Wheat and other grains are back at the heart of geopolitics following Russia’s invasion of Ukraine. Both countries play a major role in the global agricultural market. African leaders must pay attention. There is significant agricultural trade between countries on the continent and Russia and Ukraine. African countries imported agricultural products worth US$4 billion from Russia in 2020. About 90% of this was wheat, and 6% was sunflower oil. Major importing countries were Egypt, which accounted for nearly half of the imports, followed by Sudan, Nigeria, Tanzania, Algeria, Kenya and South Africa. Similarly, Ukraine exported US$2.9 billion worth of agricultural products to the African continent in 2020. About 48% of this was wheat, 31% maize, and the rest included sunflower oil, barley, and soybeans. Please click here to read the full article by Agbiz chief economist Wandile Sihlobo, written for and first published on The Conversation.

Agbiz welcomes the National Treasury’s pragmatic budget at a crucial time of economic reconstruction. The Treasury utilised part of the commodity windfall to absorb the expenditure increases while remaining mindful not to commit to permanent spending in the social relief programmes funded by temporary commodity revenue increases; such an approach would require a sustainable financing model. “This is important as the South African economy could grow at a slower pace of 2,1% in 2022 and by 1,8% in the next three years. This is not the kind of growth that can respond emphatically to the country’s socio-economic challenges,” says Agbiz CEO Theo Boshoff. “We are pleased to see a continued commitment to fiscal consolidation, prioritising health needs and resourcing the justice system in these uncertain times of the Covid-19 pandemic. We are also delighted that the minister paid attention to corruption, which he rightfully characterises as a blight to growth, and on the need to bolster state capacity. This will require that independent institutions are strengthened and that the law enforcement institutions act with agility in prosecuting corrupt individuals.” Please click here for the full Agbiz media statement.

Energy regulator Nersa said on Thursday that it had granted struggling state-owned power utility Eskom an overall average tariff increase for the 2022/2023 financial year of 9.61%, versus the 20.5% increase it had applied for. Nersa rarely allows Eskom the full amount it applies for, with disputes between the two often ending up in the courts. Eskom argues that Nersa has not allowed it to recoup sufficient revenue via electricity tariffs over many years and says that is one of the reasons why it is dependent on government bailouts. In response to the regulator’s decision, Eskom chief financial officer Calim Callib said: “The financial implications of this decision on Eskom’s long-term sustainability will need to be further understood. It is understood that Nersa considered the impact on consumers and the financial sustainability of Eskom as it made its decision.”

The current version of the Expropriation Bill (B23/2020) was tabled in Parliament on 15 October 2020. That follows unsuccessful attempts to come up with a new expropriation act in 2008 and 2013. The first briefing on the Bill by the Department to the Portfolio Committee on Public Works and Infrastructure took place in November 2020. Public hearings were held in March 2021 and a further round in September 2021. Public participation reports were then drafted, which were presented to the portfolio committee in November 2021. The portfolio committee met on 23 February 2022 to listen to the responses by the department and the state law advisers to the public comments that were received. The portfolio committee has sought legal opinion from Adv Geoff Budlender (SC) on some of the points raised during the public hearings, such as the definition of “property”. In the linked article, Agbiz head of legal intelligence Annelize Crosby provides an update on the latest developments around the Expropriation Bill.

We have generally battled with excessive moisture in the Southern Africa region, while South America has experienced persistent dryness because of the La Niña event. For both areas, predictions of the size of the 2021/22 grain and oilseeds harvest are still tentative, and the outcome will have implications for the size of the global grain and oilseeds harvest and price direction. In South America, local analysts have frequently revised the crop size for the 2021/22 season in anticipation of poor yields. Interestingly, global forecasters such as the International Grains Council (IGC) and the United States Department of Agriculture (USDA) have maintained a somewhat optimistic view of South America’s crop conditions, specifically maize production. Agbiz chief economist Wandile Sihlobo discusses this subject in the linked article, written for and first published in Mail & Guardian.

The need to improve logistics efficiency and curb the deterioration of infrastructure remains a topical issue in South Africa's agriculture. Farming communities and agribusinesses might work to improve productivity on the farms, but the ultimate goal for some agricultural commodities producers is to reach export markets. However, achieving this is not only a function of output but also the various trade agreements South Africa has with other countries and the efficiency of logistical infrastructure locally. In 2021 the cyberattacks at Transnet, vandalism of rail infrastructure, poor road networks countrywide — which the heavy rains have now worsened — and port inefficiencies at various periods, were the key risks to South Africa's agricultural export drive. Wandile Sihlobo elaborates on this subject in the linked article, written for and first published in Business Day.

Agbiz Grain Quarterly keeps every role player abreast of new developments in the grain handling and storage industry in South Africa. This edition shines the spotlight on blockchain technology, how it works, and the advantages it offers to the grain and oilseeds handling and storage sector.

In this issue, read about:

Blockchain: Possibilities for grain and oilseeds handling and storage;

The value of commercial grain silos;

Potential quality and grading problems: 2021/22 maize production season; and

Cyber attacks in the grain industry 

To read the magazine, please click here.

When a bear cries havoc and lets slip the dogs of war, it also unleashes a herd of charging market bulls. The invasion of Ukraine — a grain breadbasket of note — by resource-rich Russia on Thursday is roiling global markets, which have been on a knife’s edge as tensions heated up in recent weeks. Russian President Vladimir Putin’s decision to finally pull the trigger will keep markets on the boil for the foreseeable future. To wit, the oil benchmark Brent Crude surged over 6% in morning trade past $100 a barrel, according to Reuters. European gas prices for some contracts roared over 40% higher in morning trade, Bloomberg reported an astonishing move that highlights the turbulence that Putin's actions have stirred. This bodes ill for South Africa’s fragile economic recovery as raging oil prices have been the key driver of domestic inflation, which hits the swelling ranks of the poor and the vulnerable the hardest. Data on Thursday showed that South African factory gate prices — measured by the producer price index (PPI) — slowed in January to 10.1% from 10.8% in December. Read more in the linked article, first published on msn.com.

Since President Cyril Ramaphosa assumed office in 2018, he has tapped into external experts to close critical gaps in government. The president has recently come under torrid fire from commentators for bringing outsiders into the presidency, with some accusing him of centralising government and creating parallel structures. Getting outsiders to lend support to the government’s mission is a sign of self-awareness and purposefulness on the part of a country’s leadership. It also shows a leader’s openness to innovative ideas. External expertise through secondments and advisory bodies can lend weight to the government’s reform agenda. Such expertise is different from that which comes through consultants who trade their knowledge in exchange for material gain with no serious moral commitment to government’s success. Prof. Mzukisi Qobo, head of the Wits School of Governance at the University of the Witwatersrand, weighs in on this subject in the linked article, first published in Mail & Guardian.

In a recent IMF Staff Country Report on South Africa's economy, the organisation explores how to raise growth, reduce inequality and unemployment, and bolster the economy’s green credentials and climate resilience. These challenges have been deepened by the pandemic, which exacerbated South Africa’s economic problems, including a decade-long stagnation of per-capita income, high unemployment, and vast income inequality. But, according to an IMF Country Focus, the challenges can be met in a complementary manner. The rebound from the crisis presents an opportunity. To seize on this, the government will need to address deep structural constraints that limit the durability of the economic recovery. Please click here to read more about the suggested reforms South Africa can implement to facilitate a green transition.

Principal stakeholders in the South African fruit industry, being representatives of fruit

industry associations, government, organised civil society and labour, have agreed to cooperate and partner by adopting the Fruit Industry Social Compact. The aim of the accord is to achieve socio-economic growth within the fruit industry according to the guidelines of the National Development Plan. The stakeholders have mutually accepted the principles, guidelines and common objectives contained in the Fruit Industry Social Compact (FISC). The Fruit Industry Social Compact is an accord between government, industry and labour. Read more in the linked media statement, issued by the Department of Agriculture, Land Reform and Rural Development.

Earlier this week, Minister of Agriculture, Land reform and Rural Development Thoko Didiza launched the much-awaited country’s farmer register. The department decided to undertake this important task, to understand its client base both in terms of size and scale of operation. In 2019/20, Statistics South Africa released the Agricultural Census which covered mainly the commercial sector. “While this was encouraging, we were still short of data about smallholder producers in our country. The aim of the survey was to get data that will tell us where the smallholders are in the outreach, their demographics, production as well as their contribution to employment,” said Minister Didiza. Please click here for the full media statement.

It will be warm and dry over especially the central parts of the country during the next few days, including the western maize-production region. Warm and dry westerly winds should invade parts of the Free State and North West on several days, a welcome break from earlier wet conditions. Isolated to scattered thundershowers will initially be concentrated over the far eastern and northeastern parts, focusing on Mpumalanga, Limpopo, KZN and Gauteng. As the week progresses, the area of thundershowers should slowly expand westwards. Current forecasts indicate increased chances for thundershowers returning to the Free State and North West from Friday onwards. Read more in the latest issue of Cumulus, compiled by AgriSeker, linked here.

The National Science and Technology Forum (NSTF) has developed an online, interactive, virtual landscape aimed at stimulating learners’ curiosity in the STEM (science, technology, engineering and mathematics) fields. The STEMulator portal provides a highly interactive knowledge and exploration environment, crammed with animated and visual educational content, which entices the audience through curiosity and fun. Read more about the STEMulator in the linked article, first published on Engineering News. The STEMulator portal can be accessed here.

Please join the Israeli Trade Office to the South African embassy for a morning of learning, networking, and discussion on how Israeli Agritech can benefit South African farmers and the latest agricultural trends. Focus areas include: digitally informed irrigation decisions, growth based irrigation, irrigation by condensation, greenhouse temperature control, root zone temperature control and optimization, biological pest control, plant sensing technology, flow and dosing technology. For more information and to register, please click here.

Last week, South Africa exported the first consignment of 100 000 lemons to China since the signing of the revised citrus protocol between the two nations. Minister of Agriculture Land Reform and Rural Development Thoko Didiza, and MEC for Rural Development and Agrarian Reform, Nonkqubela Pieters, oversaw the inspection of the first few pallets of 100 000 lemons, produced in Limpopo, before they were loaded onto the vessel. The Citrus Growers’ Association of Southern Africa (CGA) leadership and Minister Didiza viewed the fruit destined for export on the inspection tables at Maydon Wharf Fruit Terminals, Durban's largest cold storage facility. CGA CEO Justin Chadwick said the new Chinese lemon protocol, which has been under negotiation since 2015, was an important agreement because it opened up major export opportunities for lemons. Read more in the linked article, first published on Freight News.

Overall given the challenges to the South African outlook, the Minister of Finance delivered a balanced budget, with a smaller than expected budget deficit and debt stabilisation counteracted with some relief to individuals and corporates. The minister had reason to be optimistic while delivering his 2022 budget speech, thanks to the windfall from the continued strength in commodity prices and higher than anticipated corporate, personal tax and VAT revenue collections. The Treasury is using this space to reduce its debt and reach a primary surplus in 2023/24, which will signal the end to fiscal consolidation. Agbiz member Cova Advisory & Associates, trading as EY Cova, shared the linked budget review published by Ernst & Young, doing business as EY, for your perusal.

Making foundation phase education more accessible to children living on farms is shaping GWK’s dream of making a tangible difference in the Northern Cape and other parts of South Africa. Recently GWK and Wildeklawer took hands to open a brand-new early childhood development (ECD) centre on Wildeklawer’s farm, approximately 15 kilometres from Barkly West in the Northern Cape. Going forward children between the ages of two and five years can visit this ECD centre every weekday.

While this is the second time that GWK partners up with a farm from the region to open an ECD centre, “Klawer Kleuters” represents the first centre opened in partnership with Wildeklawer. Read more in the linked GWK media statement.

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 Citrus Growers' Association of Southern African (CGA) shares the latest news in the citrus industry in its weekly update - From the desk of the CEO. Please click here to peruse.