The year 2022 has been challenging for several agricultural industries. Despite good rains in the summer planting areas, high energy and shipping costs, growing protectionism, biosecurity issues, and disappointing autumn rains in the winter planting area have weighed on the sector’s fortunes. This is evident from the latest Agbiz/IDC Confidence Index results, where the last quarter of 2022 fell by 4 points to 49. A score below the neutral mark of 50 points means that the sector’s outlook has turned downbeat for the first time in some years. In 2023, Agbiz and our desks will endeavour to find pragmatic solutions to the factors that weigh on the industry’s confidence. Some global factors are beyond our sphere of influence as a country. Agbiz CEO Theo Boshoff looks back at the past year and cites the challenges for 2023 in the December edition of From the CEO's desk. Please click here to peruse.

Interest-rate hikes have eased price pressures, but the weather, war and material costs could keep food prices elevated for longer. Food prices, which reached a record earlier this year, have increased food insecurity and raised social tensions. They have also strained the budgets of governments struggling with rising food import bills and diminished capacity to fund extra social protection for the most vulnerable. To better understand the scale of these unprecedented challenges for global policymakers, we quantify in new research the typical impact of four historically important drivers of food commodity prices. Read more in the linked blog post, published by the International Monetary Fund.

The global energy crisis is fueling fierce debate around the world over which new energy projects should or shouldn’t go ahead. Conversations about energy and investment often fail to take into account the considerable lag between investment decisions and when projects actually go live. At the International Energy Agency (IEA), we warned years ago that global investment in clean energy and energy efficiency was not sufficient to put us on a path to reach our climate goals. Without a surge in clean energy spending, the amounts invested in conventional energy projects also risked falling short of what would be needed to meet potential increases in demand. Read more in the linked blog post, published by the International Monetary Fund.

Agbiz recently made written submissions on draft legislation on a proposed Water Infrastructure Agency as well as phase two of the National Infrastructure Plan. The Water Infrastructure Agency Bill envisages the creation of a state-owned and state-controlled entity to administer, fund, finance, provide, operate, maintain, and provide advisory services in respect of national water resources infrastructure. Although the creation of new bulk water infrastructure and the maintenance of existing infrastructure is absolutely critical, Agbiz does question whether a new state-owned and state-controlled entity will be able to deliver such infrastructure speedily and effectively without private sector support. There are potential advantages to establishing such an agency, such as the fact that the Trans Caledon Tunnel Authority (TCTA), which has been quite successful, will be absorbed into the new entity. Hopefully, the Water Agency will be able to streamline procurement and recruitment processes using the processes already implemented successfully by the Trans Caledon Tunnel Authority. Agbiz head of Legal Intelligence Annelize Crosby discusses Agbiz's submissions in the linked article.

There is consensus among agricultural role players that sustainable growth in SA’s agricultural sector can only be achieved through the expansion of production. An expansion of export markets must be a key support pillar for growth. This has been well-understood for many years. For nearly three decades SA excelled at opening new export markets, which has supported the growth the sector has witnessed since 1994. SA has successfully negotiated several free trade agreements over the past few decades, with critical regional and international markets. These include the Southern African Development Community (Sadc) free trade agreement, the Sadc-EU economic partnership agreement, the SA Customs Union (Sacu)/Mozambique-UK economic partnership agreement, the African Continental Free Trade Area (AfCFTA) and the Sacu-Mercosur (South American) preferential trade agreement. Read more in the linked article by Agbiz chief economist Wandile Sihlobo.

This past week the United States Department of Agriculture (USDA) released its monthly flagship report, the World Agricultural Supply and Demand Estimates report. This report provides insight into the production conditions of the major grains and oilseeds. While there have been some changes in production conditions in various countries, the overall estimates continue to paint a broadly positive picture, with slight downward revisions in maize and wheat harvests. For example, the USDA forecasts 2022/23 global wheat production at 780 million tonnes, down by 0,3% from November 2022. This is mainly on the back of a downward revision of Argentina’s 2022/23 wheat crop on the back of drier weather conditions. Still, the 2022/23 wheat production forecast is 0,2% higher than the previous season supported by expected large yields in Russia, the US, Canada, Kazakhstan, China, Turkey, and the UK, amongst others. Read more in the linked article by Wandile Sihlobo.

After registering positive growth since May 2020, South Africa’s tractor sales fell by 5% year-on-year in November 2022, with 704 units sold. Still, the current sales are well above the long-term monthly average of 565 units, and reflect an environment where farmers were financially secured and confident about the seasons ahead, and thus increased investment in movable assets.

Essentially, when farmers have a good year, allied industries benefit from spending the financial gains or the produce of the farming businesses. Agricultural machinery is one such industry that benefited from farmers' spending in 2020, 2021 and the greater part of 2022. During the same period, combine harvest sales amounted to 23 units, significantly up from 8 units sold in November 2021. Wandile Sihlobo discusses the latest agricultural machinery sales data in the linked article.

At their last meeting of the year held on 12 December, members of the Informal Working Group on Trade and Gender took stock of the work undertaken in 2022 and considered their next steps. The co-chairs highlighted that the mandate of the Informal Working Group was strengthened by the 12th Ministerial Conference (MC12) outcome document, which recognizes the importance of women’s economic empowerment. They announced that 2023 should be dedicated to developing a long-term work programme containing concrete actions and deadlines. Please click here to peruse.

African leaders face a dilemma over trade relations with the United States. Should they push for the extension of the Africa Growth and Opportunity Act (AGOA) or for each country’s bilateral trade deal with the world’s biggest economy? AGOA was the signature economic policy of the Bill Clinton administration. It provides eligible sub-Saharan African countries with duty-free access to the US market for over 1,800 products. It is set to expire in 2025 but is up for discussion at the annual forum on AGOA taking place alongside the US-African Leaders Summit (13-15 December 2022). The Trump administration preferred to negotiate bilateral trade deals with African countries. A free trade agreement negotiation with Kenya in early 2020 was supposed “to serve as a model bilateral deal for other African countries”. Read more in the linked article, first published on The Conversation.

From Hurricanes Fiona and Ian, to flooding in eastern Kentucky and a record dry summer as the western US entered its 22nd year of a once-in-a-millennium megadrought, the US has already seen more than two dozen major climate disasters with losses exceeding $1bn. On top of this economic toll, extreme weather is also upending the food system in the US and much of the world. As the climate crisis causes temperatures to rise, precipitation patterns to shift and drought conditions to lengthen, many crops are struggling to grow – and produce the same yields – as they would under normal weather conditions. In some parts of the country, crops that require dry conditions are getting too much rain, while in others, they’re not getting enough. Read more in the linked article, first published on theguardian.com.

Port operations this past week were characterised by adverse weather conditions, frequent equipment breakdowns and shortages, system challenges, congestion, and road shows. The Eastern Cape ports experienced a relatively good week, as the most significant reported delay occurred when the Ngqura port was subject to load shedding from 16:00 to 18:00 on Wednesday. Durban kicked off Friday morning with only two tugs as one experienced electrical faults. Additionally, the Durban helicopter went out of commission earlier this week due to suspected water in the fuel tank. Furthermore, this week, TFR was, as usual, on the receiving end of frequent overhead power failures on the line between Johannesburg and Durban, causing minor delays. However, the movement of trains on the container corridor is much improved as the incidence of cable theft is declining. Globally, weekly container capacity deployment keeps on decreasing as carriers suffer from the growing trough in the global economy. Consequently, strategic "schedule management" remains a controversial topic, with cancellations and missed calls once again a feature of the week. Please click here to access the latest BUSA Covid-19 Cargo Movement Update.

Get the latest news from the Agricultural Development Agency (AGDA) in the December 2022 edition of its newsletter edition. Please click here to peruse.

The South African Citrus Growers’ Association (CGA) has announced the results of the 2022 export season, stating that growers packed 164.8m 15kg cartons for shipment to global markets. This is an increase of 3.2m cartons when compared to 2021, but some 5.7m cartons below the pre-season forecast. The CGA said the results highlighted an extremely tough season for growers that negatively impacted returns and the volumes they were able to export. “It threatens the future sustainability of the industry, which sustains over 140,000 jobs and brings in R30bn in revenue to South Africa every year,” the association noted. Read more in the linked article, first published on fruitnet.com.

The heavy rain in the Western Cape over the past few days has both a positive and negative impact on vineyards. Precipitation over the winegrowing areas in the Western Cape ranged from 79 mm in the Paarl to 28 mm outside Darling (see graph for rain distribution over various areas in the Western Cape). The good rainfall comes after a very dry winter and spring which led to lower groundwater levels than normal. “In general, producers had to start irrigating earlier and more often than usual to meet the needs of vineyards," says Conrad Schutte, Vinpro consultation services manager. "More frequent load shedding has an enormous impact on irrigation schedules where producers, especially in intensive irrigation areas, cannot irrigate enough to meet the vineyard's needs. The current growth phase of the vine involves cell division in berries and any stress, especially water stress, will have a negative impact on this process. This results in smaller berry sizes with a corresponding reduction in the total tonnes per hectare recovered. Read more in the linked Vinpro 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.