The crisis in Ukraine has created a humanitarian crisis of immense proportions and has also dealt a severe blow to the global economy. The brunt of the suffering and destruction are being felt by the people of Ukraine themselves but the costs in terms of reduced trade and output are likely to be felt by people around the world through higher food and energy prices and reduced availability of goods exported by Russia and Ukraine. Poorer countries are at high risk from the war, since they tend to spend a larger fraction of their incomes on food compared to richer countries. This could impact political stability. From macroeconomic perspective, higher prices for food and energy will reduce real incomes and depress global import demand. Read more in the linked report from the World Trade Organization.

Global economic prospects have been severely set back, largely because of Russia’s invasion of Ukraine. This crisis unfolds even as the global economy has not yet fully recovered from the pandemic. Even before the war, inflation in many countries had been rising due to supply-demand imbalances and policy support during the pandemic, prompting a tightening of monetary policy. The latest lockdowns in China could cause new bottlenecks in global supply chains. In this context, beyond its immediate and tragic humanitarian impact, the war will slow economic growth and increase inflation. Overall economic risks have risen sharply, and policy tradeoffs have become even more challenging. The linked IMF blog post explores the effect of Russia's invasion of Ukraine.

As the war in Ukraine unfolds, global uncertainty has surged, according to the latest reading of the World Uncertainty Index—a quarterly measure across 143 countries. This increase is a bad sign for growth. Our research finds that such increases foreshadow significant output declines. Based on our estimates, the rise in uncertainty in the first quarter could be enough to reduce full-year global growth by up to 0.35 percentage point. While global uncertainty reached unprecedented levels with the initial coronavirus outbreak, it then fell sharply. However, the World Uncertainty Index rebounded in the first quarter, reaching levels close to what was seen around the September 11, 2001, attacks in the United States and the United Kingdom’s 2016 vote to leave the European Union. Read more in the linked IMF blog post.

Despite being mostly semi-arid, South Africa has ample agricultural output. As a country, we export about half of what we produce in value terms a year. These exported products were worth a record $12.4bn in 2021. The exportable products are diverse, including wine, maize, citrus, nuts, berries, grapes, wool, fruit juices, beef, apples and pears. Our export markets are also diverse, spreading across the African continent, Europe, Asia, the Middle East and the Americas. We have achieved this progress partly because of the openness of South African policymakers, agribusinesses and farmers to technological advancement, mechanical and biological, which have been instrumental in driving productivity higher. But the reality of our environment means we cannot produce all the products we need in South Africa. For instance, our agricultural import bill in 2021 was $6.9bn. The top five imported products that year were palm oil, rice, wheat, poultry meat as well as whiskies and other spirits. These accounted for 30% of this import value. Agbiz chief economist Wandile Sihlobo discusses this subject in the linked article, written for and first published in Business Day.

What we witnessed in KwaZulu-Natal over the past couple of days is heartbreaking — the

loss of lives and the destruction of businesses are unbearable. As President Cyril Ramaphosa pointed out in his address to the nation on 18 April: “All parts of the province were affected by the rainfall, with the entire Ethekwini metro and the districts of iLembe, Ugu, King Cetshwayo and uMgungundlovu being most affected. I am yet to get a complete picture of the damage in the agriculture and agribusiness sectors. Still, I want to make a few points about KwaZulu-Natal’s contribution to South Africa’s food sector and whether the country is at risk because of the damages in the province. Read more in the linked article by Wandile Sihlobo, written for and first published in Mail & Guardian.

Rice ranks second in the four major agricultural products that South Africa imports annually and account for 7% of the US$6,9 billion spent on agricultural products imports in 2021. Other products are wheat, palm oil and poultry products. In volumes terms, South Africa imported about 1,1 million tonnes of rice, both for annual consumption and exports to the neighbouring countries. The latest data from the International Grains Council (IGC) suggests that this volume could remain unchanged in 2022. Thus, the IGC has maintained its estimate for this year at 1,1 million tonnes. Wandile Sihlobo discusses the latest data in the linked article.

Amid growing concern for KwaZulu-Natal residents, there is hope for food supplies over the longer term. The Crop Estimates Committee (CEC) believes we will still have a very good maize crop coming in at around 15 million tonnes. Agricultural Business Chamber of SA chief economist Wandile Sihlobo elaborates in the linked interview on Newzroom Africa.

.Russia's war in Ukraine has caused a shortage of wheat and grain that many countries depend on. CNN's David McKenzie walks through the far-reaching impact of the conflict. Wandile Sihlobo contributed to the linked CNN insert on the impact of the Russia-Ukraine war on global, and specifically Africa's food security.

Despite broad scientific consensus about the trends and causes of climate change, the precise timing and magnitude of risks remain uncertain. Moreover, the physical impacts of climate change may have economic implications, including threats to food security caused by extreme weather events and rising temperatures, disruption to communication and transport systems, and changes in tourism patterns. The global climate effects of rising carbon emissions are fast becoming too costly to ignore. However, mitigating these effects also carries risks and involves transition costs that can be difficult to estimate up front. In the linked article, first published on Econ3x3, the authors explore how these developments could affect financial stability and how trends in sustainable finance are being used to respond to the associated threats and opportunities.

Governments succeeded in lessening the economic pain of the pandemic by providing plenty of liquidity to stricken consumers and businesses through credit guarantees, concessional lending and moratoriums on interest payments. But although these policies proved effective in supporting balance sheets, they also led to a spike in private debt, extending a steady increase in leverage spurred by supportive financial conditions since the global financial crisis of 2008. Global private debt surged by 13 per cent of the world’s gross domestic product in 2020—faster than the rise seen during the global financial crisis and almost as fast as public debt. A record rise in private debt could slow the economic recovery, but the drag on growth will vary across countries and within them. Read more in the linked IMF blog post.

International prices of wheat and coarse grains surged in March as the reduced exports from the Russian Federation and Ukraine worsened already tight global availabilities. Contrasting trends were evident across the market segments for rice, but overall, prices moved little in March. Across most of West Africa, prices of coarse grains continued to increase and were significantly higher year on year, amid lower cross-border trade flows and higher international prices of maize. Additional price support came from reduced outputs in the Sahel as well as from solid export demand in the coastal countries. In East Africa, prices of coarse grains remained firm or increased in March and were generally well above their year-earlier levels. Exceptionally high prices prevailed in South Sudan and Sudan. In Far East Asia, in Sri Lanka, prices of rice and wheat flour continued to increase in March to new highs due to the depreciation of the national currency and the below-average 2022 “Maha” crop output. The April issue of the FPMA Bulletin has just been released. The bulletin provides the latest food price developments at the world, regional and national level. Please click here to peruse.

Zimbabwe has become the latest country to join the Southern Hemisphere Association for Fresh Fruit Exporters (Shaffe). The country was officially incorporated at the Fruit Logistica trade fair in Berlin earlier this month. “We are very happy to announce the addition of Zimbabwe to Shaffe, represented through the Zimbabwe Horticultural Development Council,” said Nelli Hajdu, secretary-general of Shaffe. The organisation’s president, Charif Christian Carvajal, commented: “As Shaffe we are working on the incorporation of more partners. Growing in partners and positioning worldwide is one of our objectives. “The fresh fruit producing and exporting countries of the Southern Hemisphere are an important part of the international trade of fresh products, and Zimbabwe is one of them.” Please click here to read more.

Kuben Naidoo, the deputy governor and Monetary Policy Committee member of the South African Reserve Bank, recently conducted the first annual memorial lecture in honour of the late Prof Mohammad Karaan. The lecture took place on 13 April at Lanzerac Wine Estate in Stellenbosch and was hosted by Stellenbosch University’s (SU) faculty of agrisciences. Naidoo described Karaan as “a person who practically demonstrated that we have the ability to break the dualism in our country, our economy and our agricultural sector.” Read the full speech here. 

It's becoming an unfortunate trend that in every release of Statistics South Africa's (StatsSA) Quarterly Labour Force Survey (GLFS), the rate of unemployment is increasing. The agricultural sector remains one of the most resilient sectors in terms of job creation. At a time when unemployment levels are worsening in South Africa, evidence suggests that farms and agro-processors in fact created additional employment during 2020 and 2021. BFAP’s Agricultural Employment Brief interprets and contextualises the latest quarterly labour force survey from StatsSA and provides insights on the major factors driving agricultural employment. Please click here to peruse.

More wet conditions are in store for the summer rainfall region during the next few days. An upper-air trough will be responsible for most of the action, and while not as intense as the system of the previous few days, it may still generate cool, cloudy periods with widespread showers or thundershowers during the long weekend across the central to the eastern interior. Yet another cold front will move over the southern parts of the country early in the period and with a fairly strong flow of colder air from the south, light frost is possible again over the southern high-lying interior and possibly in isolated pockets further north. Certain areas may receive cumulative totals in excess of 50 mm of rain during the weekend, especially over the central to eastern North West, southern Limpopo, Gauteng, southern and western Mpumalanga as well as the northern Free State. Following earlier wet weather, these may lead to water-logged conditions. Please click here to access the latest edition of Cumulus, published by AgriSeker.

The FoodPackLab 2 project is a European initiative connecting European SMEs to South African companies. It is aiming at fostering technological innovation in the agri-food sector by matching companies interested in Deep Tech and Packaging solutions with companies who can offer their tech capacities. On 23 May, they are organising this first online matchmaking event. This day will be organised in two thematic half-days: agriculture in the morning, and food processing and packaging in the afternoon. The matchmaking is oriented to food managers and executives interested in technological solutions for challenges in the food sector which may be developed through collaboration projects. Please click here for more information

SA Canegrowers has conducted a survey amongst canegrowers in rural areas of KwaZulu-Natal to determine the impact of the recent rains and flooding. The preliminary results, which have been provided to the national government, reveal extensive damage not only to canefields and farm infrastructure but also to access routes that allow growers to deliver their cane to mills. By yesterday afternoon, just over 300 growers had responded to the survey and reported that 2516.65 hectares of cane had extensive crop and root damage, therefore requiring the total replanting of these fields to bring them back into production. This damage comes to an estimated R194.9 million. Farm infrastructure to the value of R27.9 million has also been destroyed bringing the total losses to R222.9 million. Read more in the linked SA Canegrowers media statement.

This year, Vilko is celebrating their centenary. The history of Vilko goes back to 1922, when the Villiersdorp Moskonfyt en Vrugtekoöperasie Beperk was inaugurated on 28 January with the main purpose to produce "moskonfyt" (grape must jam). In 1980 the name was changed to Villiersdorp Co-operative Ltd and in 1990, after amalgamation with the Harmonie Co-op the trade name Vilko was generally in use. In the early years the co-op’s main business was centred around the winery but nowadays deciduous fruit farming is the mainstream agricultural activity in our service areas.

Read more about the latest developments and news in the pork industry in the South African Pork Producers' Organisation (SAPPO) newsletter, SAPPO Weekly Update.

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.