Food insecurity has been rising since 2018. Even before Russia’s invasion of Ukraine, the increasing frequency and severity of climate shocks, regional conflicts and the pandemic were all taking their toll, disrupting food production and distribution, and driving up the cost of feeding people and families. The situation took an even more dramatic turn with the war in Ukraine. This pushed the prices of food and fertilizers higher still—hurting importers and prompting several countries to impose export restrictions. The result is an unprecedented 345 million people whose lives and livelihoods are in immediate danger from acute food insecurity. And around the globe more than 828 million people go to bed hungry every night, according to the World Food Programme. Read more in the linked International Monetary Fund (IMF) blog post.

World trade is expected to lose momentum in the second half of 2022 and remain subdued in 2023 as multiple shocks weigh on the global economy. WTO economists now predict global merchandise trade volumes will grow by 3.5% in 2022—slightly better than the 3.0% forecast in April. For 2023, however, they foresee a 1.0% increase—down sharply from the previous estimate of 3.4%. Import demand is expected to soften as growth slows in major economies for different reasons. Read more on this subject in the linked press release issued by the World Trade Organization (WTO).

Trade between South Africa and the Kingdom of Saudi Arabia is set to expand rapidly, with the inaugural meeting of the South Africa – Saudi Arabia Joint Business Council held in Pretoria on 3 October 2022. This was followed by the 9th session of the South Africa – Kingdom of Saudi Arabia Joint Economic Commission (JEC), on 4 October. The JEC was further preceded on 3 October by a South Africa – Saudi Arabia Trade And Investment Forum (TIF). Agbiz was invited to attend the set of meetings and to present at the forum on the potential for agricultural trade between SA and Saudi Arabia, highlighting current exports and realistic export opportunities. The sector has significant room for growth as a component of the bilateral trade between the two countries, with SA agri exports to Saudi Arabia comprising only 1% of SA agri exports to the world. Please click here to peruse.

The Portfolio Committee on Agriculture, Land Reform and Rural Development has called for written submissions on the Agricultural Product Standards Amendment Bill. Comments had to be submitted on or before 30 September 2022. The Agricultural Product Standards Act provides for control over the sale and export of certain agricultural products. The Amendment Bill proposes to insert a definition for audit and to amend the definitions of ‘assignee’’, ‘‘auditor’’, ‘‘Director-General’’, ‘‘management control system’’, ‘‘Minister’’ and ‘‘sell’’. The definition of an “assignee” will be amended to specifically provide that such an institution may not have a direct or indirect interest in the product concerned. The definition of an “assignee” is amended to make it clear that the assignee may not have a direct or indirect interest in the product, which is positive. However, the words “indirect” and “interest” needs to be defined. In the linked article, Agbiz head of Legal Intelligence, Annelize Crosby, discusses Agbiz's comments. 

When we look at South Africa's agricultural and food import data for the past five years, wheat ranks as the second most valuable product after rice. It accounted for 6% (or US$417 million) of the annual average agricultural imports of US$6,6 billion during this period. This is equivalent to approximately 1,5 million tonnes in volume terms over this five-year period, which is about half of South Africa's annual average wheat consumption needs. This time around, with the Russia-Ukraine war and drought in parts of the Northern Hemisphere still a major concern, there is some worry about the general global wheat supplies and South Africa's domestic wheat production prospects. From a global perspective, recent data from the International Grains Council (IGC) provides some comfort. Agbizf chief economist Wandile Sihlobo discusses this subject in the linked article.

While our attention is shifting towards the 2022/23 summer crop season for South Africa which starts this month, the updates from the 2021/22 season are worth monitoring as they give us indications of the grains and oilseed supplies. For example, last week, the Crop Estimates Committee (CEC) lifted its estimates for South Africa's 2021/22 maize production by 2% from July to 15,3 million tonnes. About 7,8 million are white maize, with 7,5 million being yellow maize. A harvest of 15,3 million tonnes is down by 6% from the 2020/21 season crop but well above the 10-year average maize harvest of 12,80 million tonnes and annual domestic consumption of 11,80 million tonnes. And thus, this implies that South Africa will remain a net exporter of maize, which we anticipate to be about 3,5 million tonnes in the 2022/23 marketing season (note: this marketing year corresponds with the 2021/22 production season). In the linked article, Wandile Sihlobo discusses the latest data.

South Africa is starting the 2022/23 summer crop production season this month. The preliminary insights suggest that South Africa could have another good season. The three critical indicators we have thus far, i.e., (1) the tractor sales, (2) the weather outlook for the next four months, and (3) grains and oilseed prices, paint a positive outlook for the 2022/23 season.  In this week’s podcast segment, agricultural economist, Wandile Sihlobo, provides insights into these indicators and the broader outlook for the 2022/23 summer crop season.

The world must cut greenhouse gas emissions by at least a quarter before the end of this decade to achieve carbon neutrality by 2050. Progress needed toward such a major shift will inevitably impose short-term economic costs, though these are dwarfed by the innumerable long-term benefits of slowing climate change. In our latest World Economic Outlook, we estimate the near-term impact of different climate mitigation policies on output and inflation. If the right measures are implemented immediately and phased in over the next eight years, the costs will be small. However, if the transition to renewables is delayed, the costs will be much greater. This issue is discussed in an International Monetary Fund (IMF) blog post. Please click here to peruse.

Covid-19 did more than expose the fragility of some state healthcare systems and global pandemic response, it exposed the vulnerability of a global trading system built on value and supply chains that have grown increasingly complex, interdependent, and multi-faceted. Yet at the same time in many cases anchored around a few key suppliers, e.g. China. The addition of geopolitics with the Russian-Ukrainian conflict and seeming US-China tensions has triggered a desire in advanced country markets like the US and EU to divert their supply chains away from countries that are not ‘like-minded’ and that don’t have ‘shared common values’. This new supply chain strategy has been labelled “friend-shoring” and presents challenges for developing countries in an increasingly polarised world. As the US and EU move to reorientate their supply chains and thereby insulate them being disrupted for geopolitical reasons, Africa and South Africa stand to be affected, given the weighting of these markets in export baskets. Read more in the linked article, first published on The Conversation.

This statistical report published by the Food and Agriculture Organization of the United Nations contains a subset of cereal country balance sheets (CCBS) data and presents updated cereal supply and demand balances for all sub-Saharan African countries. It complements the information of the FAO/Global Information and Early Warning System on Food and Agriculture (GIEWS) Crop Prospects and Food Situation report and is published four times a year with the same schedule. This report is based on information available as of early September 2022. Please click here to peruse.

South Africa, the world’s number two citrus exporter, has what is expected to be a record crop of the fruit family on its hands. But farmers are not mixing orange juice with bubbly to celebrate, as soaring freight and other costs have chowed margins. "It will be a record in terms of volumes, topping last year’s,” Justin Chadwick, the CEO of the Citrus Growers’ Association of Southern Africa, said in an interview with DM168. “But in terms of returns for the grower, they’re looking pretty dismal. The biggest factors in terms of influence on our export returns have been the freight rate and the cost of shipping. As a result, a lot of fruit was exported at a loss.” Read more in the linked article, first published on Daily Maverick. 

The Bureau for Food and Agricultural Policy (BFAP) has warned that the South African fruit farming sector, which is the largest employer of farm workers in the country, was, over the next decade (2022 to 2031), facing a two-pronged challenge of falling incomes and rising costs. This would follow a decade of good prices recorded by most of the fruit types grown in the country. During the decade 2012 to 2021, fruit farming enjoyed “excellent returns’, the BFAP pointed out. That had been the result of good prices in export markets plus increased efficiencies (which took the form of improving yields) and the ongoing depreciation of the Rand. This meant that fruit farms had been able to absorb increased labour costs, without having to reduce their workforces. Read more in the linked article, first published on Engineering News.

Revenue from South African wine exports increased by 21% to $750 million (~R14 billion) in 2021 - an improvement that brought it back to pre-pandemic levels, despite the problems at the country's harbours, said Minister of Agriculture, Land Reform, and Rural Development Thoko Didiza. Wine was SA's fourth largest agricultural export product, making up 6% of the overall export revenue of $12.4 billion, she said at the opening of CapeWine 2022 in Cape Town on Wednesday. "SA's wine industry export markets are well diversified, with the UK remaining our leading market, followed by Germany, the US, The Netherlands, Namibia, and Canada," said Didiza. She acknowledged that the wine industry had raised issues regarding "inefficiencies of infrastructure" at harbours, which caused delays in exports at the start of the year. Read more in the linked article, first published on News24.

Port operations this past week were characterised by equipment breakdowns and shortages, congestion, adverse weather conditions, and system interruptions. Furthermore, Durban experienced a very challenging week as a shortage of truck drivers at Durban MPT and RORO terminals disrupted operations. In addition, the ongoing wage dispute between Transnet and its employees is fuelling concerns regarding strike action that could occur soon, although current dialogue indicates that the strike will be averted. Nevertheless, TPT aims to implement an additional "Avoidance of Strike Levy" to Terminal Handling Charges (THC) from 1 October 2022 to 31 March 2023 as an insurance policy against future strikes. Lastly, the MSC Eugenia's estimated arrival time was delayed by one day and is now expected to arrive at Ngqura on 2 October 2022 to deliver the second set of shore tensioners intended for Cape Town. However, these will still have to be transported to Cape Town. Internationally, the global container shipping industry continues its long march to (albeit a new) normal as the supply chain pressure valve gets lifted slightly. Please click here to access the latest BUSA Covid-19 Cargo Movement Update.

Except for relatively strong winds over large parts of the country together with high temperatures mostly over the interior, the next few days will not bring stormy or otherwise extreme conditions to the country. Sunny and warm conditions will dominate most of the time. Thundershowers will for now be confined mostly to the southern interior and southeastern parts, clearing by the weekend. There are some early indications of isolated thundershowers over the central to eastern parts next week. These should not yield significant widespread precipitation, keeping the early parts of spring relatively dry over most of the summer-grain production region. Following a relatively dry winter, only light showers are expected later over the southwestern parts of the winter rainfall region, leaving the area to remain mostly dry. Ahead of the frontal activity in the southwest, stronger winds over the interior may enhance the fire danger where vegetation is dry after the winter. While the southwestern parts of the country are expected to be somewhat cooler at times given the frontal activity, the northerly to northwesterly winds will, according to current forecasts, keep the interior relatively warm and therefor frost free. Read more in the latest edition of Cumulus, published by AgriSeker.

"The grass looks greener, but are the cattle fattening up?" This is the question that will be asked during this year's Senwes Future Focus Day on 11 October 2022. Various national and international producers will add their voices to this conversation and will discuss the way forward for farming in a competitive world. The day is presented in collaboration with Grain SA, Nation in Conversation, Agri NW and Free State Agriculture. The discussions will be facilitated by Jaco Minnaar. Those interested in attending the day are encouraged to register online using this link Everyone who registers in this way, before the event, will be eligible for a lucky draw for a holiday is Zanzibar, worth R30 000. Grain SA also has a prize up for grabs for people who complete their online brand survey. The cost associated with the day is R100 per person, which includes a ‘spitbraai’, and is payable on the day. Registration, for those unable to register online, starts at 8:00 on the day. For more information, visit Senwes' social media platforms, or call the Senwes Marketing Department on 018 464 7800.

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.