Days of torrential rain and the aftermath of Typhoon Doksuri have caused severe flooding in China's leading grain-producing region in the northeast, resulting in 14 fatalities and concerns about food security due to inundated farmlands. The floods have displaced over a million people and caused at least 30 deaths in the outskirts of Beijing and Hebei province. The storm's movement further north caused an additional 14 deaths in Jilin province. The region's fertile farmlands in Heilongjiang province have been affected, submerging rice fields, damaging factories, and causing damage to vegetable greenhouses. The floods have raised concerns about China's agricultural production and food security, given the significance of the three northeastern-most provinces in the country's grain output. Major crops produced in the region include soybeans, corn, and rice. The short-term impacts are expected to affect food prices, which had been relatively stable in recent months. China has faced various weather-related challenges to its agriculture sector, including droughts and heatwaves in the past year, which affected crop growth and production. The situation has prompted the country to prioritize food security, recognizing agriculture's role as the foundation of national security. Click here to read full article first published on CNN.

Rising interest rates aimed at curbing the most significant inflation surge in decades have strained banks in the US and Europe. Despite rate hikes generally benefiting lenders, some banks incurred losses on bond holdings, including safe US Treasuries. This prompted customer withdrawals, amplified by technology and social media, leading to several bank failures. The Financial Sector Assessment Program (FSAP) closely monitors financial stability risks and evaluates the resilience of countries' financial sectors. Amid ongoing central bank interest rate hikes, FSAP assesses the potential impact of higher borrowing costs on financial stability and growth. The program also stresses the importance of analyzing vulnerabilities in smaller financial companies, understanding the interlinkages of asset market stress, earnings, and run risk, and comprehending systemwide liquidity risks. In 2023, FSAP focuses on assessing economies with systemically important financial sectors and continues to incorporate evolving international regulatory standards. Read full article first published on IMF Blog here.

The South African citrus industry is facing renewed challenges as it battles with the European Union over regulations regarding citrus black spot (CBS). The industry and the South African government have been unsuccessful in convincing the EU to change what they consider to be unfair regulations on the fungal disease. The South African Citrus Growers' Association (CGA) is putting pressure on President Cyril Ramaphosa to take urgent action to halt what they call "discriminatory trade regulations" on CBS, which is endangering thousands of jobs in the sector. Despite evidence that CBS poses a minimal risk, the EU continues to enforce rules that the CGA deems unscientific and irrational. The industry now seeks an official World Trade Organization (WTO) dispute with the EU on their CBS regulations. Additionally, new EU regulations for false codling moth (FCM) have caused significant losses in recent years and are expected to impact this year's orange exports to the EU. Click here to read full article first published on fruitnet.com.

South Africa currently has 3 Foot and Mouth Disease (FMD) outbreak events in the previously FMD free zone without vaccination. These 3 outbreak events currently comprise 192 open outbreaks reported to the World Organisation for Animal Health (WOAH). South Africa has so far resolved 22 infected premises in the 3 FMD outbreak events and closed them with the WOAH. The first outbreak event started in May 2021 and mainly affects KwaZulu-Natal (KZN) Province, with limited spread to Free State Province. The second outbreak event started in March 2022 in the previous FMD free zone in Limpopo Province, with limited spread to Gauteng Province. The third outbreak event also started in March 2022 in the North West Province (linked to the second outbreak event in Limpopo Province) with spread to Mpumalanga, Gauteng and Free State Provinces. Click here to read full report by the Directorate of Animal Health.

AGBIZ presented on GMO regulation at SACTA's information session. The event discussed transformation and technology, focusing on genome editing's global and local updates. New Plant-Breeding Techniques (NBTs) were emphasised for climate-resilient crops and increased yields. NBTs offer economic advantages compared to traditional methods. The GMO Act in South Africa dates from 1997 and requires strict compliance measures for GMOs, including costly risk assessments for gene-edited plant varieties. Agbiz appealed this decision, advocating for a science-based risk analysis framework. The Minister's response to the Appeal Panel's recommendations is awaited, and industry stakeholders aim to work together for decisive action on GMO regulation. Read full report by Agbiz Legal Intelligence Manager Annelize Crosby here. 

Although South Africa was an early adopter of Genetically Modified (GM) technology and has commercialised and imported multiple GM crops, lines, and medicines over the past three decades, not a single locally developed product has been commercialised - a result of the significant barriers to commercialisation in the GM sector. Whilst the development of GM technology remains important, a new wave of technological developments has enabled genetics-based innovations that more closely mimic those underlying natural evolution. Products derived from these new plant breeding techniques (NBTs), e.g., genome editing products, are often indistinguishable from natural equivalents. New NBTs are methods allowing the development of new plant varieties with desired traits, by modifying the DNA of the seeds and plant cells. With NBTs it is possible to breed a wide range of products, it depends on the type of edit made and whether DNA is added to the genome of a different organism or not. In the case where only small deletions or insertions with the same organism DNA is made it is considered to be similar to conventional breeding as the edit could also have happened naturally. Click here to read full article by Annelize Crosby.

We spent most of July on the road, engaging with Agbiz members and sector role-players in various regions of the country. The feedback about the near-term outlook was reasonably positive in all our engagements, with many attributing their optimism to the favourable 2022/23 summer crop and 2023/24 winter crop seasons. The feedback from the horticulture and wine industries also remained encouraging as various stakeholders forecast growth and expansion prospects in the coming years. The outlook was less optimistic when we engaged the livestock and poultry industries that struggled with higher feed costs and persistent animal disease outbreaks. Beyond this, what all meetings agreed on was that the persistent load-shedding, rising protectionism in key export markets, rising interest rates, intensified geopolitical tensions, ongoing weakness of municipality service delivery and network industries (water, rail and ports) and deterioration of rural roads remain a significant threat to the sustainability of their businesses. While these are not necessarily new issues, the extent of weakness this year has reached worrying levels in some. Not all these issues are within the government's control, but many are, and in such cases, the government should urgently assist. Here are a few of such cases. Read full article by Agbiz Chief Economist Wandile Sihlobo here.

We spent most of July on the road, engaging with Agbiz members and sector role-players in On 04 August 2023, the Food and Agricultural Organisation of the United Nations (FAO) released its July update of the Global Food Price Index, registering a 1,3% increase from June to 124 points (still, the prices are down 12% y/y). This marginal monthly rebound was due to an uptick in the vegetable oils price index, mainly sunflower, palm, soybean, and rapeseed oils, which offset the decline in other products prices. Russia's decision not to renew the Black Sea Grain Deal has contributed to the increase in sunflower oil prices. Regarding palm oil prices, the surge reflects worries about the reduced supplies in leading producing countries because of unfavourable weather conditions. The soybeans and rapeseed price uptick reflect the concerns that the heatwave in parts of the US and Canada could reduce the harvest. The two crucial events of the past month, which are the non-renewal of the Black Sea Grain Deal and India's ban on exports of non-basmati and broken rice, are not fully reflected in the prices of July as the events occurred towards the end of the month. We think the August 2023 price data will better reflect this challenge. Still, we doubt the price increases will be as sharp as we saw in the month after the war started because of the abundance of global supplies. This time, the challenge is the movement of supplies, not the limited harvest. There are ample global grains and oilseed supplies, regardless of the worries about the weather impact in the US, Canada and parts of Asia. Click here to read full article by Wandile Sihlobo.

South Africa's ongoing land reform policy is marred by persistent myths that distort discussions surrounding farmland statistics and the nature of commercial agriculture. Debunking these myths is crucial for informed dialogue. One prevalent misconception posits that 40,000 white farmers own 80% of the land, yet careful analysis shows that white commercial farmers actually own 78% of freehold farmland, constituting 50% of the nation's total land area. Commercial farming, often believed to be synonymous with large-scale white operations, encompasses numerous small-scale family-run enterprises. Contrary to the assumption that white farmers retain land, deeds office records demonstrate consistent activity in the farmland market, with around 2% of land changing hands annually. Additionally, the misconception that black farmers solely acquire land through state-sponsored redistribution ignores the significant private acquisitions of farmland by black South Africans. The perception that only 8% of farmland has been redistributed is inaccurate; considering multiple dimensions of land reform, estimates suggest that 24% of all farmland has been redistributed or restored. Clarifying these statistics is imperative to guide effective land reform policies. Click here to read full article by Wandile Sihlobo and Johann Kirsten first published theconversation.com.

As South Africa's 2022/23 summer cop season draws to a close, the focus is shifting towards the 2023/24 production season, which commences in October. As we stated in our previous notes, the preliminary insights suggest that an El Niño could bring below-normal rainfall, but South Africa could still have a decent season. The improved soil moisture following four consecutive seasons of rain will help support crop and horticulture production as well as grazing conditions. Although there is no evidence of its occurrence in South Africa this coming summer, one factor that concerns us is the possibility of extreme heat. Various countries in Europe and regions of the US have experienced extreme heat this summer, which has proved challenging for agriculture at certain times. When the 2023/24 summer crop season starts in South Africa, monitoring temperatures and the impact on crops after that will be necessary.  Click here to listen to full Agricultural Market Viewpoint with Wandile Sihlobo.

Agbiz Grain will hold its symposium from 5 to 8 September 2023 daily from 09:00 - 12:00. Building certainty, creating sustainability" is the symposium's theme. The symposium will include panel discussions on profitability and investment priorities, supporting a world-class agricultural derivatives market, traceability of grains and oilseeds to meet consumer food safety concerns, and ensuring the insurability of the sector. Click here to register.

In 2023, Agricultural Development Agency (AGDA) is actively seizing opportunities, including establishing the Agri-Impact Fund. Exciting news about their progress will be shared at the AGM in August. They are consolidating partnerships in retail, NGO, and financial services sectors to better support their membership. The current newsletter spotlights young achievers in agriculture and their projects. AGDA is involved in commercial transactions like the Quicksell Berry Project, doubling its value through engagements with the Department of Water and Sanitation and an export contract. They're also managing the Blouberg Hub project in collaboration with De Beers and other partners. AGDA actively participates in agricultural events, discussions, and exhibitions. The newsletter features an AGDA marketing video highlighting the Grow to Market Programme's progress. The agency continues to welcome new members and prioritize collaboration for growth. Read more in AGDA July newsletter.

The Competition Commission's Online Intermediation Platforms Market Inquiry was released recently, focusing on various issues related to online sales in South Africa. One contentious aspect is the examination of Takealot, the largest player in the country's online sales space. The report suggests that Takealot's "narrow price parity" practice distorts competition by preventing third-party sellers from offering lower prices on their own websites. The commission also demands Takealot to separate its third-party business from its own sales and retail services and avoid accessing seller data. Takealot argues that other online retailers sell third-party products without facing similar requirements. The commission's stance may hinder local players and favour international giants like Amazon, which is preparing to launch its online retail offering in SA. The Competition Commission's findings are viewed as peculiar, likely leading to a series of appeals and prolonged unresolved issues. These rulings can impact the ease of doing business in South Africa and contribute to low business confidence. Read full article by the Daily Maverick here.

The updated South African Agricultural Economic Fact Sheet highlights the bilateral agricultural trade record of nearly $1 billion between the United States and South Africa. Key agricultural products traded include fresh fruit, tree nuts, animal feed, poultry meat, dairy products, processed fruits and vegetables, and wine. Covering 1.2 million square kilometers of land, South Africa is the 24th-largest country globally and possesses a diversified agricultural sector spanning grains, oilseeds, fruits, sugar, citrus, wine, livestock, and more. The country has around 40,000 commercial farmers, 200,000 smallholders, and two million subsistence farmers. Despite challenges like irregular rainfall and drought, South Africa is the continent's largest agricultural producer, contributing almost 3% to its GDP. With 14 million hectares of arable land and notable biotechnological leadership, South Africa remains a prominent player in agriculture. Click here to read full report.

The Citrus Growers' Association (CGA) has urged President Cyril Ramaphosa to initiate a dispute with the European Union (EU), a sentiment echoed by Agbiz chief economist Wandile Sihlobo and other agricultural experts interviewed on SABC news. The dispute centres around the citrus black spot (CBS), a fungal disease affecting citrus crops. The stringent EU CBS regulations have imposed significant costs on the South African citrus export industry, amounting to over R2 billion annually for risk mitigation efforts. A growing concern is the potential misdeclaration of cargo as being affected by CBS in certain European countries, exacerbating the challenges faced by the industry. To address these issues, the CGA and experts emphasize the need for swift action to safeguard the interests of the local citrus sector. Click here to watch the full discussion on SABC news to gain insights into the implications and solutions proposed by these experts.

Business Unity South Africa (BUSA) released its 148th update. the South African supply chain and international trade status are presented. Maritime operations dealt with challenges including adverse weather, equipment breakdowns, congestion, and load-shedding, leading to operational disruptions. Durban and Cape Town ports faced vessel ranging and deviations from schedules due to these issues. Cable theft incidents halted rail operations near Ladysmith and Pietermaritzburg, affecting the rail network. The global container industry experienced a decline in schedule reliability in June, with major carriers CMA CGM and ONE reporting weaker Q2 financial performance. International air cargo to/from South Africa decreased by 5%, while cross-border road freight showed increased queue times but improved transit times. The partnership with International Container Terminal Services aims to enhance the largest sub-Saharan African port's efficiency and capacity. Read the full update in the latest BUSA Cargo Movement Update.

Theo Boshoff, CEO of the Agricultural Business Chamber, appeared on eNCA to discuss the impact of Diesel prices on Agribusiness. Addressing the challenges in the industry, he highlighted how they have coped with the soaring costs of diesel. The conversation also delved into the strategies employed within agribusiness to manage higher input expenses, including the use of generators for transportation of goods across value chains. Click here to watch full discussion.

The Citrus Growers' Association of Southern Africa (CGA) demands President Ramaphosa's intervention to halt EU's discriminatory trade rules on Citrus Black Spot (CBS). Thousands of jobs in the sector are at risk due to these unscientific regulations. South Africa must promptly lodge a WTO dispute against the EU's protectionist actions, as CBS is a minor issue, impacting only a fraction of exported fruit. The EU's restrictions unfairly favour their own citrus industry, causing losses in jobs and revenue for South Africa. Despite conclusive evidence against CBS spread through fruit trade, the EU persists in enforcing unreasonable measures. False CBS interceptions further highlight the need for immediate action to protect the citrus industry and the country's rural economy. Read full statement by CGA’s Deon Joubert here.

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