August 12, 2013

Botswana's beef exports reach US$59 million in H1 2013

In the first half of the year, Botswana's beef exports reached BWP501.2 million (US$59 million), compared to full year exports of BWP522 million (US$61 million) last year, as Botswana Meat Commission (BMC) executives hailed a return to the lucrative European market.

According to Bank of Botswana figures published on Tuesday (Aug 6), beef exports accelerated from BWP89.3 million (US$10.5 million) in the first quarter of the year to an average of BWP137.3 million (US$16 million) for the next three months up to June. By comparison, full year exports in 2012 amounted to BWP522.9 million (US$61 million) at a monthly average of BWP44 million (US$5.2 million). On Wednesday (Aug 7), BMC CEO Akolang Tombale attributed the healthier exports to the parastatal's return to the European market, compared to the dependence on regional sales last year. Exports to the EU were frozen in 2011 over livestock traceability issues, while the commission has also suffered from plant failures and the outbreak of foot and mouth disease (FMD).

According to the CEO, the BMC has thus far this year exported close to three million tonnes of beef to Europe, with about one million destined for the traditional happy hunting ground of Norway. Other major EU markets have included Italy and the UK. "The difference is the EU," Tombale said in an interview. "Last year, we mostly sold in the region, particularly to South Africa but this year we have sent close to three million tonnes so far to the EU". Tombale said while the BMC had "done well" securing and supplying markets in Europe, it was affected by the non-availability of the Francistown abattoir, whose EU slaughter was suspended due to its proximity to an FMD outbreak.

The suspension has meant four days of slaughter for the EU market and only one day for other markets in Lobatse, instead of three and two, as the BMC drives to supply to its money-spinning contracts in Europe. The situation has bottlenecked the value chain from farmers, the majority of whom do not supply to the EU, as the slaughter of their beasts is squeezed into one day per week.

Tombale revealed that despite the troubles with traceability and disease outbreaks, customers in Europe had remained loyal to the BMC's product. "The EU officials were here for themselves which helped as they conducted their own audit in March and, critically, they declared that the plants were suitable," he said. "Even in Francistown, the problem is not the plant, but the containment zone. Our Europe customers are aware that the plants are fine and also that we are A-graded British Retail Consortium standard which means in terms of product and quality we are doing well."

The BMC CEO said the corporation's improved earnings would translate to better prices for farmers once the parastatal's own cash-flow improved. "There are cash-flow issues, but hopefully by the end of the year, we will be out of the woods," he said. "If the cash flow improves, the prices will go up. The issue is about managing the cash flows and my hope is that by year-end we would have improved". Hard hit by the EU suspension and operational inefficiencies, the BMC has piled on public debt in recent years in order to remain solvent as the sole buyer of export grade beef in Botswana.