Picture yourself as the finance minister of a developing economy. An eager environmentalist tries to convince you of the moral imperative of cutting your country's greenhouse gas emissions. You soon become bored because you’ve heard it all before, and your mind moves to more pressing matters. Your country is full of problems, from economic instability and inflation to challenges in funding public services. Reducing emissions is not a priority. Even if you were to succeed, your impact on the climate would be minuscule. Countries as populous as Pakistan, Nigeria, and Egypt each represent less than 1 percent of the world‘s emissions. Your country’s emissions—even cumulative since the industrial revolution—are infinitesimally small. Eliminating them all would have no material impact on the climate: you would have incurred costs and forgone opportunities to deliver economic prosperity with little to show for it. Read more in the linked article by Prof. Ricardo Haussmann, founder and director of Harvard’s Growth Lab and Rafik Hariri Professor of the Practice of International Political Economy at Harvard Kennedy School.

When Transnet workers recently went on strike, there were widespread fears in some sectors over what would happen if the movement of goods and products ground to a standstill. Government stepped in to allay the private sector’s concerns and help bring wage talks to a speedy resolution. The strike showed how vulnerable business is because of its reliance on the state’s port and rail network infrastructure. The meetings between segments of the economic cluster and Transnet management enabled the impacted sectors to work closely with the appropriate people at the state freight and rail company. That created space for business to unblock constraints and made it possible for government to gain on-the-ground insights about the upstream and downstream consequences of the strike. Read more in the linked article, first published on Daily Maverick.

The Portfolio Committee on Agriculture, Land Reform and Rural Development, on 1 November 2022, hosted public hearings on the Agricultural Product Standards Amendment Bill. The Bill aims to amend the Agricultural Product Standards Act, 1990, so as to insert definitions and substitute others; to provide for auditing of a product for management control systems; to make provision for the setting of tariffs by assignees on a cost-recovery basis; to make further provisions for the Minister of Agriculture, Land Reform and Rural Development to make regulations pertaining to audit and management control systems. A number of organisations, including Agbiz, were invited to present to the portfolio committee. Read more in the linked article by Agbiz head of Legal Intelligence Annelize Crosby.

The challenges that agriculture and agribusiness stakeholders face are the same across South Africa. After engaging with our members in various provinces of the country, we spent time with agribusiness and farmers in the Eastern Cape this past week. The Eastern Cape is an important agricultural province, accounting for about 6% of the sector's annual gross value added, roughly the same as Limpopo, North West and Gauteng. The broad challenges that continue to weigh on agribusiness leaders' minds in this province are the threat of deteriorating municipal service delivery, corruption in public offices and the failures in the network industries (i.e., roads, rail, water, electricity and ports). These inefficiencies lead to increasing costs of doing business in the province and taking investment away from productive agribusiness activities to maintaining roads and other infrastructure. Agbiz chief economist Wandile Sihlobo discusses this subject in the linked article.

In this week’s episode, Wandile Sihlobo, assesses what Kenya’s decision to lift the ban on the cultivation and importing of genetically modified (GM) white maize means. Kenya changed its regulations on GM maize in response to growing food insecurity in the country. Kenya has struggled with drought in the recent past and remains a net importer of maize. There will be an assessment of each GM trait by the Kenyan Biosafety Authority before actual imports and cultivation can occur. Assuming some of this scientific legwork has already been done, we could see imports start in the next few months. In the 2022/2023 season, Kenya needs to import a substantial volume of maize, estimated at about 700,000 tonnes. This is roughly unchanged from the previous season, which also posted poor domestic production. Please click here to listen to the podcast.

 Ukraine is often referred to as the 'breadbasket of Europe' because of its high market share of exports of wheat, corn, and grain. Wheat prices have surged after Russia pulled out of its grain export deal with Ukraine. Agbiz chief economist Wandile Sihlobo discussed the influence of the situation in the Black Sea region on the global grain market during an interview with Newzroom Africa. Please click here to watch the interview.

Despite the adversity we face, the South African consumer in a developing, poorer country like

South Africa is still in a better position than most consumers in developed, wealthier countries. The market value of all the manufactured goods and services (gross domestic product) in South Africa can increase by 1.9% in the 2022 calendar year from 2021. The countries with which the South African grain industry competes in the export market are Australia (GDP growth of 3.3%), Argentina (4.6%) and Brazil (2.6%). Read more in the linked article by Agbiz Grain general manager Wessel Lemmer, first published in Landbouweekblad.

On 27 October Agbiz was invited to participate in a SA-Spain Business, Trade and Investment Forum hosted by the presidents of both countries in Pretoria. The Minister of Trade, Industry and Competition, Ebrahim Patel, further co-hosted the Forum with Reyes Maroto, Spanish Minister of Industry, Trade and Tourism. The forum sought to deepen trade and investment ties between South Africa and Spain, focusing on a range of sectors including agro-processing, renewable energy, mining, automotive, manufacturing, water, transportation, healthcare, pharmaceuticals, and tourism. Spain is a significant investor in the renewable energy sector in South Africa and a key EU member state export market for South African products. South Africa and Spain comprise the two largest exporters of citrus fruit globally. The top five agri exports to Spain comprise fish and crustaceans, fruit and nuts (the bulk being citrus with South Africa supplying 24% of market, followed by macadamias, with South Africa supplying 60% of the Spanish market), maize, sugar, wood, and fruit juices, jams and preserves. Total South African exports across all economic sectors have steadily increased from around R7.6 billion in 2012 to around R28.5 billion in 2021. In the linked article, Agbiz Fruit manager Wolfe Braude, gives feedback on the event.

The World Trade Organization (WTO) issued the latest edition of Trade Profiles, an annual publication providing key data on merchandise trade and trade in commercial services for 197 economies, last week. Each profile displays a sectoral breakdown of the economy’s exports and imports, its main trading partners and its most traded products and services. For merchandise trade, top exports and imports are listed for both agricultural and non-agricultural products. For trade in services, data is provided for transport, travel and other commercial services. Foreign affiliate statistics (FATS) and statistics on intellectual property are also provided. Please click here to peruse.

With the African Continental Free Trade Area (AfCFTA) steadily approaching a point where meaningful trade will occur between member states, the Trade Law Centre (Tralac) published a short document that examines frequently asked questions in relation to the current standing of the agreement and its components. It is the opinion of Agbiz that meaningful trade will likely commence on a wide scale by early 2024. Steady progress is being made with regard to outstanding elements of the agreement, and certification of submission of trade offers by member states. Please click here to peruse. 

SA Canegrowers met with the Business Rescue Practitioners appointed in the Tongaat Hulett Limited (THL) matter on Wednesday. This follows a meeting held between the business rescue practitioners and representatives of the growers impacted by the THL Board’s decision to enter into voluntary business rescue, which has placed the entire sugar industry and the jobs it sustains in a perilous position with thousands of jobs and livelihoods hanging in the balance. As of 1 November 2022, THL and the business rescue practitioners have officially missed the deadline by which to make payment to growers for sugarcane delivered in September. This puts the livelihoods of thousands of growers and workers delivering cane to the Felixton, Amatikulu, and Maidstone mills in KwaZulu-Natal at risk. Read more in the linked SA Canegrowers media statement.

The South African table grape industry expects 2022/2023 season volumes inspected for export to decrease by approximately 7.65% in comparison to figures recorded in the 2021/2022 season. A crop estimate of approximately 71.7 million cartons (4.5kg equivalent) is anticipated, with the upper expected limit at 103% and the lower expected limit at 97% of this figure. Volumes in the Orange River and Northern Regions are expected to contract between 12-17%, whilst volumes in the Olifants, Berg & Hex River Regions are expected to contract by 4-6%. Should historical trends between inspected volumes and exported volumes repeat, it may result in the number of cartons actually exported dipping below 70 million (4.5kg equivalent). Read more in the linked article, first published on FreshPlaza.

“After a very disappointing 2021/22 season, which despite a good crop turned out to be a disaster on farm level given trade and logistical issues, stonefruit growers and exporters are looking forward to a much-improved offering of South African stonefruit,” said Jacques du Preez, general manager trade and markets at Hortgro. In the industry’s first forecast of the season, Du Preez said supply was expected to be much more stable, reliable and on-time given that logistical bottlenecks had been addressed. “This will directly lead to SA stone fruit arriving in great condition, as it should.” Read more in the linked article, first published on fruitnet.com

The South African blueberry industry is making up for precious time lost during the recent port labour strike action. This weekend 3,500 tonnes of blueberries left Cape Town for the United Kingdom and Europe. “While this is a significant volume in the South African context, it is a volume that can comfortably be absorbed by the UK and EU markets. We expect this to coincide with the tapering off of the South American supply and the upswing in South African exports.” says Elzette Schutte, operations manager at BerriesZA. “The timing of the labour strike was not ideal for the blueberry export market, however, exporters and their logistics teams made provision for the delays through additional cold storage capacity, increased use of air-freight, and redirected fruit for alternative and better suited markets." Read more in the linked article, first published on FreshPlaza.

The El Niño-Southern Oscillation (ENSO) is currently in a La Niña state, and forecasts indicate that it will likely remain in this state during the remainder of 2022 and early 2023. The presence of a La Niña event usually has its strongest impact on rainfall during the mid-summer months. With the continued strengthening of the La Niña event, there is a high chance that it will have its usual effect on South Africa, which is generally for above-normal rainfall and below-normal temperatures over the summer rainfall areas. The multi-model rainfall forecast indicates above-normal rainfall for most parts of the country for all predicted seasons. Minimum temperatures are still expected to be above-normal countrywide, however, maximum temperatures are expected to be below-normal over large parts of the country during early- (Nov-Dec-Jan), mid- (Dec-Jan-Feb) and late-summer (Jan-Feb-Mar). The South African Weather Service (SAWS) will continue to monitor the weather and climate conditions and provide updates on any future assessments that may provide more clarity on the current expectations for the coming season. Read more in the linked Seasonal Climate Watch.

More rain is expected over most of the country during the next few days, with November starting out much wetter and cooler over the interior than October. Again, increased cloud cover together with periods of widespread showers or thundershowers will keep maximum temperatures on the mild side, in contrast to the hot and dry weather during the first half of October. The summer-grain production areas will be mild to cool for this time of the year, benefitting from above-normal rainfall expected across the country (except for the west coast and far western interior where little to no rain is expected). Due to the position of an upper-air low early in the period, scattered to widespread thundershowers are possible over the southern to southwestern parts of the country too, including the Karoo and winter rainfall region, where little to no rain occurred during October. Read more in the latest edition of Cumulus published by AgriSeker.

The recovery and intended rebound after the negative impact of the strike is the focus, as port operations this week were characterised by equipment breakdowns and shortages, adverse weather conditions, backlogs, and congestion. Our national ports experienced a very challenging week regarding adverse weather conditions, especially Cape Town, as approximately 47 hours were lost due to strong winds. Equipment breakdowns and shortages still overshadow the Durban port, while the Eastern Cape terminals could not make it through the week unscathed as weather conditions ensured operational delays. Furthermore, reports this week suggest that the Durban helicopter will commence night shift operations from the second week of November, while the continuous and extensive cable theft is adding insult to injury at our already-fragile railways.Please click here to access the latest BUSA Covid-19 Cargo Movement Update.

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.