e-Newsletter
8/2022
3 March 2022
Kindly note that from today onwards, the weekly Agbiz newsletter will land in your inbox on a Thursday morning. Enjoy the read!
South African fruit has big exposure to Russian risk
In response to Russia's invasion of Ukraine, credit insurers are withdrawing their cover and some shipping lines (for instance MSC, Ocean Network Express, Hapag Lloyd, Maersk) temporarily halt bookings to and from Russia, forcing South African exporters to stop packing fruit destined for Russia. There are shipments of South African fruit still under way to Russia with further limited volumes expected to still be shipped to Russia, depending on the availability of vessels, credit and marine insurance and whether food is exempt from sanctions. According to an article on FreshPlaza, all containers with destination Russia were blocked in EU ports during the past weekend, but on Monday evening the decision was reversed. Essential products such as fruit will now be allowed to go through after inspection for sanctioned cargo (such as aircraft parts) prior to release for Russia. Read more in the linked article, first published on FreshPlaza.
Small business organisations in South Africa: why are they being ignored?  
Government has committed itself to developing small enterprises as a way of growing the economy, making it more inclusive, creating jobs, and accelerating transformation goals. The establishment of the Department of Small Business Development (DSBD) in 2014 was advanced as a signal of its intent to achieve these outcomes. Currently, the department spends R2 billion annually on various initiatives and programmes to stimulate entrepreneurship and small business growth, especially in marginalised areas. In February 2021, President Cyril Ramaphosa said that he was “impressed with the targeted interventions the DSBD has extended to help enterprises in townships and rural areas." This, unfortunately, stands in stark contrast to the picture that emerges when one talks to experts and small business representatives. The linked report by the Centre for Development and Enterprise (CDE) is based on a project conducted with four business associations representing small firms in Gauteng.
Absa PMI rose to 58.6 index points in February 2022
.The seasonally adjusted Absa Purchasing Managers’ Index (PMI) rose to 58.6 index points in February 2022, following a three-point rise to 57.1 in January. The improvement was driven by increases in all five subcomponents making up the headline PMI, suggesting that the manufacturing sector continued to fare well during the second month of the year. Respondents noted the quickest increase in new sales orders since the second quarter of 2021. This was likely, to a large extent, driven by an improvement in exports, which rose further from an already upbeat January reading. Better demand supported a further rise in production volumes, with the output index ticking up to a healthy 59.6 points in February. This was despite a bout of load shedding at the start of the month. The average level for the first two months of the year is well above the final quarter of 2021 which bodes well for a continued recovery in manufacturing output following the slump in 2021Q3. The full report is linked here for your perusal.
POLICY AND LEGISLATION
The Climate Change Bill and why it's important for agribusiness
After two years at Nedlac and as many redrafts, the Climate Change Bill was officially tabled in Parliament on 18 February 2022. The Climate Change Bill sets out a suite of mechanisms that South Africa must take to meet its commitments under the United National Framework Convention on Climate Change (UNFCCC). Once enacted, it will become the single, framework legislation under which all climate change regulatory mechanisms will fall. Needless to say, it’s an important piece of legislation. Few sectors understand the importance of climate change quite as well as agriculture does. Meteorological estimates indicate that South Africa’s interior and western edge are set to become hotter and drier whilst the eastern coastal belt is set to become hotter and wetter. This could have an impact on the geographic spread of our production areas but the one constant being predicted is volatility. Agbiz CEO Theo Boshoff discusses this subject in the linked article.
Agbiz presents on Land Court Bill in Parliament
Agbiz made a presentation on its submission on the Land Court Bill to the parliamentary committee on justice and correctional services on 1 March 2022. Agbiz highlighted the importance of access to justice and an efficient court system in land matters. Agbiz submitted that a successful land reform programme is seen as a prerequisite for sustainability in the sector as well as a potential driver of growth as it facilitates the entry of new participants into the primary sector. Many agribusinesses, cooperatives and commodity organisations have invested greatly into supporting new entrants to the farming sector through various farmer support programmes. Agbiz members, therefore, have an interest in the development of policies and programmes that can facilitate access to land for their future clients. Agbiz head of Legal Intelligence Annelize Crosby gives feedback in the linked article.
AGRIBUSINESS RESEARCH
SA fuel prices at a record high in March 2022
This week South Africa's petrol (95 ULP inland) and diesel (0.05% wholesale inland) prices increased by R1,46 cents per litre (c/l) and R1,44 (c/l), respectively. The retail price of petrol is now at a record R21,60 per litre from the current level of R20,14 per litre. Simultaneously, the wholesale diesel price is R19,48 per litre from R18,04 in February 2022. The underpinning driver of the fuel price increase is the rising Brent crude oil price on the back of the current geopolitics and supply constraints that existed before the intensification of the Russia-Ukraine conflict, amongst other factors. Agbiz chief economist Wandile Sihlobo discusses the effects of the latest fuel price increase in the linked article.
Fertiliser prices will soar if sanctions restrict Russian exports
Much of the commentary from the agricultural perspective has focused on how the global agricultural market will be directly affected by the Russia-Ukraine war through price volatility and a supply crunch in grains and oilseeds. Still, there is a lot to be said about the fertiliser market too. According to data from Trade Map, Russia is the world’s leading exporter of fertiliser materials in value terms, followed by China, Canada, the US, Morocco and Belarus. These fertiliser mixtures include minerals or chemicals, nitrogenous fertilisers, phosphoric fertilisers and potassic fertilisers. Wandile Sihlobo discusses this subject in the linked article, first published in Business Day.
SA 2021/22 summer crop first production estimates better than expectations
The start of South Africa's 2021/22 summer crop production season was challenging for farmers and agricultural role players because of excessive rains that delayed plantings in various regions and threatened crop yields prospects. But the past few weeks were calm with reasonably warm weather conditions in much of the country, thus supporting crops and easing concerns about the possibility of smaller yields due to excessive soil moisture. The data released by the Crop Estimates Committee this week underscores this optimistic view of crop conditions. For example, while the 2021/22 first production estimate for maize is 14,5 million tonnes, down 11% year-on-year (y/y), this is well above the 10-year average harvest of 12,8 million tonnes and annual maize consumption of 11,8 million tonnes. Wandile Sihlobo discusses the latest data in the linked article.
AGBIZ GRAIN
Consumers are becoming poorer in 2022
The disposable income of consumers in South Africa will come under pressure in 2022. Higher fuel prices, which could lead to higher food prices and consequently increases in inflation, will, among other things, be the reason why the Reserve Bank will be forced to announce further increases in the repo rate this year. A higher repo rate leads to higher interest rates and lower consumer spending. As consumers spend less, inflation declines as demand for consumer goods declines. Agbiz Grain general manager Wessel Lemmer discusses this subject in the linked article, first published in Landbouweekblad.
OTHER NEWS
Concerns rise over Black Sea spring crops amid Russia-Ukraine war
The stoppage of grain exports out of Ukraine was confirmed on Monday as the country said all ports will be closed until the end of the Russian invasion, though there is a chance that supplies for the next season out of both Ukraine and Russia could also be in jeopardy pending the outcome of the war. Spring grain planting is right around the corner for both countries, most importantly corn for Ukraine and spring wheat for Russia, and it is unclear whether the ongoing conflict will impact production either physically or economically. Read more in the linked article, first published on Reuters.
Ukraine says two commercial ships hit by Russian missiles near Odessa port
Ukraine said Russian warships shelled a Moldovan-flagged chemical tanker and a Panamanian-flagged cargo ship due to load grain near Odesa port in the Black Sea on Friday, one day after Russia began a full-scale invasion of Ukraine. A total of three non-military vessels have now been hit since the start of the invasion. On Thursday, the Turkish-owned Yasa Jupiter cargo ship was struck off Odessa. Ukraine's infrastructure ministry said that the Moldovan-flagged vessel, the Millennial Spirit, was carrying 600 tonnes of diesel at the time of the attack from a Russian military ship. Earlier on Friday Moldova's naval agency said the crew of the Millennial Spirit was Russian and that two of them had been seriously injured. Read more in the linked article, first published on Reuters.
Colombian farmers and exporters are worried about Russia's exclusion from the Swift network
The Colombian agricultural sector will be affected by the consequences of the military aggression perpetrated by Russia in Ukraine. One of the sector's biggest concerns stems from the most recent series of sanctions announced by the European Union and the United States against Russia, which includes the expulsion of some Russian banks from the Swift international financial mechanism. The war in Ukraine will also make it hard to import key agro-inputs for Colombia's food production, as Russia and Ukraine are important suppliers of these products. For example, 42% of the urea, the fertiliser most used by local farmers, comes from Russia and Ukraine. Read more in the linked article, first published on FreshPlaza.
South African blueberry grower sees strong increase in shipments to Germany
.South Africa has shipped a third more blueberries than anticipated to Germany this season as it looks to grow its position in the market. Some 4 000 tonnes of blueberries were shipped to Germany this season, a 1 000-ton increase on forecasts on the back of the country’s biggest-ever crop. That figure represents 20 per cent of total South African blueberry exports, according to industry body Berries South Africa (Berries ZA). The rise in shipments comes during a season in which South Africa has stepped up its marketing in Germany with a range of trade-focused activities. Read more in the linked article, first published on HortiDaily.
SA Dairy Championships attracts more than 900 entries
More than 900 dairy products compete in the 2022 South African Dairy Championship, the largest and oldest dairy competition in Africa. This year, the championship is hosted for the 189th year by Agri-Expo. The judging took place on Thursday 24 and Friday 25 February at Elsenburg outside Stellenbosch. "There are good reasons why 68 manufacturers entered as many as 920 dairy products for the championships this year," says Johan Ehlers, chief executive officer of Agri-Expo. "This competition is put together with great accuracy and transparency and is therefore fully endorsed by the industry," says Ehlers. Agri-Expo, as independent organiser since 1834, manages the process behind the scene – from the online entries, the class divisions, the cold chain of products entered from all over the country, the compilation of judging panels, the judging process and its audit component, to the final announcement of the winners.” Read more in the linked Agri-Expo media statement.
Vaccination to control FMD outbreak in KwaZulu-Natal
The Department of Agriculture, Land Reform and Rural Development announced an animal vaccination campaign that will take place in the disease management area (DMA), following the outbreak of foot-and-mouth disease (FMD) in the new hotspot KwaHlabisa, KwaZulu-Natal. The outbreak is showing signs of active spread and some of the newly affected dip tanks are close to the boundary of the DMA and the Hluhluwe Umfolozi Game Reserve. This situation warrants the use of vaccination to reduce the viral load and, thus, control the further spread of the disease. At this stage, the vaccination will be limited to cattle within the DMA, in order to slow down the spread of the disease, as well as to prevent spread outside the DMA and into the game reserve. Read more in the linked DALLRD media statement.
MEMBERS' NEWS
Wetter conditions returning to the interior
February turned out to be generally drier over many areas. Precipitation was mainly in the form of thundershowers, sometimes severe, while the long cloudy and rainy spells of earlier this summer was largely absent during the month. While upper-air high-pressure systems dominated the circulation across the interior during most of February, a significant upper-air trough is expected to develop over the western parts during the rest of the week, bringing much more favourable conditions for widespread rainfall and cloudy, cool spells over especially the central to southeastern parts. The next few days will therefore see a return of somewhat more widespread rainfall to the interior, focusing on the central parts, with more abundant cloud cover. Scattered to widespread showers and thundershowers are expected over these parts until the weekend. Rainfall however should be largely absent over the northeastern parts, including the eastern parts of the maize production region, while the western production areas should see relatively high rainfall totals. Read more in the latest edition of Cumulus, published by AgriSeker.
Weekly newsletter from CGA
The Citrus Growers' Association of Southern African, 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 news from the pork industry
Read more about the latest developments and news in the pork industry in the South African Pork Producers' Organisation (SAPPO) newsletter, SAPPO Weekly Update.
UPCOMING EVENTS
We are very excited to announce that the Agbiz Congress 2022 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 the event not to be missed.

Delegates can now register for the Agbiz Congress 2022. In-line with international best practices, delegates will be required to be fully vaccinated. 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 for early bird registration at only R4 110 for members and R4 630 for non-members. Please click here for more information.
Agbiz Congress 2022
22-24 June 2022 | Sun City

Africa Agri Tech Conference and Exhibition
29 August 2022-2September 2022 | Menlyn Maine | Pretoria
AGBIZ MEMBERSHIP
Why join Agbiz?
  • Agbiz is the only organisation that serves the broader and common over-arching business interests of agribusinesses in South Africa.
  • Agbiz addresses the legislative and policy environment on the many fronts that it impacts on the agribusiness environment.
  • Agbiz facilitates considerable top-level networking opportunities so that South African agribusinesses can play an active and creative role within the local and international organised business environment.
  • Agbiz research provides sector-specific information for informed decision-making.
  • Agbiz newsletter publishes members' press releases and member product announcements.
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