This year, the outlook for winter crops is clouded by a difficult operating environment, especially the areas that are under irrigation. The two biggest headwinds are power cuts and dollar strength. Nevertheless, there are also positives that should take the pressure off food price rises that have hit consumers hard. These positives include a fall in the cost of inputs, like fertiliser and agrochemicals, as well as good harvests from the summer season just ending. Agbiz chief economist Wandile Sihlobo discusses this topic in the linked article, first published on The Conversation.

The FAO Food Price Index, a measure of the monthly change in international prices of a basket of food commodities, rebounded by 1% in April 2023 from March to 127 points. This uptick is due to the increases in sugar and meat prices. Meanwhile, the cereals, dairy, and vegetable oil prices continued to drop. The price surge in sugar reflects the concerns about the tight global supplies in the 2022/23 season. This uptick is caused by the downward revisions to the sugar production forecasts for India and China, along with lower-than-earlier-expected outputs in Thailand and the European Union. Moreover, the meat price index increase was underpinned by the firm demand in Asian countries for pork. In the linked article, Wandile Sihlobo discusses why the price trend in international market could be a reality in the domestic market.

On 9 May 2023, Agbiz made an oral submission to the Portfolio Committee on Forestry, Fisheries and the Environment on its views on the Climate Change Bill. The portfolio committee has been conducting public hearings on the Bill since September 2022. A large number of organisations have already presented on the Bill. In its submission, Agbiz highlighted the importance of the agricultural sector in terms of employment, trade, and food security. The importance of climate change legislation and the fact that there is a need to find cost-effective ways to address agricultural emissions is acknowledged, but Agbiz cautions against a perception that the sector has an unlimited mitigation potential. Agbiz pointed out that the sector’s greenhouse gas emissions must be balanced with the economic and employment opportunities it creates, as well as the lack of viable alternatives. Many of the mitigation options entail additional costs to farmers. Agbiz head of Legal Intelligence Annelize Crosby discusses this topic in the linked article.

In this video, Agbiz head of Legal Intelligence Annelize Crosby gives a summary of the important Bills that are in process in Parliament as well as policies that are still in the making. Please click here to peruse.

This past week, the Business Councils of the BRICS Group gathered virtually to discuss a range of priorities for the year in preparation for the 15th BRICS Summit in August 2023. This business grouping works collaboratively with the political heads, focusing primarily on commercial opportunities within BRICS. As chair of the BRICS group this year, South Africa led the conference and proposed the focus areas for the year. Within the Agribusiness Working Group, which Agbiz chairs, there are five priority areas for the year. In all these priority areas, the most urgent point for South Africa is trade and investment, as well as the improvement of fertiliser availability. On trade, the main interests of South African agriculture and agribusiness in the grouping are advancing exports, specifically to China and India. In the linked article, Wandile Sihlobo discusses this subject.

We continue to see a mixed picture in South Africa's agricultural machinery sales. For example, tractor sales were down by 3% y/y in April 2023, with 543 units sold. Meanwhile, combine harvester sales were at 104 units, up significantly from the 44 units sold in April last year. The robust combine harvester sales are surprising, as we thought by now there would be a general moderation in the agricultural equipment sales from last year's intense levels. In addition to varied farmers' financial reasons, part of the reason for these strong combine harvester sales is that we have a large summer grain and oilseed crop in the 202/23 season, and the harvest will gain momentum later this month. In the linked article, Wandile Sihlobo discusses the latest agricultural machinery data.

A major challenge that could confront South Africa's agricultural sector in a few months is a change in weather conditions from favourable rains to drier and hot conditions. This would be a switch from a prolonged period of La Niña to El Niño. South Africa has had four seasons of La Niña induced heavy rains from 2019/20 to 2022/23. These above-normal rains supported agriculture leading to higher yields across various field crops, fruits, and vegetables. The livestock industry also benefited from improved grazing pasture. Importantly, having four consecutive La Niña seasons was an unusual occurrence. The typical cycles are two seasons of higher rainfall followed by normal-drier seasons. Wandile Sihlobo, joined Newzroom Africa to discuss the potential impact of the forecast El Niño on South Africa’s agriculture. Please click here to peruse.

More than two million people go to bed hungry in South Africa. That’s according to Statistics South Africa. With the high cost of living, a lot of households find themselves battling to keep up with food prices. Wandile Sihlobo spoke to eNCA about this issue. Please click here to watch the interview.

For producers, the decline in wheat prices has raised concerns about a potential reduction in plantings. But this past week, we learned that South African farmers are reasonably optimistic about the 2023/24 season. In its recent data, the Crop Estimates Committee indicated that farmers intend to plant 542 600 hectares of wheat in the 2023/24 season, which is 3% up from the five-year average area planted (although down 4% y/y). In our view, such an area planted, combined with favourable weather conditions, would yield a solid harvest of 2,03 million tonnes. We assumed an average yield of 3,75 tonnes per hectare, which is a possibility if the weather conditions remain favourable throughout the season, as the forecasts suggest. Please click here to listen to this week's podcast by Wandile Sihlobo.

Agbiz Grain Quarterly keeps role players in the grain handling and storage industry informed of new developments and important technical and scientific information. The May issue features industry-specific content that includes information relating to fire protection compliance, buyer power regulations and much more.

Also in the May issue:

Please click here to peruse.

Less than half of workers employed in advanced economy central banks are women, but on average only a third of women are economists or managers, according to an International Monetary Fund (IMF) survey. Instead, women occupy 80% of administrative and HR roles, which shows that occupational segregation is quite pervasive. This is the first survey of its kind that we know of, with studies having so far focused on academia and the private and public sectors more broadly. Central banks can set high gender standards for other economic institutions and this work sheds light on how monetary authorities can improve their own performance.Read more in the linked IMF blog post.

The near and medium-term prospects for European agriculture are not good. “I think we’re going through historical change,” said Ramón Armengol, president of Cogeca. “We’re seeing the first effects of the war and climate change.” Across Europe, agricultural production is down, while farmers are being hit with the triple whammy of drought, market disruption caused by the war in Ukraine, and Green Deal regulation. That was the general message from the Copa-Cogeca, the EU’s largest farming organisation at a press conference on 2 May, given by Christine Lambert, president of Copa. Armengol said that recent drops in prices on fertiliser and energy are giving farmers greater margins, but overall, European agriculture production is down, particularly fruit, vegetables, beef, and lamb, a drop caused by high production costs and low prices. Read more in the linked article, first published on The European Conservative.

With an anticipated surge in avocado quantities (currently estimated at 20 million 4 kg cartons for export) and an early start of the 2023 season, the South African Avocado Growers' Association (SAAGA) initiated its promotional activities to develop the local market in early March. SAAGA states that South African exporters dispatched significant quantities during the initial season to reach the market ahead of the major influx of Peruvian avocados. Consequently, there was a higher abundance of avocados in the South African market. Going forward, export volumes will decrease, leading to reduced availability in the South African market. Nonetheless, due to a successful harvest, there should be ample fruit to satisfy local demand. Read more in the linked article, first published on FreshPlaza.

Currently, the El Niño-Southern Oscillation (ENSO) is in a neutral state. Forecasts suggest that it will likely remain in this state throughout the winter, with a higher probability of transitioning to an El Niño state in late spring (Jul-Aug-Sep). However, the influence of ENSO is expected to be limited in the upcoming seasons, except for the possibility of an El Niño impacting the following summer, if early predictions hold true. It is important to exercise caution as the ENSO forecast may change during winter, and monitoring is recommended at this stage. According to the multi-model rainfall forecast, above-normal rainfall is anticipated for most parts of the country during early winter. Notably, there is an expectation of below-normal rainfall for the south-west region and above-normal rainfall for the southern coastal areas during the mid-winter (Jun-Jul-Aug) and late-winter (Jul-Aug-Sep) periods. Read more in the latest edition of Seasonal Climate Watch by the South African Weather Service.

Port operations had a slow start this week due to the extended weekend, but they have since picked up pace. Various factors, such as adverse weather, continuous equipment breakdowns and shortages, load-shedding, roadshows, and congestion, contributed to delays. Fortunately, the backlogs at the Port of Cape Town have been cleared, and vessels were able to berth upon arrival this week. However, in Durban, the ATDF trucker protests resulted in some disruptions as port employees and transporters were prevented from entering or leaving the port. Additionally, equipment issues, particularly at Pier 2, led to an insufficient number of available bookings to meet industry demand. To address this, the ports of Ngqura and East London are collaborating and sharing marine resources since one of the tugs in East London is out of commission, causing concern among industry participants. Furthermore, on Wednesday, there were 29 container loads stuck on the corridor due to significant incidents of cable theft throughout the week. Read more in the latest BUSA Covid-19 Cargo Movement Update.

Thundershowers will persist over the summer rainfall region, predominantly affecting the central to northeastern parts, throughout the weekend and into early next week. As showers and thundershowers become more widespread, there will be increased cloud cover over the central to northeastern areas, leading to a decline in temperatures and cooler weather during the weekend and early next week. These anticipated wet conditions are associated with the movement of a sharp upper-air trough. Given the lower atmospheric temperatures and instability linked to this trough, some thundershowers may become severe and produce significant hail. However, this is a typical occurrence during this time of the year. Clearing is expected in these areas by Tuesday next week. For more details, please click here to access the latest edition of Cumulus, published by AgriSeker.

On 10 May 2023, the Executive Oversight Committee convened to discuss the completion of phase one of the Sugarcane Value Chain Master Plan and seek consensus on the next steps. Chaired by Minister Ebrahim Patel, the committee was established to supervise the implementation of the master plan and includes representatives from government departments and participants in the sugar industry. The committee meeting and the finalisation of the master plan coincide with a crisis in the milling sector. The recent entry of two millers into business rescue has had widespread ramifications across the industry. Notably, the business rescue practitioners responsible for these companies have announced defaults on financial obligations totaling R1.5 billion, placing growers and industry partners in a highly precarious financial situation with an uncertain future ahead. Read more in the linked media statement by SA Canegrowers.

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.