e-Newsletter
13/2022
7 April 2022
From the CEO's desk
In the previous edition drafted on 4 February, the fourth wave of Covid-19 was seen as the biggest event that could disrupt our agricultural value chains. A mere two months later, the national state of disaster has officially ended. Unfortunately, this may be largely ceremonial as key restrictions remain in place, including a cap on public events, and 32 land borders remain closed. On the one hand, it raises concern since the remaining restrictions have no precise expiry date. On the other hand, no new restrictions can be imposed unless a new national state of disaster is declared. This does provide some certainty, so it may be a step in the right direction and a psychological boost to those who bore the brunt of the restrictions. Agbiz CEO Theo Boshoff shares the latest news on initiatives of the Agbiz administration. Please click here to peruse.
Policy uncertainty at an all-time high
The NWU Business School Policy Uncertainty Index (PUI) for 1Q 2022 rose dramatically to 59.7 from 53.2 in 4Q 2021 (Baseline 50), the highest recorded since the inception of the PUI in 2016. This seems to have been mainly driven by the big shock and heightened global economic unpredictability arising from the Russian-Ukraine conflict, which also reinforced some continued domestic uncertainties. Unsurprisingly, therefore, negative factors greatly outweighed positive ones in 1Q 2022 - but the PUI may recede from its present abnormally high point in the months ahead as different perspectives unfold. The combination of war, sanctions, supply chain disruptions and geopolitical factors has impacted global growth and inflation, together with heightened market uncertainty and volatility. The US Federal Reserve has raised interest rates, with further increases expected during the year. The rand has so far remained resilient. Read more in the linked Policy Uncertainty Index, published by the North-West University Business School.
War-induced food price inflation imperils the poor
The conflict in Ukraine has led to a surge in food prices, particularly wheat and corn. The linked column on VoxEU.org uses a newly developed toolkit to analyse the welfare impacts of food price inflation on households in developing countries. Average household welfare decreased in 43 of 53 countries in the sample, with an average real income loss of -1.5%. This impact varies substantially both across and within countries, with poorer households suffering systematically larger welfare losses. Protracted price increases will have long-term consequences for prosperity in many of these countries, exacerbating issues of poverty and inequality. Read more in the linked column on VoxEU.org, which forms part of the Vox debate on the economic consequences of war.
POLICY AND LEGISLATION
Agbiz hosts a workshop on public-private partnerships
Agbiz hosted a successful workshop on 1 April to discuss potential public-private partnerships to bolster government regulatory functions. It was a hybrid workshop, with around 23 member representatives attending in person at the Grain Auditorium and another 34 attending online. The idea for such a workshop stemmed from discussions leading up to the Presidential Job Summit in 2018 when business identified capacity constraints in critical areas as a constraint to competitiveness and ease of doing business. Many agricultural inputs and products require inspections and certifications from regulatory bodies before they can be marketed. Where service delivery is hampered by capacity constraints, it can stifle trade and economic growth up and down the value chain. The capacity challenges include key regulatory functions and a document was produced that identified areas in the agricultural sector that required specific focus. In the linked article, Agbiz head of Legal Intelligence Annelize Crosby gives feedback on the workshop.
AGRIBUSINESS RESEARCH
SA agriculture machinery industry saw robust sales in March 2022, but the outlook remains uncertain
While we maintain a cautious view of the South African agricultural machinery sales outlook in 2022, the high-frequency data confirm that the sales remained robust in the first three months of the year. The tractor sales were up by 5% y/y in March 2022, with 641 units sold. At the same time, the combine harvester sales were up 48% y/y, with 43 units sold. This builds upon the solid momentum of the past two years. As we set out in the previous month, when farmers have a good year, allied industries benefit from farmers' spending the financial gains or the produce of the farming businesses. Agricultural machinery is one such industry that benefited from farmers' spending in 2020 and 2021. The farmers, specifically grain and oilseed producers, expanded their area planted in the past two years. Agbiz chief economist Wandile Sihlobo discusses the latest data in the linked article.
What the month of April means for SA agriculture
Each year, the months of April and October are critical periods in the seasonal cycle of South Africa's agriculture. These months correspond with summer and winter crops' planting and harvesting periods. In October, the winter crops are typically maturing and approaching the harvesting stages, while the summer crop regions usually commence plantings around the same time. In April, it is the opposite – typically marked by the planting of winter crops and the approach of the harvesting season for summer crops. Notably, the harvesting period also approaches around this time for major fruits such as citrus. These events make the weather an even more important consideration during this period. The planting regions of winter crops would need increased moisture, whereas the harvesting period of summer crops and horticulture would require cooler and drier weather conditions. Read more in the linked article by Wandile Sihlobo.
AGBIZ GRAIN
Supply and demand do not determine rates
The annual adjustment in the storage rates for stock on JSE silo certificates takes place three times a year for the respective marketing years for oilseeds, summer cereals and winter cereals. The adjustment is based on the producer price index (PPI) and not supply and demand. The storage sector's basket costs, however, are exposed to unique issues and specific cost increases that are not fully reflected in the PPI. The weight of a certain cost item for storage differs from the inclusion thereof in the PPI or the relevant subindex. Agbiz Grain general manager Wessel Lemmer elaborates on this subject in the linked article, first published in Landbouweekblad.
OTHER NEWS
South Africa has had lots of rain and most dams are full, but the water crisis threat persists
Most parts of South Africa, specifically its summer rainfall areas, have received above-average rainfall since October 2021. This has led to an increase in the country’s national average water levels. The total percentage of water stored in reservoirs nationally rose from 84.6% in mid-December 2021 to 88.7% at the end of the year. By mid-March in 2022, the national average was 94% compared to 85% for the same period last year, with all provinces showing an overall increase. The normal national water storage percentage for South Africa is typically between 85% and 80%. The drought from 2015 to 2018 depleted the country’s water storage levels, especially during the first half of 2016 when overall water storage fell below 50%. Read more in the linked article, first published on The Conversation.
Government must take a decisive investment bet on macadamias, particularly in the Eastern Cape
Macadamias are a high-value agricultural export described as “golden nuts” due to the insatiable global demand, fuelled by millions of health-conscious consumers who seemingly cannot get enough of them. Demand for macadamias is so high that producers cannot meet global demand. Although the nut originally hails from Australia, South Africa has developed plantations that have made our country one of the leading macadamia exporters in the world, often competing with Australia for the number one spot. Having seen the huge potential of macadamias as a lucrative agricultural commodity, a group of Eastern Cape-based emerging commercial farmers and a rural community got together 15 years ago to establish the Ncera macadamia project. This venture, along with the Amajingqi project in Willowvale, has enabled the Eastern Cape to join Limpopo, Mpumalanga, the Western Cape and KwaZulu-Natal as macadamia-producing provinces. Read more in the linked article, first published on Business Day.
Transnet begins selling key rail slots on strategic routes to third party operators
Railway_line
Transnet has opened the sale of slots on two key corridors on its rail network to third parties. The embattled railway service provider announced on Friday that interested and qualifying operators are invited to respond. “This is a significant step in the rail reform process and advances the increased use of rail for the transportation of freight, as envisaged in the Draft White Paper on the National Rail Policy (2017),” said Transnet in a statement. The slot system will enable third parties to operate key parts of the railway, but the ownership will remain under Transnet. Read more in the linked article, first published in The Citizen.
FMD outbreaks cause China to halt wool exports
Notification has been received that China issued a formal announcement banning the import of all cloven-hooved animals and their products, with effect 2 April 2022. This will include all wool already shipped and en route to China. Undoubtedly this will lead to further auctions being delayed and other emergency measures being put in place to ensure the maintenance of our wool industry and market. Catalogue 28, which was set to sell on 6 April, has already been cancelled. It has to be kept in mind that there is an existing protocol between South Africa and China, which was implemented after the 2019 FMD outbreak and maintained on our part since. The best-case scenario is that this existing protocol is still seen as sufficient by the Chinese authorities and enough to normalise the sale of South African wool to China. Communication between the South African wool industry and our Chinese counterparts is direct and is facilitated by a joint working group formed during the 2019 outbreak, however, we have to keep in mind that the decision on allowing South African wool into China rests with the Chinese government. Read more in the linked notification from OVK.
Wetter weather returning
Current forecasts indicate a return to much more inclement conditions over both the summer and winter rainfall region during the next few days. Upper-air instability and strong high-pressure systems ridging around the country will result in several days of scattered to widespread thundershowers over large areas during the coming days. While there are no indications of intense systems that are usually associated with severe weather over the interior, thundershowers, in general, may produce hail more often by this time of the year when the atmospheric temperatures are lower, especially when the upper air is unstable as expected during the next few days. Please click here to access the latest edition of Cumulus, published by AgriSeker.
MEMBERS' NEWS
More fruits to be exported to China, says CGA
The Citrus Growers' Association of Southern Africa CEO Justin Chadwick expects local lemon producers to export more tonnes of lemon throughout this year to China after having exported 225 tonnes to the market since the start of the year. "To date, only (225 tonnes) of lemons have been exported to China; it is very early in the season and we expect considerably more to go as the season ramps up," he stated. South Africa is a leading lemon producer in Africa. The country now has the capability of exporting lemons due to a revised lemon protocol. According to the previous agreement, signed bilaterally in 2006, all citrus exports from South Africa were required to undergo cold treatment for 24 days at or below 0.6 degrees Celsius to prevent fruit flies and false codling moths. Read more in the linked article, first published on FreshPlaza.
South African deciduous fruit industry affected by Ukraine crisis
The Ukrainian crisis and the impact thereof was completely unforeseen, dramatic and severe. The South African industry was faced with fruit in transit prior to the war started as well as further shipments in the period before sanctions were imposed. During the previous season, 21% of South Africa's pear exports (4,4 mill cartons), 6% of apples (2,1 mill cartons), and 9% (610 000 cartons) of plums were marketed in Russia. Volumes to Ukraine were very limited. The EU pear stocks are down by -15% on last year which will likely offer some opportunities for South African pear exporters. On the other hand, the EU apple stocks are up by +9%. Read more in the linked article, published by Hortgro.
Get the latest news from the FPEF
Keeping it Fresh, the newsletter of the Fresh Produce Exporters Forum (FPEF) contains all the recent relevant news and developments. Please click here for the latest edition.
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's (SAPPO) newsletter, SAPPO Weekly Update.
Weekly newsletter from CGA
Justin Chadwick, CEO of the Citrus Growers' Association of Southern African, shares the latest news in the citrus industry in his weekly update - From the desk of the CEO. Please click here to peruse.
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 government regulations, delegates will be required to be fully vaccinated or submit a negative PCR test 72 hours before the event. 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 as soon as possible. Please click here for more information.
AgriVoltaics for the Food/Water/Energy/Jobs Nexus in Southern Africa
28 April 2022 | 12:00-14:30 | Zoom webinar

Nampo Harvest Day
16-20 May 2022 | Bothaville

Hortgro Technical Symposium
6-10 June 2022 | Lord Charles Hotel | Somerset West

12th South African Large Herds Conference
6-8 June 2022 | Champagne Sports Resort | KwaZulu-Natal
More information or contact Julie McLachlan on julie@mpo.co.za or 083 740 2720

Agbiz Congress 2022
22-24 June 2022 | Sun City

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

Nampo Cape
14-17 May 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.
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