Countries facing escalating debt service costs, exacerbated by the pandemic, global conflicts, and rising interest rates, are experiencing severe fiscal constraints. The median low-income country now spends over twice as much on debt service as a decade ago, with debt redemptions nearly tripling their historical average. Although improvements in debt restructuring processes have been made, further action is needed to reduce uncertainty and expedite these processes. To avoid a potential debt crisis that threatens growth and stability, the IMF and World Bank propose a three-pillar strategy: enhancing domestic resource mobilisation, securing international support, and reducing debt servicing burdens through innovative financing solutions. This comprehensive approach aims to increase fiscal space, bolster economic growth, and build resilience in vulnerable nations. Click here to read full report derived from IMF Blog.

A continuous rise in global shipping and container rates is causing concern in Western and Eastern markets across the globe. Led mainly by tight capacity, strong demand, and the ongoing disruption in the Red Sea, rates are approaching record highs seen during the COVID-19 pandemic. This week, shippers and forwarders in Brazil reported that they are seeing container freight rates continue to surge on northbound trades to the U.S., Central America, and the Caribbean. Forwarders say rates have already doubled since mid-June and show little sign of easing until November or December, if not later. One source told the Journal of Commerce that rates have reached $5,000 to $6,000 per FEU, “depending on how late you try to book.” “Freight rates are rising drastically,” Fabrizio De Paulis, managing director of Brazil forwarder De Paulis Logistics & SCM Eireli, told the Journal of Commerce. “There’s been a capacity shortage in July, with many vessels sold out, especially Maersk services.” Click here tom read full article derived from freshfruitportal.com.

The benchmark for world food commodity prices was broadly unchanged in July for the second month in a row, as increases in international quotations of vegetable oils, meat products and sugar offset an ongoing decrease in those for cereals, the Food and Agriculture Organization of the United Nations reported Friday. The FAO Food Price Index, which tracks monthly changes in the international prices of a set of globally-traded food commodities, averaged 120.8 points in July, marginally below its revised 121.0 figure for June. The index is now 3.1 percent lower than its corresponding value one year earlier. The FAO Cereal Price Index declined by 3.8 percent from June as the global export prices of all major cereals decreased for the second consecutive month. Wheat quotations dipped on increasing seasonal availability from ongoing winter harvests in the northern hemisphere and generally favourable conditions in Canada and the United State of America supporting expectations for large spring wheat harvests later in the year. Click here to read full report derived from fao.org.

Biosecurity has been a top-of-mind issue in South Africa's agriculture for more than three years. The specific area of concern has primarily been on animal disease. Rightly so, given the many recent outbreaks across the country. Still, we must never neglect plant health. But for this week, we want to reflect on animal health. Cases of foot and mouth (FMD) disease, avian influenza, African swine fever, and Brucellosis continue to emerge, leading to huge costs to farming businesses. The damage to the industry is vast in terms of loss of productive animals, earnings, high-value export markets. The damage to confidence should also not be ignored as the sector will struggle attract investment if there is no clear strategy for addressing animal disease. We have raised this issue many times, and it is good to see that the new Minister of Agriculture, Mr John Steenhuisen, has this issue at the top of the Department of Agriculture's list of priorities. This is encouraging, but the real issue is that the process of improving the resolution of animal health issues in South Africa has been dragging on since 2000. Click here to read full article by Agbiz Chief Economist Wandile Sihlobo.

The world endured elevated food prices in the past few years for various reasons, ranging from drought in the major agricultural-producing regions of South America to the Black Sea war. But in recent months, global agricultural prices and consumer food prices have softened. Food prices globally are roughly 25% less than the peak levels reached in March 2022, which was right after Russia invaded Ukraine and caused much disruption and panic in the agricultural markets. This past week, the Food and Agriculture Organization of the United Nations (FAO) released its monthly Global Food Price Index, i.e., the FAO Food Price Index. This Index measures the monthly changes in international prices of a basket of agricultural commodities. The FAO Food Price Index stood at 120.8 points in July 2024, marginally below its revised figure for June. The major contribution factor to the marginal moderation was the easing in grain prices, while other commodities increased somewhat. The FAO Food Price Index is now 3% lower than its corresponding value one year ago. Most notably, as we stated above, the Index is 25% below its peak in March 2022, when Russia had just invaded Ukraine. Click here to read full article by Wandile Sihlobo.

South Africa is at the tail end of the 2023/24 summer grains and oilseed production season. In October 2024, our attention will shift to the new season, the 2024/25 production. The summer grains and oilseed comprise white maize, yellow maize, sunflower seed, soybeans, groundnuts, sorghum and dry beans. Thus, the crop size estimates we have at hand for the 2023/24 season are unlikely to change much and possibly represent an actual picture of the harvest. For example, in its sixth production estimate released on July 27, the Crop Estimates Committee placed South Africa's 2023/24 summer grains and oilseed harvest at 15,9 million tonnes. This is 0,5% less than last month. The monthly downward revisions are primarily in yellow maize, groundnuts and dry beans. The expected harvest of 15,9 million tonnes is down 21% year-on-year, signifying the sharp impact of the mid-summer drought on the grains and oilseed production. Click here to read full article by Wandile Sihlobo.

The Karoo region of South Africa deserves much attention regarding agri-tourism. But to get to such a point, the responsibility partly lies on farming communities and the farmers in the region. The starting point is marketing the area and continuously investing in accommodation and farming facilities to enrich the visitor’s experience. Other partners should be the entrepreneurs involved in the meat production, wool, and clothing industries; they should also promote agritourism in this Karoo region. The provincial and local government should also do their part in improving infrastructure that connects these various remote farms and makes them accessible. The municipalities should ensure service delivery and beautify the towns. Increased policing to enhance safety is also an important consideration. Promoting agritourism not only supports the economy of these small rural towns but also ensures that young people and many South Africans fully appreciate the quality of food, fibre, and beverages their country offers the world. Read full article by Wandile Sihlobo here.

Restaurants and retailers are crucial stakeholders in showcasing South Africa’s great foods. Some have made efforts to showcase famous food products from European heritage. However, they ignore the gems in South Africa’s foods. It is time to be knowledgeable and honest about the origins of the food products served to South Africans and tourists. A bit of history here and there would add to the experience, and such history would also market our beautiful country’s various agricultural and food-producing regions — a small effort with significant returns. Because South Africa produces such a wide variety of high-quality foods, promoting one region or taste doesn’t necessarily mean others are substandard. Instead, it signals the different flavours and respects consumers’ various preferences. Labelling products correctly in the store and on the menu will enhance consumers’ eating and shopping experience. Consumers are tired of commodities without specific details of the product’s origin. Click here to read full article by Wandile Sihlobo first published in dailymaverick.co.za.

President has indicated his support for land reform, the launch of the Land Reform and Development Agency could expedite this. In his opening of parliament address President Cyril Ramaphosa stated that the government “will increase funding to land reform, prioritise the transfer of state land and improve post-settlement support by strengthening the institutional capacity of responsible structures”. This profound statement is at the heart of SA’s agricultural inclusive growth agenda. Over time the SA government has amassed more than 2-million hectares of land that has never been released to beneficiaries with title deeds. These now mostly underutilised government-owned farms were acquired through the proactive land acquisition strategy and sit in the government landholding account. Many black farmers we interact with tell countless stories of frustration and their inability to expand and commercialise their farming operations because of their lack of secure access to land. Click here to read full article by Wandile Sihlobo.

South Africa's agriculture is part of the global agricultural market. Therefore, we must consistently pay attention to the production conditions of agricultural commodities globally as they impact our domestic prices and consumers. The world endured elevated food prices in the past few years for various reasons, ranging from drought in the major agricultural-producing regions of South America to the Black Sea wars. But in recent months, global agricultural prices and consumer food prices have softened. Food prices globally are roughly 25% less than the peak levels reached in March 2022, which was right after Russia invaded Ukraine and caused much disruption and panic in the agricultural markets. At the moment, the global agricultural observers are shifting their focus to the new production season, which is 2024/25, of grains and oilseeds. Click here to listen to full podcast – Agricultural Market Viewpoint with Wandile Sihlobo.

Agbiz Grain Quarterly is a digital magazine dedicated to the South African grain handling and storage sector. The August 2024 issue features comprehensive feedback from the recent Agbiz Congress, including key takeaways and insightful discussions led by industry leaders. It also delves into important topics such as the impact of environmental regulations on grain storage, current sea freight rates, and industry perspectives on emissions targets. This edition includes an in-depth look at several crucial issues, including the industry's call for a standard operating procedure for grain and oilseed inspections. Highlights also feature a French co-operative’s exploration of South African grain industry solutions, the need for logistical reform at Transnet, and the influence of sea freight rates on raw material importation. Additional articles cover emissions targets, the debate over white wheat, weed seed contamination risks, the effect of split kernels in barley on profit margins, and essential environmental law knowledge for SHEQ practitioners. Click here to read magazine.

China’s economic development over the last several decades has been remarkable amid rapid growth. We project growth will remain resilient at around 5 percent in 2024, despite the continued property sector adjustment. At the same time, China has relied too much on investment as opposed to consumption. Diminishing productivity and an aging population risk restricting growth, which we expect to slow significantly in coming years, to around 3.3 percent in 2029. Addressing these challenges requires a comprehensive and balanced policy approach. Given these circumstances, the country’s service sector is an underexploited driver of growth—which was also recognized at the Third Plenum. Reallocating resources to services has helped boost productivity over the past two decades. And it can continue doing so in the years ahead if supportive reforms are implemented. Read full report by imf.org here.

Ticks that suck the blood of South Africa’s cattle are developing resistance to the only pesticides that kill them and have become increasingly difficult to control. If not contained, the spread and resistance to pesticides of these small parasites will affect farmers’ incomes and could reduce the country’s meat and milk production. South Africa has approximately 12.2 million cattle. The ticks that live on cattle carry pathogens that can cause deadly diseases like anaplasmosis (which causes fever and anaemia) and babesiosis (which causes fever and progressive anaemia). The potential impact of ticks on South African agriculture is magnified by the sector’s peculiar circumstances. South Africa’s farming community consists of two agricultures: a large number of subsistence farmers with limited resources and a smaller number of commercial farmers. Click here to read full article derived from theconversation.com.

In the first quarter of 2024, dairy sales to other SACU countries rose by 1.7% in mass compared to the same period in 2023. Sales of whey and whey powder nearly doubled, while butter and butter products saw a significant decrease of 21.6%. The average F.O.B. price for concentrated milk increased by 20.1%, with other dairy products experiencing price hikes, except for butter, which saw a minor drop. The total sales value grew by 12.1%, driven largely by a 99.4% increase in the value of whey and whey powder. Conversely, sales value for butter and related products fell by 24.8%. This report aims to provide essential market insights for stakeholders in the dairy industry to optimise decision-making and value chain operations. Click here to read the full report on the sale of dairy products to the other members of the South African Customs Union, Q1 2024 by Milk South Africa.

The world is changing so quickly it’s hard to think of one aspect of our economic lives that hasn’t shifted from what it was only a few years ago. Trade is no exception. New technologies, the re-emergence of industrial policy, and rising geopolitical tensions are all putting added pressure on the international trading system. Michele Ruta is a trade expert at the IMF. He says global cooperation is key to preventing economic fragmentation, from which no one benefits. Check out the IMF’s global trade webpage and an entire issue of the IMF's Finance and Development magazine on Trade. Click here to listen to podcast and click here to read transcript. 

I have been asked to reflect on South Africa’s economic landscape from the perspective of the National Treasury and I want to start with our most recent history. We all know that South Africa is grappling with an economy that is growing slower than the growth rate of its population. As a result, real incomes of the average South African have seen a significant decline over the last 10 years or so. In practical terms, this means that the size of the economy is unable to sustain the country’s spending priorities. A situation that has been exacerbated by the effects of the Covid-19 pandemic and the economic turmoil which followed. As a result, our government's fiscal position remains strained, limiting the resources available to address our many challenges. Our strained fiscal position means that we are forced to live in an environment of scarcity where not all of the needs of our citizens can be met adequately given the resources we have. Click here to read full DG’s Speech: at the Bureau for Economic Research conference.

Transnet Port Terminals (TPT) has said it is looking at interventions to alleviate the current backlog of trucks accessing Pier 2 at Durban Container Terminal (DCT) where a buildup of harbour carrier traffic and related industry frustration have led operators to vent their anger at the logistics utility. According to the state-owned entity (SOE), one of the interventions includes the allocation of five areas for additional container stacking, which could eliminate the need for a truck slot booking system, the principal source of much resentment and recrimination among transporters. Earle Peters, managing executive for Durban Terminals at TPT, said: “We are looking at facilities within the port precinct that can fulfil the same role and function as Pier 2. Transporters will be able to fetch containers at their leisure and convenience, without the need of a booking system.” Jabu Mdaki, who is the chief executive of TPT, said more detail about additional space allocation for the container congestion often experienced at Pier 2 would soon be shared with industry. Click here to read full article derived from freightnews.co.za.

The Lemon Focus Group of the Citrus Growers' Association of Southern Africa (CGA) has adjusted South Africa's lemon export figures downward. The Orange Focus Group of the CGA also reviewed the export estimates on oranges for the 2024 season with a further downward adjustment made to the latest projected export figures for Navels, while the category for Valencia oranges received its biggest projection cut of the season, mostly driven by recently reported extreme weather events in key growing regions. Although the lemon season is drawing to a close, and some areas have finished packing, feedback from the remaining harvesting areas has necessitated a further downward adjustment of the overall export estimate. At the start of the lemon season, the export of 37.9 million 15kg cartons of lemons was projected. This has been reduced during meetings held throughout the season. This week's adjustment brings the total estimate for 2024 exports of lemons to 33.9 million cartons. Last year, Southern Africa exported 35.6 million cartons. Click here to read full article derived from freshplaza.com. 

The South African logistics network has faced operational challenges in early 2024, with a daily average of 7,428 containers handled, down from 8,878 last week. Port operations have been hindered by weather, equipment issues, and congestion, notably in Cape Town and Durban. Global container schedule reliability has decreased, with significant delays and port congestion impacting major hubs. Air cargo volumes at ORTIA have decreased slightly but remain higher than last year. Regional cross-border road freight has seen increased queue times, but decreased median border crossing times. The South African container industry, particularly Durban Pier 1, is struggling to meet targets, with trade volumes and figures reflecting declines. Immediate attention is needed to address equipment shortages, security issues, and operational disruptions to support recovery and enhance the sector’s resilience. Click here to read the full BUSA Cargo Movement Update. 

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 Fresh Quarterly, you will get a summary of the most pertinent information as well as reminders of important upcoming events. Please click here to peruse.

The Agbiz Congress 2024, held from 5 – 7 June at Sun City, offered a pivotal platform for reflections on domestic and global challenges impacting businesses within the agricultural sector. With the main theme "Sustaining Growth in a Changing Global Landscape," the Congress delved into pressing issues ranging from political uncertainty to emerging geopolitical tensions and ways to expand agricultural markets. Wandile Sihlobo, Chief Economist of Agbiz, remarked, "The selection of speakers and subject focus of various sessions mirrored the challenges of the day, including political uncertainty, rising geopolitical tensions, a desire to expand agricultural markets, economic conditions, and ways of improving the efficiency of network industries." "The Agbiz Congress has become a key event in the agricultural calendar," stated Theo Boshoff, CEO of Agbiz. "Under the theme 'Sustaining Growth in a Changing Global Landscape,' delegates gained critical insights into navigating emerging trends such as geopolitical uncertainty and trade protectionism, as well as unlocking sustainable finance and addressing activist campaigns." Click here to read full report by Agbiz Communication Officer Temba Msiza. Click here to access all images from congress.

• 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.