In the early months of 2024, global trade faces significant disruptions as attacks in the Red Sea impact the Suez Canal, causing a 50% drop in trade volume compared to the previous year. Simultaneously, drought-related restrictions at the Panama Canal have led to a 32% reduction in daily ship crossings since October, affecting about 5% of global maritime trade. Shipping companies reroute vessels around the Cape of Good Hope, extending delivery times by more than 10 days on average, particularly impacting businesses with limited inventories. High-frequency transit estimates reveal a 74% surge in trade volume around the Cape, compensating for Suez Canal losses. Port calls in sub-Saharan Africa declined by 6.7%, raising concerns about potential supply chain disruptions and inflationary pressures due to extended shipping times. The shipping disturbances create challenges for accurate assessment of global trade momentum, affecting customs-recorded imports and exports, with potential fiscal revenue implications for low-income countries. Click here to read full article by IMF Blogs. 

The El Niño Southern Oscillation (ENSO) refers to the natural ocean-atmosphere phases in the Pacific Ocean, with El Niño marked by warmer sea surface temperatures and La Niña by lower temperatures. ENSO strongly influences global atmospheric circulation patterns, leading to extreme climate events. In the summer rainfall region of South Africa, El Niño is associated with warmer and drier conditions, while La Niña brings cooler and wetter weather. In July 2023, the World Meteorological Organisation officially declared the onset of El Niño conditions for the 2023/2024 season. A team of experts, convened by the Extreme Climate Events Research Alliance (ECERA), held the El Niño 2023 Summit in June 2023 to discuss its development and potential impacts in southern Africa. Regular updates are planned to keep stakeholders informed about the evolving ENSO situation. Click here to read full El Niño 2023 Summit Report by the ENSO Reference Group.  

President Cyril Ramaphosa has emphasised the significance of expanding trade and investment between South Africa and Ghana, highlighting the need to explore avenues for enhancing cooperation beyond the existing areas covered by the Bi-National Commission (BNC). He was delivering opening remarks at the second session of the South Africa-Ghana BNC held at the Department of International Relations and Cooperation's OR Tambo Building in Pretoria on Tuesday. “In addition to the many areas of cooperation that the BNC covers, it is important that we explore how best both countries can increase trade and investment among ourselves. “The purpose of the Business Forum that will take place on the margins of this BNC is to expand trade and investment between our two countries. “Ghana is host to several South African companies. Our companies are keen to expand their investments in Ghana and look to us to work together to improve the business environment. We invite investors from Ghana to look at opportunities in our country,” the President said. Click here to read full statement by SAnews.gov.za. 

Central South Africa remains dry, increasing the risk of crop losses in key agricultural regions like the Free State and the North West. Spotty rainfall provided minimal relief but failed to reverse the drying trend that began in February. In contrast, eastern areas maintained good development with a mix of rain and sunshine forecast. Western crop areas are expected to remain dry, with temperatures remaining above normal. While the Western Cape and Eastern Cape saw some rainfall, many production areas remained dry. Overall, less than 15% of summer crop areas received sufficient rainfall to improve soil moisture. High temperatures persisted, exacerbating concerns over crop health and moisture retention. Read full report by World Weather Inc. here.  

The damaging effects of persistent dryness and heatwave in South Africa's summer crop-growing regions have raised concerns about a possible rise in consumer food inflation in the coming months. With South Africa's food price inflation averaging 11% in 2023 (from 9,5% in 2022, 6,5% in 2021, and 4,8% in 2020)1, which was relatively high compared with recent periods, talk of further upside pressure in inflation comes as an unwelcome development. However, the underlying drivers of the increase in food inflation in the past two years were mainly the international agricultural commodity prices and, to a much lesser extent, idiosyncratic domestic factors. Still, towards the latter part of 2023, local factors such as animal diseases, weaker domestic currency, and load-shedding-related costs were some of the key drivers of food inflation. The drought in South America, China's strong demand for grains and oilseed, rising shipping costs, higher energy prices, and the Russia-Ukraine war were some of the factors that were behind the higher global agricultural producer prices, which, in turn, boosted the domestic prices, and thus leading to relatively elevated consumer food price inflation in 2022 and 2023. Click here to read full article by Agbiz Chief Economist Wandile Sihlobo. 

SA, Zambia and Zimbabwe have recently published reports indicating a potential decline in grain harvest because of intense El Niño-induced dryness. These developments could put the entire Southern Africa maize supply chain at risk, with Zambia and South Africa hard hit by heatwaves and dryness. The neighbouring small producers such as Zimbabwe, Botswana, Lesotho and Namibia are also struggling with dryness. Given that South Africa, Zambia and Zimbabwe are among the largest maize producers within the Southern Africa region, a potential decline in the harvest in these countries suggests there could be an increase in the risk of food insecurity. This would necessitate imports to meet the shortfall in the region’s maize supplies. The dryness in an El Niño event is not unexpected in the Southern Africa region as this weather phenomenon is typically accompanied by dryness. The year started favourably, with excellent rains. But the dryness intensified from the end of January. Major damage has been caused to crops since then. The unusual pattern may be part of the broader climate change challenges. Click here to read full article by Wandile Sihlobo for moneyweb.co.za. Click here to listed to latest Agricultural Market Viewpoint episode on the same topic.  

South Africa’s agricultural sector faced several challenges in 2023, but we didn’t think the overall annual performance would drop sharply. Along with the Bureau for Food and Agricultural Policy, we expected a mild contraction in 2023 because of the animal disease challenges in the livestock and poultry subsector. However, the figures released by Statistics South Africa on March 5 show that the gross value added by agriculture, forestry and fishing fell by 12.2% year on year (from a mild increase of 0.9% in 2022 and a robust increase of 7.4% in 2021). The headwinds in the livestock and poultry industry weighed on the overall sector performance more intensely than we had anticipated. The livestock and poultry industry, which accounts for nearly half of the sector’s value, was hit by animal diseases such as foot-and-mouth, avian influenza and African swine fever in 2023. In the case of the livestock and pig industry, foot-and-mouth disease and African swine fever were a challenge even in 2022 but intensified in 2023. Read full article by Wandile Sihlobo for dailymaverick.co.za here.

South Africa’s agricultural machinery sales fell notably in February. The tractor sales were down 34% year-on-year, with 516 units sold, and the combine harvester sales were down 54%, with 18 units sold. These significant sales decline broadly reflects the normalisation of sales after a few years of robust activity. For example, South Africa’s tractor sales for 2022 amounted to 9 181 units, up 17% year-on-year and the highest annual sales for the past 40 years. The combine harvesters also had an excellent performance of 373 units in 2022, up 38% year-on-year and the highest yearly sales figure since 1985.  The sales for the year before were also exceptional. These generally strong agricultural machinery sales these past few years were primarily on the back of large grain and oilseed harvests. In 2023, the tractor sales were down marginally from the previous year, while the combine harvester sales held the last year’s momentum. Thus, we think the agricultural machinery sales will begin a correction period this year. Thus, while in the past, agricultural machinery sales would be read as one of the early indicators of the health of the farming sector, this time around, the sales should be read differently for the reasons we stated above. Click here to read full report by Wandile Sihlobo. 

The latest GDP figures display a bleak reality of the agricultural sector. The contribution of agriculture, forestry, and fisheries to the GDP declined by 2 percent. Many factors threaten agricultural growth, including power cuts, animal diseases, and climatic conditions. Watch full eNCA interview with Wandile Sihlobo here. 

Agbiz Grain, together with Senwes and Peritum Agri, celebrated the launch of the Grain Depot Manager Programme on Friday, 8 March. This collaborative effort, developed over four years, is a testament to their commitment to fostering skills and expertise in the agricultural sector. The event featured speakers Emmie Pietersen, Director of Peritum Agri Institute; Heinrich Henning, Operations Manager at Senwes; and Wessel Lemmer, General Manager of Agbiz Grain, who shared their insights and excitement about this innovative programme. The Grain Depot Manager Programme caters to the needs of enterprises handling grains and oilseeds, especially those serving farmers. It aims to equip learners with the skills to operate effectively as Grain Depot Managers. The programme emphasises achieving operational efficiencies, responsible resource utilisation, and maintaining the mechanical integrity of bulk grain handling and storage units. Click here to read full report by Agbiz Communication Officer Temba Msiza. 

The worldwide cucumber market faces dynamic challenges as supply and pricing trends evolve. In Europe, slowly starts in major production countries coincide with low pricing, while supplemental lighting in the Netherlands and Belgium has seen a surge. The Mediterranean region is closely monitoring drought impacts on cucumber production. In North America, storms in Mexico and lower-than-expected Honduran imports contribute to a tight supply, possibly causing a significant jump in prices. South Africa grapples with low supply and higher cucumber prices due to seasonal weather changes. The report delves into regional insights, highlighting the delicate balance between supply, demand, and external factors shaping the cucumber industry's landscape. For a comprehensive exploration, read the full report here. 

This update provides a comprehensive overview of the South African supply chain and international trade landscape. Commercial ports faced challenges such as adverse weather conditions, congestion, and equipment shortages, impacting operations. However, efforts to enhance port infrastructure are underway to address these issues. In the maritime industry, the Ocean Alliance extended its cooperation agreement, while MSC's expansion of cold storage facilities signifies continued growth. In the air cargo sector, ORTIA saw increased volumes, with investments in airport infrastructure welcomed. Internationally, air cargo witnessed growth despite declining yields. Regional cross-border road freight trade experienced improvements in queue and transit times, with ongoing developments in border operations. Overall, the industry has seen minor victories, including improved efficiency in port operations and ongoing infrastructure investments, promising enhanced reliability and efficiency in cargo movement. Read the full update in the latest BUSA Cargo Movement Update. 

Southern Africa's Citrus Growers' Association (CGA) celebrated a significant milestone in its "Vision 260" export strategy with the opening of MSC's first-ever reefer warehouse in Cato Manor. The R350 million facility, operated by MSC's Medlog, boasts a capacity for 10,000 pallets and is strategically located near the Port of Durban, supporting the region's goal of reaching 260 million cartons of citrus exports by 2032. Justin Chadwick, CEO of CGA, highlighted the importance of cold chain capability in scaling up citrus exports, praising MSC's role in facilitating global distribution. The presence of dignitaries, including MSC SA's chairperson and CEO, underscores the significance of this development for the region's perishable cargo industry. This initiative marks MSC's second recent milestone in enhancing cold chain infrastructure in South Africa, further solidifying its commitment to supporting the country's export ambitions. Click here to read full article by freightnews.co.za. 

As Spanish citrus producers voice concerns over the influx of Egyptian oranges into Europe, questions arise about the driving forces behind this trend. While trade diversification is accepted, discrepancies in import regulations raise eyebrows. Data from the European Commission's AGRIDATA reveals the Netherlands as the largest importer of Egyptian oranges in the 2022/23 campaign, followed by Spain and Italy. The 2023/24 campaign sees a surge in Egyptian imports, with Spain witnessing a significant increase. As European countries grapple with these imports, debates about market dynamics and regulatory alignment intensify. Despite ongoing discussions, the appeal of cheaper Egyptian oranges continues to challenge the stability of European citrus markets. Read full article by freshplaza.com here. 

Peritum Agri Institute and Roots College officially launched their collaborative effort in Windhoek, Namibia, on February 27, 2024, aiming to provide quality agricultural education for Namibian school leavers interested in farming. The opening ceremony, attended by prospective students, parents, media, and government officials, including Honorable Minister Erastus Uutoni, highlighted the initiative as groundbreaking. Dr. Johan Riekert, the founder of ROOTS College, emphasised the programme's goal of empowering Namibian youth through education, adopting an entrepreneurial approach to address food security in arid regions. The courses not only focus on equipping students with agricultural knowledge and skills but also instill an entrepreneurial spirit for sustainable agricultural enterprises. Minister Uutoni encouraged young people to seize educational opportunities to enhance agricultural development, emphasising the critical role of agriculture in both urban and rural planning. Peritum Agri Institute's founders, Emmie Pietersen and Belinda Louw, expressed their inspiration from Namibia's resilience in agriculture and their commitment to fostering practical education on climate-smart agricultural practices for a prosperous future. Click here to read full statement by Peritum Agri Institute.  

The global cotton trade is experiencing an upward trend despite challenges in shipping logistics. The ongoing global situation sees cotton production consistently exceeding consumption, keeping prices below 95 cents per pound (cpp) on the Cotlook A-Index. Although there was a recent increase in prices to around 95 cpp, it is not expected to be sustained due to weak consumer demand. Geopolitical unrest, particularly in the Red Sea area, has led to shipping complications, causing concerns for merchants and mills. The elevated prices of shipping containers, notably in trade between West Africa and Asia and European exports to Asia, are impacting cotton-trading countries like Egypt and India. While the current situation is manageable, a potential shipping crisis looms if the conflict persists and cotton demand rises. Despite reduced consumer sentiment, the cotton trade remains over 10% higher than the previous season, offering a positive outlook. The International Cotton Advisory Committee (ICAC) projects a season-average A index for 2023/24 ranging from 81.02 to 103.61 cents, with a midpoint at 90.88 cents per pound. Click here to read the full Cotton Market Report February 2024.

Michelle Marais emerged as the inaugural winner of the 2023/2024 Women’s Insight Deliberation Competition, celebrated at a gala event in Johannesburg. The competition, aiming to provide a platform for women in agriculture to discuss and influence agricultural issues, showcased Marais' passion for creating opportunities for farmers in Africa. Marais highlighted the importance of enticing young people into agriculture while making them aware of the sector's realities. The event served as a space for women to deliberate on topics impacting their lives, careers, rural communities, and the environment. Supported by partners like Hollard Insurance Group and Case IH SA, the competition emphasized the significant role women play in agriculture, with special recognition given to pioneers in the field. The event organisers expressed gratitude to all participants and announced plans for the 2024/2025 competition. Read full statement by Future Agri Perspective here.  

Freshfel Europe has expressed concern over the potential impact of Defra's proposed changes to Annex 11 of the retained Implementing Regulation 2019/2072. These changes could subject half of all EU fresh fruit and vegetable exports to the UK to increased inspections and red tape, potentially costing up to £200m (€235m). Such measures could render the UK market less attractive for EU exporters, endangering food security and affordability. Freshfel emphasises the importance of transparent and flexible rules to maintain seamless trade and prevent disruptions to the supply chain, urging UK authorities to reconsider their approach. Read full article by fruitnet.com here. 

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. 

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