12
e-Newsletter
37/2020
25 September 2020
Competition in the digital economy
 
During the second week of September 2020, the Competition Commission of South Africa published its strategy document entitled Competition in the Digital Economy. This 68-page strategy document looks at the digital economy, the move to which has arguably been accelerated by Covid-19. In particular, the Commission's strategy document looks at the features of the regulatory environment required in order to extract maximum benefit from the digital economy. The Commission goes on to state that an enabling regulatory environment, together with sound competition policy, and an informed consumer base, innovative business culture and willing commercial partners can ensure that the digital economy realises the promise of inclusive economic growth. Accordingly, it is unsurprising that the Commission intends prioritising digital markets for merger control purposes for the next five years, i.e. between 2020 and 2025. The linked article by Werksmans Attorneys, discusses the 10 things you should know about the Competition Commission's strategy document.
Covid19: Cargo movement update      
 
The BUSA Covid 19: Cargo movement update - the eighth of its kind - contains a consolidated overview of the South African supply chain, as well as the current state of trade internationally. The update comes on the back of the country reporting its steepest drop in GDP since 1960, with GDP falling by just over 16% between the first and second quarters of 2020. Nonetheless, there is further positive news concerning Covid-19 infections: the number of new diagnoses of Covid-19, which started to decline rapidly in mid-July, levelled out at an average of just over 1 600 a day in the week to 6 September. In contrast to the move to levels 4 and 3 however, three weeks after level 2 started on 18 August reported infections had not risen sharply. In global terms, South Africa has dropped another place to eight position globally (with Mexico overtaking South Africa in the past week). Please click here to peruse.
Overview of import patterns in the latest TIPS Import Tracker
 
South Africa had a trade surplus of R30 billion in the second quarter of 2020, up from R4 billion in the second quarter of 2019. Generally, South African trade performs better in the second quarter of the year, compared to the first quarter. With the exception of 2012 to 2014, there has been a trade surplus every year in the second quarter for the past decade. In the second quarter of 2016 it peaked at R36 billion. In line with trends during 2020, the second quarter saw a general decline in trade, mainly impacted by the Covid-19 pandemic. In the year to the second quarter of 2020, imports declined by 26% while exports declined by 18%. Second quarter trade in 2020 is the lowest level of trade since the second quarter of 2012, in constant 2020 Rand. The latest TIPS Import Tracker provides an overview of import patterns and looks at the causes of surges in imports, and their likely impact on industry. 
AGRIBUSINESS RESEARCH
Agritourism to benefit most from move to 'level 1' of the lockdown

The move to level 1 of the lockdown is a welcome step from a broader macroeconomic perspective as this ensures activity in the country can continue to gradually normalise across more sectors of the economy. Within agriculture the segment that is likely to benefit most is agritourism, which has been hard hit by the pandemic due to restrictions on international and local travel, along with the wider tourism industry. Agbiz chief economist Wandile Sihlobo discusses this subject in the linked article, written for and first published in Business Day.
SA livestock and poultry industry faced with rising input costs

This must be a challenging year for the animal feed companies and by extension the livestock and poultry industry. The years of a large harvest like the 2019/20 season are typically followed by a notable decline in commodity prices which is beneficial to the livestock and poultry industry. We had the second-largest maize harvest on record, about 15.5 million tonnes (yellow maize at 6.5 million tonnes and white maize: 9.0 million tonnes) and the third-largest soybean harvest on record (about 1.26 million tonnes); yet prices didn't reflect this increased production. On 21 September 2020, soybean spot price reached a record R8 090 per tonne, up by 40% y/y. Meanwhile, yellow maize, which is also a key input along with soybeans in animal feed, traded at R3 284 per tonne, up by 22% y/y. In the linked article, Wandile Sihlobo explains how this will subsequently lead to increased costs to the users of grain and oilseeds, mainly the livestock industry.
OTHER NEWS
Zimbabwe's 'command agriculture' a huge flop, free market a success

Zimbabwe imported agricultural products worth more than US$1bn - half of it maize - last year, despite investing more than US$3bn in 'command agriculture', a controversial programme to ensure food self-sufficiency introduced in 2016. 
This revelation is contained in a recently released quantitative study titled Zimbabwe Agricultural Survey Report which suggests that agriculture should be run on a free-market system and the government should create an enabling system just like in tobacco, the only success story. The lead researcher of the report, Prof Gift Mugano, told TimesLIVE that command agriculture is registering a low uptake because the government is interfering in maize production. Please click here to read the full article.
Drought-inducing La Niña arrives as US wheat, South American corn planting begin

La Niña  conditions have started up their projected multi-month residency in the Pacific Ocean, just as new crop cycles are kicking off in the Americas, including corn and soybean planting in South America and wheat planting in the United States. When La Niña last showed up in late 2017, it made for extremely dry growing seasons in some of these regions, particularly in Argentina and the southern US Plains, and farmers harvested very poor crops in early 2018. La Niña is characterized by cooler-than-normal surface waters in the equatorial Pacific Ocean, and this month those waters have reached the coolest levels for the time of year in nearly a decade. When the ocean cools off so much this early, La Niña typically has more staying power earlier in the next year. Read more in the linked Reuters article.
Harvest begins with Iowa soybeans, Kansas corn

The first two of 16 US Crop Watch fields were harvested last week, though for the most part, the producers report that harvest activity has been on the lighter side and will likely ramp up in the coming days. Warm and dry weather across most of the Corn Belt this week will aid in the effort. The Kansas corn was harvested last Monday and the results were as expected, but the Iowa soybeans, cut on Saturday, came in slightly worse than predicted. The producers have been rating yield potential each week on a scale from 1 to 5. Scores of 1 or 5 represent yields close to or exceeding 15% below or above average, while 2 and 4 are assigned to yields around 5% to 10% from the recent field average. Please click here to read the full Reuters article.
 Deciduous fruit industry awards excellence in 2020 

The worldwide coronavirus pandemic has forced the South African deciduous fruit industry to present its annual awards digitally this year. "We decided to announce the winners in a press release and to hand over the awards during a virtual event that will replace the 45th gala evening," said Jacques Jordaan, chairman of the awards committee and CEO of the Canning Fruit Producers Association. Three people received awards for outstanding performance working on deciduous fruit farms specifically and five for their direct and indirect contributions to the industry. Please click here for the full media statement.
 Latest news from CropLife

CropLife South Africa has released the seventh issue of the Crop Circular. This issue covers topics such as GM foods, the complexities of running a poison information centre and the ABCs of active ingredients. 
 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


For more information, please visit the congress web page. 
PMA Fresh Summit 2020
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"
6 May 2021 | CSIR | Pretoria 
Enquiries: Marianna.duplessis@gmail.com | +27 063 076 9135

MPO Virtual Annual National Congress
4 November 2020 
Contact Julie McLachlan: julie@mpo.co.za or 083 740 2720
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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