SA trade with Israel mainly agricultural

2014-08-17 15:00

As the death toll mounts in Gaza, campaigns for the economic and political isolation of Israel are growing, with new calls to boycott retailers stocking Israeli produce.

However, the economic relationship between South Africa and Israel really revolves around intermediate goods, mostly for agriculture.

This means most South African imports of Israeli goods are for use by South African companies producing South African goods.

The South African wing of the Boycott, Divestment and Sanctions (BDS) campaign this week launched a new consumer campaign aimed squarely at Woolworths and its sourcing of food from Israel.

“We’re under no illusion that the boycott of Woolworths will lead to the economic isolation of Israel,” said BDS spokesperson Muhammed Desai.

Consumer boycotts have to be part of a bouquet of measures, he added.

South Africa’s major export to Israel is diamonds and, according to Desai, stopping the exports of largely unworked gems sits well with the beneficiation agenda anyway.

Ultimately, South Africa’s trade with Israel makes a very small contribution to the Israeli economy, said Desai.

“Even getting Woolworths to stop stocking Israeli goods would send a message to other retailers, domestic and international.”

Israel’s deputy ambassador in South Africa, Michael Freeman, described the BDS campaign as “extremist”, but also hypocritical and essentially hopeless.

According to Freeman, the campaign affects cucumbers at Woolworths (incidentally, Woolworths confirmed to City Press that it does not sell Israeli cucumbers), but ignores the indirect trade with Israel.

A sincere boycott would involve a catastrophic withdrawal from the world, he argued.

Israel hosts the major manufacturing site for microprocessor giant Intel. “I doubt you’ll find a computer without Intel chips from Israel,” said Freeman.

Major technology multinationals like Google, Microsoft and Apple produce a fair amount of their products and software in the country as well, he added.

More directly, Israeli inputs underpin a very large part of South Africa’s agricultural sector.

The significant farming-related imports mirror the two major Israeli companies operating in South Africa’s agriculture sector pointed out by Freeman.

Hishtil SA is based in Mooketsi, Limpopo, where it produces seedlings and has a partnership with the country’s largest tomato producer, ZZ2.

It also provides seedlings from Riebeek West in the Western Cape.

ZZ2 reportedly produces 38% of South Africa’s tomatoes and a growing share of its avocados, but Israeli seedlings account for more than half of the South African tomato crop, according to Freeman.

“If BDS wants to boycott Israel, it should abandon tomatoes,” he told City Press.

Another Israeli firm in South Africa is Netafim, which produces irrigation equipment for farmers. Netafim’s local subsidiary is based in Kraaifontein in the Western Cape.

What we trade

Israel is a relatively minor trade partner and the relationship is heavily skewed in favour of South Africa, according to statistics from the department of trade and industry.

The trade relationship is, however, concentrated in very particular sectors.

While South Africa exports about R6?billion worth of goods to Israel each year, it imports about half of that.

Israel is the destination for more than a 10th of South Africa’s diamond exports, worth about R2.5?billion a year. The country also buys more than R2?billion worth of South African coal a year.

The two mineral products make up 85% of South African exports to Israel, while food and beverages make up much of the balance.

South Africa’s major imports from Israel are insecticides and chemical fertilisers, as well as machinery for farming and irrigation.

These made up about 50% of the R2.8?billion in imports from Israel last year.

The balance includes medical electronic equipment, R160?million in non-woven textiles, about R260?million in plastic packaging material and about R56?million in prepared foodstuffs ranging from sweets to prepackaged sauces.

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