At a time of heightened uncertainties for the global economy, India’s strong performance remains a bright spot. So, it’s fitting that the Group of Twenty (G20) finance ministers and central bank governors will gather in Bengaluru this week. This will be another challenging year. But it could represent a turning point – with inflation declining and growth bottoming out. "Indeed, while our latest projections show global growth slowing to 2.9 per cent this year, we anticipate a modest rebound to 3.1 per cent in 2024. In a world facing multiple challenges and rising geopolitical tensions, this leadership is critical – and beautifully captured in the theme of India’s G20 presidency: 'One Earth, One Family, One Future'." Read more in the linked IMF blog post

Economists will be studying the pandemic for generations to learn from the dramatic global downturn and the ensuing credit crunch, but one important lesson about the scope of action needed to contain the next global crisis is already coming into focus. During the pandemic, countries often used all-out responses that combined large fiscal, monetary, and prudential policies like grants, credit facilities, and relaxed capital requirements. As we demonstrate in a new working paper, this kind of expansive response may be needed to support corporate borrowing and credit growth in major future crises that combine global supply and demand shocks. Our findings are based on an analysis using a dataset we made available last year tracking national announcements of economic and financial policy responses to the pandemic. Over the course of 2020, countries most frequently used packages of more than one fiscal, monetary, or prudential policy, while standalone policy announcements were rare. Read more in the linked IMF blog post.

The energy challenges of agriculture were highlighted in various speeches this past week. First, the 2023 Budget Speech by Finance Minister Enoch Godongwana outlined the implementation of the refund on the Road Accident Fund levy for diesel used in the food manufacturing process from 1 April 2023 for two years. This will help ease pressure as more and more agribusinesses are relying on diesel generators to keep operations running. This should ideally not cover purely food manufacturers but also role players within the food manufacturing value chain, such as animal feed, which is critical for poultry and livestock. Moreover, the tax incentives on investment in renewables will help ease cost pressure on businesses and hopefully incentivize increased renewable installations. In the linked article, Read more in the linked article by Agbiz chief economist Wandile Sihlobo.

The Department of Agricultural, Land Reform and Rural Development (DALRRD) is in the process of drafting new policies which will be followed by legislation to regulate communal land tenure as well as redistribution. A seminar was hosted by DALRRD in Kempton Park on 23 February 2023. Stakeholders and an expert panel were invited to discuss a concept policy on communal land and redistribution. Agbiz’s Annelize Crosby participated in the panel discussion. The department stated that it required assistance and guidance on how to balance divergent positions and recommendations on communal land and redistribution when developing legislation, without deviating from the constitutional values of the supremacy of the Constitution and the rule of law. In the linked article, Agbiz head of Legal Intelligence Annelize Crosby provides more information.

We now have the entire year's data on South Africa's agricultural trade in 2022. Exports reached a new record of US$12,8 billion, up 4% from the previous year. Maize, wine, grapes, citrus, berries, nuts, apples and pears, sugar, avocados, and wool were some of the top exportable products in 2022. Notably, the exports were spread across various key markets. The African continent remained a leading market, accounting for 37% of South Africa's agricultural exports in 2022. Asia was the second-largest agricultural market, accounting for 27% of exports, followed by the EU, the third-largest market, accounting for 19%. The Americas region was the fourth-largest, accounting for 7%, and the remaining 10% went to the rest of the world. The UK was one of the leading markets within the 'rest of the world' category. The products of exports to these markets were primarily the same, with the African continent and Asia importing a reasonably large volume or value of maize. Meanwhile, exports to other regions were mainly fruits and wine. Read more in the linked article by Agbiz chief economist Wandile Sihlobo.

The start of South Africa's 2022/23 summer crop production season was challenging for farmers and agricultural role players because of excessive rains. Crop planting in various regions of the country was delayed by roughly a month, threatening yield prospects. But the warm weather at the end of January and much of February helped improve conditions on the farms. It thus eased concerns about the possibility of smaller yields due to excessive soil moisture. Moreover, the persistent load-shedding raised concerns that areas under irrigation could receive poor yields. Still, the return of rainfall, at a moderate pace, from mid-February provided a much-needed breather and improved crop conditions. Within summer crops, roughly 20% of maize and 15% of soybeans are produced under irrigation. Read more in the linked article by Wandile Sihlobo.

South Africa's agricultural sector has had a broadly better-than-expected performance in 2022. The exports reached a record US$12,8 billion, and agricultural machinery sales, such as tractors, were at the highest level in 40 years. This materialised despite the range of challenges that faced the sector, such as excessive rains at the start of the 2021/22 summer crop season, disease outbreaks in the livestock industry, trade barriers in fruits and wool, and logistical challenges at our ports, particularly in the first half of 2022. The data released by Statistics South Africa also paints a broadly comforting picture, showing that in the last quarter of 2022, there were about 860 000 people employed in primary agriculture, which is well above the long-term agricultural employment of 780 000. In the linked article, Wandile Sihlobo discusses the latest jobs data.

There is so much in the implementation pipeline of South Africa’s agriculture policy this year. The past four years have largely seen various initiatives that sought to inject confidence in the sector. These are now ripe for implementation, especially ahead of the 2024 general elections. In the past, these programmes seemed like a pipe dream. Now they are nearing implementation. There is a window of opportunity for the government to show results in these areas since they are beyond policy development and ripe for action. If implemented effectively, these programmes could boost growth in the sector, sustain employment, and possibly attract new investment. For more details, listen to this week’s podcast by Wandile Sihlobo.

A resolution recently proposed to the US House Committee on Foreign Affairs, opposes South Africa’s hosting of military exercises with the People’s Republic of China and the Russian Federation, particularly close to the anniversary of the start of the Ukrainian conflict. The resolution calls on the Biden administration to conduct a thorough review of the United States-South Africa relationship, which has led some to speculate that this could endanger South Africa’s place in any renewal of the African Growth and Opportunity Act (AGOA). This US Trade Act was enacted on 18 May 2000 and was subsequently renewed until 2025. The legislation provides for enhanced market access to the US for sub-Saharan African (SSA) countries that meet the criteria spelled out in the Act, principally that beneficiary countries must be working to improve the rule of law, human rights, and respect for core labor standards. AGOA is a unilateral dispensation, meaning the SSA beneficiaries do not have to open their markets in return. Agbiz Fruit manager Wolfe Braude discusses this subject in the linked article.

A new WTO information note released on 23 February reports that global trade remained resilient and performed better than pessimistic predictions for 2022 as economies greatly affected by the war in Ukraine found alternative sources of supply. For the longer-term outlook, new WTO simulations show the importance of strengthening the multilateral trading system, with least-developed countries likely to be hardest hit if international cooperation were to break down. The note titled One year of war in Ukraine: Assessing the impact on global trade and development estimates that trade growth in 2022 was above the WTO trade forecast of 3% issued in April and substantially higher than its estimates for more pessimistic scenarios for the year. The stability of global trade was also evident in global supply chains, confirmed by the 4% year-on-year growth of trade in intermediate goods in the second quarter of 2022. Please click here to peruse.

One year after Russia’s invasion halted Ukraine’s export of grains through the Black Sea, the future of a UN-brokered deal that allowed shipments to resume hangs in the balance as the warring parties fight a proxy battle – at a time of deepening global hunger – over which of them can rightly claim to be feeding the world. The number of people facing food insecurity rose from 282 million at the end of 2021 to a record 345 million last year, according to the United Nations World Food Program. More than 50 million people are on the brink of famine. And the worst may yet be to come. Read more in the linked article, first published politico.com.

Overall, 716 out of 796 (88.9%) of non-tariff barriers (NTBs) registered in the online reporting system implemented by the three regional economic communities (RECs), COMESA, East African Community and the Southern Africa Development Community have been resolved. Only 80 NTBs remain unresolved. The main NTBs include restrictive licensing, permitting, and other requirements applied at the border. Barriers behind the border, such as unwarranted technical barriers to trade and sanitary and phytosanitary measures are equally prevalent. The tripartite NTBs Online and SMS Reporting, Monitoring and Eliminating system www.tradebarriers.org has been operational since 2010 and has remained an effective tool in the resolution of cross-border trade challenges. Please click here to peruse.

 “We clearly need to rethink how we use the water we have in a sustainable and equitable way – with innovations in agriculture being at the forefront”, the Director-General of the Food of Agriculture Organization of the United Nations (FAO), QU Dongyu, told African leaders and experts during the high-level opening of the first FAO regional workshop on National Water Roadmaps in Zimbabwe. Qu explained that the National Water Roadmaps – strategies that will help to strengthen water resources management— are an important tool to address the growing challenges around water, helping to achieve the 2030 Agenda for Sustainable Development. The first FAO regional workshop held in-person in Harare and virtually, aims to inform African countries about the overall role of water in sustainable development and to provide a platform for governments, international organizations, civil society, the private sector and academia to discuss and develop country-specific water plans. Please click here to peruse.

This week, port operations were characterised as usual by adverse weather, frequent equipment breakdowns and shortages, power outages, load-shedding, delays, and congestion. The weather situation in Cape Town redeemed itself to some extent this week, as minimal delays were reported due to adverse weather. However, an area-wide power failure accompanied by unfavourable weather conditions took centre stage in Durban and ensured operational delays. In addition, East London reported that there was a continuous struggle with stage 6 load-shedding as the port is only exempted from load-shedding up to stage 5. Finally, several Instances of cable theft were reported throughout the week – especially between Thursday and Friday – which ensured that no trains could convey cargo to and from Durban. Lastly, Stats SA's latest "Land Transport Survey" indicated that the split between national rail and road cargo moved further in favour of road (85/15) as rail's problems continue unabated. In the global maritime industry, the sharp drop in transpacific capacity utilisation has weighed down market sentiment as carriers continue to drop rates in response, even on routes where utilisation remains relatively healthy. However, the spread between demand and supply is steadily closing, implying that the market equilibrium between price and quantity (liner capacity) is getting closer.. Read more in the latest BUSA Covid-19 Cargo Movement Update.

Tropical Cyclone Freddie made landfall with its center just north of Vilanculos. The system resulted in widespread heavy rainfall and windy conditions from late Friday until early Monday over the extreme northeastern parts of South Africa (Northern Lowveld, eastern Limpopo River Valley and northeastern escarpment). Current forecasts favor a track from eastern Limpopo towards southern Zimbabwe and then out east again, but these may change as weather models are not particularly accurate when it comes to the forecasting of tropical cyclone tracks. However, given the projected track of the system currently, most of South Africa should experience relatively warm and dry conditions during the next few days while the system results in inclement weather in the extreme northeast. The summer-grain production region should be relatively dry also, even though it is expected to become cloudy and cooler over the eastern parts of the region with isolated thundershowers during the weekend. Read more in the latest edition of Cumulus, published by AgriSeker.

Following a disappointing 2022 season, the industry expects a rise in volumes this year

The South African avocado export industry has released its first estimate of the new season, predicting that the country will export around 18m cartons this year. This would mark an increase of nearly 2m cartons, up ten per cent on last year’s 16.3m cartons. Not only is there a bigger crop, but marketing prospects are also reported to be much better than last year, particularly in the early season. Harvesting has started and growers are keen to get their fruit to market early. The first containers destined for Europe and the UK left South Africa last week and are expected to arrive by the end of next week. Derek Donkin, Subtrop CEO, said the estimate was lifted at yesterday’s first exporter marketing meeting having earlier been pegged at 17m cartons. Read more in the linked article, first published on fruitnet.com.

Fruit SA warns that if stage 6 load shedding persists and is not resolved, many growers will go out of business, putting thousands of jobs at risk, while emerging growers will be hit the most. The fruit sector employs just under 300 000 people directly on farms. “The reality is that it is not viable to farm, pack or export at stage 6 level of load-shedding since it becomes difficult to manage irrigation schedules, cooling and packing with the use of generators beyond Stage 3 of load shedding,” Fruits SA CEO Fhumulani Ratshitanga said in an interview. The CSIR last week said the year 2022 overtook 2021 as the most intensive load-shedding year yet, with December being the highest load-shedding month ever. Read more in the linked article, first published on iol.co.za.

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