The identification of South African export opportunities : special reference of fruit juice to Oman and Qatar

Abstract

As part of the Accelerated Shared Growth Initiative of South Africa (AsgiSA), the South African government is focusing on improving the country's export performance (Department of Trade and Industry, 2006a). One of the objectives of the Department of Trade and Industry (DTI) is to increase the level of South African exports through the development and implementation of strategies for targeted markets. The DTI commissioned a study to scientifically identify priority products and markets in order to justify its export promotion activities and to ensure that government resources are effectively allocated. Tills led to the development of the Decision Support Model (DSM) by Viviers and Pearson (2007) as an instrument to identify realistic export opportunities for South Africa. The Viviers and Pearson (2007) study adapted and refined the methodology of Cuyvers et al. (1995) to the South African circumstances and used a sequential filtering process to identify realistic product/market export combinations for South Africa. The outcome of the DSM for South Africa was 9690 SITC product/market opportunities in seventy-four countries, clustered in twelve geographic regions. One of these regions was the Middle East. The DTI indicated the need for a study on South Africa's export opportunities to the Middle East as a result of their prioritisation of regions for export promotion. This need is therefore the rationale of this study. The research objectives were to analyse the identified Middle East countries and determine the product with the most realistic export opportunities to two of the Middle East countries and lastly, to develop a market profile to assist the DTI in promoting the exports of this product to these countries. In this study, several methods of product and market selection were investigated in order to determine the most suitable method to identify the product/market opportunities from the DSM to the Middle East. The product selection method selected involved a three-phase filtering process to determine the product with the highest export potential to the Middle East. The analysis was based on a cluster-selection process. It was determined that fruit juice was the product with the highest export potential to the region. The market selection process used a composite market potential index to determine which country in the Middle East had the highest potential for exports of fruit juice from South Africa. The two countries in the Middle East with the highest potential to import fruit juice from South Africa were Oman and Qatar. A market profile for the export of fruit juice to Oman and Qatar was developed. The market profile provided an economic overview of the two markets, analysed the market potential of fruit juice and provided technical information regarding the requirements for the export of fruit juice by South Africa to Oman and Qatar. The results of this study firstly indicate to the DTI and exporters that South Africa should export fruit juice to Oman and Qatar and secondly presents a market profile with detailed information of the process to follow in exporting fruit juice to these countries.