As G20 ministers and central bank governors gather in Bali this week, they face a global economic outlook that has darkened significantly. When the G20 last met in April, the International Monetary Fund (IMF) had just cut its global growth forecast to 3.6 per cent for this year and next—and the IMF warned this could get worse given potential downside risks. Since then, several of those risks have materialised—and the multiple crises facing the world have intensified. The human tragedy of the war in Ukraine has worsened. So, too, has its economic impact, especially through commodity price shocks that are slowing growth and exacerbating a cost-of-living crisis that affects hundreds of millions of people—and especially poor people who cannot afford to feed their families. And it’s only getting worse. Read more in the linked IMF blog post.

In an environment of generally higher product prices for the consumer, the FAO's Global Food Price Index decelerating by 2% from May to 154 points in June is a welcome development. This third consecutive decline was mainly underpinned by softening in the prices of vegetable oils, grains and sugar. In the case of grains, the decline in prices from the higher levels we saw following the invasion of Ukraine by Russia is mainly on the back of improved wheat supplies following the harvest period in the northern hemisphere. The vegetable oil prices coincided with Indonesia's decision to reverse its policy proposals to limit the export volumes of palm oil. This policy reversal brought assurance of supplies' availability, which worried importing countries. Still, the global food prices are at reasonably elevated levels compared to last year, up 23% year-on-year (y/y). In the linked article, Agbiz chief economist Wandile Sihlobo discusses the latest data.

With the winter chill setting in, we have once again been reminded just how fragile South Africa’s electricity system is as increased consumption has been met with a fresh bout of load-shedding. For South Africans living in rural areas, this is nothing new. Aside from the broad supply-side issues which the whole country faces, rural towns often face the additional challenge of ageing transmission and distribution networks and roving blackouts due to municipal debt. This is certainly an irritation for most, but it has become one of the biggest challenges to sustainability for businesses operating in these areas. Solar energy is often touted as the way to go but the realities of generating one’s electricity are often more complicated than many may realise. At a recent Agbiz workshop, we zoomed into some of the factors that businesses should take into consideration. Read more in the linked article by Agbiz CEO Theo Boshoff.

South Africa's agricultural sector currently faces numerous challenges, ranging from foot-and-mouth disease, protectionism in the EU, rising farm input costs, and deteriorating network industries, amongst others. Still, the benefits of the solid production performance of the sector in the past two years, when commodity prices, specifically for grains and oilseeds, were elevated, are reflected in the machinery sales, which have been robust in the first half of the year. For example, tractor sales amounted to 4 133 units in the first half of this year, up 18% from the corresponding period last year. At the same time, combine harvester sales amounted to 213 units, up by 37%. Wandile Sihlobo discusses the latest data on agricultural machinery sales in the linked article.

The cost of living is rising and everyone is feeling the impact. Some are asking why South Africa exports food when millions live in poverty and prices are surging. Why not cater for South Africans first and block exports? Do we have sufficient food for ourselves before worrying about the global consumer? These are all fair questions. In short, South Africa has sufficient food supplies and mechanisms to ensure that we do not export too much food and risk creating shortages in the domestic market. South African consumers are a priority. The exports are essential for the sustainability of the farming business. However, one has to appreciate that the food price increases are not unique to South Africa. In May 2022, Zambia, Kenya, Brazil, the US and the EU had consumer food price inflation averaging more than 10% year on year. By comparison, SA’s consumer food price inflation averaged 7.8%. Read more in the linked blog post by Wandile Sihlobo or watch an eNCA interview on the same topic here.

A global food crisis is looming, so policymakers everywhere need to think hard about how to make food cheaper and more plentiful. That requires making a commitment to producing more fertiliser and better seeds, maximising the potential offered by genetic modification, and abandoning the rich world’s obsession with organics. Russia’s brutal war in Ukraine is making less food available because the two nations have been responsible for more than a quarter of global wheat exports and large quantities of barley, maize and vegetable oil. On top of punishing climate policies and the world emerging from the pandemic, prices of fertiliser, energy and transport are soaring, and food prices have climbed 61% over the past two years. Bjorn Lomborg, president of the Copenhagen Consensus and visiting fellow at Stanford University’s Hoover Institution, shares his views on this subject in the linked article, first published on Business Day.

Global fertilizer prices are at near record levels and may remain elevated throughout 2022 and beyond. Fertilizer prices account for nearly one-fifth of U.S. farm cash costs, with an even greater share for corn and wheat producers. Fertilizer accounts for 36 per cent of a farmer's operating costs for corn, and 35 per cent for wheat. These elevated prices could have implications for crop production in 2022 and 2023. The Russian invasion of Ukraine has exacerbated the already limited fertilizer supply situation and has triggered import-export restrictions that will compound shortage concerns. The United States is a significant producer of nitrogen and phosphorus yet imports large quantities of potassium-based fertilizers. Although fertilizer prices began increasing in 2021, many US producers were able to avoid the later surge in fertilizer prices caused by Russia’s invasion of Ukraine, because fertilizers for 2022 plantings were purchased in 2021. However, as the Russia-Ukraine war continues, the impact of fertilizer prices could likely take a heavier toll on 2023 agricultural production decisions, domestically and abroad. Read more in the linked agricultural trade report published by the United States Department of Agriculture (USDA).

Port operations this past week were characterised by general equipment delays and issues relating to load-shedding and weather delays. Our commercial ports were not generally busy or congested; however, equipment availability remains an issue. Cape Town Container Terminal is still dredging berth 601 while the Eastern Cape begins to make alternative plans to soften the blow of load-shedding, having little or no generator backup. Weather conditions caused minimal delays, and port operations continued as usual. On the international shipping side, significant supply chain disruptions continue, with the World Bank anticipating global trade growth to slow to ↑4% in 2022 – citing the war in Ukraine and a shift in global activity toward the less trade-intensive services sector as the main determinants. In addition, some high-volume ports are experiencing congestion six times worse than in 2010, with little to no expectation of a fix this side of 2023. Consequently, the average number of containerships waiting outside major ports is growing, with schedule rotation delays of more than 15 days on some major routes. Read more in the linked BUSA Covid-19 Cargo Movement Update.

The latest edition of SmartAgri Barometer published by the Western Cape Department of Agriculture is packed with news of diverse and exciting initiatives that all relate to tackling climate change and its impacts on people, the environment and the economy of the agricultural sector. The contributions attest to the hard work and passion for finding solutions within both the public and private sectors, including universities, NGOs and agribusinesses. Please click here to read the latest edition.

The inaugural Southern Africa Conference hosted by the International Fresh Produce Association (IFPA) is set to take place from 17 to18 August 2022 at the Century City Conference Centre, Century City, Cape Town. Building on the legacy of PMA's Fresh Connections, the IFPA South African Conference will move forward as a leading and essential event on the calendar of the fresh produce industry in South and Southern Africa. Attendees include commercial fruit and vegetable growers, exporters, retailers, wholesalers, market agents, fresh produce markets, input suppliers and service providers. This year's in-person conference promises to be a unique opportunity to catch up with old friends, make new connections, learn from international speakers and uncover new opportunities. For more information and to register, please click here.

The Western Cape Department of Agriculture (WCDoA) is recruiting a new chief director: research and technology development services. Please click here for a copy of the advertised post and the link to the post for prospective candidates to apply. Applicants should first register a profile on the Western Cape Government Careers website before they can apply for the post. Should you experience any difficulties, please contact the helpline at 0861 370 214.

Sentraal-Suid Co-operative Ltd (SSK), with its head office located in Swellendam, was founded in 1931 and has been serving its loyal members as a co-operative for the past 90 years. The business currently operates in the Western and Southern Cape as well as in the Garden Route, Langkloof and Karoo. SSK strives to ensure the prosperity and survival of the organisation and its members by continuously promoting and pursuing growth and diversification, whilst maintaining stability. Signium Africa has been exclusively retained to advise on appointing results-driven, ethical, assertive and decisive individuals with proven leadership skills to the following key positions: chief operating officer: commercial and chief operating officer: grain services. For more information on the position of COO: commercial please click here, and for the position of COO: grain services, click here.

The Citrus Growers' Association of Southern Africa, shares the latest news in the citrus industry in its weekly update - From the desk of the CEO. Please click here to peruse.

Read more about the latest developments and news in the pork industry in the South African Pork Producers' Organisation (SAPPO) newsletter, SAPPO Weekly Update.