e-Newsletter
26/2021
9 July 2021
Global agri-food systems need to transform to reach SDGs 
This year’s OECD-FAO Agricultural Outlook comes at a critical juncture. The Covid-19 pandemic has placed unprecedented stress on the agricultural sector, requiring swift action to ensure the sector can remain resilient, efficient and sustainable, now and over the longer term. The 2021 UN Food Systems Summit in New York will be an excellent opportunity for the international community to chart a future vision for the agri-food systems, including meeting the sustainable development goals (SDGs). With less than 10 years until the 2030 target for achieving the SDGs, policymakers need to reflect on the factors and forces driving performance in the agri-food systems. It is against this background that the 2021 OECD-FAO Agricultural Outlook identifies and analyses the drivers of performance in the agri-food markets over 2021 to 2030. The annual OECD-FAO Agricultural Outlook provides decision-makers with reliable information on future trends for agriculture and food and the factors driving global demand, supply, trade and prices. It provides a comprehensive medium-term baseline scenario for the expected evolution of agricultural commodity, fish and biofuel markets at national, regional and global levels. This baseline scenario represents the considered views of global experts from national governments and international commodity organisations around the world. Please click here to peruse.
Rebuilding the South African industrial base – progress with sugar and poultry masterplans 
Solid progress is being made with the implementation of partnership agreements in the poultry and sugar industries. This was noted by the Minister of Trade, Industry and Competition Ebrahim Patel and Minister of Agriculture, Land Reform and Rural Development Thoko Didiza during the Executive Oversight Committee (EOC) meetings held with industry captains, union leaders and government officials. The poultry industry reported an increase in the production of chickens locally with about 290 000 additional chickens produced every week compared to a year ago. Soybean and maize output have also increased significantly over the past year, with an additional 144 000 hectares of maize and 122 000 hectares of soybeans planted. The industry reported that more than 2 000 jobs were created across the value chain. Improved country-of-origin labelling is due to come into operation from 1 September 2021. The cabinet ministers focused discussion on steps to strengthen entry by small-scale farmers and contract growers into the poultry value chain. A number of projects involving black poultry producers were highlighted and the meeting agreed to step up efforts to support growth and transformation. A focus session will be held on ways to unlock export opportunities for South African poultry products. Please click here to peruse.
Vinpro survey: SA wine industry at the edge of a cliff
The South African wine industry is at a tipping point, with many wine businesses, especially smaller companies and those under black ownership, facing potential closures in the next three to twelve months due to the recurring and now fifth domestic wine sales restrictions. This according to a survey by Vinpro in the past week. According to the Impact of Covid-19 on the Wine Value-Chain Survey that Vinpro conducted early in July 2021 among wine grape producers, wineries and other wine-related businesses, 58% of the 549 respondents indicated that their businesses would have to make drastic changes over the next year to be able to overcome the current challenges related to Covid-19, and 22% will in all probability not be able to survive at all. Even more alarming is the fact that 46% of black-owned brands and farms believe that their businesses won’t be able to survive the next year. Please click here to peruse.
POLICY AND LEGISLATION
Section 25 merry-go-round causing unnecessary uncertainty 
The Ad Hoc Committee tasked with amending section 25 of the Constitution was due to submit its report containing key recommendations to the National Assembly on 31 May. It is now common knowledge that the committee did not deliver a report but asked for an extension, which was granted until the end of August. The mere fact that the committee requires additional time is nothing out of the ordinary but the issues that still need to be discussed have caused some waves in the agricultural community. The Amendment Bill which was published for public comments has a fairly limited scope, namely to clarify that a court may determine that nil compensation is just and equitable compensation in certain circumstances. Not all political parties were happy with these changes. Some members of the committee wanted more radical changes to be applied throughout section 25 whilst others argued that no amendment is necessary in the first place. Agbiz head of Legal Intelligence Theo Boshoff discusses this issue in the linked article, written for and first published in Farmer's Weekly.
AGRIBUSINESS RESEARCH
Should South African agribusinesses expand into the African continent? 
South African agribusinesses aiming to expand their operations into the rest of the continent in the coming years will face different environments compared to realities in South Africa. This includes the commonly cited factor of poor infrastructure, and also a much less talked about problem, which is low levels of agricultural productivity. With respect to the latter, a recent study by agricultural economists Thomas Jayne and Pedro Sanchez argued that sub-Saharan Africa’s agricultural output growth in the recent past has been through area expansion rather than improvement in productivity or yield per hectare. A case in point is maize, which shows a striking difference in yield levels between South Africa and the rest of sub-Saharan Africa. Consider maize yields between 2015 and 2020 in Zimbabwe, Nigeria, Kenya, Malawi and Tanzania, which averaged 2 tonnes per hectares for most of these countries with the exception of Zimbabwe, where the yields averaged 1 tonne per hectare over the observed period. By contrast, South Africa’s maize yields averaged 5 tonnes per hectare over the observed period. Agbiz chief economist Wandile Sihlobo discusses this subject in the linked article.
SA’s summer crop production forecasts were left roughly unchanged in June 2021’s assessment
Last week, the South African Crop Estimates Committee (CEC) released its fifth production estimates for the 2020/21 season, which left most crop estimates roughly unchanged from the previous assessment in May. This is with the exception of commercial maize, whose forecast was lifted marginally by 0,3% from the previous month to 16,2 million tonnes. Meanwhile, the non-commercial maize saw a much larger revision of an 8% increase from the previous month to 586 650 tonnes. This placed South Africa’s overall maize production for the 2020/21 season at 16,8 million tonnes. This is up by 6% from the 2019/20 production season, and the second-largest harvest on record. Moreover, the groundnuts production estimate was also lifted by 2% from May to 58 900 tonnes (up 18% y/y). Read more in the linked article by Wandile Sihlobo or listen to a podcast on this subject here.
What’s behind the surge in global agricultural commodity prices? 
One of the lingering questions over the past few months is why global agricultural commodity prices continue to rise in the face of large production figures? We narrow our focus to a few commodities within the grains and oilseed complex to answer this question. The explanation for this phenomenon ranges from dryness in parts of South America in the past few months, which affected the crop that the region is currently harvesting, to other weather-related concerns in Europe and North Americas, where plantings for the new season of 2021/22 are at completion stages. But more fundamentally, the two critical issues adding upward pressure on global grains prices are the lower stocks and expectations of increased grain usage in the US renewable energy industry. First, the global grains and oilseeds stocks are low as consumption from China and other industrial users in the developed world remained strong over the past few years. This is precisely the case for maize and soybeans. The lower stocks are a catalyst for the knee-jack reactions we have observed on prices whenever there is news of unfavourable weather conditions in major grains and oilseeds production countries. Such price fluctuations happen even if the weather-related news have minimal impact on actual crop conditions.Wandile Sihlobo explores this subject in the linked article.
OTHER NEWS
FAO: crop prospects and food situation
Food risk
The Food and Agriculture Organization of the United Nations (FAO) assesses that globally 45 countries, including 34 in Africa, nine in Asia and two in Latin America and the Caribbean, are in need of external assistance for food. Conflicts and climate-related shocks continue to underpin the high levels of severe food insecurity. The effects of the Covid-19 pandemic, primarily income losses, have exacerbated vulnerabilities and heightened existing levels of food insecurity. Please click here to peruse the July 2021 issue of the quarterly report Crop Prospects and Food Situation.
Opinions divided on forecasts that oil prices could hit $100 a barrel after Opec+ talks collapse: 
There are some heavy-hitting proponents of a $100 oil price either this year or next. For now, the hurdles that stand in the way of a $30-plus advance in the price of the fossil fuel probably outweigh those that don’t, but if the hike is realised, it could be a concern for the global economy and, more specifically, inflation. The collapse in Opec+ negotiations on oil production quotas last week has added further fuel to forecasts that the crude oil price could be headed to $100 a barrel. But opinions are divided on whether it is likely to make it there, and there’s a long list of factors that could stand in the way. After the UAE walked away from the negotiating table on Friday, unhappy with the ceilings proposed on additional daily production, the oil price shot up above $77 – its highest level since 2018. Read more in the linked article, first published on Business Maverick.
July 2021 ENSO update: La Niña watch
As things stand with the El Niño-Southern Oscillation (ENSO), neutral conditions are currently present in the tropical Pacific and are favoured to last through the North American summer and into the fall. But forecasters at NOAA’s Climate Prediction Center have issued a La Niña Watch, which means they see La Niña likely emerging (~66%) during the September-November period and lasting through winter. Near-average sea surface temperatures, consistent with ENSO-neutral conditions, were observed across most of the equatorial Pacific Ocean during June. Please click here to peruse.
SA grains and oilseeds harvest progress
The harvesting process for oilseeds is nearing completion with some sunflower hectares still to be harvested. Producers are harvesting maize in earnest; with 50 to 60% already harvested in the North West and 75% harvested in the eastern parts of the country. Feedback from producers indicate they generally harvest lower than expected maize yields due to the impact of several factors (insufficient heat units, fertilizer leaching, excess rain, etc.). In general it is a very good maize season while it is an above-average soybean season.” The Grain SA survey is available here.
South African citrus industry optimistic about its future
Citrus has been grown in South Africa for a very long time. According to records, the first citrus exported from South Africa was in 1906. The industry is built on solid foundations of research, variety development, plantation investment and the passion of citrus farmers. The whole citrus ecosystem is focused on the markets that South Africa supply to. This is how PMA South Africa’s country manager, Lianne Jones, summarised the input of citrus experts in PMA SA’s broadcast in partnership with Beanstalk.Global, on 24 June 2021. The panel of speakers included Prof. Vaughan Hattingh at Citrus Research International (CRI), Jon Roberts at CGA Cultivar Company, Duo Landman at Landman Group, Rowan Vickery at FruitOne and Joe Shaw Roberts at KANTAR. Read more in the linked PMA media statement.
Recovery in cotton consumption and trade
Eqypt_cotton
Global production for 2020/21 is estimated to be 24 million tons, which is the lowest in the last four seasons and represents a 7% decrease from 2019/20. Production is expected to recover next season to reach its pre-pandemic levels. Global consumption has recovered from 2019/20 by 12.5% to reach 25.29 million tons in 2020/21 and is projected to improve further to 25.8 million tons next season. Lower production combined with higher demand will cause ending stocks to decline to stand at 20.99 million tons – a level similar to what was recorded in 2015/16. Read more in the June 2021 Cotton Market Report published by Cotton SA.
Virtual cross-incubation programme Brazil-South Africa - deadline extended
Submissions for the Virtual Cross-Incubation Program Brazil-South Africa on agritech will be received until July 15, 2021. The Embassy of Brazil in Pretoria, the Brazilian Association of Science Parks, Business Incubators and Accelerators (Anprotec), the Brazilian Micro and Small Business Support Service (SEBRAE), the Department of Science and Innovation of South Africa (DSI), and the Technology Innovation Agency of South Africa (TIA), with the support from the Innovation Diplomacy Program (Brazilian Ministry of Foreign Affairs), launched the cross-incubation programme of Brazil-South Africa startups in the agritech sector. The program will consist of the immersion of Brazilian startups in the South African innovation ecosystem and the immersion of South African startups in the Brazilian innovation ecosystem. Please click here for more information.
News on climate change in the SmartArgi Barometer Newsletter
The first edition of the SmartAgri Barometer Newsletter of 2021/2022 has a fresh face and some new sections. The Western Cape Department of Agriculture (WCDoA) is particularly looking forward to showcasing the work of our early-career researchers who are contributing to our understanding of climate-change vulnerability of agriculture and possible solutions. The Western Cape can lead the way in many areas of climate-smart agriculture, as evidenced by the announcements of two international conferences to be hosted here. Please click here to peruse. 
MEMBERS' NEWS
Covid-19 claims another agricultural legend
Agbiz was shocked and saddened to learn that Kobus Steenekamp, country ​​commercial lead South Africa at Bayer Crop Science, passed away on Saturday 3 July 2021 from Covid-19-related complications. Steenekamp is widely described as a true legend of the South African agricultural industry. In a statement issued by Bayer Crop Science, Dr Klaus Eckstein, head of Bayer SA and group head of Crop Science Africa, describes Steenekamp as a gentle giant who will be remembered for his leadership, friendship and sense of humor. "His knowledge and expertise in the industry have had a lasting impact on the producers and colleagues with whom he has worked over the decades," says Eckstein. Our condolences go out to his family, colleagues and friends. Read more in a Bayer Crop Science media statement.
Get the latest news from AFMA
The latest AFMA newsletter, AFMA e-News is now available online. Please click here to peruse.
Weekly newsletter from CGA
Justin Chadwick, CEO of the Citrus Growers' Association of Southern African, shares the latest news in the citrus industry in his weekly update - From the desk of the CEO. Please click here to peruse.
The latest news from the pork industry
Read more about the latest developments and news in the pork industry in the South African Pork Producers' Organisation's (SAPPO) newsletter, SAPPO Weekly Update.
UPCOMING EVENTS
Climate Change Leadership Series
Theme: "Bringing science, people and policy together"
8 July 2021 | Zoom meeting

Sustainability Summit 2021
21-23 September 2021 | Virtual

2021 AFMA Symposium
18-19 October 2021
Enquiries: events@afma.co.za 

Intra-African Trade Fair 2021
15-21 November 2021 | Durban

Agbiz Congress 2022
22-24 June 2022 | Sun City
AGBIZ MEMBERSHIP
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