Building confidence amid an uncertain recovery
With the Covid-19 pandemic continuing to threaten jobs, businesses and the health and well-being of millions amid exceptional uncertainty, building confidence will be crucial to ensure that economies recover and adapt, says the OECD's Interim Economic Outlook. After an unprecedented collapse in the first half of the year, economic output recovered swiftly following the easing of containment measures and the initial re-opening of businesses, but the pace of recovery has lost some momentum more recently. New restrictions being imposed in some countries to tackle the resurgence of the virus are likely to have slowed growth, the report says. The Interim Economic Outlook projects global GDP to fall by 4,5% this year, before growing by 5% in 2021. The forecasts are less negative than those in OECD's June Economic Outlook, due primarily to better than expected outcomes for China and the United States in the first half of this year and a response by governments on a massive scale. However, output in many countries at the end of 2021 will still be below the levels at the end of 2019, and well below what was projected prior to the pandemic.
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Trade as a tool for efficient recovery
As economies now look for paths to recovery from the Covid-19 crisis, new evidence reaffirms that policies for more open and trade-integrated economies could significantly benefit domestic competition and ultimately may help lower costs for consumers in emerging and developing economies. A recent working paper from the IMF examines the effect of trade liberalization using a large firm-level dataset covering about 400 000 firms in 83 emerging and developing economies from 2000 to 2017. Please click here to peruse.
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Financial services firms need to manage digital risk
Amid the humanitarian and economic shock of Covid-19, the digital forces reshaping the financial services industry have gone into overdrive. This disruption is changing the nature of digital risk as well as introducing new risks that might not have existed in the recent past. At the same time, digital technologies and processes offer financial institutions the opportunity to redefine business models and transform customer interactions. This paper from Deloitte - Financial services: Managing risk to get fit for a digital future - explores the digital risk landscape along its various dimensions across the financial services industry. The paper also discusses some significant types of digital risks that are common among financial institutions and how financial firms can turn them into a digital advantage.
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Repo rate remains unchanged
Since the July meeting of the Monetary Policy Committee (MPC), the Covid-19
pandemic has abated in South Africa. A range of other countries however continue to experience a rapid spread of the virus. The economic effects of the crisis have been extensive and a recovery to pre-pandemic levels will take several years. Current forecasts from the IMF show global gross domestic product (GDP) contracting by
about 4.9% this year, although the general economic outlook has improved somewhat. Against this backdrop, the MPC decided to keep rates unchanged at 3.5% per annum. The implied policy rate path of the Quarterly Projection Model indicates no further repo rate cuts in the near term, and two rate increases in the third and fourth quarters of 2021. Please click here for the full MPC statement.
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Agbiz CEO re-elected to BUSA's board of directors
At the annual general meeting of the South African business representative body Business Unity South Africa (BUSA) held earlier this week, Agbiz CEO Dr John Purchase was re-elected to the BUSA board of directors. In his message as president in the BUSA Annual Report, Sipho Pityane stated that 'it has never before been more imperative to have credible, adequately capacitated organised business entities that is one of the reliable stakeholders in society to advance, both its strategic interest simultaneously with those of society." Please click here to access the BUSA Annual Report.
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Joint effort keeps South Africa's agricultural sector thriving during the pandemic
At the outset of the Covid-19 lockdown, agriculture and the food sector were classified as essential services to avoid disrupting the nation's food supply. But there were always concerns about whether the agricultural value chains and logistics could work efficiently when most other sectors of the economy had ground to a halt.
Industry leaders quickly met, and with the help of the Bureau for Food and Agricultural Policy (BFAP) created a weekly value chain tracker covering all aspects of the sector. This proved an essential tool as challenges emanating from it were elevated to the legislators to be tackled swiftly and ensure the continuity of the sector. Agbiz chief economist Wandilel Sihlobo discusses this subject in the linked article, written for and first published in Business Day. Also listen to the 702 interview on this article.
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Agribusiness confidence rebounded in the third quarter of 2020
After deteriorating from the 50-point mark to 39 in the second quarter, a period during which there was heightened uncertainty about whether the agriculture and agribusiness sectors would operate efficiently when most sectors of the economy were closed under the lockdown regulations, the Agbiz/IDC Agribusiness Confidence Index (ACI) rebounded to 51 in the third quarter of 2020. A level just above the neutral 50-point mark implies that agribusinesses are only marginally optimistic about business conditions in South Africa. This corroborates various high-frequency data which show that most of South Africa's agriculture and agribusiness sectors have not been severely affected by the ongoing COVID-19 crisis, as the sector was classified as essential and largely did not close down throughout the lockdown period. The subsectors that were severely affected by the lockdown regulations include the wine and tobacco industries, whose sales were prohibited for certain periods. This third-quarter survey was conducted in the first two weeks of September and covers agribusinesses operating in all agricultural subsectors across South Africa. Wandile Sihlobo discusses the latest data in the linked article.
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Parts of the Eastern Cape were never truly out of drought
Harvest and agricultural performance have been unexpectedly robust. From January 2020 some of the regions suddenly received good rainfall. But parts of the Eastern Cape remain dry, with increasing reports of a potential 'day zero'. Read more in Wandile Sihlobo's article, written for and first published on Fin 24.
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Global grain and oilseed production prospects for 2020/21 remain positive
The 2020/21 global grain and oilseed production estimates from the International Grain Council (IGC) painted a positive picture of the supplies although there were a few minor downward revisions. We are now increasingly convinced that the recent unfavourable weather conditions in parts of Europe, Asia and even the US will not have a severe adverse effect on global production estimates. The United States Department of Agriculture (USDA) released its monthly update of World Agricultural Supply and Demand Estimates report on 11 September 2020, which painted a somewhat similar picture of abundant supplies as the IGC.
In the linked article, Wandile Sihlobo and fellow agricultural economist, Tinashe Kapuya reflect on the recent 2020/21 global grain and oilseed production forecasts from the United States Department of Agriculture and further draw implications for South Africa.
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Managing talent for business success
Talent management can be very challenging for a business in need of skills that are not widely available in the market. Engineers and artisans often fall into this category. The attraction, development and retention of talent is one of the most important challenges that businesses face globally. Though it may seem that HR professionals develop catchy phrases, talent management is not a new concept and can be described as the activities and processes that involve the attraction, identification, development, engagement, retention, and deployment of specific people whose talents are necessary for the business to succeed. The specific elements of talent management are: Building a talent culture, identifying the positions, roles and capabilities that will determine the sustainability and growth of the organisation, setting up talent processes and systems, stakeholder management and monitoring and reporting on the talent management strategy. Jahni de Villiers of Labour Amplified discusses this subject in the linked article.
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Farming input vouchers
The Solidarity Fund's initiative has approved a R95m farming input voucher intervention, based on the following logic:
- Subsistence-focused smallholder farmers have lost income during Covid-19 restrictions, compromising their ability to fund their ongoing farming activities/ next farming cycle.
- An input voucher will enable an existing small-scale farmer to purchase key farming inputs and prevent their households from being pushed into a poverty trap, by supporting their ongoing ability to produce food.
- Supporting small-scale, household-level food production, with a reasonably short production cycle, is aligned with the Solidarity Fund's mandate and the need to respond to Covid-19 aggravated hunger
By supporting subsistence farmers in primarily rural areas with a voucher to purchase vegetable/ maize/ beans/ poultry-related inputs, the Solidarity Fund will have a strong likelihood of:
- reaching households that are most vulnerable to hunger, and
- supporting direct access to food.
Agbiz members are encouraged to participate in this process when the project starts. Please click here for more information.
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Macadamia prices hold firm amid smaller crop
The global 2020 macadamia crop suffered a blow as yields dropped 3% amid unfavourable weather conditions. Although sales have, for the most part, held firm over the past few months, this reduction in supply could serve to benefit farmers in terms of prices paid for the nuts. In South Africa, which was the world's largest producer of macadamias, the yield was down 16% from last year's crop of 59 050 tonne. Instead of the annual increase in yield achieved through rapid orchard expansions, the local crop was only expected to reach 49 503 tonne nut-in-shell (NIS), measured at 1,5% kernel moisture content. Read more in the linked article, first published in Farmer's Weekly.
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Ukraine grain sowing facing worst weather in a decade
Weather conditions for winter grain sowing in Ukraine are the worst in the last 10 years due to severe drought across most of the country, the APK-Inform consultancy on Wednesday quoted weather forecasters as saying.
Ukraine, among the leading global grain growers and exporters, is likely to reduce its grain harvest to around 68 million tonnes this year from a record 75 million tonnes in 2019 due to poor weather. Read more in the linked Reuters article.
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AFMA announces new board members at virtual AGM
The Animal Feed Manufacturers Association (AMFA) announced the directors elected to the AFMA Board at the 73rd Annual General Meeting on 4 September 2020. New members to the board are Francois van de Vyver, Franscois Crots, Johan du Plessis, Neil Dominy, and Paul Saunders. Returned directors include Wouter de Wet, Mbusi Dlamini, Sharlene Moodley and Anina Hunter. Directors continuing for a further year are Thinus van Lill and Michael Schmitz. Wouter de Wet and Thinus van Lill were re-elected respectively as chairperson and vice-chairperson of the board of directors. Please click here to peruse.
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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.
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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. |
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13-15 October 2020 | Virtual event Fresh Summit has always been the family reunion for the produce and floral industries where buyers and sellers come together to do business, and this year is no different. You'll get all the connections, content, and community you expect - and more! www.pma.com/events/freshsummit
2020 AgriAllAfrica Agribusiness Conference - POSTPONED TO 2021
Theme: "Imagined responses to Covid-19: Progress with the development of solutions"
MPO Virtual Annual National Congress
4 November 2020
Agbiz Congress 2021
Theme: "Building resilient and sustainable agri-food ecosystems".
7-9 April 2021 | Sun City Convention Centre | South Africa
Second International Congress of Biological Control (ICBC2)
26-30 April 2021 | Davos, Switzerland
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Why join Agbiz?
- Agbiz is the only organisation that serves the broader and common over-arching business interests of agribusinesses in South Africa.
- Agbiz addresses the legislative and policy environment on the many fronts that it impacts on the agribusiness environment.
- Agbiz facilitates considerable top-level networking opportunities so that South African agribusinesses can play an active and creative role within the local and international organised business environment.
- Agbiz research provides sector-specific information for informed decision-making.
- Agbiz newsletter publishes members' press releases and member product announcements.
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THIRD-PARTY WEBSITE LINKS TO THIS NEWSLETTER
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The Agbiz Newsletter may contain a few links to websites that belong to third parties unrelated to us. By making these links available, we are not endorsing third-party websites, their content, products, services or their events. Agbiz seeks to protect the integrity of its newsletter and links used in it, and therefore welcomes any feedback.
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