Facebook  Twitter  Linkedin  
e-Newsletter

03/2023

26 January 2023

Focus on improving EAF as a quick win to stop load-shedding

There is no doubt that the future of electricity generation will be largely renewable energy and possibly nuclear energy. However, in the short to medium term the South African electricity grid will be largely powered by coal-based electricity generation. The Integrated Resource Plan (IRP) of 2019 captures the roadmap and policy direction adopted by South Africa. A lot has changed since 2019, and hence the IRP 2019 is being reviewed. To name a few changes in the assumptions made in 2019: it was assumed that the Eskom fleet Energy Availability Factor (EAF) would be maintained above 70% whereas today it is consistently below 60%; renewable energy costs have come down substantially, but there is a need to consider the cost of introducing large energy storage systems to support grid stability and make up for the performance of intermittent/variable renewable energy. In the linked opinion article, first published on Engineering News, SANEDI CEO Dr Zwanani Titus Mathe interrogates measures and interventions that could be pursued to improve the energy availability factor of the Eskom coal fleet so as to address intensifying load-shedding.

Two more years of load-shedding as long as …

Antonio Gramsci had it right: ‘The crisis consists precisely in the fact that the old is dying and the new cannot be born; in this interregnum a great variety of morbid symptoms appear.’ Gramsci was referring to politics in Italy in the 1930s, but the quote also describes Eskom and load-shedding in South Africa in the 2020s. Load-shedding brings with it the morbid destruction of many small businesses and the merciless disruption of peoples’ lives. Eskom is dying and cannot be saved in its current condition. Electricity provision, however, is not dying. It is important to distinguish between those two, lest we are overwhelmed by morbid symptoms. Independent political analyst, JP Landman, looks at the issues at Eskom that concern South Africans most and how the power utility can turn around the current situation. Please click here to peruse.

Agbiz continues to engage with government and Eskom on load-shedding challenges

The severe load-shedding has increased food security risks in South Africa, and financial pressures on farmers, agribusinesses and the value chain role players. Whilst the risk is great, statements on food security should only be made from an evidence base. As such, Agbiz conducted a survey this past week across all the sectors and the results are currently being analysed by a joint team of experts. Insights will be shared as soon as possible. The survey will also be used to inform possible interventions that government and private sector representatives are formulating to ensure a sound approach. The results of the survey will help enrich the response approach for the sector. Agbiz has also been engaged in various meetings with the Department of Agriculture, Land Reform and Rural Development, and Eskom to find ways to ease the pressure on agribusinesses. These engagements are ongoing and will benefit from the results of the survey. Read more in the linked Agibz media statement.

POLICY AND LEGISLATION

Agbiz participates in workshop on interface between science and policy

A joint workshop hosted by SANSOR and Croplife on the topic of bridging the gap between science and policy took place at the Future Africa venue in Pretoria on 23 January. The workshop aimed to examine how science could better inform certain policy decisions and what the potential role of scientists could be in policymaking in the agricultural space. Agbiz also presented at the workshop. With increasing globalisation, the impact of climate change and food security challenges, there is a great opportunity for science to inform, contribute to and support decision-making, also in South Africa.In the linked article, Agbiz head of Legal Intelligence Annelize Crosby reports back on the workshop..

Agbiz workshop on rural rejuvenation: buffering against instability

.Agbiz hosted its third workshop in a series of rural rejuvenation workshops in Pretoria on 20 January 2023. The previous workshops dealt with energy security and public-private partnerships. The third workshop intended to learn from the July 2021 and other incidences of unrest and instability and to equip members to be proactive in identifying and managing the risks of social instability. In the linked report, Annelize Crosby gives feedback on the key points that were raised during the workshop.

AGRIBUSINESS RESEARCH

El Niño is showing its head again and presents risks for the 2023/24 season

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 benefited from improved grazing pasture. Importantly, having four consecutive La Niña seasons was an unusual occurrence. The typical cycles are two seasons of higher rainfall followed by normal-drier seasons. Excluding the current trend, the only other period in the recent past with three successive years of conducive weather conditions and a large crop harvest ran through 2007/08, 2008/09, and 2009/10 production seasons. This period brought a sizeable agricultural yield to the country. Read more in the linked article by Agbiz chief economist Wandile Sihlobo.

Energy crisis now a food security risk

There is probably no issue more urgent than the worsening energy crisis for South Africa's agriculture and agribusinesses. Farmers who rely on irrigation have all expressed concerns that persistent load-shedding negatively affects production.In crucial field crops, roughly 20% of maize, 15% of soybean, 34% of sugarcane and nearly half of the wheat production are produced under irrigation. Fruits and vegetables also heavily rely on irrigation and thus face similar challenges. In red meat, poultry, piggery, wool, and dairy production, there are also concerns that load-shedding beyond stage two makes operations and planning challenging, as these industries all require continuous power for their usual activities. In this week's podcast, Wandile Sihlobo speaks about the risks to South Africa’s food security presented by load-shedding. Please click here to peruse.

Power cuts hobble farming sector 

South Africa’s agricultural sector has all the ingredients to reduce poverty at scale and create millions of jobs. But six things are preventing the sector from harvesting these positive economic spin-offs. Wandile Sihlobo discussed the issues that currently hamper optimum productivity in the agricultural sector in an interview with CNBCAfrica earlier this week. Please click here to view the interview.

AGBIZ GRAIN

Formal qualification for grain depot managers

Koos du Pisanie of RSG Landbou spoke to Lizelle Jacobs, director of Mind Alive, about the new formal qualification for grain depot managers. Please click here to listen to the interview.

OTHER NEWS

The cost of misreading inflation

The 2021 surge in global shipping costs was a canary in the coal mine for the persistent rise in inflation. It bears remembering that, as recently as the second half of 2021, the Federal Reserve considered that the surge in consumer price inflation would dissipate, with price increases returning to the Fed’s 2 percent target in 2022. In testimony before Congress, Fed chair Jerome Powell affixed the now infamous “transitory” moniker to the ongoing price increases, which he ascribed to temporary supply bottlenecks and price declines in the early stages of the pandemic. The Fed rejected the notion that price increases reflected an overheated economy—a view that was nevertheless already making the rounds in certain segments of Congress—and did not foresee any tightening before 2023 or 2024. Read more in the linked article by the International Monetary Fund.

USDA publishes strengthening organic enforcement final rule

Last week, the USDA National Organic Program (NOP) previewed the Strengthening Organic Enforcement (SOE) final rule. This update to the USDA organic regulations strengthens oversight and enforcement of the production, handling, and sale of organic products. This final rule implements 2018 Farm Bill mandates, responds to industry requests for updates to the USDA organic regulations, and addresses National Organic Standards Board (NOSB) recommendations. “Protecting and growing the organic sector and the trusted USDA organic seal is a key part of the USDA Food Systems Transformation initiative,” said Under Secretary for Marketing and Regulatory Programs Jenny Lester Moffitt. Please click here to peruse.

Global fresh onion market review – are prices about to skyrocket?

Market participants in Eastern Europe and Central Asia are discussing the prospect of onion prices reaching $1/kg in wholesale trade. This means that retail prices can reach an unprecedented $1.5-$2.0/kg! How possible is this, is this unique, and what is the reason for such gloomy forecasts? EastFruit experts analysed the onion market in Iran, Pakistan, Uzbekistan, the Netherlands, Poland, Tajikistan, Ukraine, Georgia, Moldova, Kazakhstan, and Turkey and offer their preliminary conclusions in the linked article, first published on east-fruit.com.

“Worst US avian flu outbreak” persists, “there is no historical context for this”

Earlier this week, it was reported in the Wall Street Journal that, “Nearly a year after it began, the worst avian-influenza outbreak in US history is continuing to decimate poultry flocks across the Midwest and Colorado, frustrating efforts to keep the virus from affecting the nation’s egg prices and supply.” The Journal article noted that “‘One of the challenges is that we don’t know why it has been able to thrive for so long. We’re almost a full year into this outbreak and it is ongoing,’ said Maggie Baldwin, Colorado’s state veterinarian.” Read more in the linked article, first published on Farm Policy News.

Cape Town port fruit export volumes up 8%

Transnet’s Cape Town Container Terminal has increased its export volumes by 8% since the start of the deciduous fruit season, compared to the previous year. The season officially commenced in December 2022, with exports of pome fruit (apples and pears), berries, as well as table grapes and stone fruit destined for the international markets. Transnet Port Terminals (TPT) said in a statement on Friday that exporters had shipped more than 118 381 TEUs through the CTCT, despite weather challenges of wind and fog. It said the terminal had put recovery plans in place to mitigate delays and clear backlogs that had been created as a result of inclement weather. The terminal currently has seven vessels at anchorage and is continuing to tighten its operational plans for improved efficiency. Read more in the linked article, first published on freightnews.co.za.

BUSA Covid-19 cargo movement update

Port operations this week were characterised by adverse weather conditions, frequent equipment breakdowns and shortages, power outages causing system challenges, and congestion. For example, operations at the Cape Town Container Terminal were frequently delayed throughout the most significant part of the week due to strong winds and dense fog. In addition, equipment challenges were rife in Durban this week as extensive delays were experienced due to a shortage of tugs, while TFR continues to suffer from rampant cable theft. On a more positive note, TNPA in both Durban and Cape Town reported that their ports would be exempt from load-shedding, providing a glimmer of hope for our economy amidst the seemingly intractable energy crisis. In the global maritime economy, capacity management reigns supreme. The current landscape is characterised by waning global demand, desperate efforts by ocean carriers to stem the tide of free-falling rates, and the largest active cellular fleet since 2020. Read more in the latest edition of the BUSA Covid-19 Cargo Movement Update.

IFPA appoints new country manager for Southern Africa

The International Fresh Produce Association (IFPA) has appointed Stephanie van der Walt as the new country manager for IFPA Southern Africa. IFPA is the result of combining two produce industry organisations, namely the Produce Marketing Association (PMA), founded in 1949 and the United Fresh Produce Association (UFPA), founded in 1904. In her new role, Van der Walt will focus on supporting IFPA's global impact through service to members, seeking opportunities to create greater value for Southern African members and providing insights into the needs of the Southern African market. As part of IFPA's global country manager team, Van der Walt will collaborate with international colleagues to create opportunities to connect IFPA's global markets. Read more in the linked IFPA media statement.

MEMBERS' NEWS

AFMA executive director resigns

The Board of Animal Feed Manufacturers Association (AFMA) announced the resignation of its Executive Director (ED), De Wet Boshoff effective immediately. Boshoff has decided to pursue personal business interests, effective immediately. Boshoff was appointed as ED in March 2006, and the board would like to thank him for his service and contributions to AFMA over the years. The board has commenced a process of identifying a suitable replacement and AFMA members will be advised as soon as an appointment has been made. In the interim, Liesl Breytenbach (technical and regulatory manager) will take up the responsibilities of the ED until an appointment has been made.

Latest news from CGA

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.

UPCOMING EVENTS

Xth International Symposium on Irrigation of Horticultural Crops

29 January-2 February 2023 | Stellenbosch

More information


Fruit Logistica 2023

8-10 February 2023 | Berlin

More information


Africa Agri Tech Conference and Exhibition

14-16 March 2023 | Sun Arena | Menlyn Maine | Pretoria

More information


GOSA Symposium

15-16 March 2023 | Diaz Hotel | Mossel Bay

More information


Pulses and Special Crops International Summit

30-31 March 2023 | Parana | Brazil

More information


Agbiz Grain Symposium

4-7 September 2023 | Virtual

More information: annelien@agbizgrain.co.za


AFMA Forum 2023

Theme: "Feed & Food – The 4th Agricultural Revolution"

5-7 September 2023 | Sun City | South Africa

More information

AGBIZ MEMBERSHIP
Why join Agbiz?
  • 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.
  • Agbiz facilitates considerable top-level networking opportunities so that South African agribusinesses can play an active and creative role within the local and international organised business environment.
  • Agbiz research provides sector-specific information for informed decision-making.
  • Agbiz newsletter publishes members' press releases and member product announcements.

Facebook  Twitter  Linkedin  
THIRD-PARTY WEBSITE LINKS TO THIS NEWSLETTER
The Agbiz Newsletter may contain a few links to websites that belong to third parties unrelated to us. By making these links available, we are not endorsing third-party websites, their content, products, services or their events. Agbiz seeks to protect the integrity of its newsletter and links used in it, and therefore welcomes any feedback.