The global economy is recovering from pandemic, war, and inflation challenges with resilience but slow growth and disparities between regions. Projections indicate a soft landing, with declining inflation and modest unemployment, especially in the U.S., while advanced economies slow down more than emerging markets. Factors include service sector recovery, tighter credit impacting housing and investment, and last year's commodity price shock. Persistent risks include China's real estate crisis, volatile commodity prices due to climate and geopolitical factors, eroded fiscal buffers, and potential financial instability. Priorities include maintaining tight monetary policy until disinflation is established, fiscal buffer rebuilding by removing energy subsidies, and policy alignment. Structural reforms, global cooperation, and avoiding geoeconomic fragmentation are crucial for sustainable growth and prosperity. Click here to read full article first published on IMF Blog.

South Africa, Egypt, and Morocco are at the forefront of clean wind energy capacity in Africa, with 83 wind farms currently providing 9GW of clean power. The Global Wind Energy Council's report emphasises that while wind energy contributes significantly to national grids – accounting for 17% of Kenya's power generation and 15% of Senegal's – its transformative potential remains largely untapped. Notably, a significant number of potential wind energy projects across the continent face risks due to financial constraints, unstable policy frameworks, and grid limitations. The report outlines substantial wind energy potential across Africa's five subregions, with northern Africa leading the way, boasting the potential for 18,822GW. Despite these challenges, the wind sector must address grid constraints to unlock its full potential. World leaders are urged to support Africa in becoming a renewable energy superpower by increasing financial support to the continent, especially at the upcoming COP28 conference. Read full article first published on Daily Maverick here.

Amidst a challenging year for container shipping, Africa stands out as a bright spot, with experts anticipating further growth driven by the African Continental Free Trade Area (AfCFTA), the world's largest free trade area. Containerized imports into Africa surged by 10.1% in the first seven months of the year compared to 2019, attributed mainly to trade from Asia into the African west coast. Data indicates a 22.3% growth in deployed tonnage in the Asia-West Africa trade for October 2023. Despite strong growth, the Asia-Africa trade only represents 3.2% of global deep-sea volumes, offering significant room for expansion. Experts cite rapid urbanization in Africa as a key driver for rising demand in containerised goods. AfCFTA is expected to further boost intra-continental trade and investment while making African ports more attractive for international liner companies. However, the African ports need substantial upgrades to accommodate larger vessels and enhance productivity. Click here to read full article first published on splash247.com.

The South African Poultry Industry faces a challenge with the outbreak of Highly Pathogenic Avian Influenza (HPAI), including strains H5N1 and H7N6. H5N1 impacts the Western Cape and KwaZulu-Natal, while H7N6 affects the Free State, Gauteng, Limpopo, Mpumalanga, and North West. All affected farms are under quarantine, preventing the removal of live chickens and eggs. HPAI-infected chickens deteriorate quickly and reduce egg production. As a result, eggs from infected farms won't reach supermarkets. It's a myth that people should avoid eating eggs during the avian flu outbreak, as properly cooked eggs and chicken are safe due to heat destroying the virus. Furthermore, there's no reported human transmission from chicken meat or eggs. Still, raw eggs pose a food safety risk, emphasising the importance of thorough cooking. Consumers can trust the safety of eggs and poultry on supermarket shelves due to strict guidelines. Avoiding eggs can harm nutrition, as they offer essential nutrients and remain cost-effective in tough economic times. Eggs can be enjoyed throughout the day, providing a nutrient-rich and budget-friendly protein source for South Africans. Click here to read full article first published on Business Report.

The Portfolio Committee on Agriculture, Land Reform and Rural Development held public hearings in Parliament on 10 October into the Preservation and Development of Agricultural Land Bill (PDALB). Agbiz, Agri SA the Institute for Race Relations, SAAI, the Minerals council of South Africa, the Black Agricultural Commodities Federation and Inyanda National Land Movement & Rural Women’s Assembly all presented their submissions on the Bill. The Bill aims to provide a regulatory framework for sustainable agricultural development. It promotes a balanced approach to the use of agricultural land in South Africa by introducing strategic and technical instruments to preserve agricultural land. The Bill will promote the delineation of high value agricultural land and the establishment of a national agro-eco information system that will guide investment on agricultural land. In a presentation to the portfolio committee on 17 February 2023, the Department of Agriculture, Land Reform and Rural Development acknowledged that the current institutional, legal and administrative frameworks governing the development of agricultural land is ineffective in protecting agricultural land for purposes of food production and do not conform to the constitutional requirements. A new framework for the protection is therefore critically important. Click here to read full article by Agbiz Head of Legal Intelligence, Annelize Crosby.

The topical issue in South Africa's agriculture currently is the avian influenza spreading across South Africa. The most dominant strains are the highly pathogenic H5 and H7. The most affected provinces so far are Gauteng, Mpumalanga, Free State, Limpopo and North West. We understand that over a hundred mostly commercial facilities have reported avian influenza cases so far. Notably, there are reported losses in parental stock for breeders of layers and in broilers. For this reason, there are now constraints to egg supplies, as evident in various retail shelves across South Africa. Over the past week, we participated in two critical meetings addressing the immediate challenge. First, the Department of Agriculture, Land Reform and Rural Development (DALRRD) met with the retailers. The aim was to assess the severity of the egg supplies at the retail level and assess various response measures. Second, the DALRRD met with the poultry industry to receive an update on the spread of the disease and for the industry to obtain insights into the state's veterinary services. Click here to read full article by Agbiz chief economist Wandile Sihlobo.

The relatively more robust agricultural machinery sales of the first half of this year were primarily a tail-end benefit of the past season when large harvests and higher commodity prices boosted grain and oilseed farmers' finances. The delivery delays of the orders raised the sales figures for the first half of the year. Over the medium term, the sales will likely remain subdued despite the current 2022/23 large grain and oilseed harvest, but somewhat above long-term average levels. The recent months' sales point to this path. For example, South Africa's September 2023 tractor sales were down (-8% y/y), with 715 units sold. Surprisingly, the combine harvester sales remained slightly firm, with 18 units sold, up 6% from September 2022. Still, this comes after a notable decline in the previous months, which again speaks to the moderation in machinery sales. Although we have a large grain and oilseed harvest, with the 2022/23 maize harvest estimated at 16,4 million tonnes, the second largest on record, and soybeans at a record 2,8 million tonnes, we don't expect a boost in machinery purchases. Furthermore, the prices of these commodities have declined by roughly 15% y/y, specifically maize. Also worth highlighting is that the agricultural machinery sales have been robust in the past few years; therefore, the replacement rate will be reasonably low. Click here to read full report by Wandile Sihlobo.

Last week, the Food and Agriculture Organization of the United Nations (FAO) released its monthly Food Price Index for September 2023, averaging 121.5 points. The Index primarily measures the monthly change in international prices of a basket of agricultural commodities. The current price level is roughly unchanged from August 2023. The declines in the price indices of vegetable oils, dairy and meat offset increases in the sugar and grains price indices. Favourably, the Index is 11% below its corresponding period in 2022 and 24% below the all-time high reached in March 2022 following the invasion of Ukraine by Russia. If we focus on grains, the major upside driver of prices, according to the FAO, is "a confluence of factors, including strong demand for Brazil's supplies, slower farmer selling in Argentina and increased barge freight rates due to low water levels on the Mississippi River in the United States of America." In addition to these factors, the lingering concerns about rice exports after India banned non-basmati rice exports on July 20 remain a potential upside risk to grain prices. After the news of the rice export ban, we saw cases of panic buying (in the United States and Canada), additional export restrictions (such as export licensing requirements in Myanmar), and price controls (retailers in the Philippines), which further adds upside risk to prices. Click here to read full report by Wandile Sihlobo.

The Western Cape, which accounts for over two-thirds of South Africa's winter crops and a large share of wine grapes and various horticulture products, faced another heavy and destructive flood this past week. The rainfall peak was mainly the Bredasdorp in the Southern Overberg region. Significant damages to farm infrastructure, electricity supply and road networks are reported in various small farming towns of the province, mainly the southern areas. Still, the impact of the floods on wine grapes and table grapes remains unclear as industry horticulturalists continue assessing the fields. We have seen anecdotal evidence of damages in some storage facilities and crop fields in the southern regions of the province. Another challenge caused by wet soils has been the difficulties of tractors spraying herbicides and fertilizers, so some farmers now use drones to spray the fields. Perhaps this is a positive step toward technological advancement accelerated by unfavourable weather conditions. Click here to listen to the latest Agricultural Market Viewpoint with Wandile Sihlobo.

The Agbiz Grain and Oilseeds Value Chain Symposium, conducted as a hybrid event in Pretoria, recently aimed to delve into various aspects and prospects within South Africa's grain storage industry. The symposium comprised four sessions, each tackling different themes concerning the profitability, traceability, and risk management of the grain and oilseeds sector. Plaas TV also participated in the event to provide insights. Among the topics discussed were future challenges, access to stock, and price convergence in the second session. The third session focused on traceability and regulatory compliance in grain storage, and the fourth session centred on the insurability of the storage sector. Various experts shared their perspectives during these sessions, shedding light on critical issues in the industry. Links to the discussions are provided for those interested in exploring these topics further. Watch Plaas TV insert on Grain storage industry seeking sustainable solutions here, future challenges and solutions here, traceability and regulatory compliance here and insurability of the storage sector here.

In a recent meeting with development partners, Ghana's Minister for Food and Agriculture, Dr. Bryan Acheampong, revealed plans for the launch of the second phase of the government's flagship agriculture program, "Planting for Food and Jobs (PFJ)" in July 2023. This five-year program aims to shift from small-scale farming to large-scale agriculture, fostering food security and transforming the nation's agricultural landscape. Notably, it will replace the input subsidy system of the original PFJ with an input credit approach, addressing concerns of corruption and fiscal sustainability. The PFJ 2.0 emphasizes value chain-driven agriculture, technology integration, and inclusivity, targeting commercial monocropping and large-scale farming. The new program is set to create jobs and boost agricultural productivity, following the successful implementation of the initial PFJ, which had significantly improved Ghana's agricultural sector. While PFJ 2.0 seeks to address the limitations of its predecessor, specific implementation details and pathways are yet to be fully outlined, raising questions about its immediate impact on trade, which may lead to decreased crop production and potential food price hikes in the short term. Click here to read full report by The US Department of Agriculture.

The interior regions of South Africa are poised to experience a prolonged period of warm and dry weather due to unfavorable atmospheric circulation patterns. While this is expected to persist until next week, a glimmer of hope shines on the horizon with indications of potential relief on the way. In contrast, the southern parts of the country, including the winter rainfall area, are set to receive much-needed rainfall in the coming days. These contrasting weather conditions result from the emergence of yet another low-pressure system along the southern coast, which tends to direct rain to the south while leaving the interior parched. As this dry spell continues, the interior can anticipate above-average temperatures, particularly in the central to northeastern regions, with a brief respite in sight as cloud cover is expected to bring about cooler conditions by early next week. However, the southern regions can look forward to cooler temperatures as the rain-bearing system tracks eastward. Moreover, an optimistic shift toward somewhat wetter conditions is on the horizon, with scattered thundershowers forecasted for the central to eastern parts starting from next week. This change is attributed to the development of an upper-air trough over the southwestern regions, ushering in moisture and enhanced cloud cover, likely providing some relief from the persistent dryness. Read full report on the CUMULUS season 2023/2024 update by J Malherbe, R Kuschke here.

The European Union's agro-food sector is at a critical juncture, facing challenges from climate change, crises like COVID-19 and the Ukraine war, and the triple dilemma of food security, livelihoods, and environmental sustainability. Drawing lessons from the period 2014-22, an OECD review examines how the EU's agro-food system has demonstrated resilience, maintained productivity, reduced GHG emissions, and fostered innovation. While productivity growth has been steady, it lags behind other OECD countries. Environmental sustainability, too, hasn't seen expected improvements, primarily due to policy design and implementation. The Common Agricultural Policy (CAP) 2023-27, a significant part of the EU budget, is seen as a strategic tool for addressing environmental concerns and broader food systems objectives. To transform EU food systems, innovation is critical for sustainable productivity growth. Reforms are necessary, focusing on payment redesign, regulatory enhancements, innovation integration, data strategy strengthening, and the introduction of environmental services. This comprehensive approach will help the EU agro-food sector meet the ambitious goals of the European Green Deal while ensuring resilience and sustainability. Click here to read full report by OECD.

In his new book A Country of Two Agricultures, Wandile Sihlobo, Chief Economist of the Agricultural Business Chamber of South Africa (Agbiz), dissects this dilemma and offers some sensible solutions to narrow the chasm between the haves and have-nots in the countryside. To wit, on one hand, South African agriculture is defined by mostly subsistence farming, notably in the former homelands where tenure is insecure and infrastructure has been lacking. This is the lot of the vast majority of black people who live off the land. On the other hand, it is South Africa’s vibrant and mostly white-owned commercial agricultural sector. It is capital-intensive and increasingly high-tech, raising the bar to entry while providing South Africa with much-needed food security and export earnings. Take the example of maize. According to Sihlobo, in the second half of the 1990s, South African commercial maize plantings averaged. 3.7 million hectares (ha) per season producing average annual harvests of 9.5 million tonnes — about 2.5 tonnes per ha. Click here to read full review of A Country of Two Agricultures by Ed Stoddard first published on dailymaverick.co.za.

With South Africa grappling with a Gini coefficient of 0.65 and growing hunger among its households, the fruit industry faces a critical role in ensuring sustainable food production and mitigating inequality. Statistics South Africa reports that unemployment, rising food costs, and energy crises have left 2.1 million South African households hungry in 2021. Fruit South Africa, celebrating its 10th anniversary, serves as a vital player in facilitating export-oriented fruit industry operations and trade negotiations at the government level, representing various fruit associations. The fruit industry is a significant contributor to the country's economy, trading 60% of its produce with over 100 countries, providing essential foreign currency. However, maintaining these numbers requires tackling issues like transformation, as the industry strives to set measurable targets and increase black ownership of fruit farm hectares. Moreover, accessing new markets and ensuring trade agreements in a competitive global arena relies on meaningful partnerships with the government. The industry must also navigate the complexities of global trade compliance, seeking streamlined approaches to protect South African fruit growers facing profitability challenges. Read full article derived from freshplaza.com here.

In the 157th update on South Africa's supply chain, several key developments are highlighted. Commercial ports have seen an increase in container handling, averaging 7,679 containers per day, albeit impacted by network challenges, adverse weather, equipment breakdowns, and congestion. The Port of Cape Town's performance remains subpar, and Durban faces operational delays due to adverse weather and network issues, including a helicopter issue. In the global container shipping industry, carriers hesitate to reduce capacity despite declining rates, leading to a standoff with capacity increasing despite flat global demand. MSC has surpassed Maersk in fleet size. Port congestion affects only about 6% of the industry, and freight rates are decreasing with further declines expected. In the air freight sector, international air cargo to and from South Africa has marginally increased, especially imports, while domestic cargo remains significantly down. Globally, air cargo shows slight growth, but challenges persist due to the contraction in global trade. Read the full update in the latest BUSA Cargo Movement Update.

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. 

• Agbiz is the only organisation that serves the broader and common over-arching business interests of agribusinesses in South Africa.
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• Agbiz research provides sector-specific information for informed decision-making.
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