Earlier, Financial Times writers Emiko Terazono and Valentina Romei reported that “Climate change and the war in Ukraine are set to keep food prices at far higher levels than before the Covid-19 pandemic, despite signs of moderation in global commodity markets, economists and agriculture experts have warned. “Wholesale food prices have stabilised over recent months, raising hopes that the surge in the retail cost of staples such as rice, bread and milk seen in the past two years would diminish in 2023. “The latest update of the food price index of internationally traded agricultural commodities, compiled by the UN Food and Agricultural Organization (FAO), published on Friday, posted its eighth consecutive monthly decline in November since peaking in March. The November index showed prices were just 0.3 per cent higher than a year earlier.” However, the stabilisation in international markets is yet to translate into lower inflation for households around the world. Read more in the linked article, first published on Farm Policy News.

Despite a growing global consensus, obstacles to reducing net carbon emissions to zero are stark. The global disruptions in energy markets and the war in Ukraine have added impetus to the push for renewable energy and the drive toward net-zero carbon emissions. Yet, even as the global consensus around the energy transition becomes stronger, the challenges to that transition are also becoming clearer. The need for energy security was a concern that had largely faded over the past several years. The energy shock, the economic hardship that ensued, skyrocketing energy prices that could not have been imagined 18 months ago, and geopolitical conflicts—all these have combined to force many governments to reassess strategies. Read more in the linked article published by the International Monetary Fund.

After remaining in optimistic territory for nearly three years, the Agbiz/IDC Agribusiness Confidence Index (ACI) fell by 4 points in the fourth quarter of this year to 49. This is the first reading below the neutral 50-point since the second quarter of 2020 and implies that agribusinesses are slightly downbeat about business conditions in South Africa. Persistent episodes of load-shedding, higher input costs, rising protection in some export markets, animal disease outbreaks, rising interest rates, intensified geopolitical tensions which disrupted supply chains, and ongoing weaknesses in municipal service delivery and network industries remained the key factors survey respondents cited as their primary concerns. This survey was conducted in the final two weeks of November, covering businesses operating in all agricultural subsectors across South Africa. Read more in the linked Agbiz media statement.

We are nearing the end of a challenging year in South Africa's agriculture. The sector's gross value added will likely show a mild contraction when the data for the entire year are published by March next year. This would be a notable shift from two consecutive years of solid growth with the sector having expanded by 14,9% y/y in 2020 and 8,8% y/y in 2021. Mild declines in critical crop harvests such as maize, production challenges in the sugar industry, trade friction in fruits, vegetables, beef and wool, as well as widespread foot-and-mouth disease weighed on the sector's performance this year. In a slightly more technical sense, the strong growth in the last two years has created an exceptionally high base, setting the ground for some pull back. Therefore, despite the expected moderate decline in 2022, it is important to note that overall activity has remained strong and the sector maintained its core contribution of improving national food security and job creation. Read more in the linked article by Agbiz chief economist Wandile Sihlobo.

After contracting for two consecutive quarters, South Africa's agricultural gross value added expanded by 19,2% quarter-on-quarter (seasonally adjusted) in the third quarter of this year. The better yields of some field crops (mainly summer grains and oilseeds) and horticulture, combined with relatively higher prices, specifically grains and oilseeds, underpin this improvement. Also worth noting is that the summer grains harvest, typically in the year's second quarter, was delayed by roughly a month and fell into the third quarter this year. In a slightly more technical sense, the weak growth in the last quarter also created a lower base, setting the ground for a recovery in the third quarter. Wandile Sihlobo discusses the latest GDP data in the linked article.

South Africa is set to have a decent wheat harvest in the 2022/23 season. Last week, the Crop Estimates Committee released its fourth production estimates which show a mild improvement from October figures. The current harvest estimate is 2,2 million tonnes, which is roughly the same as the 2021/22 season, the largest harvest in two decades. Farmers lifted the area plantings to 566 800 hectares, from 523 500 hectares in the previous year. This was on the back of attractive prices following a surge in wheat prices after Russia invaded Ukraine, as well as good soil moisture in various wheat-growing regions of the country. In the linked article, Wandile Sihlobo discusses the latest wheat crop production estimates data.

In this week's segment, Wandile Sihlobo focuses on critical events shaping South Africa's agriculture and performance. " I expect a mild contraction in the gross value added following two years of solid growth. Still, it is essential to note that overall activity has remained strong, and the sector has maintained its core contribution of improving national food security and job creation. I also discuss in the podcast key programmes that were launched, such as the Agriculture and Agro-processing Master Plan and the Land Bank's Blended Finance programme. These programmes are essential for the long-term growth of the sector. Please click here to listen to the podcast.

Food security consists of three aspects. Firstly food should be affordable for consumers. Secondly, affordable food should be accessible. And thirdly, the food should be safe. Grain storers ensure that the storage of staple foods adheres to the legislative requirements of food safety. Agbiz Grain finalised a code of conduct in 2022 that is endorsed by its members. Agbiz Grain general manager Wessel Lemmer discusses this topic in the linked article, written for and first published in Landbouweekblad.

The 1980s and 1990s saw a policy revolution in developing countries in which many highly protected (if not closed) economies were opened to world trade. These reforms were largely undertaken unilaterally, but international economic institutions such as the World Bank, the International Monetary Fund, and the General Agreement on Tariffs and Trade/World Trade Organization supported these efforts. This paper examines the ways in which these institutions promoted, or failed to promote, trade policy reform during this pivotal period. Read more in the linked paper by Douglas A.Irwin, nonresident senior fellow at the Peterson Institute for International Economics

The WTO director general’s annual overview of developments in the international trading environment shows that trade restrictions are increasing in a context of economic uncertainty exacerbated by the Covid-19 pandemic, the war in Ukraine and the food security crisis. According to the latest WTO Trade Monitoring Report presented on 6 December at a meeting of the Trade Policy Review Body, WTO members are introducing restrictions at an increased pace, particularly on food, feed and fertilisers. The stockpile of import restrictions in force also continues to grow. Please click here to peruse.

At the recent Asia Fruit Logistica meeting in Bangkok, produce industry marketing consultant Dawn Gray was reminded that tables can quickly turn. Because of the pandemic, the Asia Fruit show had not physically convened in two years. The good news, she notes, was that participants were quite excited to see each other again. Obvious in Bangkok, was the decline of participants from China and India. Over the past decade at the show, which was previously presented in Hong Kong, there has been increased focus on selling into China and Asia from many growing regions. The optimism surrounding China’s insatiable appetite is not there now, between Covid and the logistics nightmare created by Covid. “There were huge amounts of backups and ships that couldn’t get containers. Ocean freight rates tripled and quadrupled to get to Asia.” Steamship deliveries became incredibly inconsistent. Shipments that normally would have taken 28 to 35 days took 48 to 60 days. This shortfall for fresh produce is enormous. Read more in the linked article, first published on FreshFruitPortal.com.

The SADC Secretariat through its Climate Services Centre (SADC-CSC), is convening the mid-term review of the twenty-sixth Southern Africa Regional Climate Outlook Forum (SARCOF-26) from 5 to 7 December 2022 in Johannesburg, South Africa. The SARCOF-26 mid-term review is being supported through the European Union (EU) funded Intra-ACP Climate Services and related Application Programme (ClimSA). SADC- CSC is the specialised SADC regional climate institution whose mandate is to develop, generate and disseminate hydro-meteorological products, which make valuable contributions to the safety and well-being of the people and communities in the SADC region. These products also support key socioeconomic sectors including agriculture, energy, water resources, health, among others and are also crucial for increasing resilience and adaptation to climate variability and change in the region which is prone to hydrometeorology hazards such as flash floods, heatwaves, tropical cyclones and droughts. Please click here to peruse.

Port operations this past week were characterised by equipment breakdowns and shortages, adverse weather conditions, backlogs, power outages, road shows and congestion. The anomaly of road shows was a prominent feature in Durban this week across all shifts, while strong winds ensured significant delays in the Eastern Cape. Additionally, the 'Bear Mountain Bridge' encountered technical difficulties during her voyage from Singapore to Durban, resulting in a delayed arrival date and planned initially to omit her Cape Town call, but due to problems in Durban, this was switched around, and she will now omit Durban. Furthermore, TFR were once again on the receiving end of intermittent cable theft, causing minor delays on the rail corridors this week. Globally, merchandise trade has slowed significantly in the last quarter, as the solid post-pandemic rebound is well and truly over. Moreover, the WTO further warns that trade growth will likely slow in the closing months of 2022 and into 2023 as the global economy continues to be buffeted by strong headwinds. Please click here to access the latest BUSA Covid-19 Cargo Movement Update.

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 the 2022/23 summer season. The presence of a La Niña event usually has its strongest impact on rainfall during the mid-summer months. With the continued persistence 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 mostly above-normal countrywide, however, maximum temperatures are expected to be below normal over most of the country during all predicted seasons. Read more in the latest Seasonal Climate Watch, issued by the South African Weather Service.

Following the major changes in the world due to Covid, the situation in the world changed dramatically at the end of February 2022, due to the invasion of Ukraine by Russia and the reactions of other countries to the invasion. These developments: • Increased dramatically the level of uncertainty about future developments in the world; and • Impacted negatively on economic growth in the world, prices of, amongst other, food and energy, international trade and trade relations between countries. The duration and outcome of the conflict created by Russia is unknown, and escalation of the negative impact of the conflict on economic growth in the world, is possible. It is known that even when the conflict came to an end, some of the negative consequences of the conflict, will continue in the medium term and most likely also in the long term. Also, Covid did not disappear from the world. Please click here to access a summary of key market signals for the diary industry published by the South African Milk Processors Organisation (SAMPRO).

South African wine grape producers expect a good, but somewhat smaller 2023 wine grape crop following a healthy, yet dry season. This is according to the first of four crop estimates issued by viticulturists and producer cellars. “At this very early stage the net decrease in the estimate is mainly attributed to all our growing regions that have experienced a drier season, except for the Northern Cape which has had its own difficult environmental conditions during and after the harvest,” says Conrad Schutte, manager of Vinpro’s team of viticulturists who issue the crop estimates with the industry body SAWIS. “Poor flowering and set in various areas, together with the uprooting of vineyards, also contributed to the decrease in our estimate for the 2023 harvest.” Read more in the linked Vinpro media statement.

Over the course of 2022, pork production has increased by 9,2%. However, pork producers remain under profit pressure due to high feed prices. Since March 2022, pork prices have remained at approximately six times that of the price of maize, 33% below the long-term average. “Between 2015 and 2022, the average market price of pork increased by 10%, but in real terms it has decreased by 24%. This highlights the all-time low point in profitability that pig producers experienced in 2022,” says Nico Scheltema, head of business intelligence at the South African Pork Producers’ Organisation (SAPPO). Overall, the industry remains confident about its future. “Looking ahead, producers will have to find innovative ways to improve cost efficiencies and draw resilience from its agility. SAPPO remains well-positioned to enable the sustainability of the industry,” says Johann Kotzé, chief executive officer. Read more in the linked SAPPO media statement.

In the latest edition of Keeping it Fresh, the Fresh Produce Exporter's Forum (FPEF)'s newsletter, you will get a summary of the most pertinent information as well as reminders of important upcoming events. Please click here to peruse.

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.