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19/2024

16 May 2024

Northwest Africa wheat: Varying weather conditions

In Northwest Africa (the countries of Morocco, Algeria, Tunisia), the wheat forecast for marketing year (MY) 2024/25 is expected to have mixed results. The poorest conditions can be found in the large southern and central growing regions of Morocco, as well as in northeastern Morocco and adjacent areas of western Algeria. Conditions are better farther east in central and eastern Algeria, due to increased rainfall, particularly falling later in the season. Tunisia is expected to have the best conditions of the Maghreb, having received favourable rainfall throughout most of the growing season. Overall, Northwest Africa’s growing season started much later than usual in the fall of 2023 because rainfall was late arriving and limited in quantity, thereby delaying and reducing planted acreage. Harvest begins in southern Morocco in May, progressing north and east into Algeria and Tunisia. Harvest wraps up in Northwest Africa in the eastern highlands around the end of June. Read full World Agricultural Production by USDA here.

Challenges facing Central Banking in a changing world

In the midst of a shifting global landscape, central banking faces a myriad of challenges that extend beyond traditional monetary policy concerns. From geopolitical tensions to technological disruptions, policymakers must navigate a complex web of risks and uncertainties. The SARB's April 2024 Monetary Policy Review highlights the delicate balancing act central banks must undertake, aptly titled 'Walking a Tightrope'. Key global trends, including the rise of China, shifts in the global monetary system, and the resurgence of populism, underscore the evolving nature of the central banking mandate. Furthermore, heightened financial fragility and the growing salience of climate change present additional hurdles for central banks to address in their pursuit of stability and resilience. Click here to read full Monetary Policy Discussion Paper by Prof Raymond Parsons.

Agribusiness input into the Network Statement

Agbiz CEO Theo Boshoff attended recently attended a consultation hosted by the Interim Rail Regulator. The session received inputs on the first draft Network Statement which sets out the process of slot allocation, conditions and tariff proposed by Transnet’s Infrastructure Manager for access to the rail network. Agbiz’s presentation focussed on the fee methodology and makes out the argument that the fee structure is based on an over-statement of Transnet’s Regulated Asset Base. Consultations will also be held in Durban and Cape Town. Click here to read full Agribusiness input into the Network Statement compiled by Theo Boshoff. 

AGRIBUSINESS RESEARCH

Climate Change Bill and sectoral emissions targets

The Climate Change Bill was finally passed by both houses of Parliament on 25 April 2024 and is awaiting the President’s signature. The Bill provides a domestic legal framework for the commitments that South Africa made to curb global warming and climate change. There is a global climate change agreement in place, - the United Nations Framework Convention on Climate Change (UNFCC). The Kyoto Protocol and the Paris Agreement follow on the UNFCC. Countries have agreed in the convention and its protocols to reduce greenhouse gas emissions. South Africa is a party to both the United Nations Framework Convention on Climate Change and the Kyoto Protocol, having acceded to the Convention in 1997 and ratified the Kyoto Protocol in 2002. As a signatory, South Africa has to comply to the Kyoto Protocol. South Africa has not yet signed the Paris Agreement. Click here to read full report by Agbiz head of Legal Intelligence, Annelize Crosby.

AGRIBUSINESS RESEARCH

An excellent year for maize exports ends, and a likely more challenging one begins

April marked the end of South Africa's 2023/24 marketing year for maize. This marketing year corresponds with the 2022/23 production season, as the crop harvested mid-year in 2023 was marketed from then through to the end of April 2024. According to data from the Crop Estimates Committee (CEC), the 2022/23 production season was characterized by an excellent harvest of 16,4 million tonnes. This was because of large plantings and the favourable summer rainfall that boosted the yields. The ample harvest allowed South Africa to maintain its position in export markets. South Africa is the world's ninth largest maize exporter, trailing the US, Brazil, Argentina, Ukraine, Romania, France, Paraguay and Poland. Data from the South African Grains Information Services shows that in the 2023/24 marketing year, the exports amounted to 3,4 million tonnes, down by 6% from the previous year. About 63% of the exported maize was yellow, with 37% being white maize. Read full article by Wandile Sihlobo here.

South Africa's primary agricultural employment lifted in the first quarter of 2024

While South Africa's agriculture has had a rough start to the year, characterised by El Niño-induced drought, the employment conditions remain encouraging. The data released by Statistics South Africa today shows that employment in primary agriculture lifted by 6% year-on-year to 941 000 in the first quarter of 2024. This is also up 2% from the last quarter of 2023. Admittedly, the significant drought damage has been concentrated on the summer grains and oilseed regions, not across all agricultural subsectors, which somewhat explains the resilience in job data. Moreover, there could also be a lag in fully accounting for agriculture's financial pressures and the impact on employment after that. We can observe from the current data that jobs generally increased across most subsectors of agriculture in the first quarter compared with the corresponding period last year. Click here to read full SA Agriculture Labour Market update by Wandile Sihlobo. 

South Africa's agricultural machinery sales declined in April 2024

South Africa's tractor sales were down 8% y/y in April 2024, with 500 units sold. The combined harvester sales were down 75% y/y in the same month, with 26 units sold. The persistent decline in sales since the start of the year reflects the normalization of sales after a few years of robust activity. For example, South Africa's tractor sales for 2022 amounted to 9,181 units, up 17% y/y. This was the highest annual sales figure in the past 40 years. The combine harvesters also had an excellent performance of 373 units in 2022, up 38% y/y. This was the highest yearly sales figure since 1985. In 2023, the tractor sales were down marginally from the previous year, while the combine harvester sales held the last year's momentum. These past few years, the generally strong agricultural machinery sales were primarily supported by ample grains and oilseed harvests when prices were also favourable. Click here to read full Agricultural Machinery Sales update by Wandile Sihlobo.

Outlook for 2024-25 global grains and oilseed production is promising

On May 10, the United States Department of Agriculture released its flagship monthly report — the World Agricultural Supply and Demand Estimates. This report is keenly observed monthly by the agricultural market participants worldwide. It provides annual forecasts for supply and use of maize, wheat, rice, soybeans, sunflower seed, cotton and other grains and oilseeds. The report provides insight into these commodities in the US and the world. The department provides their first estimates for each new marketing year in May. On Friday, we received the first estimates for the 2024-25 season. But the observers of these reports typically have to read the first month’s data with caution; these data are still preliminary because the season has recently started in the Northern Hemisphere, and the Southern Hemisphere is still at the tail end of the 2023-24 season. Click here to read full article by Wandile Sihlobo for mg.co.za.

An end to El Niño and likely return of La Niña is positive for SA agriculture

After a scorching summer that led to significant crop failure, the El Niño cycle seems to have ended. Major weather forecasters, including the International Research Institute for Climate and Society (IRI) and the Australian Bureau of Meteorology, recently confirmed this view. We are currently in a neutral state, where neither El Niño nor La Niña is active. While an end to an El Niño is always a welcome development, it comes at a time when the 2023/24 summer crop season is at its tail end. Therefore, this update on weather conditions will not have a material impact on harvest prospects. If anything, ending an El Niño cycle would mean a normal transition into a winter season. Such normal weather conditions would favour the drying up of mature crops in the summer crop-growing regions, as well as improved harvesting conditions. It would also mean normal to favourable weather conditions for the winter crop-growing regions. Click here to read full article by Wandile Sihlobo.

SA agriculture should explore trade opportunities within Brics+

Export opportunities for South Africa's agricultural products are opening up within BRICS+ countries. Over the past two years, China, the Kingdom of Saudi Arabia, and Egypt have widened market access for various agricultural products from South Africa. Admittedly, Egypt and the Kingdom of Saudi Arabia have recently joined the BRICS+ grouping, and market access is part of the long-term bilateral engagements with South Africa. South Africa has access to selected fruits, wine, wool, meat and grains. However, South Africa aims to broaden market access in BRICS+ for most of the country's agricultural products. For this reason, through the 2023 BRICS Summit in Johannesburg and the prior engagements, South Africa prioritized trade as a significant point on the agenda for discussion. Click here to listen to full podcast – Agricultural Market Viewpoint with Wandile Sihlobo. 

AGBIZ GRAIN

A silver lining around economic clouds expands

In April, the International Monetary Fund (IMF) released its forecasts for South Africa and the world. Regarding interest rate expectations, there are encouraging signs of relief. High interest rates limit economic growth worldwide, but the IMF believes interest rates will decrease. Central banks such as the European Central Bank, the Federal Reserve Bank of America, and the South African Reserve Bank have raised interest rates in line with their anti-inflationary policies. Contrary to expectations, the sharp rise in policy rates by central banks has not led to a global slowdown in economic growth. As inflation is expected to fall, for example, to the Reserve Bank's target of 4.5% in 2025, central bank policy rates should also fall. This will contribute to lower interest rates. Although the outlook for economic growth is not overly optimistic, the expectation of better economic conditions based on an improvement in the global economy, lower interest rates, and inflation is a bright spot. Click here to read full article by Agbiz Grain general manager, Wessel Lemmer.

Discover insights in the May issue of Agbiz Grain Quarterly

Uncover the latest developments in the grain handling and storage industry with Agbiz Grain Quarterly's May issue. Delve into a variety of key topics, including the groundbreaking grain silo project in Egypt and the significant merger of VKB and GWK. Gain valuable insights into Transnet’s draft Network Statement and explore technical aspects of grain handling and storage for export. In this issue, discover in-depth articles on grain theft, the impact of import duty on oilcake, and the 2024 GOSA symposium's focus on progress and stability. Explore analyses of Egypt's grain silo project, the SAGL's external business review, and the implications of PPI on storage tariffs. Additionally, learn about the hazards and risks associated with grain fumigation, VKB and GWK's merger, and Agbiz Grain's application for amendments to maize grading regulations. Don't miss out on this essential resource for industry professionals. Access the Agbiz Grain Quarterly Digimag here. 

OTHER NEWS

Secure your spot at the 2024 Agbiz Congress for agricultural innovation

Discover more and sign up for the 2024 Agbiz Congress through our event website, where you'll find extensive details and information about this crucial gathering. Explore the website to stay informed and reserve your place at this indispensable event. Get all the details and register for the 2024 Agbiz Congress here.

South African avocado industry preparing to start first shipments to India, Japan and China

South African avocados have in the space of eight months gained market access to potentially reach over 2.5 billion people across India, China and Japan. It may seem like these big key markets suddenly opening, but it has taken around 15 years for South Africa to gain access to Japan, several years to India and a few years to China. This means only a short wait of a couple of more months this year remain for the last verification visits by for instance Chinese officials to take place in mid-June. Shortly thereafter, official shipments will start. Derek Donkin, CEO of the South African Subtropical Growers' Association (Subtrop), says they are busy finalizing the last details on the ground to be able to send the fruit. "We got new market access to China in August last year when the protocol was signed. At the moment we're waiting for the final Chinese inspection scheduled to take place in mid-June. Thereafter, we expect to send the first shipment of avocados." Click here to read full article derived from freshplaza.com.

Port inefficiencies must not be allowed to spoil citrus exports

Millions of cartons of citrus will in coming weeks make their way to SA’s ports as citrus season starts to ramp up. But a serious obstacle stands in the way of getting a record volume of our high-quality citrus to overseas markets — underperforming ports. Citrus exports generate R30bn in foreign revenue for SA every year, so it is essential that our ports (and the logistics network that feeds into them) function effectively to enable the citrus industry to make this significant contribution to the economy. From November to February backlogs and other logistical problems, especially at the Port of Cape Town, had a near disastrous effect on the deciduous fruit industry. While the 2023 citrus season (April to September) saw a relative improvement in port logistics performance compared with 2022’s, it is feared that citrus growers will face obstacles in getting their produce to foreign markets in 2024 similar to those of growers in the deciduous fruit industry. Click here to read full article derived from businesslive.co.za.

A shared South African industry-government vision makes for promising economics 

For the fresh fruit industry of South Africa, going solo and operating in silos are as outdated as relying on a horse and cart to get around, says Fhumulani Ratshitanga, CEO Fruit South Africa (FSA). "The R63 billion export-oriented fresh fruit industry of South Africa relies heavily on specific services by the South African Government. It's only through well-negotiated, favourable trade agreements and other market access requirements initiated by government, that the industry can successfully penetrate export markets around the world, while competing successfully. Therefore, the role of government greatly impacts the ability of the industry to navigate the competitive international fresh produce terrain, and to – consequently – contribute meaningfully to the national agenda," states Ratshitanga. Given the importance of these government functions, and the potential economic ramifications, alignment between industry strategic focus areas and government policies is critical. Click here to read full article derived from freshplaza.com.

South African blueberry season kicks off

The South African blueberry season has started in the north of the country, and it is expected that the first export shipments will get under way within four weeks. However, significant exports will only begin when harvesting in the Western Cape ramps up in the second half of the year. Meanwhile Berries ZA, the industry’s grower body, said that it was making good progress with efforts to increase its footprint in eastern markets. South Africa has already submitted key information to India to advance access and has received initial feedback, according to Brent Walsh, chief executive of Berries ZA. While it is generally accepted that the process with India will be competed relatively soon, it will take longer to gain entry to China, where all focus is now on access for South African stonefruit. Walsh said there was great anticipation in the Indian trade for the start of South African exports. Click here to read full article derived from fruitnet.com.

South African citrus growers gearing up for significant export season to the U.S.

South African citrus growers from the Western and Northern Capes are gearing up for a significant export season to the United States, with expectations to ship around 60,000 tons of citrus through Cape Town to Philadelphia. This marks a 9% increase over the 2018 record of 55,000 tons, according to the Citrus Growers Association. The association highlights that the 230 growers exporting to the US support approximately 30,000 jobs in rural areas, with an anticipated increase in employment due to the rise in exports. These exports are coordinated under Summer Citrus, a collective established in 1999 to streamline logistics, marketing, and sales to enhance market access during the US summer. Over the past decade, this initiative has boosted citrus exports to the US by 60%. Click here to read full article first published in freshplaza.com.

Current state of the South African supply chain and international trade

This update provides a comprehensive overview of the South African supply chain and international trade dynamics. It highlights challenges such as adverse weather conditions, equipment breakdowns, and shortages in commercial ports, impacting operations in Cape Town, Durban, and Eastern Cape Ports. Despite challenges, there's been a significant recovery in container throughput globally, though South Africa's regional containerised sector faces hurdles. The international air cargo market sees fluctuations, with growth compared to last year but still below pre-pandemic levels. Regional cross-border road freight trade shows mixed trends, with varying border crossing times. The energy sector's successes serve as a blueprint for logistics, urging accelerated private sector participation and Transnet's revamp. Rising freight rates underscore the urgency for South Africa to streamline its logistics to meet increasing demand and mitigate supply chain delays. Read the full update in the latest BUSA Cargo Movement Update.

Devastating Dzud: Mongolia's winter weather crisis

Winter weather extremes, locally known as dzud, affected most of Mongolia between November 2023 and March 2024, leading to significant livestock losses and damaging the livelihoods of a large number of pastoral households. The dzud, characterized by freezing temperatures and snowfall amounts nearly twice the longterm average, created an impenetrable ice cover over crop residues and pastureland that severely hindered livestock access to essential grazing resources. Consequently, most herders depleted their hay and fodder stocks by February/March, two to three months earlier than usual. With limited feed supply, the livestock body conditions deteriorated to alarming low levels, leading to widespread deaths by starvation and cold. Click here to read full GIEWS Update by the FAO.

Shifting Seasons: Impact on global cotton trade

Changes in cotton planting seasons, particularly in Brazil, prompt adjustments in international trade balances. The ICAC and USDA historically counted cotton production in the season it was planted, delaying availability for trade until the following season. However, the ICAC now shifts records forward one season from 2000/2001 onwards. Brazil's December planting cycle aligns with similar cycles in African countries like Kenya, South Africa, Tanzania, Zimbabwe, and Zambia. The 2023–2024 global cotton market outlook indicates 31.979 million hectares planted, with an average yield of 768.65 kg per hectare. Production stands at 24.581 million metric tonnes, consumption at 24.661 million metric tonnes, and ending stocks at 21.41 million metric tonnes, influencing trade dynamics and stocks-to-mill use ratios. Click here to read full Cotton Market Report April 2024.

MEMBERS' NEWS
The latest news from CGA

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. 

Hortgro News 

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.

Get the latest news from the FPEF

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.

UPCOMING EVENTS

Agbiz Congress 2024



The Agricultural Business Chamber (Agbiz) invites you to attend the Agbiz Congress 2024, 5-7 June 2024 in Sun City, to explore the challenges facing us in a global economy under the banner of ‘sustaining growth in changing global landscape’. Click here to learn more.


Showcase Beefmaster 

22 & 23 May 2024 | Stellenbosch Airshow 

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South Africa Wine Conference 2024

23 May 2024 | CCICT, Cape Town

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Berries ZA Annual Technical & Trade Symposium

30-31 May 2024

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Agbiz Congress 2024

5-7 June 2024 | Sun City

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Africa Agri Tech 2024

25-27 June 2024 | CSIR Convention Centre, Pretoria

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International Fresh Produce Association (IFPA) Southern Africa Conference

5-6 August 2024 | Century City Conference Centre, Cape Town

Learn more 


96th Congress of the South African Sugar Technologists Association

13 – 15 August 2024 | ICC Durban

Learn more and register

AGBIZ MEMBERSHIP
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.

Please visit the Agbiz website for more information

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