As this will be the last issue of our newsletter for 2023, I would like to wish all members and stakeholders a blessed festive season. 2023 has been a busy year where we have made great strides in areas such as international trade, institutional reform, and multiple regulatory matters, but it has also seen several challenges. For context, by the end of October this year, we were projected to experience 286 days of load-shedding, setting a new record after 205 days in 2022. We also continue to face challenges with our logistics network, service delivery, and several other issues. The Agbiz office will officially close on the 23rd of December to 3rd of January but senior staff can still assist members should any crises arise that require our intervention. With an election year looming, 2024 is predicted to be another challenging year, so the office will be taking a break to build up strength for the coming year. We hope that all members and stakeholders take this time to rest, and we also wish those sectors entering their peak season the very best. We would also like to thank all members, stakeholders, and our media partners for their continued support throughout the year. Thank you, and we wish you all a blessed festive season.

Theo Boshoff, Agbiz CEO.

Authors Claver, El Khoury, and Weeks-Brown stress the urgent need for a more comprehensive approach to tackling financial crimes and their economic fallout. Despite progress, efforts against money laundering and terrorist financing fall short, with a significant gap between compliance and effectiveness. The authors highlight the high direct and indirect costs, affecting vulnerable individuals and permeating economies. They emphasise the global nature of illicit financial flows, attracting criminal proceeds and causing widespread consequences. To address these challenges, the authors call for a deeper understanding of the fiscal, monetary, financial sector, and structural costs of illicit flows. The IMF plans to expand its data analytics capacity to comprehensively analyse these issues. The authors stress persistent and collaborative efforts, urging improved cooperation among stakeholders. The IMF commits to helping member countries assess and address the impact of financial crimes. The article concludes by underscoring the imperative of continued vigilance in this ongoing battle to prevent severe economic consequences. Click here to read full article first published in imf.org.

The South African Cabinet has given the green light to the Freight Logistics Roadmap, a plan designed to dismantle Transnet's monopoly in the country's logistics system. The plan, developed in collaboration with organised business and logistics experts, aims to enhance competition by increasing private sector involvement in managing the rail network and ports. The immediate focus, as highlighted by Minister Khumbudzo Ntshavheni, is to stabilise and improve the operational performance of the logistics network, which has been a source of economic harm, estimating a cost of at least R500 billion since 2010. The Freight Logistics Roadmap outlines timelines for critical reforms, including granting private sector access to railway lines, establishing an independent rail network manager, closing unprofitable lines, and offering concessions on ports and rail routes to private operators. While Transnet will continue to play a central role, the plan seeks to introduce competitive forces and encourage private investment in locomotives through a state-owned leasing company. The roadmap is seen as urgent, with government support from entities like the Treasury and the Departments of Transport and Public Enterprises. Though not an immediate turnaround, the plan is expected to in-still confidence in the logistics network, addressing a longstanding issue in the next five to ten years. Click here to read full article first published on Daily Maverick.

The Southern African Customs Union (SACU), established in 1910 and comprising Botswana, Eswatini, Lesotho, Namibia, and South Africa, faces challenges as Botswana extends restrictions on vegetable imports until December 2025. SACU aims to promote cross-border trade, economic integration, development, investments, and fair competition among member countries. South Africa, the largest economy in SACU, relies on the union as both a destination market and a partner for agricultural development and exports. Botswana's extended restrictions impact South African farmers, potentially eroding SACU's regional integration goals. The SACU Agreement recognises diverse economic pathways, but trade-restrictive measures like border closures affect relations and hinder free cross-border trade. South Africa's Minister of Agriculture plans to engage with Botswana to find a solution, emphasising the need to shift from protecting individual countries to fostering a paradigm that integrates investments and policy priorities for SACU's overall benefit, leveraging continental and global export opportunities. Click here to read article first published in iol.co.za.

The Agbiz/IDC Agribusiness Confidence Index (ACI) deteriorated by 10 points to 40 in Q4 2023. This is its lowest level since Q2,2020, at the height of the Covid-19 pandemic hard lockdown restrictions. Critically, the Q4 2023 reading is below the neutral 50-point mark, implying that South African agribusinesses are downbeat about business conditions in the country. This pessimism emanates from the numerous challenges facing the sector such as intensified delays and inefficiencies at the ports, deteriorating rail and road infrastructure, worsening municipal service delivery, increased geopolitical uncertainty and persistent episodes of load-shedding. This survey was conducted between the last week of November and the first week of December, covering businesses operating in all agricultural subsectors across South Africa. Click here to read full report by Agbiz chief economist Wandile Sihlobo and click here to watch his interview with Newzroom Afrika where he speaks about the dropping of the agribusiness confidence index. 

As the year draws to a close, it is worth reflecting on critical events that dominated the South African agricultural scene over the past year. There are three in particular that stood out for us. First, the intense and persistent load-shedding right from the start of the year was a significant challenge for South Africa's agriculture and agribusinesses. The impact became apparent when one considers that all of South Africa's horticulture – fruits and vegetables depends on irrigation that needs an adequate power supply. In crucial field crops, roughly 20% of maize, 15% of soybean, 34% of sugarcane, and nearly half of wheat are produced under irrigation. In red meat, poultry, piggery, wool, and dairy production, electricity is also heavily used across various processing activities. Similarly, agribusinesses and other food-producing businesses faced similar challenges in various downstream processing activities, such as milling, bakeries, abattoirs, wine processing, packaging, and animal vaccine production. Exporting agribusinesses, especially those where delays can be costly, such as fruits, red meat, and wine, were also worried about the port activities. In the first quarter of the year, the economic impact of the load shedding was felt across the food, fibre and beverages value chains. Primary farmers and businesses searched for capital to invest in their own energy generation, and some experienced losses in their stock. Click here to read full article by Wandile Sihlobo.

The regular readers of this column might know that I have consistently painted a positive picture of South Africa’s agricultural performance this year, after favourable rainfall across the country. Therefore, I suspect it shocked some to read that, after an encouraging recovery of 2,8% quarter-on-quarter (seasonally adjusted) in the second quarter of 2023, the country’s agricultural gross value added contracted by 9,6% in the third quarter. I was equally surprised as I thought the ample field crop, the harvest of which was a month behind the typical schedule, would still be reflected in the third-quarter data. For example, the 2022/23 maize harvest is at 16,4 million tonnes, which is 6% higher than the 2021/22 season’s harvest and the second-largest harvest on record. The soybean harvest is at a record 2,8 million tonnes. South Africa’s sugar cane crop is forecast to be 18,5 million tonnes in 2023/24, up 3% y/y. Other field crops and fruit harvests were also decent this year. Ultimately, the base effects and headwinds in the livestock and poultry industry weighed on the sector. The livestock and poultry industry, which accounts for nearly half the sector’s value, has been hit by diseases such as foot-and-mouth, avian flu and African swine fever. Click here to read full article by Wandile Sihlobo for mg.co.za.

South Africa’s agricultural exports amounted to $3.9-billion in the third quarter of this year, up by 4% y/y (according to data from Trade Map). This quarter, the products that dominated the export list were citrus, maize, apples and pears, nuts, wine, soybeans, sugar and fruit juices. his solid export activity was both a function of improvement in volumes and prices, specifically of fruits. This more than offsets the effects of lower grains and oilseed prices, which have declined notably from their 2022 levels. Overall, South Africa’s agricultural exports amounted to $10.2-billion in the first nine months of the year, up 1% from the same period in 2022. This export activity was mainly before intensified challenges at South African ports. Given that the inefficiency challenges at the ports and rail lines are not new, the agricultural export success resulted from continued collaboration between the industry and Transnet to improve the logistics at the ports. The South African agricultural industry has established forums to continuously engage with Transnet and enhance communication about problems at the ports so that the response could be swift to drive the exports of high-value and perishable products. Click here to read full article by Agbiz chief economist, Wandile Sihlobo for Daily Maverick.

South Africa's agricultural exports amounted to US$3.9 billion in the third quarter of this year, up by 4% y/y (according to data from Trade Map). This quarter, the products that dominated the export list were citrus, maize, apples and pears, nuts, wine, soybeans, sugar, and fruit juices. This solid export activity was both a function of improvement in volumes and prices, specifically of fruits. This more than offsets the effects of lower grains and oilseed prices, which have declined notably from their 2022 levels. Overall, South Africa's agricultural exports amounted to US$10,2 billion in the first nine months of the year, up 1% from the same period in 2022. This export activity was mainly before the intensified challenges at the South African ports. Given that the inefficiency challenges at the ports and in railway lines are not new, the agricultural export's success resulted from continued collaboration between the industry and Transnet to improve the logistics at the ports. Click here to listen to full episode on Agricultural Market Viewpoint with Wandile Sihlobo.

Emerging from the COVID-19 pandemic in 2020, the hope for an extended period of global stability was swiftly shattered as a conflict erupted in the Black Sea region. Subsequently, we have witnessed escalating global conflicts that have triggered significant shifts in the geopolitical landscape. This has prompted nations to reassess measures that disrupt worldwide trade, including export restrictions and pricing controls that impact global supply chains. Concurrently, the international community grapples with combating critical plant and animal diseases while grappling with the looming spectre of climate change. However, the imperative remains for businesses to persevere and adapt to the evolving global terrain. In echoing Charles Darwin's theory, it is not the strongest species that survives, but rather those that prove most adaptable to change. In light of these challenges, the 2024 Agbiz Congress theme intentionally recognises the evolving global panorama and redirects its focus towards sustaining growth in this uncertain environment. Esteemed speakers will share their perspectives on how to navigate and adapt to the complexities posed by geopolitical, environmental, and social instability. Aligned with Agbiz's ethos, the Congress aims to seek solutions that will propel the sector towards prosperity. To learn more and register for the event, we have launched our 2024 Agbiz Congress website, where you can find comprehensive information and details about this vital gathering. Visit the website to stay updated and secure your spot at this essential event. Learn more and register for the 2024 Agbiz Congress here.

The growing challenges of South Africa’s port logistics have become very apparent in recent months, with growing backlogs in the ports, especially Durban and Cape Town, largely due to old equipment breaking down, the availability of spares, deferred maintenance, and insufficient equipment to handle the demands of exporters and importers. At the Port of Durban, particularly, this had led to significant queues of ships at anchor, awaiting their turn to berth and take on or offload cargo. With some of these ships en route to ports in the Eastern Cape and the Port of Cape Town before sailing to overseas markets, further delays are triggered. Although the logistics crisis has been growing for years, it has accelerated as equipment has moved ever further past its end of life. The recent announcement by the Treasury of funding support for Transnet, linked to a turnaround plan, will hopefully allow for planned equipment replacement, spares, and maintenance contracts to proceed. These are elements of growing private sector involvement and support, with some notable examples being the tender announced for Durban’s Pier 2. However, no similar tender or concession is currently planned for the Cape Town Container Terminal (CTCT). This is something Agbiz and agri-exporters have pushed for, believing that for the port to handle the sector’s growth, private sector participation (PSPs) is necessary to catapult SA’s ports from their current low rankings globally and sustain further growth. The fruit industry, for example, expects production growth of 33% by 2029 (from 2019). In the 2023 export season alone, table grapes delivered 12% more export volume, apricots 24%, nectarines 19%, pears 17%, and apples 4%. Click here to read full report by Agbiz Fruit Desk Manager Wolfe Braude.

South Africa's 25th citrus shipping season to the USA concluded with approximately 100,000 pallets sent to the US market, marking it as one of the country's most successful export programs. The program's success is attributed to a well-managed, collaborative effort involving growers, importers, and various service partners. Clear and efficient communication, a rarity in the industry, played a crucial role in distinguishing the programme as a reliable partner for customers in the US. The container program into Philadelphia, coupled with seamless collaboration, contributed to swift product delivery, enhancing overall efficiency. Partners involved in the Summer Citrus from South Africa programme expressed optimism about continuing and expanding the programme. The collaboration is deemed essential for complementing national chains during the summer, fostering a seamless approach to marketing and retailing. Despite challenges tied to weather-dependent factors, stakeholders are satisfied with the long-term sustainable shipping options into the United States. The success of the South African citrus programme in the US stands as a testament to the power of collaboration and effective communication in the supply chain. Click here to read full article by freshplaza.com.

The Western Cape Minister of Agriculture, Ivan Meyer, convened a meeting with agricultural stakeholders on 6 December 2023, to address the critical challenges at the Port of Cape Town (PoCT) affecting agricultural exports. Minister Meyer expressed deep concern over the inefficiencies at PoCT and the potential impact on the upcoming peak export season for the fruit industry. Stakeholders, including Glen Steyn and Anton Rabe, highlighted the deteriorating capacity at PoCT, emphasising the need for urgent action to prevent a collapse during the peak season. Wolfe Braude, Fruit Desk Manager at Agbiz, underscored the economic significance of primary agriculture in South Africa, urging prioritised attention to agricultural challenges. While stakeholders cautiously welcomed the upcoming visit by the national Minister of Public Enterprises to PoCT, they stressed the urgent need for Transnet to address the crisis. Minister Meyer advocated for increased private sector involvement in port management, aligning with the global trend, to ensure efficiency and meet the needs of the agricultural sector. Click here to read full statement by gov.za.

A severe drought affecting the Panama Canal watershed has led to a significant reduction in freshwater levels, impacting shipping volumes. October 2023 witnessed the lowest rainfall since 1950, prompting the Panama Canal Authority to decrease daily transit capacity, causing delays for vessels passing through the canal. This situation may have repercussions for fresh fruit and vegetable shipments to the U.S. East Coast, particularly affecting table grapes in terms of both volume and quality. The United States heavily relies on imports for its annual consumption of 1.3 million tonnes of table grapes, with key suppliers being Peru, Chile, and Mexico. The Panama Canal is a crucial route for shipments from Chile and Peru to the East Coast, and disruptions could necessitate alternative shipping routes, potentially affecting shelf life and fruit quality. Shippers may need to consider options such as west coast ports or routing around Cape Horn, both of which could extend transit times. The impact on East Coast table grape imports during the key months of December to April remains uncertain. Despite forecasted increases in U.S. imports for 2023–24, reaching 760,000 tonnes, challenges posed by Panama Canal restrictions may influence the actual outcomes. Click here to read the full Fresh Apples, Grapes, and Pears: World Markets and Trade report by the U.S. Department of Agriculture.

This update offers a comprehensive overview of the South African supply chain and the current state of international trade. Notably, commercial ports' container handling saw a decline to 7,026 containers per day, raising concerns amidst existing backlogs and widespread port congestion. Operational challenges persist due to weather conditions, equipment shortages, and breakdowns, causing disruptions and significant operational hours lost. Internationally, container throughput has increased by nearly 10% compared to last year, indicating relative stability. However, South Africa faces challenges, losing regional trade to competitors and grappling with oversupply issues influenced by disruptions at the Suez and Panama passages. Air freight in and out of South Africa rebounded, with outbound cargo showing a substantial 11% increase. In regional cross-border road freight trade, average queue times increased while transit times decreased. SADC border crossing times decreased significantly in South Africa but remained relatively unchanged in the greater SADC region. Various developments, including a tanker explosion, increased scanning activities, and strikes in Zambia and the DRC, impacted regional trade. Read the full update in the latest BUSA Cargo Movement Update.

In the burgeoning era of generative artificial intelligence (AI), likened to historical technological shifts, innovative global policies are essential to harness the benefits and manage potential risks. Unlike prior technological revolutions, generative AI is rapidly disseminating, with the potential to reshape economies and redefine humanity. The swift proliferation of AI, as demonstrated by studies, holds promise for significant productivity gains, potentially boosting annual labour productivity growth and global incomes. However, uncertainties surround the net impact on labour markets, with AI acting as both a complement and substitute for human work, particularly affecting high-skill positions. As AI operates across borders, the need for a coordinated global framework and harmonised policies becomes paramount. Current legislative efforts, such as the EU's risk-based classification of AI, are positive steps, but international consensus is crucial. With AI's potential to influence societal narratives and ethical concerns, a coordinated global response, similar to climate change cooperation, is proposed. Governments must develop adaptable social safety nets, tax policies, and education systems to address challenges arising from widespread job displacement and changing skill demands. International financial institutions (IFIs), including the IMF, can play a vital role in understanding AI's effects, sharing policy responses, and promoting global cooperation to ensure inclusive benefits. Read full article by IMF here.

After 12 years of diligent service, Ms Mary Skosana, who worked as a cleaner at the Agbiz Office, enters retirement. Mary will now be starting a new venture by rearing laying hens with her family and selling them to the local community of Hammanskraal. The Agbiz team wishes to thank Mary for her dedicated and loyal service over the years and we wish her the very best in her retirement.

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. 

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.

Discover the latest updates in Berries ZA's December 2023 Newsletter! Click here to read and stay informed about the berry industry's highlights and upcoming events.

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