DETERMINANTS OF BEEF EXPORTS IN ESWATINI

588

CHAPTER ONE

Introduction

Background information

World meat exports went up by 51% from 2004 to 2014. Unlike world meat imports, annual beef exports hold the highest share of 40% of the annual total world exports, followed by poultry and swine exports with shares of 36% and 24%respectively (Bankole, 2016). World beef exports, grew by 40%, presenting the smallest growth rate of the meat types. The United States accounts for 23% of the world’s meat exports making it the world’s largest meat exporter. The United States’ trade partners, Mexico and Canada, are the largest export market for the United States’ meats. It is also interesting to note that Brazil closely follows the United States as the world’s largest beef exporter (Bankole, 2016).

 USDA-ERS-PSD Online Database, computed by author United States and India had a large increase in their rate of meat exports from 2004 to 2014 with a growth rate of 101% and 276%, respectively. India’s large export growth comes from its large beef export market which accounts for 10% of India’s exports (Bankole, 2016) . This is as a result of a popular religious belief against beef consumption in India, hence other meat types like pork and poultry are more acceptable. Other countries like China, New Zealand and Argentina experienced a decline in meat exports with growth rates of -10%, -10%, and -22% respectively (Ponnampalam et al ., 2019). Argentina recorded its highest number of meat exports in 2005. However, in the wake of the 2006 outbreak of foot and mouth disease in Argentina, more than thirty countries closed their borders to Argentina’s beef[n1]  (Jordan, 2017). The decline in exports from 2005 resulting from this event may be a reason for the negative growth rate in Argentina’s meat exports (Arita et al ., [n2] 2014).

In 2013, the global beef export market was estimated at [n3]  $42.4 billion. The market consisted of  , chilled, and frozen beef. Botswana is relatively small exporter of beef in the global context. In 2013, its total beef exports were us$116.6 million, representing a world export markets share of 0.3%. Botswana was ranked 22nd and 28th in the world in the export of frozen and chilled beef, respectively (Getahun, 2017).

Known widely to be naturally raising cattle with advanced farm management and breeding and processing techniques, the Australian beef industry exports to over 100 countries around the globe in form of either fresh (chilled) or frozen, with a smaller portion exported in processed form. In the environment of growing live animals export, once arrived in target markets, animals are either processed according to local custom, used to stock local feedlots, or, on a much smaller scale, used as breeding stock (Imthap, 2012). [n4] Australia exported frozen beef to Thailand for 1,479,186 kg or 281,719,591 Thai baht in 2008, which is the amount that has been increasing dramatically since 2004. This is while the Australian beef price has been decreasing gradually according to FTA (Free Trade Agreements)In 2008, a SADC Free Trade Area (FTA) was established under the guidance of Southern African Development Coordination Conference (SADC) Protocol on Trade, and Eswatini became a party to it. The FTA was aimed at phasing out all tariffs on goods imported from within the SADC region. During the same year, Southern African Customs Union (SACU) countries signed a Trade Agreement with European Free Trade Area (EFTA) countries. Under the SACU – EFTA agreement, Eswatini was granted a beef quota of 500 tonnes per year. The quota increased beef exports by 76.32%. Further, during the same year, SACU countries signed the Trade, Investment, and Development Cooperation Agreement (TIDCA) with the United States of America-USA (Sacolo et al,2017)

Exports are an engine of growth for Eswatini but have been declining in the 2000s by 1.5%/year, with a significant decline of 12% in 2018(World bank, 2017). Trade[n5]  is highly dependent on South Africa, she accounts for 81% of imports, 67% of exports,[n6]  (World Bank, 2017).