China has announced a reduction in tariff rates on imports of South African rooibos from a range of 15–30% to just 6%. This move, which happens to coincide with International Rooibos Day, marks a positive development for expanding the global reach of South Africa’s tea industry.
This development followed discussions between South Africa’s minister of trade, Ebrahim Patel and the Chinese minister of commerce, Wang Wentao, during the 8th meeting of the China-South Africa Joint Economic and Trade Commission in August 2023.
Speaking to Farmers’ Weekly, agricultural economist Dr Kobus Laubscher hailed this decision as a triumph of bilateral inter-governmental negotiations. He said that this shift allows the rooibos industry to compete globally on product value rather than mere sentiment.
Among a total of 45 countries, including Japan, the Netherlands and Germany, China ranks as the seventh-largest importer of South African rooibos. Europe is currently the largest market for it, but this tariff reduction is expected to boost exports to Asia as well.
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‘This is an excellent example of bilateral inter-governmental negotiations based on a demand-pull supported by a supply push. It meant that the rooibos tea industry is able to compete in the market on the basis of product value and not sentiment,’ Dr Laubscher told Farmers’ Weekly.
He continued, ‘Europe remains the biggest off-taker of local rooibos, but it could be expected that the decision by the Chinese authorities to lower tariffs could also spill over to that continent. Increased exports would invariably also stimulate development and expansion at the grassroots level.’
The Department of Trade, Industry and Competition said that rooibos has a unique position in the global market. With annual exports worth hundreds of millions of rand in 2022, rooibos has become a prominent feature in the international tea landscape.
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The Customs Tariff Commission of the State Council of China’s decision to adopt a tariff code of 6% for rooibos is expected to boost production and employment in South Africa. The Rooibos Council of South Africa reports an annual production of approximately 20 000 metric tonnes, supporting over 5 000 jobs.
Rooibos originates from the Cederberg mountains north of Cape Town, with South Africa exporting the tea since 1904. The industry is currently valued at around R600 million.
Minister Patel expressed optimism about the future of trade relations with China, noting the country’s status as South Africa’s largest global trading partner.
‘China is currently South Africa’s largest global trading partner, with Chinese customs reporting two-way trade of more than R900 billion. We look forward to continuing our engagements with our Chinese counterparts as we seek to move exports to a greater basket of value-added agricultural and industrial products,’ Patel said.
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Picture: TeaCora Rooibos / Unsplash
