At the G7 Ministers of Agriculture Meeting, Qu Dongyu, director general of the Food and Agriculture Organization of the United Nations (FAO), emphasised the need for collective actions to address rising hunger levels and domestic food price inflation worldwide. He stressed the importance of both immediate and longer-term global food security objectives. Qu called for efficient, effective, and coherent efforts to tackle the challenges and find solutions that can translate into tangible results on the ground. He identified five key actions that require implementation, including the roles of markets, assistance, agrifood systems, the private sector, and science and innovation. Please click here to peruse.

According to the International Monetary Fund (IMF)'s latest World Economic Outlook, there will be a slowdown in growth from 3,4% last year to 2,8% this year, followed by an acceleration to 3% next year. However, the outlook is heavily skewed to the downside, with a high likelihood of a hard landing. In an alternative scenario where there is further financial sector stress, global growth is expected to slow down to about 2,5% in 2023. Looking ahead, growth is expected to remain at around 3% over the next five years. This projection is the lowest medium-term growth forecast since 1990 and is significantly below the average of 3,8% from the past two decades. The subdued outlook is attributed to the necessary tight policy stances to combat inflation, the repercussions of the recent financial conditions decline, the war in Ukraine involving Russia, and an increase in geoeconomic fragmentation. Read more in the linked IMF blog post.

South Africa, Egypt, Benin Republic, Botswana, Namibia, Djibouti, and Rwanda are better rated than Nigeria in the latest global Logistics Performance Index (LPI) released by the World Bank. The LPI report, titled Connecting to Compete 2023: Trade Logistics in an Uncertain Global Economy, provides a measure of countries’ ability to move goods across borders with speed and reliability, the report is coming after three years of unprecedented supply chain disruptions during the Covid-19 pandemic, with soaring delivery times. The report which is based on a maximum score of 5, adjudged South Africa as the best in Africa and 19th in the world with a score of 3,4%, followed by Botswana and Egypt which scored 3,1% each to place a joint 57th position globally. Please click here to peruse.

At the Agricultural Business Chamber of South Africa (Agbiz)'s recent Council meeting, the chairperson, Francois Strydom, highlighted that agribusinesses keep the rural economy running and create employment and livelihood, but require credible partners to sustain the growth and vibrancy of the rural economy. “South Africa has some of the best and most resilient agribusinesses in the world but we shouldn’t take their resilience for granted. Operating conditions are becoming more difficult by the day. Rural municipalities are simply not performing optimally and businesses are having to spend millions each year to make up for it. This is not a sustainable situation and we need leaders to step up and take accountability for the state of business conditions in our country.” Read more in the linked Agbiz media statement.

In recent notes, we expressed a view of potential moderation in consumer food inflation in the second half of the year. We believe that the products that will underpin this softening are grain-related products, vegetable oils, meat, and fruit. But within the grain category, South Africa is exposed to imports, particularly wheat and rice. Global grain prices have declined over the past few months, except rice, which has surged. However, this does not change our view on domestic food inflation. This note explains our thinking on global rice prices. In April 2022, rice from various origins, such as Thailand, Vietnam, India, and Pakistan, traded below US$400 per tonne. This month, except for India, these rice price origins traded over US$470 per tonne. This is notable considering that for much of 2022, when other grains such as wheat and maize surged following the invasion of Ukraine by Russia and drought in South America, rice prices remained steady and even softened in some months. Agbiz chief economist Wandile Sihlobo discusses the higher global rice prices in the linked article.

Yesterday, the Crop Estimates Committee's data reaffirmed our optimism about South Africa's 2022/23 summer grain and oilseeds production season. Maize production is estimated at 15,9 million tonnes, up mildly from last month's estimate and 3% higher than the 2021/22 season's harvest. The current harvest is the third-largest harvest on record. The harvest improvement is primarily on the back of expected large yields, as the area planted is slightly down from the 2021/22 season. About 8,4 million tonnes is white maize, with 7,5 million tonnes being yellow maize. A crop of 15,9 million tonnes implies that South Africa will have sufficient supplies to meet domestic needs of roughly 11,4 million tonnes and remain with about 3,0 million tonnes for export markets in the 2023/24 marketing year that starts in May. Moreover, the soybeans harvest was lifted by 2% from the March estimate to a record 2,8 million tonnes. In the linked article, Wandile Sihlobo discusses the latest crop estimates data.

The aim of the Food Safety Summit, an annual, two-day conference, is to educate, inspire and empower people in the food space to provide safe food. With food safety at the core of this event, their podcasts offer a brief insight into aspects of food safety as we navigate through 2023. In the linked podcast with Wandile Sihlobo, the factors affecting South Africa's food supply is the topic of discussion.

South Africa's livestock industry has faced numerous challenges over the past few years. One of these was the rise in feed prices since 2020, especially for maize and soybeans. The rise in animal feed prices coincided with a worsening in consumers' financial strain due to the damaging effects of the pandemic. Thus, we saw a decline in the demand for red meat products as consumers opted for relatively cheaper forms of protein. Moreover, the spread of foot-and-mouth disease (FMD) to six of South Africa's nine provinces for the first time in history was another challenge for the industry. This brought temporary bans in certain export markets, extending to auctions and livestock movement, mainly cattle, for some time in 2022. Please click here to listen to this week's podcast by Wandile Sihlobo.

By early April 2023, many Ukrainian official agencies and private companies published their end-of-the-year results. Although a worst-case scenario was avoided, the Ukrainian economy suffered significant damage. Although agricultural production in Ukraine remained significant, many producers declared substantial losses and are struggling to stay afloat. Total agricultural industry loss in 2022 reached billions of dollars, undermining the industry’s resilience in 2023. Please click here to read the full report by the US Department of Agriculture’s Foreign Agricultural Service.

Favorable weather conditions and high sugar prices are expected to boost Brazil's sugarcane crop in marketing year (MY) 2023/24, with a forecast production of 661,4 million metric tons (MMT), which is 6,5% higher than MY 2022/23, according to the US Department of Agriculture's Foreign Agricultural Service (FAS). This increase in sugar prices should lead to a higher sugar proportion in the sugar-ethanol production mix. Consequently, The FAS post in São Paulo predicts a 15% rise in Brazilian sugar exports to 32,4 MMT, raw value, in MY 2023/24, owing to a greater surplus of exportable sugar in comparison to the prior season. Brazil is still the second-largest beneficiary of the US sugar tariff-rate quota, with an allocation of 196 440 metric tons, raw value, for FY 2023 TRQ. Please click here to peruse.

The surge in soybean plantings in South Africa has led to the US Department of Agriculture's Foreign Agricultural Service (FAS) projecting a record 800 000 tonnes of oilseeds (including soybean and sunflower) exports in its latest Global Agricultural Information Network report. This surge in oilseed plantings in South Africa has been ongoing for the past two decades, with the soybean area expanding almost nine-fold. The FAS post in Pretoria anticipates this growth trend in soybean plantings to continue into marketing year 2023/24, with the area and total oilseed production expected to reach a historic high of 1,8 million hectares and nearly 3,6 million tonnes, respectively. However, South Africa is approaching the limit of its local oilseed crushing capacity due to this increase in soybean plantings. Read more in the linked article, first published on World-Grain.com.

Assomela, the Italian association of apple producers, has criticised the proposed EU ban on all fruit and vegetable packaging, with the exception of products over 1,5 kg. The ban, which would require all fruit and vegetables to be sold loose in the EU except for sales units larger than 1,5 kg, is deemed "discriminatory" and "disproportionate" by the association. As a result, Assomela has called on the European Commission to rethink its draft regulation for the proposed Packaging and Packaging Waste Directive (PPWD). The regulation would affect all types of packaging, including cardboard, across all sectors. But Italy’s apple association is among a number of groups in the fresh produce industry that believe it goes too far and focuses too much on reuse rather than recycling. Read more in the linked article, first published on fruitnet.com.

Maintenance of port equipment in South African ports is key, as these complex heavy machines are in almost daily use and in some cases are older models. To most effectively maintain the equipment, and reduce downtime, Transnet Port Terminals (TPT) has decided to enter into long-term agreements with the original equipment manufacturers (OEMs) for the supply and life-cycle maintenance of vital equipment. Unlike smaller machines such as forklifts, the large rubber tyred gantries (RTGs) and ship-to-shore cranes used to load containers onto ships cannot simply be replaced. In some cases, Transnet and suppliers have had to search globally for the particular equipment configuration that matches South African port specifications. So maximising the health of the existing stock until they are replaced is hopefully one of the quickest ways to increase port performance. This is a matter of crucial concern for South African exporters and in particular exporters of perishable products such as fruit. Some fruit types have a viable shipping ‘life’ of mere weeks before damage to the fruit renders it unsellable to foreign buyers at ports of destination. This has been the driving force behind Agbiz and specifically the fruit, wine and grain industries' efforts in 2022 and 2023 to improve logistics corridors and port performance under an Agbiz-Transnet Interface Agreement. The agreement seeks to pragmatically and strategically align existing assets to industry needs, whilst mapping gaps and deploying joint public sector participation (PSPs) investment projects to fill such gaps. Read more in the linked article, first published in Engeineering News. 

President Cyril Ramaphosa condemned the EU Tuesday for restrictions on citrus exports from South Africa to prevent the importation of non-indigenous moths which stranded tonnes of fruit at sea when introduced last year. Ramaphosa said he was "disappointed at the (EU's) acts of... protectionism against" the country's agricultural products, "most recently against our citrus". "We are now the world's second-largest exporter of citrus and believe recent decisions by the EU are unfair," Ramaphosa said while co-hosting a business roundtable with visiting President of Finland Sauli Niinisto in Pretoria. The full remarks can be found here. The two sides will face increasing pressure to reach a deal before the envisaged SA-EU Summit in mid-2023. With such remarks on citrus now a common occurrence during SA-EU member state events, the issue is not fading from the headlines. Both parties are no doubt hoping to make progress soon towards reaching an agreement in order to re-affirm historically deep and collegial trade ties that in citrus’ case, have existed for over a century. Read more in the linked article, first published on RTL Today.

India maintains its position as the top country in terms of the total area under cotton production, with 13 million hectares recorded in the most recent season. However, despite having far more land dedicated to cotton, India's cotton production has consistently been lower than countries with less cotton acreage due to various factors. Nevertheless, India still holds the second position for total cotton lint production, currently at 5,2 million tons. Cotton farmers in India are believed to have held back their cotton to maximise profits after coming off near record-high prices and high consumption demand. However, with the recent fall in prices and decreased consumption due to global economic uncertainty, farmers are experiencing difficulties. Read more in the linked Cotton Market Report published by Coton SA.

This week's port operations were disrupted by adverse weather, continuous equipment breakdowns and shortages, load-shedding, backlogs, and congestion. However, there was a much-improved situation in Cape Town as minimal delays were reported due to adverse weather, and the port dropped from the first page of Linerlytica's Port Congestion Watch as backlogs were cleared, and vessels at anchorage reduced. Unfortunately, an intoxicated truck driver caused extensive delays in Durban, while two other intoxicated drivers were denied entry to the port. Load-shedding again affected the Port of East London as Eskom's stage 6 load-shedding schedule continues, and multiple cable theft incidents disrupted rail operations, with the most significant incident causing extensive delays on Wednesday. In the maritime freight shipping industry, freight rates have rebounded strongly due to the mid-April general rate increase. Capacity utilisation has decreased this week as more capacity returns to the market with new ship deliveries. Currently, idled capacity is at its lowest level since November, standing at just 1% of the total fleet, compared to its recent peak of 2,5% in February. Read more in the latest BUSA Covid-19 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.