e-Newsletter
25/2022
7 July 2022
Zondo: some results are already in
In his latest newsletter, political and trend analyst JP Landman shares his views on the findings in the Zondo Commission report. "A young friend expressed her dismay about what she had seen and read in the media since the release of the final Zondo Commission report. With the recent avalanche of bad news about rising food- and petrol prices, and interest rate costs, the commission had given her some hope. However, the responses she had heard and read in our media made her feel that hope was in vain, or even naïve. I believe that many of the responses that left her desperate came out of too narrow a focus. When will the first people be in jail? Are they going to pay the money back? Valid questions. However, the commission and its report are not a single event and shouldn’t be judged only by how many convictions flow from it. It is part of a much bigger picture. What is more, we have already seen consequences flowing from the processes leading up to the release of the final report." Please click here to peruse.
Urgent appeal by BUSA and BLSA to resolve South Africa's energy crisis
Both BLSA and BUSA had urgent meetings with Eskom’s André de Ruyter last week to understand the current stage 6 load-shedding crisis we are facing and the impact it has on our country’s economy and citizens. This has long been understood by business, which has proactively positioned itself to support government’s efforts to ensure security of energy (specifically electricity) supply. Unfortunately, efforts to this end over many years have either failed or not gone far enough to resolve the underlying challenges: operational, financial, and structural afflicting Eskom and the broader energy ecosystem. Urgent action is now required, and both organsations appealed to President Ramaphosa to act firmly and decisively to address this national crisis. Please click here to read the letter addressed to President Ramaphosa.
The seasonally adjusted Absa Purchasing Managers’ Index (PMI) declined to 52.2 index points in June from 54.8 in May
The seasonally adjusted Absa Purchasing Managers’ Index (PMI) declined to 52.2 index points in June from 54.8 in May. However, the headline PMI masks a worrying deterioration in demand and activity during the month. The business activity index signalled a contraction in output for a third consecutive month. Indeed, the average level for the second quarter (45) is much lower than the average recorded in the first quarter (58.9). Along with the stark decline in actual factory output in April, this suggests that after a stellar performance at the start of the year, the sector is likely to be a big drag on GDP in the second quarter. This is as the destructive flooding in KwaZulu-Natal, sustained supply chain friction and significant load-shedding weigh on output. Please click here to peruse.
POLICY AND LEGISLATION
Employment equity targets to be gazetted for comment
The Employment Equity Amendment Bill was passed by Parliament in June 2022, and the Department of Employment and Labour (DEL) requested a further meeting with the sector to finalise the targets on 5 July 2022. The meeting was attended by representatives from Forestry SA, Agri SA, Agbiz and the fisheries industry. The agricultural organisations put forward a plea for realistic targets for the sector, which took into consideration the structural impediments as well as the diversity of the sector. Rural areas have specific challenges that impact the recruitment and retention of staff. There is a low turnover of staff in many agricultural businesses, particularly at managerial level. The sector representatives proposed that the targets needed to be aligned with the BEE scorecards of companies. The matter of the five-year target was discussed, and DEL alluded to the fact that the legislation will probably only come into force in 2023, and the first assessment of the five-year target will only start in 2024. On the issue of national and provincial targets, DEL indicated that employers will be able to choose whether to implement the national or provincial targets. Once the choice has been exercised using the electronic submission system, the relevant target will be allocated to an employer. Agbiz will continue to participate in this important consultative process and keep on pressing for realistic targets in collaboration with other important stakeholders in the sector. We will keep members informed of all developments.
AGRIBUSINESS RESEARCH
Disease and rising feed costs set to temper agriculture’s growth spurt
South Africa's agricultural sector has had two consecutive years of strong growth, with expansion in all subsectors - livestock, field crops and horticulture. This year will be a break from the 2020 and 2021 strong performance. I expect the sector's gross value added to fall3 to 5 % year on year given the high base from 2021. The overall field crop harvest is likely to be lower than the previous season, though some crops such as soybeans and sunflower seeds promise a large harvest. But that will not be the only source of potential contraction in the sector. The livestock sector which accounts for about half the sector's gross value added continues to face numerous challenges. Agbiz chief economist Wandile Sihlobo discusses this subject in the linked article, written for and first published in Business Day.
Rising protectionism across the world presents threats to South Africa's agriculture
South Africa's agricultural exports lack sufficient diversification. Outside of the African continent, they are heavily concentrated in a few Asian countries and the European Union (EU). Export diversification contributes to a country's economic resilience, especially in the face of disruptions in global supply chains or if one of the major markets imposes non-tariff barriers to protect its producers against the competition. More recently, we have seen how the Covid-19 pandemic and the Russia-Ukraine war destabilised the global supply chains, with many countries relocating these domestically. The pandemic and geopolitical frictions have also raised a sense of protectionism, especially in the EU. Read more in the linked article by Wandile Sihlobo.
SA has enough food supplies and prices should ease in the coming months
May to July each year is a busy time in South Africa's agricultural sector. Farmers in the summer crop-growing areas are harvesting key crops, which include maize, soybeans, sunflower seed, sorghum and dry beans. During the planting period of the current season's crop, from October 2021 to December 2021, some people worried that the excessive rains would force farmers to reduce the area planting, and the yields in planted areas would likely be poor. But the pause and later moderation of the heavy rains from the start of 2022 paid off. Farmers returned to the fields and planted an area roughly similar to the previous seasons, just over four million hectares. Wandile Sihlobo discusses this subject in the linked article, written for and first published in The Herald.
OTHER NEWS
Feedback from Agbiz Congress 2022 on Farm TV 
Building resilient and sustainable agri-food systems was the theme for the Agbiz Congress 2022, which was recently held at Sun City. PlaasMedia provided some insightful feedback from this event. Please click here to view the feedback report as covered by PlaasMedia.
SA relatively well placed to manage the rise in global food prices
Rising food inflation has been a feature of the world economy this year. What are the implications for SA’s inflation outlook, the agricultural sector and for the country’s food requirements? Wandile Sihlobo, chief economist of the Agricultural Business Chamber South Africa (Agbiz), was the main speaker in a recent webinar hosted by Investec Securities. He outlined South Africa’s food inflation outlook and how well the local agricultural sector was placed to deal with the current challenges. Explaining the background to the forecast of the 6% rise in consumer food prices in 2022, Sihlobo emphasised the role of price variation in food products within South Africa’s food basket, given the global shocks that underpin them. Food (about 15.3% of the total CPI basket) accounts for a substantial share of South Africa’s consumer price inflation basket. Within the food basket, the key components are meat (35%), bread and cereals (21%), milk, cheese and eggs (17%), vegetables (8%), sugar, sweets and desserts (4%), oils and fats (3%), and fruit (2%). Read more in the linked Investec article, or listen to the podcast in the article.
BUSA Covid-19 cargo movement update
Port operations this past week were characterised by equipment breakdowns, delays in the Cape regions, and road congestion in the KwaZulu-Natal region. However, the overall port performance showed a positive trend, with rail at Durban Container Terminal recovering and Pier 1 moving a record number of containers at waterside operations. On the international shipping side, the ongoing narrative of increased container throughput amid decreasing spot rates continues, as schedule reliability and liner connectivity have also increased slightly. All the indicators point to a continuation of supply chain recovery, despite the warnings made by UNCTAD that the ongoing war in Ukraine is pushing up global shipping costs, stifling trade, and exacerbating existing supply chain disruptions (see below). As a result, many countries are looking elsewhere for the commodities they import, notably oil, gas, and grain. These disruptions have intensified rising food and fuel prices, with accelerated global inflation the net result. Read more in the linked BUSA Covid-19 Cargo Movement Update.
Cotton: A rare period of stability in an up-and-down year
In the final month of the 2021/22 season, production and consumption remain virtually unchanged from last month’s report, although Australia’s forecast has been revised upward slightly, adding 119 000 tons to the 2021/22 season and 41 000 tons for 2022/23. Consumption remains unchanged at 26.15 million tons which still surpasses the expected production of 25.91 million tons despite Australia’s larger contribution. However, there is a potential crisis brewing, namely an unprecedented global hunger crisis with millions facing food insecurity. Read more in the latest Cotton Market Report published by Cotton SA.
Seasonal climate watch
The El Niño-Southern Oscillation (ENSO) is currently in a La Niña state, and forecasts indicate that it will likely remain in this state during the coming seasons. During winter, the presence of ENSO has less of an impact. Thus, the presence of the current La Niña event is not expected to have any significant impact on rainfall in the coming seasons. The multi-model rainfall forecast indicates below-normal rainfall for the south-western half of the country and notably above-normal rainfall over parts of Kwa-Zulu-Natal towards the spring season. Both maximum and minimum temperatures are expected to be above normal for most of the country. Read more in the Seasonal Climate Watch issued by the South African Weather Service.
MEMBERS' NEWS
Senwes rewrites history with record results
Member logo_Senwes
An exceptionally good agricultural production and commodity price cycle, together with the unlocking of synergies from recent merger transactions and the reorganisation of the business model of the group, resulted in record results for the financial year. The financial results of the Senwes Group reflect a 45,8% increase in turnover amounting to R10,88 billion (2021: R7,46 billion), while the operational profit amounted to R1,06 billion, representing an increase of 30,9%, from R810 million in the previous year. A profit attributable to normal equity holders of R601 million was delivered, representing an increase of 19,2% from the R504 million of the previous year. Read more in the linked Senwes media statement.
SSK is looking to fill two key positions
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.
Justin Chadwick re-elected as co-chair of the World Citrus Organisation
Justin Chadwick, CEO of the Citrus Growers' Association of Southern Africa, has just been re-elected as the co-chair of the World Citrus Organisation. Even while tackling some of the biggest industry challenges to date, the citrus sector’s leader is flying South Africa’s flag high on the global stage. Chadwick heads up the organisation alongside Jose Antonio Garcia of Ailimpo in Spain and says that he is excited that South Africa can work alongside Spain as the number one citrus exporter in the world. Chadwick regards the re-election as a huge honour for him and an opportunity to position the citrus sector as a global source of safe and nutritious fruit. Read more in the linked article, first published on Food for Mzansi.
Weekly newsletter from CGA
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 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.
Latest edition of AFMA e-News
For the latest news from the Animal Feed Manufacturers' Association (AFMA), please click here to access the latest edition of AFMA e-News.
UPCOMING EVENTS
International Fresh Produce Association (IFPA) Southern Africa Conference
17-18 August 2022 | Century City Conference Centre | Cape Town
For more information: membershipsa@freshproduce.com or visit the website

Africa Agri Tech Conference and Exhibition
29 August-2 September 2022 | Menlyn Maine | Pretoria

Nampo Cape
14-17 September 2022 | Bredasdorp Park
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.
THIRD-PARTY WEBSITE LINKS TO THIS NEWSLETTER
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.