

  • Find the US Department of Agriculture guides for exporting to several global destinations (including South Africa) at www.fas.usda.gov.
  • Care to find out how countries fare in the competitive rankings? Two reports are the World Competitiveness Report (produced by the IMD Business School in Switzerland), and the Global Competitiveness Report (produced by the World Economic Forum in Switzerland). Visit www.imd.org and www.weforum.org.
  • Find the trade briefs, working papers etc at www.tralac.org (Trade Law Centre for Southern Africa). Download the latest weekly customs, excise, tariff and trade remedy summary notification.
  • Read the information on www.agbiz.co.za on trade relations.
  • COMESA, EAC and SADC implement a Non-Tariff Barriers (NTBs) reporting, monitoring and eliminating mechanism. See www.tradebarriers.org.
  • www.cbi.eu – the Centre for the Promotion of Imports from Developing Countries (CBI) provides market information, export promotion, matching, advice on import enquiries, and environmental information for exporters from developing countries.
  • www.bilaterals.org – read about “everything that is not happening at the WTO”
  • FreshPlaza: global fresh produce news, www.freshplaza.com
  • Southern Africa’s Freight News www.freightnews.co.za
  • FTW Online “for import/export decision makers” – www.ftwonline.co.za
  • The CTA’s monthly news update on agricultural trade issues – subscribe at http://agritrade.cta.int
  • www.exporthelp.co.za – “Your online export helpdesk”
  • www.fas.usda.gov – Foreign Agricultural Service (the United States Department of Agriculture)
  • International Air Transport Association (IATA) www.iata.org
  • International Trade Centre (ITC), the “Development partner for export success” – www.intracen.org
  • www.trademap.org – International Trade Centre website for “trade statistics for international business development”
  • www.macmap.org – Market Access Map, “making import tariffs and market access barriers transparent”
  • www.mbendi.co.za – the global information resource for business and travel.
  • www.thefoodworld.com – this website lists companies worldwide who supply food.
  • World Bank www.worldbank.org
  • World Customs Organisation – www.wcoomd.org

 

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