The recent global inflation spike, triggered by the pandemic, fiscal and monetary stimuli, and Russia’s invasion of Ukraine, offers valuable insights for central banks. As demand for goods surged and supply bottlenecks worsened, inflation became embedded in core sectors. The Phillips curve, which tracks the relationship between inflation and economic slack, steepened, showing that smaller changes in slack had a larger effect on inflation. A key lesson is that when supply constraints are widespread, policy tightening can effectively reduce inflation with minimal economic impact. However, when bottlenecks are sector-specific, focusing on core inflation is vital to avoid unnecessary economic contraction. These insights suggest that central banks should adapt their monetary policy frameworks, integrating flexible measures to address sector-specific shocks and improve inflation forecasting. Click here to read full article by IMF Blog.

South Africa's agricultural growth in the first 30 years of the democratic era has been supported, among other things, by two pivotal interventions. The first was a deliberate and concerted strategy to invest in genetics for crops, horticulture, and livestock. The second was a strong push to expand export markets. As production continues to increase, and there remains capacity for its expansion, these two levers must be accelerated. The Department of Agriculture must support new ethical breeding techniques that the private sector occasionally presents, as they may be vital for continuous productivity improvement. More importantly, with climate change and the increasing frequency of extreme adverse weather conditions, improved seed cultivars that cope with such environments will become critical in supporting our agricultural system. Therefore, crop and livestock breeding should remain a priority policy area for South Africa as an anchor for food security and agricultural production progress. Click here to read full report by Agbiz chief economist Wandile Sihlobo. Click here to listen to full podcast – Agricultural Market Viewpoint with Wandile Sihlobo. 

A new Africa Finance Corporation (AFC) report has raised concern that the myriad expansions, upgrades and investments in ports on the continent in recent years have not improved the operation of inland logistics and supply chains. African ports have received an estimated $15 billion in investments since 2005, allowing them to upgrade and modernise to accommodate larger vessels and offload higher cargo volumes for transportation across the continent. According to data released by the African Development Bank, this ongoing port development has led to increased container traffic. The number of container units moving through African ports increased by nearly 50%, from 24.5 million to 35.8m between 2011 and 2021. AFC’s 2024 report, titled ‘State of Africa's Infrastructure,” has noted that increased port capacity has yet to lead to an efficient logistical supply chain across the continent. Click here to read full article derived from freightnews.co.za.

The land question remains one of the most emotive and divisive issue in post-democratic South Africa. Thirty years ago, the state committed to transfer at least 30 percent of the country's 86 million hectares of arable farmland to Blacks by 1999. The goalpost kept shifting. But how does that picture look 30 years on? Agbiz head of legal intelligence Annelize Crosby joins the conversation on SABC News. Watch here.

SA’s agriculture and agribusiness sectors have a broader responsibility for food security beyond the country’s borders. The Southern Africa region leans heavily on SA for food supplies. This is clear from SA’s agricultural exports. The country exported about $13.2bn of agricultural and processed food products in 2023, according to Trade Map data. Almost 40% of these exports were to the African continent. Notably, about 90c in every dollar of SA’s agricultural exports to the continent is earned from Southern Africa. Grains, fruits, vegetables and selected beverages are typically high on SA’s list of agriculture and food exports to the region. Not all countries rely equally on SA’s agriculture and food industry. Seven countries dominate: Botswana, Namibia, Mozambique, Zimbabwe, Lesotho, Eswatini and Zambia, which accounted for 81% of SA’s agricultural exports to the continent in 2023. In fact, over the past five years these countries have, on average, accounted for 80% of SA’s agricultural exports to Africa each year. Read full article by Wandile Sihlobo here.

Technological improvement is a primary catalyst for the growth of the South African agricultural sector.1 Thus, South Africa must continue to spend money on research and development to support the long-term growth of the agricultural sector. However, in recent years, the country seems to be spending less on research, which is worrying, especially during increased climate change risks and the need for even greater spending on research. Consider the work done jointly by the University of Pretoria and the Agricultural Research Council (ARC) for the international Agricultural Science and Technology Indicators in 2014, which estimated that South Africa in that year spent about R2,5 billion on agricultural research – by public, university and private sector agencies. The most recent government appropriation reports reported that the Department of Agriculture transfers an annual total of R1 billion to the Agricultural Research Council to operate its various programmes to support the agricultural sector. Click here to read full article by Wandile Sihlobo.

Ordinarily, we use agricultural machinery sales to gauge farmers’ intentions for the season ahead. When the sales are robust, we are typically positive that farmers are eager for the new season. Equally, we worry about the poor machinery sales. But we are in no ordinary period. The recent months’ sales cannot be a guide to the season ahead for various reasons. First, the agricultural sector has had a few seasons of higher machinery sales, supported by improved incomes for farmers due to ample harvests and higher commodity prices.  Thus, there was bound to be some correction period, leading to moderation in sales. Since the start of 2024, we have been in this “market correction” period for both tractors and combine harvester sales. After a few years of higher sales, the replacement rate of the old machines is justifiably down. Second, the fact that we struggled with an intense mid-summer drought did not help. Farmers are under financial pressure because of the resultant crop losses. Click here to read full article by Wandile Sihlobo.

This is one of those blog posts that I will regularly update when we receive new data. This week, I want to highlight that South Africa continues to export maize to the Southern Africa region. Most of these exports are white maize, a staple for the area. The major producers of white maize globally are South Africa and Mexico. In times of drought, there are always fears that the major maize producers may not have sufficient supplies for the region or may limit exports. We are certainly in a season where Southern African countries have lost most of their harvest and now require imports. For example, Zambia lost 50% of its maize crop; Zimbabwe lost 60%. There were also significant crop losses in Malawi, Lesotho, and the broader region. South Africa was not insulated from this devastating drought. However, the crop losses were relatively better because of the improved seed varieties South Africa uses and the better input application, which supported the crop in some regions of the country. Still, South Africa’s maize production is down 22% from last season’s expected harvest of 12,8 million tonnes. Read full article by Wandile Sihlobo here.

After a slight increase to 4,1% in August 2024, South Africa's consumer food price inflation remained unchanged in September. However, there was a mild deceleration in some products' price inflation, including "bread and cereals", "meat", "sugar, sweets and desserts". The "oils and fats" are in deflation. The "milk, eggs and cheese" remained flat from the previous month. These moderating price trends were countered by the slight increase in the price inflation of "fish", "fruit", and "vegetables"; thus leading to an unchanged headline consumer food price inflation in September 2024. The base effects of higher consumer food price inflation a year ago have contributed to the generally moderate trend of some products this year. For example, this time last year, there were risks of higher grain prices after India banned rice exports, and avian influenza, which spread in various regions of the country, led to constraints on egg supplies and, ultimately, upside price risks. We are far from that worrying reality, as India has resumed rice exports and South Africa's poultry product supplies have normalized. Click here to read full article by Wandile Sihlobo.

As I write this blog post, it is pouring outside. We are receiving nice rains in the northern, central, and eastern regions of South Africa. This is an ideal time to improve soil moisture so farmers can proceed with the 2024-25 summer crop planting process. I am even more upbeat after looking at the weather forecast for the next two weeks, which shows prospects of frequent rains – see the coloured parts of the South African map. This is great for agriculture. We are emerging from a tough season of mid-summer drought, and the season ahead promises to be a recovery period. There are prospects of a La Niña weather phenomenon, which, if it materialises, would bring above-normal rains and support agriculture in South Africa and the entire Southern Africa region. Admittedly, there remains some uncertainty about the La Niña occurrence, but most indications are optimistic. Read full article by Wandile Sihlobo here.

A new Oxfam report published on World Food Day shows that 7 000 and 21 00 people are likely dying each day from hunger in war zones. In South Africa, an estimated 16.7 million tonnes of food is wasted, with experts saying 40 million people could be fed from that quantity. Agbiz chief economist Wandile Sihlobo has more. Click here to watch. Newzroom Afrika DStv channel 405.

On Friday, 18 October 2024, Agbiz attended the Emergency Summit on Climate Change and Agriculture, hosted by Food for Mzansi in Centurion. The summit brought together experts, farmers, and policymakers to discuss critical climate-related challenges affecting South Africa's agricultural sector, particularly erratic weather patterns, droughts, and rising temperatures. The event featured a mix of presentations, panel discussions, and testimonials from farmers adapting to climate change. One of the standout presentations was delivered by Pieter van Niekerk, Principal Sales Manager at AgriCarbon. His presentation, titled Demystifying Carbon Credits: A Game-Changer or Just Hot Air?, explored carbon credit opportunities for the agricultural sector, particularly for fruit and wine growers. His insights focused on carbon offsets and future possibilities for carbon trading, especially in light of South Africa's Carbon Tax Act and the EU's proposed Cross-Border Carbon Tax. Click here to read full report by Agbiz Digital Communications Manager Temba Msiza.

Growth is projected to hold steady, but amid weakening prospects and rising threats, the world needs a shift in policy gears. The global battle against inflation is nearing victory, with rates projected to fall to 3.5% by the end of 2025. However, downside risks are rising, requiring a "policy triple pivot." First, monetary policy should ease as inflation nears central bank targets. Second, fiscal policy must shift towards stabilising debt and rebuilding financial buffers. Finally, growth-enhancing reforms are crucial to lift productivity and address long-term challenges like climate change and ageing populations. Without these shifts, global growth could stagnate, making it harder to manage future crises and achieve sustainable economic stability. Click here to read full report by the imf.org.

While the global economy appears stable with inflation declining and central banks cutting interest rates, significant medium-term financial risks are mounting. Accommodative financial conditions have led to increased investor risk-taking, resulting in high levels of debt, leverage, and lofty asset valuations. These vulnerabilities could magnify future financial shocks, much like those preceding the 2008 financial crisis. Additionally, there's a widening gap between geopolitical risks and subdued financial market volatility, which may result in abrupt market sell-offs if tensions escalate. The recent market turmoil in August, though short-lived, demonstrated how quickly sentiments can shift. Policymakers must remain vigilant, tightening regulatory frameworks and maintaining buffers to mitigate potential crises. The time for proactive measures is now to ensure that financial stability remains intact as the world navigates this complex landscape. Click here to read full article by IMF Blog.

The Minister of Land Reform and Rural Development (DLRRD), Mr Mzwanele Nyhontso (MP), will handover title deeds to Rakwadu Claimant Community in Limpopo, on Friday, 25 October 2024, following the successful processing of their land claim by the Commission on Restitution of Land Rights. The Rakwadu community, which is made up of 172 households and 1,002 beneficiaries, will be returning to their ancestral land almost 60 years after they were dispossessed of their rights in land due to past discriminatory laws and policies. To restore their land rights, the department has acquired two productive farms measuring 2,400 hectares, mainly utilised for fruit production, on the farm Deelkraal 412 LT and the remaining extent of the farm Goedgeleken 566 LT, at a total cost of R77,725,000.00. The Rakwadu community’s land claim on the farm Deelkraal 412 LT was lodged by Chief Ntsauoa David Mohale on 7 December 1998. Click here to read full statement.

Brazil has added another element to its ongoing privatisation plans by announcing that it intends to auction off 35 terminals. The news comes a day after it was reported that MSC wholly-owned subsidiary, SAS Shipping Agencies Services, had agreed to acquire a 56.47% stake in port operator Wilson Sons for a total cash consideration of 4.3 billion Brazilian real. The latest development marks a significant step in the country’s broader strategy to modernise and enhance its port infrastructure through private investment, aiming to boost efficiency and competitiveness in global trade. As part of the fast-tracked sell-off scheme, 22 terminals are expected to be auctioned between now and the end of 2025. Three of these auctions are set to take place before the close of this year. Notably, two major assets are included in these sales: a new terminal at Itaguaí and a container terminal at the Port of Santos, Brazil’s largest and most important port. Click here to read full article from freightnews.co.za.

We are excited to announce that Agbiz will be moving to our new office in the week of 2 to 6 December. Our new location will be at Agri-Hub Office Park, Block C, First Floor, 477 Witherite Street, The Willows, Pretoria. If you have any questions or need further information, please reach out to Retha at admin@agbiz.co.za.

Fruit South Africa is looking for a skilled professional to join their team as the Market Access Liaison Manager. This role focuses on facilitating international market access for the fruit industry and driving strategic growth. If you have experience in agricultural trade, strong networking abilities, and are passionate about supporting South Africa’s fruit industry, this could be the perfect fit for you! Click here to learn more and apply.

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. 

Agbiz Media Day

6 December 2024 | Grain Building Auditorium, 477 Witherite Street, The Willows

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GOSA Workshop: Geared for innovation

24 October 2024 | NAMPO Park

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SAIAE & PASAE International Symposium 2024

23 – 25 October 2024 | Grabouw, Western Cape

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AFMA Symposium 2024

31 October 2024 | CSIR International Convention Centre

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C&I Solar + Storage Summit

19-20 November 2024 | The Maslow Hotel, Johannesburg

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Shape Africa’s Agricultural Future at the Annual African Agri Investment Indaba 2024

18 – 20 November 2024 | Cape Town International Convention Centre

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ESG & Value Addition in Agriculture Conference 2024

4-5 December 2024 | Garden Court OR Tambo Johannesburg

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• Agbiz is the only organisation that serves the broader and common over-arching business interests of agribusinesses in South Africa.
• Agbiz addresses the legislative and policy environment on the many fronts that it impacts on the agribusiness environment.
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