Finance Minister Enoch Godongwana delivered the 2023 budget speech in a uniquely challenging environment. Global economic growth is slowing, from an estimated 3.4% in 2022 to 2.9% in 2023. The domestic challenges, particularly the energy crisis, remain a significant constraint to growth, with the South African economy expected to grow by less than 2% through 2025. Agbiz welcomes this budget speech. We are particularly encouraged by the minister’s focus on Eskom's debt and the debt-relief arrangement, which will assist Eskom to have the flexibility to prioritise capital expenditure in transmission and invest in the maintenance of the existing generation fleet to improve the availability of electricity. Please click here to access the full Agbiz media statement on the 2023 budget speech.

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. A major development in recent times was the launch of the Agriculture and Agro-processing Master Plan, which offers government and the private sector a new possibility to grow the sector, build competitiveness, attract more investment, and ensure inclusion. More concretely, the Department of Agriculture, Land Reform and Rural Development (DALRRD), launched a blended finance instrument that had been in the works for a few years now. This is a joint initiative with the Land Bank and the aim is to broaden participation by other financing agencies to achieve the required scale to make a positive dent in transforming the sector. Read more in the linked article by Agbiz chief economist Wandile Sihlobo.

The Portfolio Committee on Agriculture, Land Reform and Rural Development was briefed by DALRRD on the abovementioned Bill on 17 February 2023. This legislation is long overdue. There have been attempts since the early 2000s to come up with legislation that protects high-value agricultural land. The two existing pieces of legislation, namely the Subdivision of Agricultural Land of 1970 and the Conservation of Agricultural Land of 1983, do not sufficiently cater for the protection of high-value agricultural land. The aims of the Bill are to prevent the fragmentation of agricultural land, minimize the loss of agricultural land, promote viable farming units, encourage the optimal use of agricultural land, and provide for food security. Agbiz head of Legal Intelligence Annelize Crosby discusses this subject in the linked article.

The Minister of Health published draft regulations in the Government Gazette public comment on 31 January 2023. Comments must be submitted on or before the end of March 2023. Agbiz is in the process of compiling comments on the draft regulations. Comments from members regarding the potential impact, if any on their business will be very helpful. The regulations prohibit the manufacture, importation, selling, donation, or offering for sale of any pre-packaged foodstuff unless the foodstuff has been labelled according to the regulations. The labelling must provide accurate information regarding the characteristics, origin, composition, quality, nutritive value, nature, or other properties of a foodstuff and the time and place of its manufacture to the consumer. The food business operator under whose name or business name a foodstuff is marketed is responsible for the information required by these regulations. In terms of the definitions, food business operators are foodstuff manufacturers, sellers, or importers. Annelize Crosby provides more information on this subject in the linked article.

Wandile Sihlobo, chief economist at the Agricultural Business Chamber of South Africa (Agbiz), spoke to the Global Business Report about South Africa's rising food inflation and the triggers behind it. He also mentioned blackouts and how Eskom's output struggles will impact food prices for the coming months. Please click here to peruse.

Although the country has had a lot of rain recently, experts say primarily rain-fed agriculture will be put under pressure soon. Wandile Sihlobo, chief economist at the Agricultural Business Chamber of South Africa (Agbiz), spoke with eNCA's Dan Moyane on what can be expected in the next season. Please click here to watch the interview.

Despite various headwinds throughout the year, South Africa's agriculture exports for 2022 did not decline as much as some feared. Data for the first 11 months of the year show exports at a cumulative US$11,9 billion, up by 3% from the same period in 2021. Moreover, US$11,9 billion is the second-largest agriculture exports value on record. When we receive the December exports figure in the coming weeks, it is possible that the 2022 agricultural exports could be just under 2021 levels of US$12,4 billion or even exceed them. In this week’s podcast, Wandile Sihlobo explores the various challenges the sector faced, and how the industry role players managed to overcome them and realise solid export performance. Please click here to peruse.

The grain storage sector needs a flexible load-shedding arrangement to help mitigate its impact. The impact can be reduced if load-shedding is scheduled at a convenient time for storers. Next to a flexible arrangement, the barriers to supplying energy to the network must be removed. Fair agreements are needed to exclude grain storers from load-shedding. Agbiz Grain's members collectively handle 70% of the grain and oilseeds delivered in South Africa. Staple foods, such as white maize flour, bread flour, and sunflower oil, are produced from this. Agbiz Grain general manager Wessel Lemmer elaborates on this subject in the linked article, first published in Landbouweekblad.

As the People's Republic of China (PCR) dismantles its zero-Covid policy measures, there is great optimism about the economy and, particularly, the hotel, restaurant and institutional (HRI) sector. Stakeholders expect a rebound in travel to fuel recovery in hotels, restaurants, and other outlets. PRC agricultural production, processing, and transportation logistics were resilient during the pandemic, but full economic recovery will be slowed by structural headwinds and cautious consumers. PRC food and agricultural imports – critical to the food security balance sheet – remain strong and are expected to grow faster than the rate of GDP. The PRC remains the United States’ largest food and agricultural product export market with sales reaching a record $41 billion in 2022.Read more in the linked report on post-Covid food and agricultural situation by the United States Department of Agriculture (USDA) Foreign Agricultural Service.

Inflationary expectations, despite stabilisation, remained elevated. According to official forecasts, the government expects an increase of 5-7%. However, some experts talk about 30-40% and a new wave of price increases. The increase in prices for vegetables and fruits is due to the increase in their storage cost. The war and adverse weather conditions in the fall caused a deficit of some vegetables. For example, about a third of onions and a quarter of carrots were grown in the Kherson region. The occupation and hostilities led to the loss of almost the entire harvest. The autumn rains affected the quality of onions, which deteriorate quickly. Therefore, Ukraine is forced to import them from Poland, Egypt, the Netherlands, and Moldova. The cost of logistics is increasing and, accordingly, the price of imported vegetables is rising. Read more in the linked article, first published on freshplaza.com.

The Cape Town Container Terminal is implementing mitigation measures to deal with the impact of adverse weather conditions on operations during the current peak deciduous fruit export season. Transnet Port Terminals managing executive for the Western Cape, Andiswa Dlanga, said the container terminal’s operations had been impacted by weather challenges since November 2022, with 584.76 hours of wind speeds ranging from 80 to 120 km/h. This has had an impact on vessels on the quay and those waiting at anchorage. Productivity has also been impacted, although the terminal continues to assist vessel operations and the landside where feasible, despite windy conditions. Read more in the linked article, first published on freightnews.co.za.

This week, port operations were characterised by the usual suspects identified as adverse weather, frequent equipment breakdowns and shortages, delays, and congestion. Weather challenges persisted in Cape Town this week as the port was windbound for approximately 40 hours. The marine fleet in Durban resumed its resurgence this week as three tugs were operational at the start of the week, and six tugs were in service during the latter stages of the week. Concerning TFR, a lengthy power outage at the Loliwe station, which stretched from Sunday afternoon to Monday afternoon, led to operational challenges on the rail line, while instances of cable theft occurred once more on Thursday, which ensured that three trains were cancelled as a result. Furthermore, reports on Thursday morning suggested that the Eastern Cape ports are anticipated to be subject to an influx of reefer containers soon due to the current weather delays at Cape Town. Globally, goods demand remains weak as port congestion eases (~7,9% of total fleet) but remains clogged in pockets, including Cape Town (the current berthing delay is nine days). Read more in the latest BUSA Covid-19 Cargo Movement Update.

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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.

In the latest edition of Keeping it Fresh, the Fresh Produce Exporter's Forum (FPEF)'s newsletter, you will get a summary of the most pertinent information as well as reminders of important upcoming events. Please click here to peruse.