Business Unity SA (BUSA) notes with serious concern the blockage on the N3 by truck drivers and reports of disruptions on some of the alternative routes between Johannesburg and Durban. This is a recurring occurrence and BUSA has consistently appealed to government to take proactive measures to stop such blockages and arrest those that are responsible. It is very clear that our appeals have not been heeded and there appears to be no accountability in government for this and we do not see any consequences for those perpetrating these acts. The economic impact of such blockages is obvious, given that the N3 is a critical arterial for the transport of essential and strategic goods between Johannesburg and Durban, and to areas like Richards Bay. Please click here to read the full statement.

The Agbiz/IDC Agribusiness Confidence Index (ACI) moderated further by 2 points to 60 in the second quarter following a 12-point decline in Q1, 2022. This fall in sentiment is on the back of a range of factors including rising input costs, biosecurity concerns, hikes in interest rates, intensified geopolitical risks, as well as ongoing weakness in municipal service delivery and network industries. Still, a level above the neutral 50-point mark implies that agribusinesses remain broadly optimistic about operating conditions in South Africa. Therefore, Q2, 2022 results still reflect favourable conditions, albeit not as strong as the recent quarters. This survey was conducted in the first 10 days of June 2022 and covered agribusinesses operating in all agricultural subsectors across South Africa. Agbiz chief economist Wandile Sihlobo discusses the latest data in the linked document.

The Russian invasion of Ukraine has opened a new chapter in international relations, with important implications for the global economic order. The outbreak of large-scale warfare on European soil, with its associated human tragedies, brings back memories of the continent’s darkest times. Within three days of the invasion, the Group of Seven, consisting of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States, soon followed by other countries, deployed a range of economic sanctions against the aggressor. As discussed in our latest World Economic Outlook, the war and the associated economic sanctions will have a major impact on the world economy, slowing down activity and increasing price pressures. The linked IMF article uses an earthquake analogy to describe the effects of the Russia-Ukraine war "because the war reveals a sudden shift in underlying geopolitical tectonic plates".

The WTO's 12th Ministerial Conference (MC12) began on 12 June 2022 at WTO headquarters in Geneva. Ministers from across the world are attending to review the functioning of the multilateral trading system, to make general statements and take action on the future work of the WTO. Agriculture remains a sticky point in the world trade negotiations once again. Minister Thoko Didiza believes that the resuscitation of the Agriculture Round of negotiation is critical. Most importantly it is and should be about disciplining domestic support that distorts trade which is what developing countries, including South Africa, have been subjected to over the years. Minister Didiza opines that the current draft text on agriculture creates a basis for agreeing to a work program for the next Ministerial Conference. “It is important that the revival of the agriculture negotiation must not undo or dilute the gains that had been made in the previous rounds of negotiations, especially relating to support for resource-poor and rural farmers as in Article 6.2 of the current Agreement on Agriculture”, said Minister Didiza. Please click here to read the DALRRD media statement.

At Mpumalanga Agriculture’s annual congress held on 1 and 2 June 2022, the organisation presented Annelize Crosby, head of Legal Intelligence at Agbiz, with an honorary award. The award gives recognition to the exceptional contribution Annelize made over a 25-year period working for organised agriculture in the area of land reform and property rights. Recognition is also given to the continued work which Annelize does in this regard at Agbiz. From the Agbiz team, we congratulate Annelize on this worthy recognition.

The Employment Equity Amendment Bill has now been passed by both houses of Parliament and is awaiting the signature of the president. Once the president has signed the Bill, it will be gazetted and become law and a date for its coming into law will be determined. The Amendment Bill provides that the Minister of Employment and Labour will be able to determine numerical targets to be met for any economic sector. These sectoral targets may differentiate between occupational levels, subsectors, regions or other relevant factors. Prior to identifying national economic sectors or setting numerical targets the minister will consult with the Employment Equity Commission on the proposed sectors and sectoral targets and publish any proposals for public comment. Read more in the linked article by Agbiz head of Legal Intelligence Annelize Crosby and Thapelo Machaba, agricultural economist and policy analyst at Agbiz.

Periods of uncertainty tend to lead to countries taking drastic self-interested policy measures. Since the start of the Covid-19 pandemic, several countries have placed temporary bans on exports of grains, ostensibly to protect domestic consumers. In July 2021, China went as far as banning exports of fertiliser in an attempt to ensure adequate domestic supply. Such inward-looking policy actions often have a notable disruption on the highly interconnected global agricultural market. In the case of China’s ban on fertiliser exports, for instance, the impact was felt through a sharp rise in prices across the global fertiliser market as China is the second-largest fertilizer exporter by value after Russia, accounting for roughly 12% of global exports. As the world increasingly came to better manage the worst of the pandemic’s health aspects through the use of vaccination and other health measures, we saw a reversal of grain export bans by the likes of Vietnam and Kazakhstan. The G7 Agriculture Ministers had criticized the actions of banning exports at the time. Wandile Sihlobo discusses this topic in the linked blog post.

Business Day editorial, 14 June 2022, "Non-tariff barriers pose a growing challenge for SA farm exports", refers. In a letter to the publication, Agbiz chief economist states: It raises the importance of export markets for our growing agricultural sector. In a letter to the publication, Agibz chief economist Wandile Sihlobo states: I agree South Africa needs to increase its focus on growing its export markets for the agricultural sector. If we don't expand export markets, our efforts to boost production won't be fully rewarded. South Africa already exports about half of its agricultural products a year in value terms, and in 2021, the sector exports reached a record US$12,4 billion. To sustain this momentum, we need to broaden our export markets beyond the excellent presence we have in Europe, Africa, and parts of Asia. At the Agricultural Business Chamber of South Africa (Agbiz), we believe that China, India, Japan, the Kingdom of Saudi Arabia and Bangladesh are some critical markets for the government and private sector to explore. The consumer base in these markets has solid buying power, and the population are growing in some of them. In addition to trade policy matters, we have serious challenges domestically that too could hinder our export activity. A case in point is the deterioration in the functioning of the network industries – roads, rail, ports, water and electricity supply." Please click here to read Wandile Sihlobo's complete letter to Business Day.

Something important for global agriculture happened this past week but received minimal media coverage. The Chinese National Crop Variety Approval Committee released two standards that clear the path for cultivating genetically modified (GM) crops in the country. This has been the missing piece in the regulations for the commercial growing of genetically modified maize and soybeans in China. The government has two steps in these regulations. These are a “safety certificate” and a “variety approval” before crops can be commercially cultivated. Various genetically modified maize and soybean varieties have received the safety certificate since 2019. What’s been missing has been the “variety approval”. Now that hurdle has been cleared and commercialisation of genetically modified crops in China is a real possibility. Read more in the linked article by Wandile Sihlobo, written for and first published on The Conversation.

Increasing exports and investment in South Africa's agriculture and agribusinesses are central to the growth and sustainability of the sector. Hence, the Agricultural Business Chamber of South Africa (Agbiz) prioritises this area and thus regularly engages and participates in events of various embassies, international institutions and businesses to showcase South Africa's agriculture and agribusiness sectors. On 14 June 2022, the United States Department of Agriculture (USDA) held a virtual session spotlighting South Africa's agriculture and agribusiness. The event was attended by the USDA staff, American universities and businesses. Agbiz chief economist, Wandile Sihlobo, presented at the gathering about South Africa's agricultural and agribusiness conditions, detailing the sector's role in the economy, current production conditions, and potential areas of expansion that require investments. Read more in the linked document. 

Agbiz chief economist, Wandile Sihlobo, participated in a BBC conversation about the rising food insecurity and protectionism across the world. We are seeing the export bans of key agricultural commodities, all with the purported aim of protecting domestic consumers. The first significant agricultural exporter to introduce restrictions was Indonesia at the end of April, temporarily banning palm oil exports. This was a significant shock to the vegetable oil market because of Indonesia's significance to global supplies. This country accounted for an average of 54% of global palm oil exports in value terms over the past five years. Before this ban on palm oil exports, the impact of the Black Sea export disruption and tighter supplies the palm oil supplies in Asia have been visible in prices. For example, this past March, the FAO's Vegetable Oil Price Index was up by 23% from February to a new record of 249 points.

Fortunately, Indonesia has now reversed this export ban. Most recently, India has followed with similar steps announcing a ban on wheat exports. This has added further price volatility in the wheat market at a time when the 2022/23 global wheat stocks are expected to be tight as a result of the expected reduction in production in key areas of the EU and the Black Sea. You can access a short clip of the conversation here.

Economic prospects changed significantly in the three months since Russia invaded Ukraine. Not everything can be attributed to the invasion, but everyone will agree that it made the biggest contribution to the weaker economic outlook. Economists are worried that the world is facing a recession. Agbiz Grain general manager Wessel Lemmer discusses this subject in an interview with Jake Stols of PretoriaFM. Please click here to listen to the interview.

Last week saw the release of two standards that clear the path for the cultivation of genetically modified (GM) crops in China. Designed to control the authenticity and effectiveness of varieties of GM soybean and maize, they were released by the National Crop Variety Approval Committee, which sits under the Ministry of Agriculture and Rural Affairs (MOA). In China, GM crop varieties need to receive both a safety certificate and a “variety approval” before they can be commercially cultivated. Since 2019, 11 GM maize and 3 GM soy varieties, developed by both private companies and public institutions, have been granted safety certificates. But none has yet received variety approval due to the absence of standards. Now, that these are available, the approval and commercialisation of such GM crops are on the horizon. Read more in the linked article first published on China Dialogue.

Global production is down this month primarily on smaller crops in India and the European Union, only partially offset by an increase for Russia. Global consumption is lowered this month. Ending stocks are revised down mostly on lower supplies in India. Imports are nearly unchanged as higher imports for Iran and Pakistan are mostly offset by lower imports for Bangladesh and Sri Lanka. Exports are up for Russia, Argentina, and Uzbekistan, but mostly offset by reductions to India. The U.S. season-average farm price is unchanged at $10.75 per bushel. Please click here to read more.

Global 2022/23 oilseed production is forecast at nearly 647 million tons, slightly lower compared to May, as reduced sunflower seed in Ukraine and rapeseed in the European Union more than offset gains for soybeans in Ukraine and Zambia and rapeseed in Australia. Oilseed exports are raised on Australia rapeseed and Ukraine soybeans which exceed a reduction for Argentina sunflower seed. Global vegetable oil trade is slightly lower on reductions for Ukraine sunflower seed oil exports which more than offset gains for Turkey sunflower seed oil and Canada rapeseed oil exports. Global protein meal exports are slightly lower this month following reduced sunflower seed production in Ukraine as well as lower rapeseed meal in India. Global oilseed stocks are up nearly 1 million tons primarily on larger Argentina soybean stocks. The projected U.S. season-average farm price for soybeans is up 30 cents to a record $14.70 per bushel. Please click here to read more.

Considering that agriculture is the most expansive and intensive way in which people transform natural landscapes, the good news is that the amount of land globally devoted to food production may soon begin falling as population growth slows and agricultural productivity increases. "'We believe that projecting conservative values for population, affluence, consumers, and technology shows humanity peaking in the use of farmland,' argues Jesse Ausubel, director of the Program for the Human Environment at Rockefeller University, and his colleagues in their 2013 article 'Peak Farmland and the Prospect for Land Sparing.' Please click here to peruse.

With pork the most popular protein on Chinese tables, pig breeding can be very profitable with gross margins rising above 30% for some producers when there’s a shortage, driving farmers to expand capacity despite soaring costs. Still, even for the top producers, it’s not always easy to follow the right beat. China’s top five listed hog breeders recorded more than 39 billion yuan of net losses last year alone. Zhengbang represented just under half of that, while Wens Foodstuffs Group contributed about a third. Other companies that posted losses included Tech-Bank Food Co. and New Hope Liuhe Co. Tight liquidity is a common challenge in the industry. In Zhengbang’s case, a 1.6 billion yuan convertible bond maturing in 2026 is facing requests for early redemption this week. In addition, Tech-Bank Food told investors at the end of April that it was negotiating with a key supplier to delay some payments and that the top priority will be ensuring secure capital flows. Read more in the linked article by Bloomberg, first published on The Conversation.

High-speed roads that can carry goods to customers in far-off markets raise productivity, reduce poverty and are an important contributor to sustainable and inclusive economic development. This is why economists spend time trying to assess the state of the world’s roads through surveys and the like. IMF staff have developed a novel measure of road quality across 162 countries using Google Maps to determine the mean, or average, the time it takes to drive between large cities that are at least 80 kilometres (50 miles) apart. As the Chart of the Week shows, the world’s fastest roads are found in richer economies including the United States, Portugal, Saudi Arabia and Canada. The slowest roads are found in the poorest countries—another obstacle to inclusive growth. An interactive version of the map can be viewed here. Read more in the linked IMF blog post.

Farmers in the Netherlands have been angered by the government's plans for tougher measures that would drastically reduce emissions of nitrogen oxides. The Dutch government unveiled its goals on Friday, mandating reductions of up to 70% in many places and as high as 95% in others in a bid to protect nature -- or what the cabinet called an "unavoidable transition". “We have to emit so much less nitrogen, and unfortunately the agricultural sector emits a lot," explained Christianne van der Wal, Minister for Nature and Nitrogen Policy. "They have done an awful lot to emit less, but unfortunately that is not enough. It still needs to be reduced a lot more.” However, the decision is expected to lead to major upheavals in the country's multi-billion euro agricultural industry. Read more in the linked article, first published on msn.com.

The US Department of Agriculture’s Foreign Agricultural Service released its traditional short biannual report on global trade, production, consumption and stocks of apples, fresh grapes and pears for the 2021/22 season on14 June 2022.  With reference to South African apples, the FAS notes that production is expected to rise for a fourth straight year to a record 1.2 million tons. Volumes are up as new trees are coming into production and sufficient water for irrigation combines with good growing conditions throughout the year, leading to higher output. Many growers have also invested in netting to help manage impacts of weather and pests, resulting in higher yields. Greater supplies are expected by the analysts to boost exports to a record 625 000 tons. With regard to South African table grapes, the analysis expects SA production to production to reach record volumes for the third straight year as good growing conditions throughout the year and high‐yield varieties coming into production boost supplies to 380 000 tons. Growers are continuing to replace seeded with seedless varieties to meet export demand. However, after near‐constant growth since 2010, planted area is expected to remain flat as rising input costs check expansion. Despite record supplies, exports are expected to remain essentially unchanged at 320 000 tons as rising shipping costs and inefficiencies at the Port of Cape Town prevent greater shipments. The South African fresh pear industry production is projected by USDA to rise 35 000 tons to 510 000 tons for 2021/22, a third‐straight year of record output. New plantings continue to come online, while the season also saw good growing conditions and increased irrigation on good winter rainfall. Higher supplies are expected to lift exports only slightly to 260 000 tons as reduced shipments to Russia prevent greater gains. The report may be accessed here.

Port operations this past week continued as normal, with limited delays due to smoke (at Cape Town) and weather conditions (at the Eastern Cape Ports). Overall, ports recorded good container movements with high stack occupancy levels and decent truck movements. Most ports recorded vessels at anchorage, but for the most part, vessels did not register long stays at outer anchorage. There were intermittent equipment breakdowns, but operations seemed to continue relatively well. The industry is eagerly awaiting the re-opening of the first rail line on the Container Corridor line, which should improve the low rail movements in and out of the Durban Container Terminal. On the international shipping side, the latest container throughput figures show a significant reduction in April, after a strong rebound in global container volume in March. The spread of Omicron, the ongoing effects of Russia's war with Ukraine, and other accompanying constraints have pushed volumes down to their second-lowest level in the last twelve months, despite freight rates remaining astronomically high. Please click here for the full BUSA report.

The South African Chamber of Commerce and Industry's (SACCI) Business Confidence Index (BCI) recorded 89.3 in May 2022 – its lowest level since 85.7 in September 2020. The BCI declined from 95.6 in March 2022 to 93.7 in April and then further to 89.3 in May. This contributed to an uncertain business climate in April and May 2022. The BCI lost 6.3 index points between March 2022 and May 2022 and was 7.7 index points lower in May 2022 than in May 2021. The GDP data that was released lately indicated that the economy is catching up on the setbacks since the second quarter of 2020 by growing at 3% y/y in the first quarter of 2022. Please click here to peruse.

StatsSA’s recently released Quarterly Labour Force Statistics (QLFS) highlights that the Western Cape Province had overall positive employment growth of 1.5% (33 207) (q/q). At the same time, the provincial agricultural employment numbers show a significant increase of 49.8% in the first quarter of 2022 (y/y). A total of 67 581 primary agricultural jobs were created in the first quarter of 2022 (y/y). The agri-processing employment numbers increased by 13 647 in the first quarter of 2022 (y/y). Over the past two years, agriculture’s strong growth has driven job creation within the Western Cape agricultural sector. Read more in the linked article first published on FreshPlaza.

San Miguel (Argentina) and Citri&Co (Spain) have agreed to the transfer to Citri&Co of San Miguel’s operations in Peru and South Africa, alongside the exclusive international commercialisation of its fresh fruit from Argentina and Uruguay. San Miguel's operation in Peru is one of the main producers and exporters of citrus, avocados and seedless grapes in the country while also being a key citrus player in South Africa. Citri&Co, a European vertically integrated player sponsored by Miura Partners, strengthens its foothold in the Southern Hemisphere with this decision. It enables the company to continue growing internationally in destination markets such as the US, Middle East and Asia. Read more in the linked article, first published on FreshPlaza. 

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.

The latest issues of the Crop Circular, published by Croplife, include a review of the locust outbreaks over the past few years, what the regulatory situation is in terms of new breeding techniques, and what the newly promulgated draft EPR regulations mean for our members. Please click here to peruse.

We are looking forward to welcoming you to the Agbiz Congress 2022 that will take place from 22 to 24 June 2022 at Sun City. Our congress marks the gathering of more than 400 stakeholders in the Southern African agricultural and agri-food industry. As in the past, we are planning to bring together CEOs, senior management and board members, as well as key delegates from government, producer organisations, processors, academia and various other major role players for the Agbiz Congress 2022.

With the continued support from our sponsors, we will bring you a cutting-edge congress with world-class speakers. With the renewed possibility of hosting a face-to-face congress, we can assure you that the Agbiz Congress 2022 will be bigger and better than before and promises to be an event not to be missed.

Delegates can now register for the Agbiz Congress 2022. In line with government regulations, delegates will be required to be fully vaccinated or submit a negative PCR test 72 hours before the event. If you have already registered, our organisers will be in contact with you to verify your vaccination status. If you haven’t registered yet, please don’t hesitate to sign up as soon as possible. Please click here for more information.