As of 30 January 2024, the global economy approaches a soft landing, marked by declining inflation and sustained growth. Despite this positive outlook, challenges persist, and uncertainties loom on the horizon. The second half of 2023 showcased resilient global activity, driven by robust demand, increased labour force participation, mended supply chains, and favourable energy and commodity prices. Under the baseline forecast, global growth is expected to stabilize at 3.1% in 2024, with further improvement to 3.2% in the following year. Divergences among major economies persist, with the United States and China anticipating slower growth, while Brazil, India, and Southeast Asia show notable resilience. Inflation is on a downward trajectory, providing room for optimism, yet risks remain, including potential commodity disruptions and concerns about persistently high core inflation. The policy landscape is at a crucial juncture, with central banks navigating the delicate balance of avoiding premature easing while preparing for monetary normalization. Fiscal consolidation emerges as a key challenge, urging countries to address elevated public debt levels and borrowing costs. The urgency lies in implementing steady fiscal adjustments, coupled with a well-enforced framework, to build resilience against future shocks. Click here to read full article by imf.org/en/Blogs.

French farmers have blocked major highways to Paris, protesting against issues such as low pay, excessive environmental regulations, and the government's push to bring down food inflation. They argue that they cannot cover high costs for energy, fertilisers, and transport. Discontent is fuelled by large imports from Ukraine and renewed negotiations for a trade deal between the EU and Mercosur. Farmers also criticise EU subsidy rules and France's complex implementation of policies. The government, aiming to defuse the crisis, scrapped diesel tax increases, reduced red tape, and offered aid. Farmers' unions seek further concessions, and the government is considering additional support for wine producers and livestock while seeking EU-level changes. Read full article derived from reuters.com here.

Maize serves as the primary staple in southern Africa, particularly in Malawi, where it constitutes two-thirds of the national calorie intake. Over 90% of farming households in the country heavily rely on rain for maize irrigation, making them vulnerable to rainfall patterns. A study assessed the potential impact of El Niño on maize production in Malawi, revealing that historically, two-thirds of El Niño events resulted in a 22.5% reduction in maize harvests. Such a decline could lead to widespread food shortages, affecting both formal and informal maize markets. The researchers advocate for social protection programmes, including cash transfers and government food aid, targeting impoverished populations in both rural and urban areas. Furthermore, they recommend policy measures such as investing in irrigation for farmers and diversifying income sources beyond traditional farming to mitigate the impact of El Niño. Click here to read full article from theconversation.com.

The Eastern Cape, home to iconic figures like Nelson Mandela, harbours immense agricultural potential yet remains one of South Africa's poorest regions. Wandile Sihlobo, a prominent agricultural commentator, aptly terms it "the sleeping giant" of South Africa's agriculture. Despite holding substantial livestock and contributing significantly to the global market, the province grapples with endemic unemployment and untapped potential. Addressing challenges like subsistence farming dominance, invasive plant species, and degraded rural infrastructure is pivotal. A proposed investment framework, supported by the World Bank and aligned with the Agricultural and Agro-Processing Master Plan, seeks to catalyse inclusive agricultural development. The focus is on revitalising irrigation, enhancing rural connectivity, and fostering partnerships with agribusinesses. As the province moves from framework to action, the journey towards inclusive smallholder agriculture could serve as a blueprint for other provinces, fostering sustainable growth and job creation. Click here to read full article by blogs.worldbank.org.

In a world increasingly fractured by the ongoing wars, growing geopolitical tensions, and divisions on alignments to these tensions, South Africa’s government and business must continuously work to open new export markets and diversify from the long-existing ones to spread the risks should the tensions be prolonged. While this applies to most exporting industries in the South African economy, it is particularly relevant for the strongly export-oriented agricultural sector. South Africa’s relationship with the long-existing markets in the EU, the African continent, and some Asian and American countries must be nurtured. This is a crucial step as some countries may not outright block trade between countries in this fractured world but use non-tariff barriers. The EU recently used non-tariff barriers by alleging a “False codling moth”, a citrus pest, in South Africa and requiring that citrus products be kept at certain temperatures before accessing the EU market. This happens while South Africa has already treated the products to eliminate the chances of such pest occurrence. Even within the Southern African Customs Union, Namibia and Botswana are some countries that typically block South Africa’s vegetable exports to protect their industries. Click here to read full report by Wandile Sihlobo.

South Africa could have yet another decent summer grains and oilseeds harvest in the 2023/24 production season. The data released this afternoon by the Crop Estimates Committee puts the preliminary area plantings for summer grains and oilseeds at 4,41 million hectares, up by 0,4% y/y (albeit down mildly from 4,48 million hectares of the intended area when the season started). This increase is not limited to a few crops but across most summer crops except for soybeans, where plantings possibly fell by 10% y/y to 1,04 million hectares (which is still well above the 5-year average area of 867 240 hectares). The area plantings for other major grains, such as maize and sunflower seed, is also well above the 5-year average. White maize plantings are forecast at 1,56 million hectares, up 2% y/y, with yellow maize planting at 1,08 million hectares, up 2%/y. This places the total commercial maize planting estimate at 2,64 million hectares, 2% more than the 2022/23 production season. If we consider a 5-year average maize yield of 5,78 tonnes per hectare in an area of 2,64 million hectares, South Africa can have a maize harvest of 15,25 million tonnes. This crop would be well above South Africa’s 5-year production of 14,95 million tonnes, although down 7% y/y. Notably, a maize harvest of this size against South Africa’s annual maize consumption of roughly 12,00 million tonnes implies that the country would remain a net exporter of maize. Read full report by Wandile Sihlobo here.

There are divergent views about the effectiveness and extent to which South Africa’s agricultural policies have been implemented. Regardless of how experts feel about the capacity of the state and the policy stance of the South African government since the dawn of democracy, the one undeniable fact is that the sector has grown tremendously. Data from the Department of Agriculture, Land Reform and Rural Development show that domestic agricultural output in 2022/23 was twice as much as in 1993/94. Whether this growth has been inclusive and transformative is a question I will return to later in this piece. For now, it’s important to emphasise the growth of the industry and the drivers of its expansion. Significantly, this expansion was not driven by a few sectors but has been widespread — livestock, horticulture and field crops have all seen strong growth over this period. Of course, the production of some crops, most notably wheat and sorghum, has declined over time. This, however, had a lot to do with changes in agroecological conditions and falling demand in the case of sorghum, not policies. Click here to read full article by Wandile Sihlobo.

Food prices were a significant discussion point worldwide in 2023. South Africa had a fair share of elevated food prices in the first half of 2023, and the pace of increases slowed somewhat towards the end of the year. The December 2023 consumer food inflation data showed further deceleration to 8,5% in December 2023, from 9,0% in the previous month (and against market expectations of a slight uptick to 9,3%). The product prices underpinning this deceleration were primarily bread and cereals, oils and fats, and vegetables. At the Agricultural Business Chamber of South Africa (Agbiz), we expect this moderation path to continue in 2024 for most of the products within the food basket. The significant risk to meat supplies that animal diseases such as avian influenza presented in 2023 could ease this year. There will likely be a recovery in poultry production following a range of interventions that the industry and the government embarked on at the end of last year. Click here to read full article by Wandile Sihlobo for Agricultural Economics Today.

Experience the Renaissance with insightful conversations! Tune in as our Marketing and Communication Manager, Ms. Anga Jamela, engages in a thought-provoking dialogue with Wandile Sihlobo. Discover the significance of discussing agriculture in a country like South Africa. Watch the full interview for the Thabo Mbeki Foundation by clicking here.

Positive news is hard to come by at most times in South Africa. We hear daily of the difficulties and costs to business the inefficient ports, weakening municipalities, rising crime, and deteriorating roads present. Thus, reading the headline, "Saudi Arabia to start South African meat imports as ban ends," on BLOOMBERG, a news organization, was refreshing. This development means everything is now for the Kingdom of Saudi Arabia to import beef from South Africa. This comes after several engagements between the South African government and the private sector with Saudi Arabian authorities to unlock this market. Industry organizations such as Red Meat Industry Services and private sector stakeholders like Karan Beef, Sparta Beef, and Beefmaster, amongst others, deserve much credit for this uplifting development on the beef export front. The Kingdom of Saudi Arabia has not featured prominently in South Africa's beef export markets in the past, with only small volumes last exported in the early 2000s. The renewed access to this market is critical to South Africa's ambition to expand beef exports, as the Saudi beef market is sizable and will be worth over US$647 million in 2021, according to data from Trade Map. Click here to read full report. Alternatively, click here to listen to full episode of the Agricultural Market Viewpoint with Wandile Sihlobo on the same topic. 

Saudi Arabia will start importing South African beef and lamb products as part of an investment push into the continent’s most developed economy, this after a 20-year prohibition on South African meat imports in August. CNBC Africa is joined by Wandile Sihlobo, Chief Economist of the Agricultural Business Chamber of South Africa. Click here to watch full interview.

As of 4 January 2024, international cotton markets witnessed a dynamic 2022/23 season with price volatility. From the peak of 135.25 cents per pound on 30 August 2022, to the low of 72.26 cents per pound on 28 June 2023, global cotton prices experienced a 23% decrease, settling at an average of 101.62 cents per pound. This figure, the second-highest in the past 12 years, reflects a resilient market standing 35% above the long-term average, offering insights into the robust nature of the global cotton trade. Government support in key cotton-producing nations highlights distinctive trends. China's transportation subsidies for Xinjiang's cotton decreased, contributing to a total subsidy surge of $2.4 billion. In the USA, support for planted cotton saw a significant rise to $1.53 billion in 2022–2023. Meanwhile, India adjusted the Minimum Support Price for seed cotton and observed a notable increase in fertiliser subsidies, reaching $2.97 billion. For a comprehensive understanding of these trends and insights, delve into the detailed report on the global cotton market. Click here to read full Cotton Market Report January 2024 by Cotton SA.

Sub-Saharan Africa, particularly Sahel countries, grapples with persistent security challenges, notably in Burkina Faso, Chad, Niger, Mauritania, and Mali. Research indicates that discontent with state institutions among marginalised groups serves as a significant driver of unrest in the region. The distrust stems from perceived government failures in addressing equity issues, inclusive growth, fair allocation of natural resources, and human capital development. Institutional shortcomings intensify feelings of exclusion, inviting conflict by undermining fairness and inclusivity crucial for sustainable development. Conflict hotspots, often near national borders with limited public services, pose substantial security risks, as evident in the cross-border spillover effects from conflicts in Ethiopia, South Sudan, the Central African Republic, and the Sahel. An exclusion index spanning 1990 to 2022 underscores the instrumental role of social, political, and economic exclusion in driving conflicts. Policymakers are urged to adopt a comprehensive approach, fostering relationships between people and government to ensure justice and equitable public service delivery, crucial for sustainable peace and social cohesion. While poverty and underdevelopment alone may not trigger conflict, addressing exclusion is paramount to mitigating the fertile breeding ground for armed groups. The study emphasises the urgent need for humanitarian assistance and improved security expenditures' quality and efficiency in tandem with combating terrorism financing, recognising that these efforts may fall short without addressing the core problem of exclusion. Click here to read full article by IMF Blog.

Bonang Mohale's early departure as BUSA President prompted an ad-hoc committee, including Adrian Gore, Busi Mavuso, and Charlotte Mokoena, to select a successor. After considering suggestions from members and short-listing top candidates, Mxolisi Mgojo emerged as the primary choice. The BUSA Board unanimously nominated Mgojo during a special meeting on 26 January 2024, marking his official appointment as the new President of BUSA. Congratulations to Mxolisi Mgojo on this significant leadership role. Click here to read full statement by Business Unity SA CEO Cas Coovadia.

This comprehensive update provides insights into the South African supply chain and global trade dynamics. Domestic commercial ports faced disruptions, with container handling dropping to 6,755 per day due to inclement weather, congestion, and equipment issues. In the global shipping industry, Maersk and Hapag-Lloyd's formation of the Gemini Cooperation in January 2025 is set to reshape container shipping as the third-largest alliance globally. Despite challenges in the Red Sea and the Panama Canal, global port congestion remains low, impacting only 5.3% of the total fleet. The international air freight market to and from South Africa shows a slow pick-up, while global air cargo tonnages are notably up from last year. Cross-border road freight trade experiences fluctuations in queue and transit times, with challenges and opportunities discussed in South Africa's cross-border trade landscape. The report concludes with a call for collaborative efforts and innovative solutions to address trade inefficiencies and foster growth in the logistics industry. Read the full update in the latest BUSA Cargo Movement Update. 

Emerging from the COVID-19 pandemic in 2020, the hope for an extended period of global stability was swiftly shattered as a conflict erupted in the Black Sea region. Subsequently, we have witnessed escalating global conflicts that have triggered significant shifts in the geopolitical landscape. This has prompted nations to reassess measures that disrupt worldwide trade, including export restrictions and pricing controls that impact global supply chains. Concurrently, the international community grapples with combating critical plant and animal diseases while grappling with the looming spectre of climate change. However, the imperative remains for businesses to persevere and adapt to the evolving global terrain. In echoing Charles Darwin's theory, it is not the strongest species that survives, but rather those that prove most adaptable to change. In light of these challenges, the 2024 Agbiz Congress theme intentionally recognises the evolving global panorama and redirects its focus towards sustaining growth in this uncertain environment. Esteemed speakers will share their perspectives on how to navigate and adapt to the complexities posed by geopolitical, environmental, and social instability. Aligned with Agbiz's ethos, the Congress aims to seek solutions that will propel the sector towards prosperity. To learn more and register for the event, we have launched our 2024 Agbiz Congress website, where you can find comprehensive information and details about this vital gathering. Visit the website to stay updated and secure your spot at this essential event. Learn more and register for the 2024 Agbiz Congress here.

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.

• 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.