This article discusses the evolution of global trade and the challenges it has faced in recent years. It highlights that while there is no conclusive evidence of deglobalisation, there have been policy choices made by some countries to halt further international integration and embrace protectionist measures. The COVID-19 pandemic temporarily disrupted trade, but overall, trade has rebounded and remains resilient. The article identifies three phases of the deglobalisation movement, driven by concerns about globalisation's impact on workers and the rise of geopolitical pressures. Read the full article by the International Monetary Fund here. 

“Globalisation is a fact of life. But I believe we have underestimated its fragility,” United Nations secretary-general Kofi Annan told the World Economic Forum almost a quarter century ago. Today, the fragility of the liberal international trading system that has underpinned peace and prosperity since the end of the Cold War is all too evident. Some policymakers, viewing globalisation as a threat to domestic industries and national security, seek to reduce their reliance on precarious global supply chains. Even countries that once championed free trade are turning inward to isolate themselves from rivals and secure strategic supplies of everything from computer chips to rare earths. Read the full article first published by the International Monetary Fund here.

A group of US lawmakers, including two committee chairs, is calling for the US–Africa AGOA Forum planned for November this year to be moved from South Africa in response to what they said was the country's 'deepening military relationship' with Russia. In a letter to US secretary of state Antony Blinken and other senior officials, they also suggested South Africa is in danger of losing its benefits under the African Growth and Opportunity Act (AGOA) – Washington's flagship trade programme. There is little likelihood overall of AGOA itself being in any danger of not being renewed, but moving the meeting from South Africa would allow the US to ‘punish’ South Africa without formally harming commercial ties. Read the full article here.

The newly constituted National Logistics Crisis Committee (NLCC), of which Agbiz is a part, continues to take shape. The programme is expected to be vigorous and within a strict timeline, with the Presidency having oversight every six weeks into progress made. Agbiz has participated in the discussions between the Presidency and BUSA with regard to its formation and scope. The NLSS will follow the already active National Energy Crisis Committee (NECOM). Agbiz has briefed the parties on the progress made under the Interface Agreement signed by Agbiz with Transnet earlier in 2022. This unique agreement and the subsequent discussions held under it for grain, fruit and wine, and other freighted commodities will complement and support the sector’s participation in the NLCC. Click here to read the full article.

Agbiz hosted a member information session on the proposed sectoral employment equity targets. The workshop was attended by a large number of member representatives. Johnny Goldberg from Global Business Solutions, a prominent labour lawyer and member of BUSA, who is very knowledgeable on, among other topics, employment equity and the proposed targets, made a presentation. The presentation was sent to Agbiz members. The presentation dealt with the background of the regulations and the empowering legislation, the Employment Equity Act of 1998. The Employment Equity Amendment Act, which provides for sectoral employment equity targets has been assented to by the president and draft targets for 18 sectors have now been published for various sectors. Read the full report by Agbiz head of Legal Intelligence Annelize Crosby here.

Agbiz submitted its employment equity proposal to the Department of Employment and Labour on 9 June. The submission raised concerns about the government's proposed high sectoral targets, citing their unrealistic nature and potential negative economic impact. Agbiz emphasised the need for a more balanced approach considering social objectives while aligning with the sector's economic realities. The submission also highlighted the challenge of lumping together diverse sectors like agriculture, forestry, and fisheries, advocating for tailored approaches. Insufficient consultation time and the need for comprehensive analysis were addressed, along with suggestions for expanding justifiable grounds and considering recruitment efforts and employee development. Read the full report by Agbiz agricultural economist and policy analyst Thapelo Machaba here.

Forecasts of an El Niño occurrence in the 2023/24 summer season do not necessarily equate to a bad agricultural season. The upcoming season of possible below-normal rainfall, i.e., El Niño, follows a rare consecutive four years of heavy rains that have improved soil moisture and natural grazing veld. This means there is a natural cushion for agricultural activity even if the rains are below the average (typically around 500 mm) in South Africa. What will be necessary, however, is for the showers to fall in critical periods, such as seed germination and pollination stages of growth, which are all essential for crop growing. Read the full article by Agbiz chief economist Wandile Sihlobo here.

The central message about South Africa’s agricultural sector since the start of the year has been positive, highlighting possible large harvests after favourable rains. Because of this, people were surprised when Statistics South Africa released its first quarter GDP data, outlining that agriculture underperformed. Agriculture gross value added sharply contracted by -12.3% quarter-on-quarter (seasonally adjusted). There are a few elements that explain this sharp contraction. First, the field crops had a tough start to the season because of excessive rains, which disrupted and delayed plantings by more than a month in some areas. Click here to read full opinion piece by Wandile Sihlobo first published on Mail & Guardian or listen to this week’s podcast by Wandile Sihlobo.

We continue to see a mixed picture in South Africa’s agricultural machinery sales. For example, tractor sales were down by 13% y/y in May 2023, with 655 units sold – see the chart. Meanwhile, combine harvester sales were at 65 units, 23% y/y. The robust combine harvester sales reflect the expected large summer crop harvest. For example, South Africa’s 2022/23 maize harvest is estimated at 16,1 million, 5% higher than the 2021/22 season’s harvest and the third-largest harvest on record. Soybeans harvest could reach a record 2,8 million tonnes. That said, we still believe South Africa’s agricultural machinery sales will likely cool off this year, following a few years of excellent activity. Read the full article by Wandile Sihlobo here. 

Agbiz Grain is seeking a service provider to fulfil various contractual responsibilities. These include establishing a collaborative forum for training providers, supporting skills development providers (SDPs) with accreditation and learner registration, assisting in the accreditation of assessment centres, managing learner registrations for the external integrated summative assessment (EISA), and preparing assessment centres for EISA administration. Applicants should have experience in the SETA and QCTO environment, knowledge of grain handling, facilitation and assessment skills, strong planning and organising abilities, effective communication, attention to detail, and prioritisation skills. Interested parties can submit their CVs/proposals before 30 June 2023. Please click here for more information and contact details.

The World Economic Forum invites you to take part in the Executive Opinion Survey 2023/24 to assess the level of competitiveness of South Africa in an international comparison. This annual survey is a major component of the World Economic Forum’s Global Competitiveness Report, as well as other forum insight pieces. The survey provides the key ingredient that turns the Global Competitiveness Report into a representative annual measure of a nation’s economic environment. A truly unique source of data, the survey has also long been used by numerous international and non-governmental organisations, investors, think tanks, and academia for empirical and policy work. Click here to complete the 2023/24 survey.

Transnet has raised concerns that its railway line carrying cargo between Johannesburg and Durban, is on the verge of collapse from cable theft. The state-owned company is calling on government to step in to protect the line. This container corridor transports agricultural and automotive goods, grain, fuel, and various minerals. Agbiz CEO Theo Boshoff and executive director of the South African Cereals and Oilseeds Trade Association Dr André van der Vyver discuss this in the linked interview with eNCA.

The National Agricultural Marketing Council (NAMC) hosted a workshop on South Africa’s fresh produce chain this week. Economist Thabile Nkunjana provided an overview of recent broad trends in international trade and its impact on South African fresh produce. Africa remains the largest current market for South Africa’s vegetable exports, taking almost two-thirds (64%) of vegetables (mainly onions and potatoes) – in 2022. The EU market took 22% of exports, followed by Asia and the Middle East at 10% each. Within Africa, increased demand from Angola, Mozambique and the Democratic Republic of the Congo has offset the loss of Botswana trade, which occurred when Botswana closed its borders recently to South African vegetable exports in an effort to stimulate their domestic market (an evident contravention of the SACU Agreement). Similar to fruit, the East Asian market holds great promise for vegetable exports. Read the full article first published on FreshPlaza here.

Investec notes that the global economic slowdown continues to put pressure on both air and sea freight carriers’ volumes and revenues. For importers, however, this is positive when it comes to rate levels and capacity availability. If the rand continues with its recent recovery, it will help drive down landed costs in the second half of 2023. Freight rates have remained softer largely due to current capacity availability and subdued demand. Overall, global schedule reliability is continuing to improve. If the efforts of Transnet and the National Logistics Crisis Committee, of which Agbiz is a part, start to make an impact on logistics performance, then South African exporters will also enjoy the benefits of these lower rates and increased global reliability.  Click here to read the article.

The heads of revenue administrations in Botswana, Eswatini, Lesotho, Namibia, and South Africa, have agreed to recognise each other's importers and exporters who have been granted the status of an authorised economic operator (AEO) via a mutual recognition arrangement. These authorised economic operators must maintain high-quality internal operational processes and have an appropriate record of compliance and will then, in turn, receive certain benefits. In essence, the private sector (SACU traders) are being asked to share some risk, but with greater benefits as reward; specifically lower trade costs and quicker turn-around times for imports and exports through fast-tracked controls and reduced customs admin. Landbouweekblad spoke to Agbiz Fruit general manager, Wolfe Braude, about the recognition arrangement. Read the full article here.

Cotton planting is under way in most Northern Hemisphere countries, while the Southern Hemisphere is in the planning phase. West Texas in the US, has high soil moisture levels, which is excellent news for farmers struggling with drought and reduced production. However, farmers face challenges due to the declining international price of cotton and global economic uncertainties. Despite these factors, West Texas farmers have embraced advanced technologies and sustainable practices to increase yields and minimise environmental impact. Global cotton production and consumption remain stable, with the US producing 3,15 million tonnes and China producing 5,98 million tonnes of lint. The current season-average A-Index price forecast ranges from 96,36 to 106,47 cents per pound. Click here to read the full report by Cotton SA.

The Western Cape received beneficial rain, maintaining favourable soil moisture and ensuring promising winter wheat prospects. However, the Northern Cape and Free State experienced drying conditions and are not expected to receive significant rainfall in the next two weeks. Rain-fed crop conditions may deteriorate, while irrigated wheat remains in good shape. Harvesting of summer crops in eastern and central South Africa will continue with minimal disruptions. Rainfall is predicted in varying amounts across South Africa, with the Western Cape expected to receive significant rainfall. Drier weather is anticipated from 16 to 22 June, except for light rain in southern and western South Africa. Overall, the winter wheat outlook remains positive in Western Cape, while the need for timely rain increases in Free State for rain-fed wheat. See the full report by World Weather Inc. here. 

 A report released by the South African government paints a grim picture of the country’s water resources and water infrastructure and the overall quality of its drinking water. The Blue Drop Watch Report – an interim report because it only assessed a sample of the facilities across the country – focused on the condition of the drinking water infrastructure and treatment processes from a technical standpoint. It also reported on water quality. The issues of most significant concern that it identified included a collapse of the country’s wastewater treatment works and a sharp rise in the number of local authorities that are failing to meet minimum compliance standards. Read the full article by research specialist in water resource management at the University of South Africa, Anja du Plessis, first published on The Conversation here.

Business Unity South Africa (BUSA) released the 140th update which provides an overview of the South African supply chain and international trade. Port operations were hindered by adverse weather, equipment breakdowns, and congestion, leading to port congestion and system issues. The global maritime industry has experienced a slight decline in demand, with excess capacity outweighing current demand. The container freight market is becoming volatile, with rates on a downward trend. In the air-freight sector, international and domestic air cargo showed slight positive changes, although below last year's levels. Border crossing times decreased in South Africa but increased in the greater SADC region. The International Monetary Fund warns of mounting economic difficulties in South Africa, with low GDP growth and deteriorating fiscal position. The need for infrastructure reform, equipment improvements, and collaboration in the transport and logistics industry is emphasised, with the establishment of the National Logistics Crisis Committee (NLCC) being applauded. A public–private partnership growth model is suggested to unlock growth potential and create sustainable jobs. Read the full update in the latest BUSA Cargo Movement Update.

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.