This year’s Medium-Term Budget Policy Statement came at one of the most challenging times for the South African economy. Rising inflation, tighter financial conditions, electricity outages, inadequate roads and challenges in the rail and ports networks, amongst other challenges, continue to weigh on the South African economy. The National Treasury now expects the South African economy to grow at 1,9% in 2022 and to remain at sub-2% over the next three years. This means the challenge of joblessness and tough business operating conditions will likely remain for some time. These are issues that Finance Minister, Enoch Godongwana, reflected on in his Medium-Term Budget Policy Statement and outlined the steps the government is taking to move the country out of this low-growth trap. Please click here for the full Agbiz media statement. In a statement, North-West University Business School economist Prof. Raymond Parsons said: "Against the background of difficult global and domestic economic circumstances Finance Minister Enoch Godongwana generally delivered a realistic and credible fiscal message in the MTBPS today." Please click here to peruse.

In his latest newsletter, political and trend analyst JP Landman states that once a year, usually in August, he does an update on the fight against corruption. This year he delayed it because the head of the National Prosecuting Authority (NPA), Shamila Batohi, committed in May to Parliament that nine ‘high-profile’ state capture cases would be brought to court by the end of September 2022. "It is clear that there has been a step change in both the criminal and civil prosecution of state-capture miscreants. By the end of September, eight new criminal cases had been instituted involving erstwhile very high-flyers. These former high-flyers include a cabinet minister, a secretary-general of the ruling party, a commissioner of police, and several generals, as well as former CEOs. The untouchables of yesteryear are in court. It is welcome news that not only individuals but also companies are also being charged. There is no hiding behind a corporate veil as Bain, McKinsey and ABB discovered. The fact that charges have been brought does not guarantee convictions. Rest assured that the accused will throw everything into defending themselves. But at least the process is being followed as it should." Please click here to peruse.

On 13 October, Agri SA presented honorary awards to Dr John Purchase, former Agbiz CEO, and Annelize Crosby, Agbiz head of Legal Intelligence for their exceptional service to the industry Dr Purchase served as Agibz CEO for a period of 14 years prior to his retirement in 2021. Annelize Crosby served as the head of Agri SA’s land reform portfolio prior to her employment at Agbiz. Both of these colleagues have made a tremendous contribution to the interests of the wider sector and Agbiz would like to congratulate them both on the deserved recognition. 

As the 2022/23 summer crop season commences in the Southern Hemisphere, the grains and oilseeds production estimates released by the International Grains Council (IGC) and the United States Department of Agriculture (USDA) will increasingly incorporate more information on underlying developments at farms. As usual, these organizations will update their monthly projections to mirror conditions on the ground, compared to the past few months, when the forecasts relied on historical production figures. Against this, it is worth briefly reflecting on the recent forecasts the IGC released this past week and its implications for South Africa. In the linked article, Agbiz chief economist Wandile Sihlobo discusses the latest data.

We have generally held an optimistic view about South Africa's 2022/23 summer crop production season. The robust tractor sales since the start of the year, prospects of yet another La Niña albeit weaker than last season, and the relatively higher commodity prices pointed to possibilities of decent area plantings. The data released by the Crop Estimates Committee (CEC) yesterday is aligned with our view. The CEC indicates that South African farmers intend to plant a total area of 4,35 million hectares of summer grains and oilseeds in the 2022/23 season, up mildly by 0,2% y/y. A deep dive into the numbers show a mixed picture. Wandile Sihlobo elaborates on the latest data in the linked article.

In this week’s segment, Wandile Sihlobo explores the global agricultural conditions for the 2022/23 season, with a specific focus on grains and oilseeds. In painting this global picture, Sihlobo utilizes the grains and oilseeds production estimates from the International Grains Council (IGC). In essence, the 2022/23 global grain and oilseed season presents a comfortable picture of supplies. The 2022/23 global grain and oilseed production is estimated at 2,26 billion tonnes. This harvest is 1% lower than the 2021/22 season but still the second-largest crop on record. There is a variation across crop production levels, which will influence the prices. Still, the current expected crop will probably be sufficient to provide relief from the levels the prices were in the weeks after the start of the Russia-Ukraine war. With that said, the current production levels also mean that global grains and oilseeds prices are unlikely to return to the pre-covid and pre-war levels soon. Please click here to peruse.

Agbiz chief economist Wandile Sihlobo participated in a webinar focusing on the challenges in the railway and logistics sector. The conversation was facilitated by Elvin Harris from the Chartered Institute for Logistics and Transport. Other panel members included Denis Owaga of the Railway Safety Regulator, and Gavin Kelly of the Road Freight Association. Please click here to view a recording of the webinar. 

The WTO’s rules governing farm trade have not kept pace with the current challenges to global food markets and need to be updated, WTO director g9eneral Ngozi Okonjo-Iweala told participants at a 24 October retreat on trade and agriculture. In her opening remarks to the one-day special event held at WTO headquarters, the Director-General noted that despite some positive developments, “too often, markets for food and agriculture still continue to function poorly.” “It's increasingly clear that WTO rules have not kept pace with the challenges we face today, nor with developments on global markets,” she declared. WTO members “will have to update the WTO rulebook if we're to respond effectively to the problems on global markets, and ensure WTO disciplines help us tackle the challenges we're facing both today and tomorrow.” Please click here to peruse.

Sub-Saharan Africa faces one of the most challenging economic environments in years, marked by a slow recovery from the pandemic, rising food and energy prices, and high levels of public debt. One of the most urgent issues confronting the region is the need to tackle decade-high levels of inflation—which are devastating incomes and food security—while also supporting growth. While there are big differences between countries, the median of inflation rates in the region increased to almost 9 per cent in August. And even though the rise has been less dramatic than in other parts of the world, and the drivers are different, inflation is nearly double pre-pandemic levels, risking social and political instability and worsening food insecurity. Read more in the linked International Monetary Fund blog post.

Following a period of historically high freight rates, the Container sector is now experiencing a correction. The Container freight market is said to have peaked, as demand concerns linked to the health of the global economy have dulled sentiment somewhat. This has led to reduced demand across the Container sector, easing port congestion across Chinese and American ports and consequently softening charter rates. Container values have risen steadily over the last two years until August, but following the pattern of the freight market, this sector has since seen a fall in values. Read more in the linked article, first published on FreshPlaza.

The Minister of Agriculture, Land Reform and Rural Development (DALRRD) Thoko Didiza launched a R3.2 billion blended finance scheme with Land Bank to assist farmers. The programme will be implemented over a 10-year period with the department investing a minimum of R3,2 billion over the period. The funding will be on a blended finance structure which is a combination of a loan and grant with the focus on commodities as per the Agriculture and Agro-processing Master Plan. The department and Land Bank have each invested R325 million per annum which will effectively result in the creation of a R650 million fund a year and it will grow to R1.95 billion by end of year 3. Read more in the linked DALRRD media statement.

From this year, South Africa now finds itself in the second position as apple supplier to China which has increasingly been looking for apple imports. In first place is New Zealand. The South African export campaign to China (99% comprising red apples with a smattering of Golden Delicious) is nearing its end, neatly encompassing the lucrative Mid-Autumn Festival. The country has only been sending apples to China for eight years and the trade has been in a generally upward trend, growing by three-digit percentage points almost every year, surging by 291% from 2018 to 2019. Read more in the linked article, first published on FreshPlaza.

Weather patterns have changed and unlike the first few days of October, when sunny, heat-wave conditions occurred over many areas, maximum temperatures have come down substantially, associated with widespread cloud cover and thundershowers in places. While totals were generally low, most areas received some rain and more can be expected during the next few days, especially over the eastern parts of the country where cumulative totals may exceed 25 mm over most of the eastern maize-production region and generally across the Eastern Highveld. As can be expected during periods with normal to above-normal rainfall over parts of the summer rainfall region, fresh to strong south-easterlies will occur on several days in the southwestern parts of the Western Cape. As we progress into summer, and with dry conditions over the winter rainfall region, the main focus area of wildfires will also start shifting to this region from the interior. Read more in the latest edition of Cumulus, published by AgriSeker.

As with last week, this week's central talking point revolves around the strike action, which has fortunately ended. However, the reality is that the real work will only start now, as clearing the backlog will be a significant and challenging undertaking. Apart from the strike's impact, port operations were characterised by equipment breakdowns and shortages, adverse weather conditions, backlogs, and congestion as we slowly began to return to full operations. Operations at most of our national ports returned to some sort of normality as both UNTU and SATAWU accepted Transnet's latest wage offer, concluding the strike action that took place. In addition, the Eastern Cape ports experienced adverse weather conditions during the latter stages of the week, leading to extensive delays, while equipment breakdowns and shortages plagued the rest of our ports. Furthermore, the crane situation in Durban is continuously a cause of concern, while Transnet reported that the Durban helicopter should start conducting night shift operations from November onwards. No sooner had the strike come to an end than the South Easter started blowing in Cape Town, closing the container terminal there. Please click here to access the latest BUSA Covid-19 Cargo Movement Update.

The Daily Maverick and other publications reported that earlier this month, cocaine and methamphetamine were discovered in consignments of apples, pears and oranges exported from South Africa to India. Two fruit importers have been arrested, implicating import/export companies in Dubai and India. The export company in South Africa, based in Gauteng, is not a member of the Fresh Produce Exporters’ Forum (FPEF). The FPEF is a 20-year-old industry association with 95% representation of the country’s total fresh fruit export volume. However, the strict membership criteria of the FPEF do declare a certain calibre of exporter ineligible. Therefore, the organisation is unable to account for the actions of all fresh fruit exporters. Though the smuggling of narcotics using fresh produce is nothing new, the FPEF strongly condemns the actions of the rogue exporters linked to this crime. Especially, given the potential reputational damage to this economic powerhouse. South Africa is the largest exporter of fresh fruit in the southern hemisphere and has built its world-renowned reputation on reliability and the production of world-class fresh fruit that is exported to over 100 destinations around the world. The FPEF assures the international trading community that through its continued vigilance, the vast majority of South African fresh fruit exporters remain qualified and trustworthy.

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.