The OECD's latest Interim Economic Outlook forecasts global growth of 2,6% in 2023 and 2,9% in 2024, driven by improved business and consumer confidence, declining food and energy prices, and the reopening of the Chinese economy. Headline inflation is expected to decrease gradually in most G20 countries, from 8.1% in 2022 to 5,9% in 2023 and 4,5% in 2024 due to tighter monetary policy, easing energy prices, and declining global food prices. However, core inflation will persist due to strong service price increases and cost pressures from tight labour markets. This will require many central banks to maintain high policy rates well into 2024. Please click here to peruse.

As the world strives to recover from the pandemic, one of the persistent impacts on several advanced economies is the increased uptake of digital technologies. Remote working has become commonplace, and numerous businesses have expanded their online operations. With the pandemic receding, it is evident that digitalisation, as gauged by the proportion of workers utilising a computer with internet access, has emerged as a positive aspect across various economies. This development has significant and enduring implications for productivity and labor markets, as outlined in a new staff discussion note that concentrates on advanced economies. Read more in the linked blog post by the International Monetary Fund.

Government is in the process of preparing two draft land bills, namely a new Communal Land Tenure Bill as well as a Redistribution Bill. The bills are currently being finalised and will be published for public comment shortly, probably during May. Thereafter they will go to Nedlac. The intention is to table the bills in Parliament during August or September. The Redistribution Bill is likely to contain provisions relating to expropriation, disclosure of land holdings, land ceilings and restrictions of foreign land ownership. Agbiz will keep our members informed on any further developments.

Most observers of the global agricultural market have probably been focused on the Black Sea this past weekend, where United Nations representatives and the Turkish government engaged with the Russian and Ukrainian governments to extend the Black Sea Grain Deal, which would have expired this past weekend. Positively, the deal has been extended for another 120 days and will be reviewed after this period. This initiative started in July 2022, and its primary goal is to allow grain movement from Ukraine to the world market without military attack by the Russians. Since the deal started, Ukraine has exported roughly 25 million tonnes of grains and vegetable oils. Notably, global food prices have also moderated considerably over time, partly due to increased shipments of grains and vegetable oils from the Black Sea region to the world market. In February 2023, the FAO Global Food Price Index was at 130 points, down by 8% from July 2022, when the deal was reached. Agbiz chief economist Wandile Sihlobo discusses this subject in the linked article.

South Africa's consumer food price inflation accelerated mildly to 14% y/y in February 2023 from 13,8% in the previous month. The food product prices that increased notably were meat; milk, eggs and cheese; vegetable; and sugar, sweets and desserts. These elevated levels of South Africa's consumer food price inflation are unsurprising and illustrate an environment where there are still tail-end effects of generally higher agricultural commodity prices. Moreover, the results of load-shedding, which intensified in January 2023, will likely underpin prices for a few months and dissipate as the new measures taken by the finance minister and the Department of Agriculture, Land Reform, and Rural Development starts to gain momentum. The measures include the diesel rebate and load curtailment possibilities, amongst others. These are mainly at the production level and do not include retailers. Read more in the linked article by Agbiz chief economist Wandile Sihlobo.

We are emerging from years of exceptionally higher agricultural machinery sales in South Africa. For example, South Africa's tractor sales for 2022 amounted to 9 184 units, up 17% from the previous year and the highest annual sales for the past 40 years. The combine harvester sales amounted to 373 in the same period, up 38% from 2021 and the highest yearly sales figure since 1985. This year will likely be a pause from this robust sales period, for several reasons. Chief amongst them is that the possible replacement rate of older machinery will likely be lower this year as the past three years saw increased new machinery sales. Moreover, the rising interest rates will continue to pressure farmers' finances. While other input cost prices, such as fertilizer and agrochemicals, have softened in recent months, the current price levels are still well above long-term levels, thus adding pressure on farmers’ finances. In the linked article, Wandile Sihlobo discusses the latest agricultural machinery data.

Despite BRICS not being a trade bloc, its economic cooperation arrangement offers South Africa a strategic platform to advance its trade interests. The agricultural sector is interested in this grouping, mainly in advancing exports into China and India. These countries already import a sizable volume and value of agricultural products from the world market, and South African businesses want to join these suppliers. The main products that South Africa should promote within this grouping are fruits, wine, wool, and beef. Importantly, the increasing interest in BRICS should continue while South Africa also focuses on other core markets, such as the EU and the African continent. These are vital points Wandile Sihlobo discusses in this week’s podcast segment. For more details, listen to this week’s podcast.

During Grain SA's congress, Derek Mathews, the chairman of Grain SA, summarised the speech by Sam Roland of The Economist's intelligence unit, by stating that the grain value chain needs to improve its cooperation and focus on unlocking the benefits thereof. Roland expressed confidence in the growth shown by the agricultural sector and praised producers for their efforts. After the Covid-19 pandemic hit, the agricultural sector was the top-performing sector, growing by 25%. This is a remarkable figure. But how are the other sectors faring? Agbiz Grain general manager Wessel Lemmer discusses this subject in the linked article, first published in Landbouweekblad.

Modest growth in the animal protein sector is expected to raise China’s soybean imports to 97 million metric tons (MMT) in marketing year (MY) 23/24. The People’s Republic of China’s (PRC) removal of Covid-related restrictions in December 2022 is expected to boost overall oilseed consumption. However, relatively high prices for soybean meal (SBM) and low returns in the swine and poultry sector continue to disadvantage SBM inclusion in feed. Following a significant increase in soybean area and production in MY 22/23, PRC policies supporting soybeans are expected to continue, yielding an additional 400 000 metric tons (MT) of production in MY 23/24. Read more in the linked report by the United States Department of Agriculture's Foreign Agricultural Service.

According to Wamkele Mene, secretary general of the African Continental Free Trade Area (AfCFTA), the next phase of the Guided Trade Initiative (GTI) will involve the trading of services across the continent, commencing this year. The GTI was launched in July 2022 with the objective of piloting intra-African trade based on the environmental, legal, and trade policy foundation, involving eight countries, namely Cameroon, Egypt, Ghana, Kenya, Mauritius, Tunisia, Tanzania, and Rwanda. Following the agreement by SACU on 90% of goods to be offered under the AfCFTA, South Africa is expected to seek membership in the pilot phase. Agbiz Fruit has submitted a proposal to the Department of Agriculture, Land Reform and Rural Development to include fruit in the GTI. Read more in the linked article, first published in The New Times.

The European Union has notified the World Trade Organization Technical Barriers to Trade (WTO TBT) Committee of its plans to amend its packaging regulations in line with its goal of making all packaging reusable or recyclable by 2030. The proposed framework outlines a series of progressively ambitious measures and sustainability requirements that exporters of packaged food products will need to adhere to over the long term. Please click here to peruse.

Global onion prices are at record-high levels due to a global shortage of onions. Overall, the global onion market is characterised by high prices and reduced production. South Africa is experiencing a rise in onion prices due to lower yields, fewer hectares planted, and chronic electricity cuts, while also exporting more onions than usual. Given current high prices, South African producers are marketing faster than usual. Demand remains high, an onion trader says, while there have been lower yields in South Africa, as a result of chronic electricity cuts which hamper irrigation during high temperatures. Fewer hectares were also planted, around 20% lower, also due to heatwaves or excessive rain and input costs. Read more in the linked article, first published on FreshPlaza.

Port operations faced multiple challenges this week, including adverse weather, frequent equipment breakdowns, shortages, system challenges, and a strike at the abnormal loads permit office in Durban, leading to significant delays and congestion. In Cape Town, adverse weather persisted throughout the week, resulting in over 40 operational hours lost. The port continues to experience congestion, with nine vessels anchored by the weekend, and the average berthing delay exceeding 12 days.

Despite the challenges, there was some progress at the MPT terminal in Durban, with the gearbox for the crane on short-term outage arriving as anticipated. However, the port operated with only five tugs for the majority of the week. In anticipation of the proposed national shutdown by the EFF on Monday, 20 March 2023, several ports and terminals have been releasing their contingency plans and expected operational status on that day. Read more in the latest BUSA Covid-19 Cargo Movement Update.

A team of four female agricultural economics graduates from Stellenbosch University is currently seeking sponsorship to cover their expenses for the IFAMA 2023 Global Student Case Competition in Christchurch, New Zealand, in June. The team aims to represent South Africa at the competition, which is part of the 2023 IFAMA Conference with the theme "Transforming the global food and fibre system." This competition challenges students to use their problem-solving skills, comprehension abilities, and ingenuity to address real-world issues in the global agri-food industry. Each team has four hours to analyse the case and submit their presentations, which are open to the delegates. During the approximately 30-minute team presentation, a panel of judges evaluates their performance based on the quality of their presentation and their responses to questions. For further details, please click on this link.

The Agbiz staff and membership will bid farewell next week to Karen Grobler, who has managed the marketing and communications portfolio for Agbiz since 2018. “Karen has been an integral part of the team for a number of years and has helped to grow the Agbiz brand into a trusted and respected leader in the sector. There were many highlights during this time, but two that remain top of mind were the excellent communication provided during the Covid-19 lockdown and the 2022 Agbiz Congress hosted at Sun City, Agbiz's biggest congress to date.” This according to Agbiz CEO, Theo Boshoff. “On behalf of the Agbiz team and membership, we want to wish Karen all the best for the next endeavor.

The Citrus Growers’ Association of Southern Africa (CGA) held its Citrus Summit in Gqeberha on 15 and 16 March, in partnership with Standard Bank. The event, which typically takes place every two years, had not been held since 2019 due to the Covid-19 pandemic. More than 500 delegates, including growers, government officials, and other stakeholders from across the citrus value chain, attended the gathering. With citrus exports set to increase by 10 million (15kg) cartons per year for the next ten years, reaching 260 million cartons by 2032, the summit focused on identifying opportunities and overcoming challenges to ensure that this increased production can be shipped and absorbed by key export markets, thereby ensuring profitability and sustainability in the short and long term. Currently, the sector supports 140 000 jobs and generates R30 billion in annual export revenue. If the 10-year projection of 260 million cartons is achieved, the industry could potentially create an additional 100 000 jobs and generate R20 billion in annual revenue. Read more in the linked CGA media statement.

SA Canegrowers has expressed deep concern over the recent announcement of Gledhow sugar mill being placed under business rescue. This development is yet another indication of the sugar industry's mounting distress and the urgent need for intervention to prevent the crisis from worsening. Located in Stanger, KwaZulu-Natal, the Gledhow mill caters to over 245 growers who cultivate over 1.1 million tons of sugarcane annually, accounting for 6% of the industry's total output. These growers provide employment to more than 3 400 workers from the surrounding communities.his This comes in the wake of Tongaat Hulett's South African operations entering business rescue in October 2022. This situation has caused significant disruption in the industry, leading to payment delays for growers and casting doubt on the future of sugar milling operations along the North Coast of KwaZulu-Natal. Read more in the linked SA Canegrowers media statement.

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.