TOGETHER with general expectations for beef prices to continue rising owing to growing demand in China, the current environment should incentivize farmers to re-stock herds and increase production despite input costs mounting, Theo Klein, an economist with Simonis Storm Securities has said.
Cattle slaughtering increased by 16.4% y/y in April 2022, while sheep slaughter declined 9.8% y/y, goats down 85.1% y/y and pigs up 9.7% y/y,
“Year to date (YTD), the best performing sub-sector is cattle with total slaughtering having increased by 30.2% compared to the same period last year. Total slaughtering increased by 18.2% YTD for sheep, goats decreased 91.7% and pigs rose by 1.0% compared to the same period last year. During April 2022, live exports for cattle increased by 3.6% y/y, sheep up by 73.7% y/y and goats up by 12.6% y/y,” Klein said in a recent report.
Exports went to Europe (60%), rest of Africa (24%) and China and the US (16%). Within Africa, South Africa, Tanzania and Botswana were the biggest export destinations. South Africa was the only export destination for sheep and Botswana the only destination for pig exports during April 2022.
“YTD, export abattoirs are still operating below capacity, but are 67.8% better off than the same period last year. YTD, average auction prices decreased from N$32.12/kg to N$30.02/kg for cattle, increased from N$35.22/kg to N$335.74/kg for sheep, increased from N$37.04/kg to N$41.12/kg for goats and decreased from N$36.76/kg to N$36.25/kg for pigs. Due to improved rainfall, vegetation growth was above average in most parts of the country at the end of March 2022, but remains below average in the North-Eastern regions according to Agribank research.,” Klein further stated.
In the fishing sector, Klein noted that local fishing companies report high levels of demand from export destinations (e.g. SADC members, Australia, China, Germany, Denmark, Spain, Korea and the US amongst other).
“Together with a weakening Rand exchange rate, export earnings are set to increase from the sector going forward. Fish exports averaged 14.6% of total exports in the last two years, making this a crucial sector for Namibia’s trade balance and foreign currency reserves. However, expensive quotas, rising input costs such as wages, fuel and electricity prices are weighing on profits in the sector. All fishing sector players surveyed by Simonis Storm have indicated that climate change impacts have not impacted fishing production in 2021 and they do not see changing weather/climate patterns as a risk to future production. On the other hand, some players are looking at investing in renewable energy at land-based facilities/factories to combat rising electricity costs,” he said.
He also said during April 2022, the Namibian borders remained closed to the importation of four different horticulture products, namely butternut, cucumber, coloured peppers and pumpkin according to the Namibian Agronomic Board (NAB). The NAB, at the end of April, closed the borders for the importation of another seven products during May 2022.
“Beetroot, cabbage, green pepper, onion, sweet potato, tomato jam and sweet corn were added to the list. In the absence of crop harvest data, this indicates that local supply has improved and is forecasted to satisfy local demand. We can therefore assume crop production has been positive YTD.”
Improved rainfall during the summer season in 2022 was above short-term averages, but was not widespread, with the Omusati, Oshana and Western Ohangwena regions receiving less rain compared to others according to Agribank research.
“Sporadic and inconsistent rainfall remain a risk to crop farming,” concluded Klein.