2022 has already been a challenging year for export-orientated agricultural subsectors. On top of growing protectionism, conflict in the Black Sea region, SPS issues and damaging floods, we saw the addition of strike action at our ports and railways over the past 11 days. As the saying goes; ‘it never rains, its pours’ – pun intended. On Monday, Transnet and the majority union reached a three-year collective agreement and the minority union also called off their strike actions late on Wednesday. With workers expected back at full capacity from today, it seems as if the worst is behind us but extraordinary efforts will be needed to recover from the lost productivity. It is also an opportune time to reflect on the efforts of Agbiz and other stakeholders over the past two weeks. 

When news of the strike broke, Agbiz and other, prominent business associations immediately rallied and made contact with senior government officials and Transnet management. Daily engagements were held each evening for the duration of the strike in an effort to offer support and track the impact of the disruptions. Our colleagues within government and Transnet must be lauded for their excellent communication and efforts to engage with business throughout the process. In the linked article, Agbiz CEO Theo Boshoff, discusses how the situation unfolded and the impact the strike had on the agricultural sector.

In a striking example of collaboration between two G20 states, South Africa and the Kingdom of Saudi Arabia (KSA), both anchor economies in their respective regions, have signed 17 MoUs worth around $15 bln or R274 bln covering areas as diverse as mining, ICT, pharmaceuticals, renewable energy, tourism and agriculture, agro-food processing and food security. President Ramaphosa led a large ministerial delegation on a state visit to the KSA comprising Minister Didiza of Agriculture, Land Reform and Rural Development (DALRRD); Minister Mantashe of Mineral Resources and Energy; Minister Mbalula of Transport; Minister Patel of Trade, Industry and Competition; and Minister Mosie of Defense and Military Veterans. A large business delegation of over 80 people accompanied the president and ministers. Agbiz was invited to participate in the trip and assisted DALRRD in the lead-up to the visit. The agricultural contingent comprised the largest component of the business delegation. Agbiz Fruit manager Wolfe Braude travelled with the delegation and reports on the visit in the linked article.

The International Monetary Fund’s (IMF) World Economic Outlook released last week, forecasts that global economic growth will slow from 3.2 per cent this year to 2.7 per cent next year. The 2022 projection was unchanged from the last estimate, in July, but next year’s was cut by 0.2 percentage points. The global deceleration will be broad-based, and the 2023 projection is less than half of last year’s 6 per cent expansion. Countries accounting for about a third of the global economy are estimated to have a two-quarter contraction in real gross domestic product this year or next. The outlook is also fraught with uncertainty. The IMF estimates there is a one-in-four probability global growth will fall below 2 per cent next year and that there is a likelihood of 10 per cent to 15 per cent that it will drop below 1 per cent. Read more in the linked IMF blog post.

The Land Court Bill was introduced in Parliament on 19 May 2021. Agbiz submitted written comments on the Bill. Public hearings were held on 1 and 2 March 2022 and Agbiz presented its views at the public hearings. The portfolio committee then engaged on the Bill and heard the Department of Justice’s responses to the submissions by the public. At subsequent meetings, the committee deliberated on the Bill and proposed changes to its wording. The portfolio committee finalised the Bill on 13 September. The Bill is now before the Select Committee of Security and Justice which will hold further public hearings on 4 November. Important changes were made during the portfolio committee process. Agbiz head of Legal Intelligence Annelize Crosby elaborates on the subject in the linked article.

If one drives from the northern regions of South Africa towards the Western Cape via the N1 now, it is easy to notice a stark contrast between the landscapes on either side of the road. On the eastern side farmers will already be tilling the land, while on the western side ploughing does not start before mid-November. This contrast is a result of regional variation in optimal summer crop planting times. Depending on rainfall, the eastern regions start planting yellow maize and soybeans in mid-October while the western regions, which lag by a month, plant white maize and sunflower seed, among other crops. South Africa has enjoyed good rains for the past three seasons, which have improved soil moisture and benefited farming communities. As we start the 2022/23 season, there is optimism that this will be another high rainfall season. The South African Weather Service and forecasters from Australia and the US are expecting another La Niña system this season. This means there is an increased possibility of above-normal rainfall this summer. Agbiz chief economist Wandile Sihlobo discusses this subject in the linked article.

South Africa’s consumer food price inflation accelerated further to 12,3% year-on-year (y/y) in September 2022, from 11,5% y/y in the previous month. The products behind this monthly increase were mainly “bread and cereals”, “meat”, “milk, eggs and cheese”, and “vegetables”. The general consumer food price increase mirrors the surge in agricultural commodity prices over the past few months. The agricultural commodities price increase emanates from various factors such as the drought in South America, higher shipping costs, strong agricultural product demand in China, and, most recently, the Russia-Ukraine war. Moreover, the higher fuel price inflation since the start of the war is an additional cost driver of food prices. More specifically, the higher global grain and oilseed prices for much of this year have been the core drivers of the costs of “bread and cereals” and “oils and fats” in the consumer food price inflation basket. In the linked article, Wandile Sihlobo discusses the latest consumer food inflation data.

October 16 marked World Food Day, commemorating the founding of the United Nations Food and Agriculture Organization in 1945. Across the world, this day offers an opportunity for countries to assess their food security conditions and efforts to boost agricultural production. One of the measures that some often use to evaluate the food security condition of each country relative to the world is The Economist's Global Food Security Index, which Corteva sponsors. This latest index ranks South Africa at 59 out of 113 countries, an improvement from the 70th position in 2021. This places South Africa as the most food-secure country in the African continent, followed by Tunisia at 62nd. This improvement is commendable. When looking at the index scoring's technical position, it becomes clear why South Africa's food security ranking has improved. South Africa's scoring came in at 61,4, up from 57,8 in 2021. Read more in the linked article by Wandile Sihlobo.

The dollar is at its highest level since 2000, having appreciated 22 per cent against the yen, 13 per cent against the euro and 6 per cent against emerging market currencies since the start of this year. Such a sharp strengthening of the dollar in a matter of months has sizable macroeconomic implications for almost all countries, given the dominance of the dollar in international trade and finance. While the US share in world merchandise exports has declined from 12 per cent to 8 per cent since 2000, the dollar’s share in world exports has held around 40 per cent. For many countries fighting to bring down inflation, the weakening of their currencies relative to the dollar has made the fight harder. On average, the estimated pass-through of a 10 per cent dollar appreciation into inflation is 1 per cent. Such pressures are especially acute in emerging markets, reflecting their higher import dependency and greater share of dollar-invoiced imports compared with advanced economies. Read more in the linked blog post by the International Monetary Fund.

Global food systems have been battered by overlapping crises in recent years. Key among these are the Covid-19 pandemic, the Russia-Ukraine war and extreme weather events resulting from climate change. These have resulted in forced migration, loss of employment, climate stress, loss of biodiversity, and economic instability. In Africa, which is home to 1.5 billion people, these shocks and stressors have slowed – or even reversed – decades of progress in improving food security and nutrition. For example, 37 million people in the Greater Horn of Africa are facing acute hunger in one of the region’s worst droughts in decades. These multiple crises have forced the world to recognise that improving nutrition and food security requires more resilient global and national food systems. Please click here to read the article, first published on The Conversation.

The Government of Ghana (GOG) is pursuing the creation of a Grains Development Authority (GDA)

to, among other objectives, further the development and regulation of the market for domestically

produced grains and legumes. Convinced that Ghana is making substantial gains in the grains subsector, the agriculture minister assured that the creation of this authority would be a major boost to the export market and help put in place price control measures. According to the Minister of Food and Agriculture, the GDA, expected to be publicly funded at inception, will contribute significantly to complement the achievements being realised under the government’s flagship agricultural program – Planting for Food and Jobs (PFJ), introduced in 2017. Read more in the linked report by the Foreign Agricultural Service of the United States Department of Agriculture. 

As with last week, this week's central talking point concerned the strike action by UNTU and SAWATU, the major unions at Transnet. Consequently, there is little to report on port operations besides a major reduction in port volumes. Apart from the strike's impact, port operations were characterised by equipment breakdowns, shortages, and congestion. GCT did go windbound during the course of the week. However, no other weather-related delays were reported. Additionally, Durban experienced challenges with a pilot boat during the course of the week, adding insult to the injury already caused by the strike. Furthermore, TFR reported this week that the estimated return-to-service times of the second lines on the container corridor's Balgowan and Cato-Ridge sections were further delayed due to the strike and continuous cable theft experienced. In the global shipping industry, the latest container port throughput statistics have confirmed a picture of weakening demand resulting in lower throughput levels. These reduced throughput numbers further explain the dramatic fall in rates – which are dropping as quickly as they increased some 18 months ago. Please click here to access the latest BUSA Covid-19 Cargo Movement Update.

The Transnet strike might be over, but the fruit industry is not out of the woods yet and the aftermath will be felt by all in the value chain for many weeks to come, but mostly on ground level by the agri workers. In Grabouw more than a thousand seasonal workers at one of the biggest packhouses in the area had no work or income over the past weeks due to the Transnet strike. The packhouse’s cooling facilities were full of fruit and because the fruit could not be exported the workforce was cut as packing more fruit was out of the question, said Gafieldien Benjamin, secretary-general of the Agricultural, Food, Fishing and Retail Industry Workers’ Union (Afriwu). According to Benjamin most of the workers who lost their wages were single parents and most were female. Read more in the linked article, published by Hortgro.

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.