In the ongoing public dialogue about economic policy, the challenges faced by advanced economies usually dominate those of the developing world. In monetary policy, for instance, the defining issues of the past decade were the zero lower bound on interest rates and inflation that was too low. But neither of these problems affected emerging markets much. Our challenges had much more to do with textbook issues, such as keeping inflation from drifting above our targets, resisting demands for lower interest rates to lift short-term economic growth, and financing unsustainable fiscal positions. Governor of the South African Reserve Bank Lesetja Kganyago discusses this subject in the linked article, published by the International Monetary Fund.

Business Unity South Africa (BUSA)'s core functions are split between two chambers where all policy matters affecting the business sector are analysed, debated and mandates provided for its staff and office bearers to advocate for on numerous platforms. Labour market and developmental aspects are dealt with in the Standing Committee on Social Policy (Socpol), where Annelize Crosby and Thapelo Machaba serve, and the Standing Committee on Economic Policy (Econpol). Econpol is where all policy issues related trade, competition, the investment environment and the regulatory environment for the business sector is debated. Following the vacancy left by Dr John Purchase’s retirement, a new chair and deputy had to be elected by the members. It was announced this week that BUSA members from various business sectors voted in favour of Agbiz CEO Theo Boshoff to chair the committee in partnership with Michael Lawrence from the National Clothing Retail Federation of South Africa as deputy chair. 

From an economic point of view, labour is a production input which, along with other production inputs, plant and property determine the production costs. Labour is, however, not merely a cost calculation but the beating heart of any business. And at the end of the day, labour is about people with hopes and aspirations and often with families. The national minimum wage must strike a delicate balance between the human factor and economic reality. The cost of living is rapidly increasing and this hits the lowest-income earners the hardest. South Africa also has a legacy of inequality and one of the central pillars of the National Minimum Wage Act is to address inequality by narrowing the wage gap. These noble considerations will only be achieved if we increase employment and for this reason, the wage level must take affordability and potential job losses into consideration. It is a fine line and it will never be possible to satisfy all expectations. Even within this tough ask, one must question whether these interests were evenly balanced with the latest adjustment. In the linked article, Agbiz CEO Theo Boshoff and Agbiz head of Legal Intelligence Annelize Crosby discuss this subject.

The Consumer Goods and Services Ombud made a presentation to the Nedlac Development Chamber on 7 March. The Ombud was established in terms of section 82(6) of the Consumer Protection Act is and accredited by the Minister for Trade, Industry and Competition. The main aim of the Ombud is to enforce the Consumer Goods and Services Industry Code of Conduct by receiving and mediating complaints against suppliers of goods and services. Failure to comply with the Code is a contravention of the Act. In the linked article, Annelize Crosby provides more information.

One of the subjects we touched on last year was the apparent change in sentiment about genetically engineered (GE) crops within the European Union (EU). The region has long restricted the importation and cultivation of GE crops, but in 2022, it approved certain varieties of maize, soybeans, and rapeseed. Still, these had not gone through the authorization stages that would open the door for trade in the approved varieties. It was only on 22 February 2023 that the EU authorized imports of certain types of GE soybeans1 and rapeseed2 for use in food and animal feed for a period of 10 years. Still, this authorization does not include cultivation. These will mainly be imports, all subject to the EU’s labelling and traceability rules. After roughly a quarter of a century of opposition to GE crops, this perhaps signals a move to wider future acceptance of the technology within the EU. This change in sentiment is probably underpinned by a growing desire for nations and regions to improve their food security conditions after the Russia-Ukraine war caused notable disruption in global grain and oilseed supplies. Agbiz chief economist Wandile Sihlobo discusses this topical subject in the linked article.

After a solid performance of 8,8% y/y in 2021, we thought South Africa's agricultural gross value added would contract mildly in 2022. But the data released today by Statistics South Africa paints a slightly positive picture, showing that the sector expanded somewhat by 0,3% y/y. We based our view of a potential contraction on the decline in some vital field crop harvests, such as maize, which is down 5% y/y in the 2021/22 season, estimated at 15,5 million tonnes. Moreover, the poor performance in sugar cane production in 2021/22, and the foot and-mouth disease outbreak in the livestock industry, which spread for the first time in six of South Africa's nine provinces, were additional risks. The base effects after two years of solid growth, where the sector expanded by 14,9% y/y in 2020 and 8,8% y/y in 2021, was an additional factor to our view of a possible annual contraction in the gross value added in 2022. In the linked article, Wandile Sihlobo discusses the latest data.

South African agricultural exports were up for the third consecutive year in 2022, reflecting favourable production conditions and higher commodity prices. The export numbers for the full year have not yet been published. I have calculated the annual data for 2022 using quarterly trade export statistics published by Trade Map, a trade statistics portal developed by the International Trade Centre, the United Nations Conference on Trade and Development and the World Trade Organization. The major export crops continued to be maize, wine, grapes, citrus, berries, nuts, apples and pears, sugar, avocados, and wool. These products have been the drivers of exports over the past couple of decades. In particular, fruit and wine have increasingly become the leading export products. Read more in the linked article by Wandile Sihlobo, written for and first published on The Conversation.

The start of South Africa's 2022/23 summer crop production season was challenging for farmers and agricultural role players because of excessive rains. Crop planting in various regions of the country was delayed by roughly a month, threatening yield prospects. But the warm weather at the end of January and much of February helped improve conditions on the farms. It thus eased concerns about the possibility of smaller yields due to excessive soil moisture. This sentiment of better agricultural conditions was confirmed by the data recently released by the Crop Estimates Committee (CEC). For example, South Africa's 2022/23 overall summer crop production is forecast at 19,3 million tonnes, up 3% from the previous season. If we consider the large crops like maize, soybeans and sunflower seed, production is forecast at 15,6 million tonnes (up 1% y/y), 2,7 million tonnes (up 19% y/y), and 775 260 tonnes (down 8% y/y), respectively. For more details, listen to this week’s podcast by Wandile Sihlobo.

According to the protocol between South Africa and China, the Department of Agriculture, Land Reform and Rural Development should do investigations and tests at farm level during the maize growing season before export can begin. The protocol is China's import requirement and the registration process and list of registered market participants are requirements that China requires as part of its import requirements. It is a general trade requirement to achieve traceability in case a plague is detected in a consignment. Agbiz Grain general manager Wessel Lemmer discusses this subject in the linked article, first published in Landbouweekblad.

A realisation that increasing logistics challenges facing agriculture require new levels of a partnership led Agbiz and Transnet in mid-2022 to begin talks on a collaboration aimed at managing both the current logistics needs of the sector, as well expected increases in production within expanding industries such as fruit. This partnership, in the form of an Interface Agreement, builds on the efforts of both Transnet and agri industries over the last few years to build collaborative platforms for tackling operational needs and crises. The Agbiz-Transnet collaboration seeks to create an industrywide platform where Transnet can engage with key stakeholders in the Agri supply chain with the aim of improving logistics performance and country competitiveness, and the parties can develop an agri supply chain strategic plan aligned to the Agriculture and Agro-processing Master Plan. Three working groups (WGs) have been created, focused on fruit and wine (container cargo), grain and investment. A number of these have been held already, and on Monday 6 March, Agbiz and Transnet held a fruit and wine industry WG for stakeholders who utilise the ports and corridors of the Western and Eastern Cape. In the linked article, Agbiz Fruit manager Wolf Braude provides more information.

The FAO Food Price Index (FFPI) averaged 129.8 points in February 2023, marginally down (0.6 percent) from January, continuing the downward trend for the eleventh consecutive month. With the latest decline, the index has fallen 29.9 points (18.7 percent) from the peak it reached in March 2022. The marginal decline of the FFPI in February reflected significant drops in the price indices of vegetable oils and dairy, together with fractionally lower cereals and meat indices, more than offsetting a steep rise in the sugar price index. Please click here to peruse.

Least developed countries (LDCs) stand to benefit from strong partnerships with their global south counterparts when it comes to making their agrifood systems more efficient, more inclusive, more sustainable and more resilient, the chief economist of the Food and Agriculture Organization of the United Nations (FAO), Maximo Torero, said. "Strong global partnerships, including South-South and Triangular Cooperation, provide key support for agrifood systems transformation, and an open exchange of knowledge and expertise around this important topic," Torero said in an FAO address to a ministerial meeting on South-South Cooperation in the Qatari capital. The meeting was part of the 5th UN Conference on Least Developed Countries (LDCs), which is guided by the Doha Programme of Action for the 2022-2031 period. The overarching goals of the Doha Programme include achieving a rapid, sustainable and inclusive recovery from the Covid-19 pandemic, which has impacted the economies of LDCs particularly hard, and building resilience against future shocks. Read more in the linked FAO article.

The Food and Agriculture Organization of the United Nations (FAO) has made publicly available country-by-country indicators on healthy diets that show their cost – including by food group – and the number of individuals unable to afford them. According to the FAO, the data serves as a reminder that even if the world has made progress toward providing enough calories to feed the global population, there remains a long road ahead to sustainably nourishing all people. Recently, the FAO did an extensive analysis of how many people can in fact afford a healthy diet, one that offers a diversity of nutrient-rich food, aligned with dietary guidance. Please click here to peruse.

We know that in countries with greater gender inequality just closing the gap in women’s labour force participation could increase economic output by an average of 35 percent. Progress, however, is slow to come and shocks, such as health and climate disasters, social unrest, and war continue to worsen gender inequality by directly affecting women’s lives and livelihoods or keeping them out of school and work. Appropriate economic and financial policies can help change these negative outcomes, improving economies by supporting recovery and building resilience against future shocks. A dividend for women, in other words, is a dividend for all. Read more in the linked International Monetary Fund blog post.

Sea-Intelligence reported that while schedule reliability continued to increase for much of 2022, in January 2023 there has been a month-to-month decline of 3.8%, reaching to 52.6%. Despite this decrease, schedule reliability in January 2023 was considerably higher than in the previous two years, with the year on year increase of 22.2%. According to Sea-Intelligence, the average delay for late vessel arrivals on the other hand continued to improve, as it has for much of 2022, with the latest figure at 5.26 days, a month-to-month drop of 0.24 days. Maersk was the most reliable top-14 carrier in January 2023 with 58.3%, followed by MSC with 57.7%. There were three more carriers with schedule reliability of over 50%, while the remaining box lines had schedule reliability of 40%-50%. Please click here to access the full article, first published on Container News.

 The Bureau for Food and Agricultural Policy (BFAP)’s Agricultural Employment Brief interprets and contextualises the latest quarterly labour force survey from StatsSA and provides insights

on the major factors driving agricultural employment. Statistics South Africa (StatsSA) released the fourth and final quarter of 2022’s Quarterly Labour Force Survey on the 28th of February 2023. This brief seeks to contextualise the agricultural labour market performance using this and other relevant data sources. In the last quarter, we focused our analysis on whether the agricultural sector has shed jobs in the past two years, for which we presented some alternative data to suggest that this was not the case. Since the data remains problematic, as we’ll highlight again in this brief, we assess the QLFS trends, but also discuss some of the main factors affecting agricultural employment. Please click here to peruse.

Operational port delays this week included adverse weather, frequent equipment breakdowns and shortages, system challenges, delays, and congestion. Cape Town was revisited by the difficulties of a fortnight ago, with the most notable operational delays stemming from the container terminal being windbound for the whole of Monday. The marine fleet in Durban remained stable and continued its improved performance over the past week, as five tugs serviced waterside operations for the most significant part of the week. Additionally, crisis meetings were called in Richards Bay this week after the situation reached a really low point late last week, when up to 600 coal trucks piled up next to the main entrance to Richards Bay, bringing traffic to a standstill along sections of the N2. Reports this week suggested that NCT and GCT are no longer sharing tugs and that both ports are conducting operations with a complement of two tugs. Furthermore, intermittent cable theft continued to disrupt rail operations this week, with reports suggesting that TFR is no closer to finding a solution on the matter just yet. Read more in the latest BUSA Covid-19 Cargo Movement Update.

The BUSA office together with Productivity SA would like to invite you to participate in the 2023 IMD World Competitiveness Survey. Productivity SA is a partner of the Institute for Management Development (IMD) World Competitiveness Yearbook (WCY). The IMD World Competitiveness Yearbook is the leading annual report on the competitiveness of nations and has been published by IMD since 1989. It benchmarks the performance of 64 countries based on more than 340 criteria: official statistics (2/3) and data from the Executive Opinion Survey (1/3). We would be highly appreciative if you would join the selection of business leaders who are the panel of experts to evaluate the performance of the economy about its competitiveness, therefore, sending an important message to policymakers and to the public to enable sound national policy formulation. Please follow this link to the survey for your completion. The survey link will close on 31 March. The BUSA office will send reminders well before the deadline. Please feel free to disseminate this survey link to your relevant affiliates. 

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, early autumn rainfall remains likely to receive 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 except for the south-western parts during late autumn (Apr-May-Jun) and early winter (May-Jun-Jul) which is expected to receive below-normal rainfall. Minimum and maximum temperatures are expected to be mostly above-normal countrywide for the forecast period. Read more in the latest Seasonal Climate Watch, issued by the South African Weather Service.

The Citrus Growers' Association of Southern Africa (CGA), 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.