The shocks that have shaken the global economy in recent years have introduced a new normal for turbulence, driven in some cases by political fragmentation between countries. These episodes have also lifted uncertainty to exceptionally high levels, which in turn hurts economic growth as our research shows. To better track the evolution of these conditions, the International Monetary Fund (IMF) updated its World Uncertainty Index to show more frequent readings that are monthly, instead of quarterly, and incorporate data for 71 economies dating back to 2008. As the Chart of the Week shows, the index fell in December, the most recent reading, but has continued to hit elevated levels in recent times on the back of successive shocks, including most recently Russia’s invasion of Ukraine and the associated cost-of-living crisis. Read more in the linked IMF blog post.

The global economy is poised to slow this year, before rebounding next year. Growth will remain weak by historical standards, as the fight against inflation and Russia’s war in Ukraine weigh on activity. Despite these headwinds, the outlook is less gloomy than in our October forecast, and could represent a turning point, with growth bottoming out and inflation declining. Economic growth proved surprisingly resilient in the third quarter of last year, with strong labor markets, robust household consumption and business investment, and better-than-expected adaptation to the energy crisis in Europe. Inflation, too, showed improvement, with overall measures now decreasing in most countries—even if core inflation, which excludes more volatile energy and food prices, has yet to peak in many countries. Please click here to read the full IMF blog post on this subject.

.National Treasury must review the excise tax burdens for wine, Agricultural Business Chamber (Agbiz) chief economist Wandile Sihlobo said earlier this week. This as Finance Minister Enoch Godongwana is set to table his national budget next month. "The wine industry is on a recovery path, but lower wine grape harvest and the excise tax will continue to weigh on the sector. Thus, the National Treasury must review the excise tax to ease the pressure in this critical and labour-intensive industry. The picture of maize production remains positive and supportive of staple food availability and the livestock and poultry sector," Sihlobo said. Read more in the linked article, first published on iol.co.za.

The drier weather conditions in the Western Cape, a major wheat producer in South Africa, have weighed on the 2022/23 wheat harvest. The impact of lower yields in parts of the province is evident in the recent Crop Estimates Committee's wheat production update, which placed the province's crop at 954 000 tonnes, down from 1,26 million tonnes in the 2021/22 season. From a national perspective, South Africa's 2022/23 wheat harvest is at 2,18 million tonnes, down by 3% from December 2022 forecast and 2021/22 harvest. The challenge is poor yields in the Western Cape, not a reduced area planting. Farmers lifted the area plantings to 566 800 hectares, from 523 500 hectares in the previous year. This was on the back of attractive prices following a surge in wheat prices after Russia invaded Ukraine, as well as good soil moisture in various wheat-growing regions of the country. In the linked article, Agbiz chief economist Wandile Sihlobo discusses the latest wheat production data.

Since the start of the 2022/23 summer grains and oilseeds production season, we have maintained a positive view of the production conditions. The robust tractor sales, the La Niña-induced rains, and the relatively higher commodity prices were some of the factors that pointed to a decent area for summer crops in the 2022/23 season. The data recently released by the Crop Estimates Committee (CEC) broadly mirrors our optimism, placing the 2022/23 total area plantings for summer crops at 4,31 million hectares of summer grains and oilseeds in the 2022/23 season. This is down by 0,7% from the previous season, and 0,9% from the intentions to plant data released earlier in the season. A deep dive into the numbers show a mixed picture. Read more in the linked article by Wandile SIhlobo.

As the deepening energy crisis continues to present problems for different parts of the agricultural sector, another major challenge that could confront South Africa's agricultural sector in a few months is a change in weather conditions from favourable rains to drier and hot conditions. This would be a switch from a prolonged period of La Niña to El Niño. South Africa has had a good four seasons of La Niña induced heavy rains from 2019/20 to 2022/23. These above-normal rains supported agriculture leading to higher yields across various field crops, fruits and vegetables. The livestock industry also benefitted from improved grazing pasture. In this week's podcast Agbiz chief economist Wandile Sihlobo discusses how such a weather phenomenon would bring below-normal rainfall and hotter temperatures in South Africa. Please click here to peruse.

The Department of Agriculture, Land Reform and Rural Development (DALRRD) has received a request to amend the maize grading regulations. The industry representatives such as Grain SA, Agbiz Grain, the National Chamber of Milling, Sacota and Afma, were requested to hand in comments on the proposed amendments by the end of November 2022. The department met with the stakeholders on 17 January 2023, but a consensus on the amendments could not be reached. Agbiz Grain general manager Wessel Lemmer discusses this subject in the linked article, first published in Landbouweekblad.

Brazil is set for another record-breaking grain harvest. Post maintains its corn planted area forecast at 22.5 million hectares for MY 2022/2023 and corn production is forecast at 125.5 MMT for MY 2022/2023, up 8 per cent from the estimated 116 MMT for MY 2021/2022. Post maintains its forecast for corn exports for MY 2022/2023 at 47 MMT, based on the continued interest in international markets. Post reduces the forecast for rice planted area for MY 2022/2023 to 1.53 million hectares, based on continued loss of profitability of rice crops in Brazil and high maintenance costs. For MY 2022/2023, milled rice production is forecast at 7.2 MMT of milled rice equivalent (MRE), a 1.4 percent drop from 2021/2022. Brazil is expected to reach record wheat production. Post forecasts wheat production for MY 2022/2023 at 9.6 MMT and raises its forecast for wheat export in MY 2022/2023 to 3.5 MMT on a wheat grain equivalent basis (WGE), up 6 percent from its previous estimate. Please click here to peruse.

The government of Zimbabwe said it plans to spend more than $275 million over the next three years to build new Grain Marketing Board (GMB) silos and renovate and modernize older silos to serve increased grain production, which is anticipated to reach 3 million tonnes for 2022-23. There are proposals for the construction of four 56,400-tonne silo complexes at the Mvurwi, Kwekwe, Timber Mills and Mhangura depots. Upgrading and automating existing facilities at Banket and Lion’s Den also is under consideration. In a separate proposal, four silo locations of the same capacity will be built at the Masvingo, Lupane, Raffingora and Bindura depots. Read more in the linked article, first published on world-grain.com.

The outlook for consumption of fresh fruit and vegetables remains under pressure in the European Union. These are the conclusions from the latest consumption trends discussed in Freshfel Europe through a review of trends in Member States, covering 75% of the EU population. Despite a very positive momentum for consumption growth, many barriers are severely impacting the move towards a healthier and more sustainable diet for European consumers. The latest findings from the Freshfel Europe Consumption Monitor reveal that the average consumption for fresh produce stands at an average of 364g/capita/day for 2021, a figure that could decline by ca 10% in 2022 once the final data for last year is known. This is particularly worrying at it stays well below the minimum 400 gr. recommendation of WHO. Please click here for access to a media statement issued by Freshfel, the European Fresh Produce Association.

The Global Coalition of Fresh Produce (GCFP) has released a report analysing the current global trading environment for fresh fruits and vegetables. The report argues that fruits and vegetables are a critical element of the shift towards healthy and sustainable diets, as well as an engine of economic growth and job creation the world over. However, the GCFP has pointed out that a number of challenges are currently threatening the long-term economic viability of the fresh produce sector worldwide, and thereby economic stability, food security and health. Please click here to read the full article, first published on fruitnet.com.

Container shipping companies were on newbuild ordering spree during 2022 with the majority of them ordering new boxships driven by all-time record freight rates. However, the share of chartered vessels remains - in some cases extremely - high in most of the ocean carriers. Container News presents the following list that includes the top 10 container shipping companies in terms of the TEU capacity of their chartered vessels, according to Alphaliner's data at the end of December 2022. Please click here to peruse.

On Friday 20 January 2023, Agbiz attended the Fourth Annual Port Stakeholder Engagement, hosted by the Western Cape Minister of Finance and Economic Opportunities, Mireille Wenger, that brought together representatives from across the port logistics value chain, experts in maritime transport as well as the senior leadership of Transnet. The discussions featured an address by Portia Derby, Transnet CEO, who together with senior executives, outlined the progress being made in increasing the reliability, efficiency and performance across Transnet. The Western Cape is the channel for 55% of South Africa’s agriculture exports and thus plays a key role in national export logistics. Read more in the linked Western Cape Government media statement.

The South African Revenue Service (SARS) has released trade statistics for December 2022 recording a preliminary trade balance surplus of R5.43 billion (these statistics include trade data with Botswana, Eswatini, Lesotho and Namibia). The year-to-date (01 January to 31 December 2022) preliminary trade balance surplus of R193.28 billion is a deterioration from the R431.74 billion trade balance surplus for the comparable period in 2021. Exports increased by 4.6% year-on-year whilst imports increased by 25.1% over the same period. Please click here to access the SARS media statement.

New EU rules, implemented in July last year, aim at tackling the potential spread of an insect called the false codling moth. In July last year, the SA government lodged a complaint with the World Trade Organisation after the EU reacted to a complaint by Spain and introduced the new plant and health safety requirements on citrus imported from SA. A stalemate regarding the new EU regulations spells disaster for the 2023 season if the government cannot resolve it soon, warns the Citrus Growers' Association. Please click here to read the full article, first published on News24. You can also read the CGA media statement in this newsletter under Members' News.

Ports and rail operator Transnet, as part of its partnerships strategy, has decided to engage the market to invest in and grow Transnet Freight Rail’s (TFR’s) containerised freight business, which services the country’s manufacturing sector. To this end, Transnet will issue a request for qualifications (RFQ) to the market to identify parties interested in entering into an operating lease with TFR for the operation and maintenance of the container corridor (the line between Johannesburg and Durban) for a period of 20 years. The container corridor rail mainline is a fully electrified double-tracked rail line running from Booth, in KwaZulu-Natal, to Union, in Gauteng. Read more in the linked article, first published on Engineering News.

This week's port activity was characterised by typical operational delays- weather, equipment breakdowns and shortages, and congestion – even hindering persistent low volumes. Regionally, Cape Town was severely impacted this week, as approximately 30 hours were lost due to adverse weather conditions. Equipment breakdowns were at the forefront in Durban this week as their marine services were down to one tug on multiple occasions throughout the week. Additionally, concerns about the second set of hydraulic shore tensioners in Cape Town were raised this week as the Luanda Express was delayed for approximately 20 hours due to vessel ranging. Furthermore, TFR was once again hit by persistent cable theft throughout the week; however, on Friday, all lines were operational again thanks to swift work by the Transnet engineering team. In the global maritime economy, weekly container capacity is way down versus the last two years, notably from Asia, where cargo activity has dropped primarily due to the Chinese New Year. Unfortunately, the same is true for South Africa, as the initial indications are that January volumes will be disappointing. Read more in the latest edition of the BUSA Covid-19 Cargo Movement Update.

South Africa is facing a looming water crisis. If left unchecked, the country’s water supply deficit will reach an estimated 17 per cent by 2030. Increased household and commercial water use is pressuring the country’s already worrying water deficit. The agricultural sector is hugely important for growth and jobs but is also the biggest consumer of water—estimated at 63 per cent of available water resources. Climate change has worsened the situation. Severe droughts mean South Africa is now among the top 30 driest countries in the world, while the 2022 floods in the KwaZulu-Natal province damaged water infrastructure, including pipelines, aqueducts and storage tanks. These challenges highlight the need for stronger partnerships between the public and private sectors to improve water efficiency in the agriculture and agribusiness sectors, easing South Africa’s overall water challenges. Read more in the linked article by the International Finance Corporation (IFC) and the Swiss State Secretariat for Economic Affairs (SECO), first published in Harvest SA.

The Department of Agriculture, Land Reform and Rural Development (DALRRD) would like to announce a new outbreak of African Swine Fever (ASF) on a farm in Gauteng Province.

The farm has been put under quarantine and the Provincial Veterinary Services instituted forward and back-tracing investigations to identify any properties that could have had direct or indirect contact with the affected farm. Farms in Gauteng, North West, and the Free State have been placed under precautionary quarantine as a result of this. The ASF-negative status of these farms will be confirmed before the precautionary quarantine can be lifted. The source of the infection on the positive farm has not yet been identified, but it is believed that the infection was already on the farm since mid-December. Read more in the linked DALRRD media statement.

According to the Department of Agriculture, Land Reform and Rural Development (DALRRD) latest report, two new cases of foot-and-mouth disease (FMD) have been reported to the World Organization for Animal Health this month. There are currently 120 active cases of FMD in KwaZulu-Natal, 7 in Limpopo, 17 in North West, 4 in Gauteng, 40 in the Free State, and one in Mpumalanga. The Northen, Western and Eastern Cape are the only provinces where no cases have been reported. Please click here to read DALRRD's full FMD report.

The Citrus Growers Association of South Africa (CGA) has written to Minister of Trade, Industry and Competition, Ebrahim Patel requesting that he urgently calls for the establishment of a World Trade Organisation (WTO) Panel to adjudicate on the new False Coddling Moth (FCM) regime governing the importation of South African oranges to the region. If the issue is not resolved before the 2023 export season kicks off, growers could face hundreds of millions in losses putting the future sustainability of the entire industry at risk. The CGA’s call to Minister Patel follows a stalemate having been reached between the South African government and the European Union (EU) after the DTIC lodged a dispute at the WTO in July last year, with consultations that have taken place since then not making any progress. Read more in the linked CGA media statement.

The Citrus Growers' Association of Southern Africa, shares the latest news in the citrus industry in its weekly update - From the desk of the CEO. Please click here to peruse.