The International Monetary Fund (IMF)'s latest World Economic Outlook forecasts that growth will slow from 3,4% last year to 2,8% this year. Growth is then expected to accelerate to 3% next year. Risks to the outlook are heavily skewed to the downside, with heightened chances of a hard landing. In a plausible alternative scenario with further financial sector stress, global growth would decelerate to about 2,5% in 2023. Looking further ahead, growth is expected to remain around 3% over the next five years. This baseline forecast of 3% five years ahead for 2028 makes it the lowest medium-term growth projection since 1990, and well below the average of 3,8% from the past two decades. Please click here to peruse.

Amid a global slowdown, growth in sub-Saharan Africa (SSA) is expected to decelerate to 3,6% before rebounding to 4,2% in 2024 in line with global recovery, subsiding inflation, and a winding down in monetary policy tightening, according to the latest International Monetary Fund (IMF) regional economic outlook for sub-Saharan Africa published recently. This will be the second consecutive year that SSA has recorded a lower rate of growth than the previous year. “Growth across the region varies from country to country. Some countries, particularly those in the East African Community, or non-oil resource-intensive countries, are expected to fare better but some major economies bring down the average SSA growth rate, like South Africa, where growth is projected to decelerate sharply to only 0,1% in 2023,” said Abebe Aemro Selassie, director of the IMF’s African Department. Read more in the linked IMF media statement. You can access a video of an IMF press conference on this topic here.

The rise in the annual consumer price inflation in March from 7,0% to 7,1% was contrary to market expectations, which had anticipated that the CPI might now have shown a modest decline to about 6,7%. Food prices are the main culprit. The rate of inflation, therefore, at 7,1% remains well above the South African Reserve Bank (SARB)’s target range of 3% to 6%. As several analysts had already pencilled in a further rise of 25 basis points (bps) in interest rates at the next Monetary Policy Committee (MPC) in May on their expected lower rate of inflation, it is now even more likely that the MPC will continue to take a hawkish line then. This must be seen against a background in which the SARB has now raised borrowing costs by a cumulative 425 bps since the interest rate-raising cycle commenced in November 2021. The repo rate is now at its highest since 2010. Read more in the linked article by Prof. Raymond Parsons, economist at the North-West University Business School.

Agbiz has rejected recent reports released by the Competition Commission on agriculture and food markets, stating that the claims made are not substantiated by the cited data. Agbiz Grain general manager Wessel Lemmer discussed this subject in the linked video. For additional background, please click here to read an essay by Agbiz chief economist Wandile Sihlobo and Prof. Johann Kirsten of Stellenbosch University's Department of Agricultural Economics on this subject.

So much has been written and said regarding expropriation and the Expropriation Bill over the past number of years, and yet, there still seem to be many misconceptions about the bill and what it is trying to achieve. The possibility of government or some organ of state taking private property against the will of the owner understandably instils fear in and resistance from individuals and companies. The state is powerful and the idea of the state targeting one’s property for expropriation leaves people feeling very vulnerable. Having said that, expropriation is internationally entrenched as a legitimate part of the functions of a state, and is recognised as such, even by the United Nations. Read more in the linked article by Agbiz head of Legal Intelligence Annelize Crosby, written for and first published on Daily Maverick.

The data released by Statistics South Africa this week shows that consumer food price increases accelerated by 14,4% in March 2023 from 14,0% in the previous month. The food product prices that increased notably were milk, eggs, and cheese; fruit; vegetables; and sugar, sweets and desserts.  We expect consumer food price increases to remain sticky at relatively higher levels for the coming month, which will likely be a peak. There could be some moderation from around May and into the year's second half. Agbiz chief economist Wandile Sihlobo discusses the latest inflation data in the linked article.

This soil moisture update from World Weather Inc. is worth monitoring from time to time. Do not worry about drier conditions in much of the regions of South Africa. We are in the winter season. But, one should focus on the Western Cape, a winter rainfall region. The key message of this particular update is that the recent rains have helped improve soil moisture in the Western Cape, an important development ahead of the winter crop planting period. Farmers across the Western Cape have started to prepare the land for the 2023/24 winter crop season. The crops include wheat, barley, canola, and oats. In other provinces such as the Northern Cape, Free State, Limpopo, and Eastern Cape, where wheat is produced under irrigation, and the planting will gain momentum from the end of May. In the linked article, Wandile Sihlobo discusses the World Weather Inc. soil moisture update.

South Africa's livestock industry has faced numerous challenges over the past few years. One of these was the rise in feed prices since 2020, especially for maize and soybeans. The rise in animal feed prices coincided with a worsening in consumers' financial strain due to the damaging effects of the pandemic. Thus, we saw a decline in the demand for red meat products as consumers opted for relatively cheaper forms of protein. Moreover, the spread of foot-and-mouth disease (FMD) to six of South Africa's nine provinces for the first time in history was another challenge for the industry. This brought temporary bans in certain export markets, extending to auctions and livestock movement, mainly cattle, for some time in 2022. Read more in the linked article by Wandile Sihlobo.

Wandile Sihlobo joined eNCA to discuss the emerging disconnect between South Africa's consumer food price inflation path and much of the world. He also elaborated on general food supply availability in the context of load-shedding and shared views about our consumer food price inflation outlook for the rest of the year. We expect South Africa's consumer food price inflation to soften in the year's second half. This discussion is available here.

April is an important month in South Africa's agricultural sector, especially for field crops. Later this month, farmers in the Western and Northern Cape, Free State, Limpopo, and other winter crop growing regions will start preparing the land for 2023/24 winter wheat, canola, barley, and oats production. For now, it is unclear how much area will be planted for each crop. The Crop Estimates Committee (CEC) will release the farmers' intentions to plant data, and key figures for the potential area plantings, on 26 April. We expect most crops' plantings to exceed the five-year average area. Please click here to listen to this week's podcast by Wandile Sihlobo.

The United States Department of Agriculture’s Foreign Agricultural Service has released an annual report on South Africa’s oilseeds and products sector. The report notes that South Africa has experienced an upsurge in oilseed plantings over the past 20 years with a near nine-fold expansion in soybean area. The USDA internal analysis is that a positive trend in soybean plantings will continue in marketing year 2023/24 with area and oilseed production reaching a historically high level of 1,8 million hectares and 3,6 million metric tons, respectively. Exports of oilseeds could reach a record high of 800 000 metric tons in marketing year 2023/24. Please click here to peruse.

The African Export-Import Bank (Afreximbank) says the share of intra-African trade in the bank’s portfolio has jumped on the back of a US$20bn disbursement meant to drive trade within the continent. The Cairo-headquartered bank is on a drive to boost intra-African trade, which at 18% in 2021 is below Europe (68%) and Asia at 59%, according to the latest data. Afreximbank president Benedict Oramah said the Pan African bank has made intra-African trade finance the cornerstone of its interventions and has shown that it is not as risky as historically portrayed. Read more in the linked article, first published on Business Times.

The Western Cape Department of Agriculture (WCDoA) and Potatoes SA recently signed a three-year Memorandum of Understanding (MOU). Potatoes are the most common staple food consumed by most people in South Africa to prepare various meals. This sector employs an average of 55 000 people. The country’s leading producing regions of potatoes are Limpopo, Free State, Western Cape, Mpumalanga, Kwa-Zulu Natal and Eastern Cape. According to the head of the WCDoA, Dr Mogale Sebopetsa, the MOU commits both parties to grow this potato industry to advance economic growth and increase employment opportunities. “The MOU undertakes to build capacity, facilitate access to markets, and offer skills development programmes to enable mentorship to land reform beneficiaries within the potato sector.” Read more in the linked article, first published on FreshPlaza.

The first of this season’s avocados from South Africa arrived in the European market in week 10, the total export is expected to be 80 000 tonnes, up 23% on last year. “Volumes out of South Africa will be up this year due to new plantings coming into commercial volumes,“ said Derek Donkin, CEO of the South African Avocado Growers Association (SAAGA). “This growth is likely to continue for a few years.” The EU and UK markets seem to be holding up and exporters are trying to get volumes in there before the big volumes from Peru start arriving from week 17. Read more in the linked article first published on FreshPlaza.

Another cold front will move across the southern to central parts and result in cool to cold conditions, especially on Saturday morning when light frost may again occur over parts of the interior, including parts of the summer-grain production region. This will however be followed up by a pattern that will result in warming across the country, with above-normal temperatures for this time of the year following the weekend. Unlike the previous weekend, the interior will remain largely dry. The below-normal minimum temperatures are associated with the recent atmospheric circulation patterns akin to El Niño conditions. Read more in the latest edition of Cumulus, published by AgriSeker.

On the eve of the 2023 citrus season kicking off, the Citrus Growers’ Association of Southern Africa (CGA) has written to Minister of Trade, Industry and Competition Ebrahim Patel and Minister of Agriculture, Land Reform and Rural Development Thoko Didiza requesting an urgent update about the government’s interventions to help resolve the current impasse between South Africa and the European Union (EU) concerning the new false codling moth (FCM) regime governing the importation of South African oranges to the region. Despite months of consultations between both parties at a World Trade Organization (WTO) level, it appears very limited progress has been achieved to avert the crisis that will face the industry should growers have to implement these new regulations when oranges start being shipped to European markets in less than two weeks’ time. Read more in the linked CGA media statement.

SA Canegrowers is disappointed by the 8% drop in the final RV price (the price that growers receive for the cane processed) for the 2022/2023 season. This is mainly a result of the failure of Tongaat Hulett (THL) to pay more than R900 million due to the South African Sugar Association (SASA) at the end of March 2023, and a further default by the Gledhow mill which is also in business rescue. These defaults are in violation of the Sugar Act and Sugar Industry Agreement and have lowered growers’ revenue, placing thousands of small-scale and commercial growers in danger of losing their businesses. In total, the defaults will cost the industry R1,5 billion, of which R1 billion is deducted from the growers’ proceeds (the RV price). Read more in the linked media statement by Andrew Russell, chairperson of SA Canegrowers.

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.

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.