The war Russia is waging in Ukraine is a humanitarian disaster. Beyond this, the economic damage is already being felt worldwide and risks becoming increasingly severe and long-lasting. Russia’s invasion of Ukraine on 24 February has thrown the growth recovery from the Covid-19 pandemic into doubt and has sewn catastrophe across the region, destroying lives, homes and infrastructure. The ramifications are being felt worldwide. Here are the three key takeaways outlined in the OECD's Interim Economic Outlook: support needed for refugees; weaker economic growth, higher inflation; and energy and food price rises hitting the poor the hardest. Read more in the OECD's Interim Economic Outlook linked here.

Russia’s invasion of Ukraine has sparked significant rises in energy and food prices. An analysis by the Centre for Global Development (CGD) suggests the scale of price spike will push over 40 million into extreme poverty. In this blog, the CGD looks at the outlook for commodity prices as well as the significant implications for hunger and poverty and consider how policymakers should respond. The G20 and other grain producers must keep markets open and avoid sanctions on food, even if further disruptions arise, to avoid artificially exacerbating the impacts. Governments and international agencies will need to act quickly and generously to anticipate and support humanitarian needs—but they should also use the crisis as an opportunity to reform agricultural policies in the EU and US that are undermining food security. Read more in the linked blog post, published by the Center for Global Development.

From the outset, it was clear that repositioning Transnet to ensure it becomes the economic growth driver it has the potential to be, and not a constraint on the logistics chain would be a mammoth task. Just two years ago the operating model was to sustain the monopoly in rail, ports and pipelines, supported by a continued reliance on debt funding that had by 2020 already reached its ceiling, as set by the National Treasury. That model is no longer sustainable, not just for Transnet but also for the economy. The early work, which began in 2020, focused on repositioning the company to focus on three key commodity groups (representing 85% of revenue), each offering different strategic approaches to how Transnet would work with partners — either logistics service providers or cargo owners. Read more in the linked article by Portia Derby, group chief executive of Transnet SOC Ltd, first published in Business Day.

If one is not dealing with a particular commodity in their daily business, rarely do they keep an eye on whether it is produced sufficiently locally or imported. The main concern for consumers is always whether they get their preferred products on shelves when they go to the store. This has been the reality for wheaten products in South Africa. Hence, some South Africans realising that the country imports roughly half of its annual wheat consumption has sparked a discussion about why the country is not expanding domestic production in all the fallow land in some provinces. This is a fair question about the threat of rising wheat prices and constraints to supplies amid the Russian invasion of Ukraine; both countries account for nearly a third of the world’s wheat exports and have increased food security concerns. Agbiz chief economist Wandile Sihlobo discusses this subject in the linked article, written for and first published in Mail & Guardian.

All countries, rich and poor, must adapt to climate change. A recent report by the United Nations Intergovernmental Panel on Climate Change spelled out the dramatic consequences of failing to curb the rise in global temperature and adapting to a hotter planet. Adaptation should address risks from climate change and extreme weather, for example by safeguarding agriculture, managing the impact of rising seas, and making infrastructure more resilient. The benefits of adaptation are sometimes difficult to estimate because they depend on specific factors such as how well-adapted a country is to its current climate. Nevertheless, well-crafted policies can produce large returns, as we show in three papers published today covering climate adaptation and fiscal policy, macro-fiscal implications, and bringing climate adaptation into the mainstream of fiscal planning. Read more in the linked IMF blog post.

Kenyans are caught in the grip of higher food prices brought about by a combination of adverse weather, rising input costs – which have been worsened by the Ukraine war – as well as policy adjustments the government agreed to access funding from the International Monetary Fund. The prices for the staple commodities in the food basket used to compute inflation by the Kenya National Bureau of Statistics, such as maize flour, wheat flour, Irish potatoes, onions, tomatoes, cabbages, kales and cooking oil, rose by an average of 20% in January 2022 compared to the same period in 2021. By the end of February 2022, 3.1 million Kenyans out of a total population of 47 million were in need of food assistance. In the linked article, first published in The Conversation, Timothy Njagi Njeru explains what’s driving prices up and what can be done.

As the war in Ukraine cuts off fertiliser supplies from Russia, threatening a global food crisis, Africa's richest man Aliko Dangote opened the continent's largest fertiliser plant this week. The $2.5 billion urea and ammonia fertiliser plant was commissioned by Nigeria's President Muhammadu Buhari in Lagos, where Dangote is also due to open a 650 000 barrels per day oil refinery, later this year. Dangote told CNN Tuesday that the urea market had "gone through the roof." The fertiliser factory sits on 500 hectares of land on the outskirts of Lagos and has a capacity to produce 3 million metric tons of urea yearly, making it the second-largest plant in the world, Dangote said. Read more in the linked article, first published on CNN Business.

Kenya MY2022/23 corn production is forecast at 3.2 million metric tons (MMT), largely unchanged from MY2021/22 due to high fertilizer prices and farmers switching to alternative crops such as sugarcane. Kenya MY2022/23 wheat consumption is expected to rise to 2.25 MMT from 2.2 MMT as tourism and restaurants bounce back from COVID-19 restrictions. Kenya rice production is forecast to increase in MY2022/23 to 90,000 metric tons (MT) from 80,000 MT due to an expansion of the Mwea irrigation scheme following the completion of the Thiba Dam, however, the country will remain dependent on imports for the majority of its rice supply. Read more in the linked USDA Grain and Feed Annual for Kenya.

Another outbreak of foot-and-mouth disease (FMD) has been confirmed in the Potchefstroom district in North West. This is in addition to an outbreak of the disease which was detected in the Vhembe district in Limpopo this month, while an outbreak continues in KwaZulu-Natal. The Department of Agriculture, Land Reform and Rural Development (DALRRD) has confirmed positive laboratory results and diagnosis of FMD on a commercial stud farm near Potchefstroom in North West. The department says the affected farm as well as surrounding farms, which are situated outside the city in the direction of Ventersdorp, have been placed under quarantine. Read more in the linked DALRRD media statement.

Minister of Agriculture, Land Reform and Rural Development Thoko Didiza has met with food processors, leaders in the fruit and grains industry, agricultural trading groups, and farmer associations to discuss the availability of food suppliers and farming inputs amid the Russia-Ukraine conflict. This consultation is part of the Inter-Ministerial Task Team assessing risks to the South African economy during the Russia-Ukraine conflict. The engagement evaluated the availability of the food supplies and farming inputs supplies for the coming months. “We have gained enough understanding of our available food supplies and are confident that there are sufficient supplies for South Africa and the neighbouring Southern African Customs Union (SACU) countries for the foreseeable future, and therefore no need to panic that the country could experience shortages," the minister said. Read more in the linked DALRRD media statement.

“Grain SA is delighted and thankful that the adjusted regulations will enable Nampo 2022 to be hosted, and furthermore that we are capable to do it successfully at 50% of the park’s capacity, under the adjusted regulations,” Dr Dirk Strydom, Grain SA’s marketing, Nampo and research coordination lead said. “The Nampo Harvest Day has always been an asset to agriculture and its people and it would be good to welcome everyone back to this showcase after the two-year disruption.” The 54th Nampo Harvest Day, planned to be presented for the first time over five days to allow for the reduced capacity, will showcase agriculture’s latest technology, machinery, innovations, and productivity solutions all on one platform. The 2022 theme “Experience It!” is an invitation to the agricultural industry and the public at large to experience the biggest agricultural show in the Southern Hemisphere, first-hand. Read more in the linked Grain SA media statement.

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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.