The free flow of ideas, people, goods, services, and capital across national borders leads to greater economic integration. But globalisation, the trend toward these things moving ever more freely between nations, has seen ebbs and flows over the decades. Those trends are coming into sharper focus this year as policymakers work to understand and address the prospect of geoeconomic fragmentation, which threatens to undo the integration that has improved the lives and livelihoods of billions of people. Looking back over a century and a half of data, the main phases of globalisation are clearly visible using the trade openness metric—the sum of exports and imports of all economies relative to global gross domestic product. Read more in the linked IMF blog post.

World food commodity prices, as measured by a key FAO index, again fell month-on-month in January, continuing their drop since their peak in March 2022. The FAO Food Price Index, created by the Food and Agriculture Organization of the United Nations (FAO), averaged 131.2 points in January 2023, equating to a decrease of 1.1 points (0.8%) from December 2022. Food prices hit an all-time high in 2022 as a result of Russia’s invasion of Ukraine in late February and the subsequent pressure on the trade in key commodities such as wheat and sunflower oil. General prices had begun to rise after the Covid-19 pandemic between 2020 and 2021 but the annual highs of these years were still some way shy of 2022’s ceiling (125.7 points in 2021 and 143.7 in 2022). After the decline, the index has fallen 28.6 points (17.9%) from the peak in March 2022. Moreover, this January showed a decrease of 4.4 points (3.2%) compared to January 2022.Out of the five commodities that make up the index, vegetable oils, dairy and sugar led to a decline in prices while meat and cereals held steady. Please click here to access the FAO report.

This year South Africa assumed the role of chair of the BRICS grouping of countries, taking over from China, which chaired in 2022. While South Africa previously chaired the grouping in 2018, each tenure is different and brings a new opportunity to influence the agenda within this economically influential grouping of countries. While the group is not a formal economic or trade block, the business communities from each country typically look for ways to deepen trade and investments with other BRICS partners. The South African BRICS Business Council is one grouping with various working groups that engage with other member states on equal footing. This year, the South African BRICS Business Council will also lead the agenda in the same form as the political principals chairing BRICS. The agriculture and agribusiness role players are appropriately represented through Agbiz, which chairs the agribusiness working group in the Business Council. In the linked article, Agbiz chief economist Wandile Sihlobo weighs in on this subject.

After a year of generally subdued global rice prices, this year started with a notable increase in prices from various origins. With South Africa being a net importer of rice, the worldwide surge of prices presents upside risks to consumer food price inflation. The comforting part, however, is that South Africa will likely import the same volume of rice as the previous year. The International Grains Council (IGC) forecasts South Africa's 2023 rice imports at 1,1 million tonnes. This is roughly unchanged from 2022, when about 73% of the imports originated from Thailand, 23% from India, and the rest from various countries, including India, Pakistan, Brazil, and Vietnam. These origins will likely remain the same in 2023. In the linked article, Agbiz chief economist Wandile Sihlobo discusses the forecast for global rice prices in 2023.

After solid activity in 20221, South Africa's agricultural machinery sales will likely soften this year. We outlined several reasons for this view in our previous update. For example, we think the possible replacement rate of older machinery will likely be lower this year as the past three years saw increased new machinery sales. The rising interest rates will also continue to pressure farmers' finances. Moreover, while the agricultural sector, specifically rain-fed areas, will likely perform well, the harvest could still be less than the 2021/22 season due to prospects of lower yields and reduced planted area. This lowers the farmers' financial muscle to spend on agricultural equipment. In the linked article, Wandile Sihlobo discusses the latest agricultural machinery data.

Neva Makgetla makes an important observation in her most recent column (Longer-term measures needed to reduce prices of staple foods, February 7). She notes that while SA’s agricultural sector has performed well, producing an ample grain harvest, prices did not moderate sufficiently in response to increased supplies. Consumers carried this burden, which is evident in food price inflation having averaged 9.5% in 2022 (compared with 6.5% in 2021 and 4.8% in 2020). Broadly, the high prices of grains, vegetable oils and meat for much of 2022 were the primary drivers of consumer price inflation. But this was not unique to South Africa, it was a global challenge that mirrored the surge in agricultural commodity prices in the first three quarters of 2022 and the year before. Wandile Sihlobo responded to the article with a letter to Business Day citing that there was no need for a grain export tax or a Competition Commission enquiry. Please click here to peruse his letter.

The latest harvest news in wine grapes and maize paints a mixed outlook for these two subsectors. First, South Africa’s wine grapes for this year are projected to be lower than the 2022 harvest because of unfavourable weather conditions earlier in the season. The South African Wine Industry Statistics will release its production estimates later in February but has already indicated the prospects of lower yields. This means the wine production could also be lower than 2022 levels, with preliminary estimates pointing at an output of around 800 million litres. In this week's podcast, Wandile Sihlobo explores the production conditions in these separate subsectors and the outlook for the harvest. Please click here to peruse.

Agbiz Grain Quarterly keeps industry role players abreast of new developments in the grain handling and storage industry in South Africa. The February issue features industry-specific content that includes information relating to a new grain depot manager course, aflatoxins, and much more. Also read about new breeding technology, guarding against Internet fraud, a JSE notice regarding soya differentials with multiple reference points, and why maize hardness plays a key role in milling quality. In our series on safety in the workplace, an industry expert discusses electrical compliance in grain storage and processing facilities, along with an in-depth discussion on the prevention of dust explosions. Enjoy these and other excellent articles in this issue. Please click here to peruse.

The 2023 Fruit Logistica Trend Report is out. It contains information about the future of the fruit and vegetable industry, and what it means for business. Entitled “What next for fresh produce?Key trends for the fruit and vegetable business in 2023", the report contains a series of interviews about important topics like cost inflation, climate change, ethical trade, food waste, branding, category growth, and the application of new and exciting technologies. The exclusive, in-depth interviews feature experts who understand the industry’s most significant trends, the challenges those trends present, and how companies can take advantage of them. Please click here to access the report.

The International Air Transport Association (IATA) released data for global air freight markets showing that 2022 full-year demand for air cargo took a significant step back from 2021 levels but was close to 2019 performance. Global full-year demand in 2022, measured in cargo tonne-kilometers (CTKs*), was down 8.0% compared to 2021 (-8.2% for international operations). Compared to 2019, it was down 1.6% (both global and international). Capacity in 2022, measured in available cargo tonne-kilometers (ACTKs), was 3.0% above 2021 (+4.5% for international operations). Compared to 2019 (pre-Covid) levels, capacity declined by 8.2% (-9.0% for international operations). Read more in the linked article, first published on FreshPlaza.

With less than three months of South Africa's grape season left, the harvesting season is now focused on the mid-season Berg River Valley and the late-season Hex River in the Western Cape. After a difficult start, South Africa’s table grape season is now in full swing, with growers in the mid- and late-season areas expected to meet or exceed targets. South Africa’s Table Grape industry body, SATI, said that table grape growers were expected to deliver peak volumes over the next few weeks as various cultivars ripen. It is clear however that the trend towards a lower crop is continuing. Read more in the linked article, first published on fruitnet.com.

This week's port activity was characterised by the usual operational delays (weather, frequent equipment breakdowns and shortages, miscellaneous delays, load-shedding, and congestion). Cape Town experienced a similar week to last, as operations were delayed for more than 30 hours due to weather, berthing delays, and equipment challenges. Consequently, the industry has voiced concern regarding berthing delays, with some extending beyond nine days. Fortunately, in Durban, marine services improved this week, with the availability of tugs increasing to the standard four for most of the week. For rail, TFR reported that repairs needed on several rail lines due to the Durban flash floods had been delayed to mid-April. Lastly, TPT communicated their anticipated tariff increases for the new financial year starting from 1 April 2023. Globally, container throughput experienced a slight uptick in December, pointing to some resilience and perhaps the start of a slow recovery post-Chinese New Year. Read more in the latest edition of the 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 return to a neutral state by autumn (Mar-Apr-May). As ENSO remains in a La Niña state, late-summer and early autumn rainfall remain likely for above-normal rainfall over the summer rainfall areas. However, as summer comes to an end so does the typical impact of ENSO and it is to be monitored for the next summer season. The multi-model rainfall forecast indicates above-normal rainfall for most parts of the country for all predicted seasons. Minimum and maximum temperatures are expected to be mostly above-normal countrywide for the forecast period. Please click here to access the Seasonal Climate Watch issued by the South African Weather Service.

SA Canegrowers welcomes the disbursement of more than R79 million in transformation funding for small-scale growers at the end of January 2023. The payment, made by the South African Sugar Association, brings the total for transformation funding this season to R216 million. However, while this funding is vital, it will not be enough to save the country’s more than 21 000 small-scale growers due to a number of headwinds facing the industry. It is therefore critical that President Cyril Ramaphosa uses his State of the Nation Address on Thursday to announce substantial measures to save the one million livelihoods that depend on the sugar industry. Read more in the linked SA Canegrowers media statement.

KLK Landbou’s managing director, Stephen van Huyssteen, has announced his retirement. The KLK Board and Signium Africa are inviting interesting parties to participate in the process of appointing a new managing director. Please click here for more information.   

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.

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.