The South African economy experienced a growth of 0,4% in the first quarter of this year, hindered by power outages, volatile commodity prices, and a challenging external environment. Projections suggest a significant decline in real GDP growth by the end of the year, with slow progress in reducing unemployment, which remains close to a record high of 32,9%. To address the energy crisis caused by the mismanagement of Eskom, the government has eased regulations to encourage private sector investment and implemented a debt relief plan. To achieve inclusive and sustainable growth, further reforms are necessary, including improving energy and logistical infrastructure, reducing barriers to private investment, addressing labour market rigidities, and combating crime and corruption. Read the full article by the South Africa team at the International Monetary Fund African Department here. 

The United States Department of Agriculture (USDA) is investing $320 million to create new markets for agricultural producers and food businesses in 19 states as part of President Biden's Investing-in-America agenda. The investments aim to expand processing capacity, create fairer markets, and generate more revenue streams and market opportunities. The USDA secretary, Tom Vilsack, emphasises the goal of supporting farmers, connecting business owners to new markets, and building a resilient economy. The funds will be distributed through four programmes, including the Food Supply Chain Guaranteed Loan Programme, Meat and Poultry Intermediary Lending Programme, Business and Industry Loan Guarantee Programme, and Rural Economic Development Loan and Grant Programme. These initiatives aim to strengthen the food supply chain, support independent meat processors, enhance access to business capital, and fund rural projects for employment creation. Read the full article, first published on FreshFruitPortal.com here.

The International Finance Corporation (IFC) conducted a high-level roundtable dialogue on accelerating private sector development and financing of climate-smart agriculture (CSA) projects in South Africa. Participants discussed innovative financing approaches, CSA technologies, and policy coordination. The discussions validated the conclusions of the issues paper and will inform a roadmap for the sector. Follow-up discussions with stakeholders are ongoing to shape recommendations, which will act as a template for action and enable the development and financing of CSA projects. Agbiz members are invited to provide feedback on the issues paper and roundtable summary, and requests you to please email them to bphillips1@ifc.org by 7 July 2023.

Africa relies on imports for 85% of its food consumption, as reported by the United Nations Conference on Trade and Development. President Cyril Ramaphosa, during the African peace mission, emphasised the negative impact of Russia's invasion of Ukraine on Africa, leading to increased prices of grain, fertiliser, and fuel. Agbiz chief economist, Wandile Sihlobo, discussed Africa's dependence on Russia and Ukraine for grain and explored the potential for the continent to achieve self-reliance. Watch the Newzroom Afrika interview with Xoli Mngambi here.

From a maize supply perspective, South Africa is in a relatively strong position. According to recent estimates by the Crop Estimates Committee, the country's 2022/23 commercial maize production could reach 16,1 million tonnes, up 5% year-on-year and the third largest on record. Given that South Africa's annual maize needs are roughly 12 million tonnes; the country could have over 3 million tonnes for export markets in the 2023/24 marketing year that started in May (this marketing year corresponds with the 2022/23 production year). This ample harvest materialised through farmers' persistent efforts to plant even beyond the optimal planting window, which closed in December before the entire area of 2,6 million hectares was planted as heavy rainfall disrupted farmers' activity. Click here to read the full article by Agbiz chief economist Wandile Sihlobo.

We continue to see a mixed picture in South Africa's agricultural machinery sales. For example, tractor sales were down by 13% y/y in May 2023, with 655 units sold. Meanwhile, combine harvester sales were 65 units, up 23% y/y. The robust combine harvester sales reflect the expected large summer crop harvest. As mentioned above, South Africa's 2022/23 maize harvest is estimated at 16,1 million, 5% higher than the 2021/22 season's harvest and the third-largest harvest on record. The soybeans harvest could reach a record 2,8 million tonnes. That said, South Africa's agricultural machinery sales will likely cool off this year, following a few years of excellent activity. As we stated a few times, South Africa's tractor sales for 2022 amounted to 9 184 units, up 17% y/y and the highest annual sales for the past 40 years. The combine harvester sales amounted to 373 in the same period, up 38% y/y and the highest yearly sales figure since 1985. Read the full report by Wandile Sihlobo here.

South Africa's consumer food inflation decelerated to 12,0% in May 2023 from 14,3% in the previous month. The food product prices primarily underpinning this moderation are bread and cereals; meat; fish; oils and fats; and fruit. We expect consumer food inflation to continue decelerating in the second part of the year. As we stated in our previous notes, the red meat prices, which have softened at farm level, should continue on this trend at retail level in the coming months. Fruit prices will likely remain on a similar declining trend as harvesting across South Africa continues, and domestic supplies have improved. The decline in 'oils and fats' products is in line with what we are seeing in the global environment, as South Africa still imports its palm oil usage. For example, in May 2023, the FAO's vegetable oil price index was at 119 points, down 48% y/y. Click here to read the full article by Wandile Sihlobo.

Wandile Sihlobo engaged in an insightful conversation with broadcast and financial journalist Alishia Seckam. They delved into the factors that hinder South Africa's agricultural success and examined the impact of agricultural reforms and government programmes on the sector's progress. Don't miss this enlightening dialogue featuring esteemed speakers. Listen to the interview here and watch the discussion here. Expand your knowledge and gain valuable insights into the challenges and opportunities in South Africa's agricultural landscape

Forecasts of an El Niño occurrence in the 2023/24 summer season do not necessarily equate to a bad agricultural season. The upcoming season of possible below-normal rainfall, that is, El Niño, follows a rare consecutive four years of heavy rains that have improved soil moisture and natural grazing veld. This means there is a natural cushion for agricultural activity even if the rains are below the average (typically about 500 mm) in South Africa. What will be necessary, however, is for the showers to fall in critical periods, such as seed germination and pollination stages of growth, which are all essential for crop growing. It would not be South Africa's first time in such a fortunate position. Read the article by Wandile Sihlobo first published on businesslive.co.za, alternatively listen to Agricultural Market Viewpoint.

Agbiz Grain is seeking a service provider to fulfil various contractual responsibilities. These include establishing a collaborative forum for training providers, supporting skills development providers (SDPs) with accreditation and learner registration, assisting in the accreditation of assessment centres, managing learner registrations for the external integrated summative assessment (EISA), and preparing assessment centres for EISA administration. Applicants should have experience in the SETA and QCTO environment, knowledge of grain handling, facilitation and assessment skills, strong planning and organising abilities, effective communication, attention to detail, and prioritisation skills. Interested parties can submit their CVs/proposals before 30 June 2023. Please click here for more information and contact details. 

The recent collapse of the Turkish currency, the lira, following the presidential elections is expected to impact fruit and vegetable trade in the region significantly. The lira has depreciated by 2,7 times against the US dollar over the past two years. This depreciation stimulates exports and limits imports, leading to a projected increase in Turkish fruit and vegetable exports. Turkey is the largest exporter in the region, with annual export revenue exceeding $6 billion. The country's influence on vegetable, fruit, and nut trade is substantial. Potential export growth is anticipated for greenhouse tomatoes, cucumbers, cherries, apricots, peaches, plums, dried fruits, and watermelons. Click here to read the full article.

The EU and Kenya have concluded negotiations for an economic partnership agreement (EPA) that will boost trade and create new economic opportunities. This comprehensive trade deal includes provisions for sustainability, climate protection, environmental protection, and labour rights. Kenya, being a pioneer in sustainability efforts in Africa, has played a leading role in climate initiatives and is a reliable ally in the fight against climate change. The EPA reflects the EU's new approach to trade and sustainable development. The agreement will fully open the EU market to Kenyan products, encourage EU investment in Kenya, and provide legal certainty and stability. The EPA also includes provisions on labour matters, gender equality, and the fight against climate change. The agreement will undergo legal revision before being signed and ratified by both parties. Read the press release from The European Commission here.

There is increasing pressure on the government to enhance its efforts in addressing the inadequate road infrastructure in the country. The deteriorating condition of our roads is creating challenges in the transportation of goods and services, negatively impacting the economy and social sectors, including healthcare in underdeveloped communities distant from hospitals. Experts argue that private investment is crucial for achieving infrastructure targets. For a comprehensive discussion on this topic, click here to watch the CEO of Agbiz, Theo Boshoff, and the CEO of Senwes and Agbiz chairperson, Francois Strydom, in an interview with Anlie Hattingh on eNCA.

The World Economic Forum and its partner institute, Business Unity South Africa (BUSA), invite you to take part in the Executive Opinion Survey 2023/24 to assess the level of competitiveness of South Africa in an international comparison. This annual survey is a major component of the World Economic Forum’s Global Competitiveness Report, as well as other WEF insight pieces. The survey provides the key ingredient that turns the Global Competitiveness Report into a representative annual measure of a nation’s economic environment. A truly unique source of data, the Survey has also long been used by numerous international and non-governmental organisations, investors, think tanks, and academia for empirical and policy work. Please follow this link to complete the 2023/24 survey.

Business Unity South Africa (BUSA) released the 141th update on the South African supply chain and international trade providing an overview of recent developments. This update provides an overview of the South African supply chain and international trade. Port operations faced challenges due to adverse weather, equipment breakdowns, and load-shedding, causing delays and congestion. Global maritime capacity increased, resulting in lower rates and spare capacity. Demand for raw materials weakened globally, while air cargo tonnages and rates decreased. Border crossing times in the region increased significantly, causing delays. The operational challenges highlight the urgent need to improve the logistics network for sustainable economic growth and development. Click here to read the full update.

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.