The time is now: richer nations must step up support for the poorest
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Finance ministers and central bankers will gather in Washington this week for the International Monetary Fund (IMF)-World Bank Spring Meetings. The meeting will cover a range of topics, such as the state of the global economy, financial instability risks, fragmentation, and the impact of Russia's conflict in Ukraine. However, it is important not to overlook the urgent needs of the world's poorest nations. The Poverty Reduction and Growth Trust (PRGT), which is the IMF's tool for supporting these countries, requires immediate replenishment. During the pandemic, the IMF has provided more than $24 billion in interest-free loans through the PRGT to over 50 low-income countries, such as Chad, the Democratic Republic of Congo, and Nepal. This support has been critical in preventing instability in these nations. Read more in the linked IMF blog post.
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Inflation can have significant and long-lasting consequences on both the economy and individuals. However, the way inflation redistributes money across different segments of society is complex. Policymakers must gain a better understanding of how inflation affects various populations in different regions to respond effectively to the sharpest surge in inflation in 30 years and address the harm done to households. In the April 2023 Fiscal Monitor by the International Monetary Fund (IMF), the effects of unexpected inflation on people's well-being from mid-2021 to mid-2022 are examined. During this period, food and energy prices rose earlier and more quickly than other prices. The chapter presents several lessons for policymakers on the impact of inflation on household budgets and how fiscal policy can curb inflation while safeguarding the vulnerable. Read more in the linked IMF blog post.
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Electricity distribution: a glimpse of what the future could be
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In his regular newsletter, political and trends analyst JP Landman writes: "My sense is that South Africans are utterly exhausted. So, to give readers a break, this month I am sharing something very different. A real-life story from the ground up. A former Eskom engineer, his wife and two engineering sons (the Bosch family) have developed a practical example of how electricity distribution in South Africa will change over the next few years. The engineer-father started working on the maintenance and administration of electricity distribution systems 30 years ago when Eskom embarked on its mass electrification programme of 350 000 houses a year. Eskom made losses on these programmes and then outsourced the management of these to private companies. The father began a family business, contracting his services to Eskom in Hammanskraal, north of Pretoria. The losses were turned around and the services became profitable. What was the secret of their success?" Read more in the linked article.
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Are retailers and food producers exploiting South Africans through higher-than-warranted food prices?
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The Competition Commission's recent report on agriculture and food markets dominated the conversations in the industry groupings last week. We live in a time of higher food prices, part of the global polycrisis triggered by the pandemic and Russia’s war on Ukraine, which caused seizures in supply chains and pushed up energy and food prices. In short, this is not unique to South Africa. This is also the wrong time to cry wolf, as the Competition Commission recently did in its Essential Food Price Monitoring Report. If you raise a false alarm when none is warranted, it undercuts your credibility when danger is afoot. Let us consider the real factors that have influenced recent food prices. Please click here to access an article by Agbiz chief economist Wandile Sihlobo and Prof. Johann Kirsten of Stellenbosch University's Department of Agricultural Economics, first published in Sunday Times.
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Record soybean forecast reignites confidence in agriculture's potential
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The agricultural sector has the potential to expand given the correct incentives and visionary alignment between the government and private sector. My confidence in agriculture's potential was reignited by the Crop Estimates Committee's 2022/23 soybean production forecast of a record 2,7 million tonnes, up 22% from the previous session. This is nearly three times the volume South Africa produced a decade ago. The expansion was occasioned by farmers' response to the animal feed crisis a decade ago. At that time South Africa was importing large volumes of soybean oil cake for its growing intensive livestock production systems. In 2011, these imports amounted to almost 1 million tonnes, compared with 1,2 million tonnes of domestic demand. The significant net importer status was due to a domestic soybean production deficit and limited capacity to process raw beans into oil cake and oil. South Africa had a soybean processing capacity of 860 000 tonnes in 2012, nearly on par with the soybean oil cake imports of that year (767 130 tonnes). Read more in the linked article by Wandile Sihlobo, written for and first published in Business Day.
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One of South Africa's great agricultural seasons
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We have now received additional comforting information that the erratic weather conditions at the start of the 2022/23 summer production season had minimal impact on South Africa’s summer grains and oilseeds. The data released by the Crop Estimates Committee last week places South Africa’s 2022/23 summer grains and oilseeds production at 19,6 million tonnes, up 2% from last month’s figure and 5% higher than the previous season. This is primarily on the back of expected higher yields as the overall planted area for summer grains and oilseeds are 4,4 million hectares, roughly unchanged from the previous season. The persistent load-shedding raised concerns that areas under irrigation could receive poor yields. Please click here to listen to this week's podcast by Wandile Sihlobo.
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Tripartite Council of Ministers adopt legal instruments to implement the Tripartite Free Trade Area
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The Council of Ministers of the Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC), and the Southern African Development Community (SADC) have adopted legal instruments to implement the Tripartite Free Trade Agreement (TFTA) once it enters into force. The focus is now on the ratification of the TFTA, which is currently short of three member/partner states signatures to achieve the 14 thresholds to enable it to enter into force. Currently, 22 tripartite member/partner states have signed the agreement out of which, 11, including, Egypt, Uganda, Kenya, South Africa, Rwanda, Burundi, Botswana, Namibia, Eswatini, Zambia, and Zimbabwe have ratified it. South Africa’s dtic has confirmed that South Africa still supports efforts to conclude the agreement. It can be noted that Africa is notable for the number of overlapping trade agreements that operate simultaneously. Please click here to peruse.
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As China develops a taste for African farm produce, why ‘green lanes’ still have a long way to go
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China is diversifying its imports from Africa beyond natural resources, in a bid to reduce trade deficits. Chinese consumers are now able to enjoy various types of raisins from South Africa, along with larger quantities of citrus, apples, and pears. This shift is attributed to President Xi's 2021 commitment to create "green lanes" for African non-resource exports, which would facilitate quicker inspection and quarantine processes and broader tariff exemptions. This initiative aims to increase African imports to $300 billion by 2024, up from $105,9 billion in 2021, with the goal of narrowing the trade deficit with China, the continent's most significant trading partner. In 2021, China purchased $5 billion worth of agricultural products from Africa. According to a study conducted by Development Reimagined, a Beijing-based international development consultancy, the green lanes are having an impact, with many African agricultural products making their debut in Chinese markets since President Xi's speech at the Forum on China-Africa Cooperation in November 2021. Read more in the linked article, first published on scmp.com.
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South Africa to use BRICS chair in 2023 to advance Africa's trade, development
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The 2023 chair of the Brazil, Russia, India, China and South Africa (BRICS) multilateral bloc, South Africa, intends to leverage its position to promote the interests of African states. The theme for this year's chairmanship is "BRICS and Africa partnership for mutually accelerated growth, sustainable development and multilateralism", as stated by Minister of Trade, Industry and Competition Ebrahim Patel during a South Africa BRICS Business Council Working Groups Briefing on 30 March. While developing trade with other BRICS partners is important, South Africa sees significant potential for growth in exporting goods to other African countries. It is worth noting that the African Continental Free Trade Area (AfCFTA) will boost intra-African trade. South Africa's potential to benefit massively from African trade agreements can be seen through the experience of the Southern African Development Community (SADC) Trade Protocol. Read more in the linked article, first published in Engineering News.
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World Avocado Congress 2023 gets underway in New Zealand
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The international avocado industry has converged on Auckland, New Zealand for the 10th World Avocado Congress. Around 1 200 delegates have registered for the four-day event from 33 countries, including South Africa. After a weekend of field days and visits to farms and orchards, the event was officially launched and the official speakers' programme got underway on Monday. South Africa is currently the fourth-largest producer of avocados in Africa, and the eighth-largest producer globally. Read more in the linked article first published on FreshPlaza.
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Trade performance review of the agricultural sector of South Africa
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The Department of Agriculture, Land Reform and Rural Development (DALRRD) has released its Trade Performance Review of the Agricultural sector of South Africa for 2022. The purpose of the annual report is to inform sector stakeholders about the status of South Africa’s trade performance of primary agricultural products by analysing trade flows for the calendar year 2022 compared to 2021. The report for example notes that South Africa’s exports of agricultural products increased by 18,6% in value terms. Key import findings are that imports of agricultural products increased by 16,3% p.a. in value terms. South Africa’s total import value of agricultural products from the world was R115 billion, with animal or vegetable fats and oils South Africa’s largest import product group with a value of R19 billion, compromising a 17% share of total agricultural imports. In the linked article, Agbiz Fruit manager Wolfe Braude shares the main trade insights. To access the full report, please click here.
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Agda hosts webinar on energy solutions
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The energy crisis has caused significant losses for farmers across the country and has left many without a source of income. Watch the Agda webinar to engage with experts and find innovative solutions for farmers to survive and thrive. The session was facilitated by Dawn Noemdoe, host of Food for Mzansi' Farmer's Inside Track podcast. Participating in the Agda webinar were Mike Levington from HydREgen Energy and Agbiz CEO Theo Boshoff. Please click here to peruse.
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Key market signals for the diary industry
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The world experienced a significant shift in February 2022 due to the invasion of Ukraine by Russia and the reactions of other countries. These events, coupled with the growing tension between the Western world and China, have resulted in a surge of uncertainty about the future of global developments. Moreover, these developments have had a negative impact on economic growth, food prices, commodity prices, energy prices, international trade, and trade relations between countries. The duration and outcome of the conflict initiated by Russia remains unknown, and further escalation and negative impact on global economic growth is possible. Even after the conflict ends, some of the negative consequences are likely to persist in both the medium and long term. In addition, the Covid pandemic has not disappeared, and it has recently disrupted economic activity in China. Read more in the linked report by the South African Milk Processors' Organisation.
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Transnet exceeds its annual grain-handling target at its Durban facility
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Focused revitalisation efforts across Transnet Port Terminals (TPT)'s agricultural sector business division had seen the Durban Agribulk Terminal handle its highest volumes in 10 years, the parastatal reported on Monday. TPT said in a statement that the agricultural sector of its business operations had exceeded annual budgeted volumes by 35%, handling 1 178 389 tonnes of maize, wheat, soybeans, and woodchips over the 2022/2023 financial year. The volume is also the second-highest recorded in the history of its terminal operations. It attributed the higher volumes to the refurbishment of the terminal’s ship loader, the acquisition of two ship unloaders in 2021, and enhanced customer communication, which led to transparency and integrated planning to improve landside and vessel performance. The terminal had also invested in updating customers on the stages of cargo intake and vessel loading across all three shifts until the vessel has completed working. Read more in the linked article, first published on FreightNews.
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BUSA Covid-19 cargo movement update
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A number of factors contributed to operational delays this week, including poor weather, recurrent equipment failures and shortages, extensive employee engagements, backlogs, delays, and congestion. However, inclement weather at the Port of Cape Town improved as the week progressed, resulting in reduced congestion in the later stages. The average berthing delay has decreased from 12 days at the start of the week to just over eight days. The Port of Durban faced multiple challenges this week, with employee engagements delaying up to 15 vessels on Tuesday. In terms of rail, vandalism and cable theft continue to cause extensive security incidents between Durban and Lions River, but the Ro-Ro terminal in Durban achieved an impressive throughput capacity of over 100 000 units above its installed capacity during the 2022/23 financial year. Furthermore, the industry should note that increased storage fees will be implemented from Saturday, 1 April 2023. Globally, the international maritime industry is working towards finding a balance as rates continue to decrease. Please click here to access the latest edition of the BUSA Covid-19 Cargo Movement Update.
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Wet conditions during Easter over the summer rainfall region
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Forecasters predict an increase in showers and thundershowers across the central and eastern regions in the coming days, especially during the Easter weekend and early next week. Autumn rains usually bring about an extended period of cloud cover and lower maximum temperatures during and after the rainfall. A sharp upper-air trough is responsible for this rainfall, and current forecasts indicate that it will traverse the country from the west coast on Saturday and exit the northeast by late Tuesday next week. Initially, the central to southeastern parts will experience precipitation, which is expected to move northeastwards. Thunderstorms occurring within the system may result in hail due to lower atmospheric temperatures and upper-air dynamics. The winter rainfall region and most of the southern to the western interior are expected to remain dry. Although the rain-causing system will bring lower temperatures over the weekend, most areas will experience mild to warm conditions for this time of the year. Read more in the latest edition of Cumulus, published by AgriSeker.
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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 t o peruse.
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International Sustainable Agriculture Production, Biotechnology & Engineering Conference
3-5 May 2023 | CTICC | Cape Town
International Fresh Produce Association (IFPA) Southern African Conference
2-3 August 2023 | Century City Conference Centre | Cape Town
Agbiz Grain Symposium
4-7 September 2023 | Virtual
AFMA Forum 2023
Theme: "Feed & Food – The 4th Agricultural Revolution"
5-7 September 2023 | Sun City | South Africa
Asia Fruit Logistica
6-8 September 2023 | Hong Kong
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- Agbiz is the only organisation that serves the broader and common over-arching business interests of agribusinesses in South Africa.
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- Agbiz research provides sector-specific information for informed decision-making.
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THIRD-PARTY WEBSITE LINKS TO THIS NEWSLETTER
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The Agbiz Newsletter may contain a few links to websites that belong to third parties unrelated to us. By making these links available, we are not endorsing third-party websites, their content, products, services or their events. Agbiz seeks to protect the integrity of its newsletter and links used in it, and therefore welcomes any feedback.
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