South Africa and Botswana celebrated 28 years of bilateral trade in Gaborone, Botswana on 3 August. The event was jointly hosted by Ministers Patel and Kgafela, the respective Ministers of Trade and Industry from South Africa and Botswana. Breakaway sessions were held to focus on mining, automotive parts manufacturing and agribusiness. In the agribusiness breakaway, South Africa was represented by Theo Boshoff from Agbiz and Khani Hlungwani from BFAP. The discussions centered on the opportunities for supplier development by South African retailers in Botswana and joint challenges related to animal disease management and protectionism. On the latter point; the SACU agreement allows for the protection of infant industries. This provision has been used to place a moratorium on vegetable imports from South Africa to facilitate the development of vegetable farmers in Botswana. Throughout the discussions, producer organisations and retailers agreed that a balance needs to be sought between supporting the domestic industry through supplier development programmes whilst still ensuring supply throughout the year. In this regard, detailed discussions are needed to scope the demand in Botswana and the production potential of its domestic industry. South African imports can then make up the shortfall due to seasonality or insufficient supply. It is only through continued dialogue and information-sharing that evidence-based policy decisions can be made.

The further decline in the seasonally adjusted Absa Purchasing Managers’ Index (PMI) suggests that the manufacturing sector experienced a tough start to the third quarter following a weak second quarter. The headline index fell from 52.2 points in June to 47.6 in July. This is the first reading below the neutral 50-point threshold since July 2021 when the looting and unrest in KwaZulu-Natal and Gauteng hurt output. Electricity supply disruptions were the likely cause of the drop in production last month. The Absa Purchasing Managers’ Index™ (PMI™) compiled by the Bureau for Economic Research (BER) and sponsored by Absa, is based on the widely used and highly regarded Purchasing Managers Index (PMI) produced by the Institute for Supply Management (ISM) in the USA. Please click here to access the file.

Loadshedding will still be with us until the end of 2024. There is no shortterm fix for Eskom. It needs new capacity to stop loadshedding. Having said that, let’s look at the bigger picture and the longer term. In one week we got three big announcements on electricity in South Africa. First, the president addressed the nation and outlined how government intends to deal with Eskom, loadshedding and the future of the electricity industry. Two days later Eskom showed its hand at a coal transition indaba on how it sees the energy picture unfolding and what investment it would entail. The following day Treasury lifted the veil on its plans for Eskom’s debt. There is a remarkable alignment and consistency between the three announcements and together they paint a clear picture of a huge gamechanger for South Africa. Political and trend analyst JP Landman shares his views on this subject in the linked article.

Agbiz, in cooperation with Agbiz Grain and Gerard Ramage from VKB, has come up with a proposal to host a number of workshops for members to promote compliance with health, safety, environmental and quality (SHEQ) standards. There are a host of laws and regulations that speak to these issues. It is quite a challenge to make sense of all the different laws and standards in this regard. It can be quite challenging to get operations, management, and employees to comply with legislation that is vital for employee and customer safety and environmental wellness. Read more in the linked article by Annelize Crosby, head of Legal Intelligence at Agbiz.

The EU is among regions that have, for some time, resisted importing and cultivating genetically engineered (GE) crops. But this changed on July 1, when the European Commission approved the importation of GE maize for human and animal consumption. This follows a similar approach with soybeans. This authorisation is valid for 10 years but does not include cultivation, and imports will be subject to EU labelling and traceability rules. After nearly 25 years of opposition to GE crops, this perhaps signals a move to wider acceptance in the EU, though the recent concession may have been forced by shortages and prices rather than European consumers’ support for the well-proven science. Read more in the linked article by Agbiz chief economist Wandile Sihlobo, written for and first published in Sunday Times.

South Africa's 2021/22 summer crop harvest is near completion, as we approach the new season which begins in two months. Still, there were important revisions brought by the Crop Estimates Committee this past week. For example, the 2021/22 maize harvest was lifted by 0,2% from June to 14,71 million tonnes. About 7,47 million tonnes is white maize, with 7,24 million tonnes being yellow maize. Essentially, this is down by 10% from the 2020/21 season crop but well above the 10-year average maize harvest of 12,80 million tonnes and annual domestic consumption of 11,80 million tonnes. Importantly, this means that South Africa will remain a net exporter of maize, which we anticipate to be just over 3,0 million tonnes in the 2022/23 marketing season (note: this marketing year corresponds with the 2021/22 production season). Wandile Sihlobo discusses the latest data in the linked article.

When the European Commission’s Standing Committee on Plants, Animals, Food and Feed (ScoPAFF) Committee first discussed new phytosanitary measures for South African citrus, largely at the urging of Spain, in early 2022, the possibility of the measure being approved appeared remote, due to the impracticality of South African compliance mid-season, and the significant damage it would cause to the trade relationship between South Africa and the EU. However, in a last-minute about-turn, the committee approved the revisions to the existing measures in early May 2022, triggering one of the most significant trade disagreements between the parties in recent times. Wolfe Braude, manager of Agbiz Fruit, discusses this subject in the linked article.

International wheat and maize prices decreased in June, reflecting seasonally increased availabilities of wheat in Northern Hemisphere exporters and of maize in Southern Hemisphere exporters. By contrast, strong demand for “Indica” and ”Basmati” rice, coupled with thinning ”Basmati” availabilities, kept international rice prices on the rise in June. Based on the latest available data, FAO analysis indicates that the number of countries facing abnormally elevated levels of food prices remained high in June. While reduced domestic supplies, national macroeconomic difficulties and/or localized insecurity remain the underlying drivers of the high prices in many cases, the disruptive impact of the war in Ukraine on international food, fuel and fertilizer markets remains a major cause, especially for countries highly dependent on imported wheat and coarse grains. Read more in the latest edition of the FPMA Bulletin that is linked here.

Inflation has pushed up prices for almost everything, but rising food prices could mean life or death for people in countries already struggling with conflict, economic downturns, and the effects of climate change. Maximo Torero Cullen is chief economist for the UN's Food and Agriculture Organization, which tracks global food security. In a podcast, Torero says wheat and fertilizer supply shortages have driven up prices and increased food import bills for the most vulnerable countries by more than 25 billion dollars, putting 1.7 billion people at risk of going hungry. Listen here to a podcast on this subject with Maximo Torero Cullen.

Despite smaller logjams at Los Angeles and Long Beach, North American port congestion has just re-entered record territory, according to an article by FreightWaves. In January and February, when North American congestion previously peaked, there were just under 150 container vessels waiting off the coastlines. Two-thirds were in the Los Angeles/Long Beach queue. As of Thursday morning last week, there were 153, the majority off East and Gulf Coast ports. Whereas the earlier West Coast pileup was centralized, highly publicized and relatively easy to track, today’s ship queue is more widely disbursed and attracting less attention. Port congestion had finally looked like it was easing in May and early June. Ship queues had fallen back to double digits. There were 92 vessels waiting offshore as of June 10, led by 25 off Savannah, Georgia, 20 off Los Angeles/Long Beach, 18 off New York/New Jersey and 14 off Houston. Click here for the full article.

This past week's main headline for port operations relates to substantially increased throughput levels compared to last week despite some challenging weather conditions in Durban and Richards Bay. Also, the helicopter at the Durban port was re-commissioned during the latter stages of the week after component repairs were completed earlier in the week. Some delays experienced were primarily attributed to equipment breakdowns, congestion, vessel ranging in Cape Town, and, unfortunately, a horrible truck accident in Durban. Lastly, for rail, TFR still hasn't provided an estimated return time on the second line of the container corridor after the derailment. However, they suggested earlier this week that the second line of the Durban-Cato Ridge railway should be back in commission by 17 September. Please click here to peruse the latest BUSA Covid-19 Cargo Movement Update.

Hendrik van Staden has been appointed as Syngenta Seeds Business Unit Head in Sub Sahara Africa from 1 August 2022.

“In his new role, Van Staden will guide the organisation in its mission to foster the current momentum and to drive further growth of the seeds business in Africa and advancing our commitment to regenerative agriculture,” Kobus Lindeque, former Seeds Business United Head sub-Sahara Africa said. Lindeque was instrumental in the integration process between Sensako and Syngenta in South Africa and the development of a summer crop growth strategy to support the extremely successful Sensako wheat seed business. This growth strategy of Syngenta’s seeds business in Africa will be the foundation for future growth. As an expert business mentor, Lindeque will remain available in the capacity of a business consultant and mentor and will work closely with Van Staden in the onboarding process. Read more in the full Syngenta media statement.

The Citrus Growers' Association of Southern Africa, shares the latest news in the citrus industry in its weekly update - From the desk of the CEO. Please click here to peruse.