The International Monetary Fund (IMF) and World Trade Organization (WTO) emphasise the importance of adapting the international architecture to a rapidly changing world, as economic interdependence and international trade face increasing challenges. They highlight the positive impact of trade on global prosperity, productivity, economic growth, and resilience during crises. Fragmentation and trade restrictions could lead to significant economic costs and hinder technological advancements and knowledge transfer. The institutions propose a forward-looking trade policy agenda that focuses on inclusivity, green initiatives, and digital and services-driven trade. They stress the need for cooperation, updated global trade rules, and multilateral efforts to address global challenges and ensure the benefits of trade are shared broadly. Read the full article on the IMF website. 

The International Monetary Fund's African department hosted a conversation "Addressing Regional Challenges in Africa" between Nobel laureate Michael Kremer and the department's director, Abebe Aemro Selassie. The discussion was focused on the key measures policymakers can take to tackle regional challenges in Africa, including low productivity in agriculture, climate change, limited access to technology, insufficient investment, weak institutions, high unemployment, and income inequality. The conversation also addressed global issues such as climate change and pandemics. Click here to watch the full conversation on the political economy of reforms in Africa. 

Government and organised business have agreed to urgently work together in partnership to remove obstacles to inclusive economic growth and job creation. At a meeting on 6 June, the parties discussed appropriate engagement and oversight structures. The partnership, which commenced with energy via NECOM (National Energy Crisis Committee) has now expanded to logistics with the formation of a National Logistics Crisis Committee (NLCC), and an envisaged Joint Initiative to Fight Crime and Corruption (JICC). A cross-cutting communications programme will keep the nation informed of progress. The three programmes will be overseen by a Joint Strategic Operations Committee, chaired by the director general in the Presidency, and relevant secretariats are being constituted. Business will contribute resources, capacity, and support, in partnership with government’s own contributions. Read the full article first published on SAnews.gov.za here and click here to read the full presentation and feedback from the meeting with the president by Business For SA.

South Africa’s agriculture has had great consecutive seasons since 2019/20. The sector’s gross value added grew by 14,9% in 2020, 8,8% in 2021, and modestly by 0,3% in 2022. This was primarily supported by favourable weather conditions. The current season is also likely to deliver solid growth for the sector, with variation across subsectors. We already see prospects of large crops across the country. Export performance is likely to be robust, especially with a weaker rand exchange rate, which makes South African products more competitively priced in the global market. Still, the sector is not reaching its full potential. A number of factors stand in the way of even greater success and greater participation of black farmers in commercial value chains. Read the full article by the chief economist at Agbiz, Wandile Sihlobo, first published on The Conversation here.

With Transnet in the news weekly as it battles to improve logistic concerns, senior Transnet officials gave a presentation to the Select Committee on Public Enterprises on 2 June – detailing current and planned measures to improve rail and port operations. Transnet National Ports Authority (TNPA) chief executive Pepi Silinga outlined expected marine services equipment acquisitions between now and 2026 and mixed results in terms of key performance indicators. In an effort to significantly improve delivery, a series of 'game-changing' CAPEX investment projects worth R13,4bn over five years are planned across South Africa’s major ports, expanding berths and terminals, deepening channels, and making better use of existing space. Click here to read the full report.

Recent publications in the Government Gazette regarding the amended Employment Equity Act and draft regulations for water use licenses have sparked controversy in the agricultural sector. The employment equity targets set by the Minister of Employment and Labour for the agricultural sector are seen as arbitrary and not aligned with other relevant transformation factors. The regulations linking ownership and employment equity to compliance are at odds with the incentive-driven approach of broad-based black economic empowerment (B-BBEE). The mismatch with B-BBEE and the potential for constitutional issues raise concerns. Simplifying and aligning the B-BBEE codes with industry efforts and goals would promote genuine transformation without burdening the sector with litigation costs. Read the full article by Agbiz CEO Theo Boshoff here. 

On 19 May 2023, the Department of Water and Sanitation published a notice called Revision of Regulations Regarding the Procedural Requirements for Water Use License Applications and Renewals. The due date for comments is 19 July 2023. The draft regulations provide, among other things, that applicants for water licenses will have to initiate a pre-application engagement with the department first. During this engagement, the applicant will be advised on the need for authorisation, the type of authorisation, and the requirement and information needed to apply. Also, it will be indicated whether a site visit is required. Thereafter an application for a water use license can be submitted. The so-called responsible authority will then assess the application. A non-refundable application fee will have to be paid. There will be an opportunity for interested and affected parties to object to a license application. If the property is subject to a land claim, both the Land Claims Commissioner and the land claimants will have to indicate that they do not object to the license application. Read full comments on water use license regulation by Agbiz head of Legal Intelligence Annelize Crosby here. You can also watch the linked video in which Annelize Crosby dissects the proposed legislation for water licensing. 

The FAO Food Price Index, a measure of the monthly change in international prices of a basket of food commodities, declined by 3% in May 2023 from the previous month to 124 points. Importantly, this is 22% lower than the all-time high reached in March 2022, primarily driven by the softening prices of the cereals, dairy, and vegetable oil indices. These price trends will likely overshadow the impact of the rising sugar and meat prices in the near to medium term and thus keep the headline global food price index at relatively lower levels than a year ago. The price surge in sugar reflects the concerns about the tight global supplies in the 2022/23 season and the rising concerns over how the development of the El Niño phenomenon may affect the 2023/24 crops. Click here to read the full piece by Agbiz chief economist Wandile Sihlobo.

In an article by Agbiz chief economist Wandile Sihlobo for the World Bank's Africa Agriculture Policy Leadership Dialogue, the success of South Africa's agriculture sector is highlighted, despite facing various challenges. While the share of primary agriculture in the economy has declined, the sector has grown substantially in real terms, driven by new technologies, skilled farmers, and progressive trade policies. Private sector efforts, in collaboration with a favourable policy environment, have been crucial for the sector's resilience, even during the COVID-19 crisis. The article emphasises the importance of limited trade interventions, investments in infrastructure, embracing technological advancements, and supporting commercial farming as key lessons for other African countries. Read the full article here. 

The numbers released by Statistics South Africa earlier this week show that in the first quarter of 2023, agriculture gross value added sharply contracted by -12,3% quarter-on-quarter (seasonally adjusted). There are a few elements that explain this sharp contraction. First, the field crops had a tough start to the season because of excessive rains, which disrupted and delayed plantings by over a month in some areas. Second, the cattle industry still feels the adverse effects of foot-and-mouth disease, leading to a decline in slaughtering activity. We see similar issues of animal disease challenges also in the pork industry. Lastly, one can not underestimate the impact of load-shedding disruptions on poultry production. However, the government has since introduced various measures to ease the load-shedding burden on farmers, such as load curtailment, expansion of the diesel rebate to the food value chain, and, most recently, the launch of the Agro-Energy Fund. Read more in the linked article by Wandile Sihlobo.

There is a generally held view that South Africa will likely transition into an El Niño state in the upcoming 2023/24 summer season. However, the intensity of it, its duration, and its impact on crop production remain uncertain. Still, South Africa can be expected to have a smaller harvest compared with the past four years of consecutive ample harvests of field crops and horticulture. A critical factor to note is that the expected El Niño comes after four straight seasons of solid rainfall and good soil moisture. Therefore, in the event of a weak El Niño state, the current soil moisture conditions could support crop conditions and ensure another reasonably decent harvest as in 2018/19, which was also an El Niño period. Notably, the season before 2018/19 was not even as favourably wet as the past four seasons. We will have a much better view of the expected El Niño intensity in two to three months, which will also be closer to the summer crop planting. In the linked article, Wandile Sihlobo discusses the subject.

May 2023 marked a year since South Africa's Agriculture and Agro-processing Master Plan was completed and launched. This plan offers the government and the private sector a framework to grow the sector, build competitiveness, attract more investment, improve inclusion, and create jobs. This year should mark the start of the implementation phase. But progress so far remains limited, as the focus shifted to energy security at the beginning of the year because of the intensified load-shedding. With various interventions such as the load-curtailment, extension of diesel rebate, and Agro-Energy Fund under implementation, the sector should refocus its attention on the Agriculture and Agro-processing Master Plan and explore means of implementation. Admittedly, the operating environment in the sector is more challenging than when the plan was drafted. Still, neglecting or delaying implementation will only allow the present challenges to worsen. For more, listen to this week’s podcast by Wandile Sihlobo.

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 European Union (EU) underwent significant changes in its development and political goals during the review period. Policies such as the European Green Deal and a new political agenda to reinforce global influence were adopted. The EU economy experienced volatility due to the pandemic and the war in Ukraine but showed a strong recovery in 2021. The EU remained the world's top trader, with trade surpluses in services. The EU adopted a new trade strategy focusing on open and fair trade while seeking 'open strategic autonomy'. The EU prioritised multilateral cooperation and actively contributed to the reform of the WTO. The EU maintained a large network of regional and bilateral agreements and facilitated trade with developing countries through its GSP scheme. Read the full report by the WTO Secretariat here. 

The World Trade Organization (WTO) has launched the Global Trade Data Portal to tackle supply chain disruptions and food security risks exacerbated by the COVID-19 pandemic and the Ukraine crisis. The portal provides real-time insights into maritime grain trade, including an interactive grain and oilseeds dashboard updated every three hours. It offers visualisation tools based on WTO trade statistics and tariff data, as well as access to freely available trade-related statistics from other organisations. The portal aims to support informed decision-making by providing timely and detailed data for policy actions and rulemaking. The Global Trade Data Portal can be accessed here.

International Monetary Fund economist Kodjovi M. Eklou wrote a paper analysing the effects of dollar exchange rate volatility on firm productivity in emerging markets economies. Based on firm-level data from 16 emerging markets between 1998 and 2019, the study reveals that increased volatility in the dollar exchange rate reduces firm productivity growth. The findings highlight the influence of factors such as low financial development, high dollar invoicing, significant bilateral trade with the US, extensive collective bargaining coverage, and open capital accounts. Additionally, the study explores the role of foreign exchange interventions (FXI) and finds that they mitigate the negative impact on firm productivity. Read the full paper by Kodjovi M. Eklou here. 

Trade relations between the United States and Africa have centered on Congress’ Africa Growth and Opportunities Act (AGOA) since 2000, designed to foster the continent’s economic development and prosperity via preferential access to American markets. Yet in the last decade, African trade with the US has stagnated at much the same levels as it was when the Act was passed. David Luke and Jamie Macleod consider how the original impetus behind the AGOA can be revived. Until the Biden administration, US–Africa trade policy had been remarkably consistent. The centerpiece of this is the Africa Growth and Opportunities Act (AGOA), which has been in place since October 2000, through five separate US administrations. Click here to read the full article first published on London School of Economics site.

La Unió Llauradora expressed concern about the continuous loss of citrus harvest production in the Valencian community over the past three campaigns, with a further decline expected for the upcoming season. Lack of profitability and the impact of climate change are cited as the main causes. Last year, over 6 000 hectares of citrus were abandoned in the region. While average prices paid to producers and gross revenues increased, they do not compensate for the production reduction and rising costs. Additionally, citrus consumption in Spain has declined since the beginning of the pandemic. La Unió calls for government support and measures to improve the situation for citrus producers. Please click here to read the full article, first published on freshplaza.com

South Africa’s most important lifeline linking the Port of Durban with the industrial heartland of Gauteng appears to be as close as it has ever been to collapse under the weight of rampant cable theft and sabotage by criminal syndicates. What’s more, the country’s logistics utility, Transnet, has publicly admitted that it has its back against the wall, incapable of holding back the wholesale threat against its infrastructure. Rudzani Ligege, managing executive at Transnet Freight Rail (TFR), made no secret this week of how desperate the current situation is. To meet manufacturing demand and keep supplies flowing on the National Corridor Line (NCL) between the port and Gauteng, responsible for about 40% of South Africa’s GDP, TFR needs about 47 trains running daily on the NCL. Read the full article, first published on freightnews.co.za here.

Business Unity South Africa (BUSA) released the 139th update which details how the South African supply chain has experienced operational delays due to adverse weather, equipment breakdowns, vessel ranging, load-shedding, and congestion. Cape Town's port lost over 20 operational hours to strong winds, while Durban faced ongoing challenges. The rail network reported no incidents for the first time in weeks. The citrus industry expects a surge in volumes, and shipping company CMA CGM plans to introduce a container deposit fee. The global maritime industry is rebounding but hasn't reached pre-drop levels, with added capacity, lower rates, and subdued demand. Air freight remains slightly below last year's levels, and the market is expected to hit rock bottom soon. Border crossing times decreased, but operational constraints persist at certain points. Finally, a Mutual Recognition Arrangement (MRA) was signed among SACU member states to lower trade costs and enhance supply chain security. Read the full update in the latest BUSA Cargo Movement Update.

The El Niño-Southern Oscillation (ENSO) is presently in a neutral phase. However, forecasts suggest that it will likely transition into a weak El Niño state in late winter and early spring, eventually intensifying into a strong El Niño state for the rest of the summer season. It's important to exercise caution as ENSO predictions during this period are less reliable than at other times of the year. Monitoring ENSO forecasts from now until August/September is advised, as they become significantly more accurate during that time. Currently, the impact of ENSO is limited until the summer season begins, which is expected to be influenced by a strong El Niño state if early predictions hold true. According to the multi-model rainfall forecast, above-normal rainfall is expected for most of the country from winter (Jun–Jul–Aug) through early spring (Aug–Sep–Oct). Initially, this pertains mainly to the southwestern regions during winter, but it also becomes relevant for the eastern coastal areas during spring. Read more in the latest Seasonal Climate Watch, published by the South African Weather Service.

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.