Facebook  Twitter  Linkedin  


20 July 2023

Weak global economy, high inflation, and rising fragmentation demand strong G20 action

The Group of Twenty (G20) needs to take strong action on the weak global economy, high inflation, and rising economic fragmentation. Joint efforts are crucial to address these challenges, including debt vulnerabilities, climate change, and limited concessional financing. While global growth is projected at 2,8% in 2023, recent indicators show mixed results. Tackling inflation requires careful monetary policy management, along with fiscal tightening and targeted measures. The medium-term global economic outlook remains bleak due to economic fragmentation and pressing global challenges. The G20's leadership is vital to ensure a well-equipped and representative IMF, providing support to vulnerable countries. Strong multilateral institutions like the IMF and the World Bank's IDA are crucial for economic stability and income convergence. IMF reforms, increased resources, and a focus on climate-related shocks are necessary. The G20 must provide strong leadership to address the world's challenges effectively. Read the full article first published on IMF Blog here. 

UN secretary-general regrets Russia’s decision to withdraw from grain deal

UN secretary-general António Guterres expresses regret over Russia's withdrawal from the grain deal, which facilitated the export of 30 million tonnes of Ukrainian grain to global markets via Black Sea ports. This decision is expected to impact global food security, particularly in developing countries. The Black Sea Grain Initiative and the Memorandum of Understanding with Russia were vital for reducing food prices by over 23% since last year. Despite efforts to keep the deal alive, Russia's decision remains unchanged, leading to a withdrawal of security guarantees for ships navigating the northwestern part of the Black Sea. The UN remains committed to advancing global food security and price stability. The UN General Assembly president Csaba Kőrösi calls for dialogue resumption and an end to the conflict in Ukraine, highlighting the deal's significance in alleviating the food crisis for millions worldwide. Read the full article first published on UN News here.

South Africa’s Land Bank can be fixed: change the funding model and narrow the focus

It is disheartening to see how many South Africans, including parliamentarians, have forgotten the simple and influential role the Land and Agricultural Development Bank (Land Bank) played in South African agriculture. The former minister of agriculture, Derek Hanekom, summarised this role nicely in his foreword to the bank’s 1997 annual report: The Land Bank was a conduit for cheap money for mortgage finance for farmers, for production finance to co-operatives, and for the liquidity of the marketing boards. The Land Bank, established in 1912, had a narrow mandate for many decades. Its focus was on mortgages for white farmers to acquire farmland. It also provided wholesale finance to agricultural cooperatives and marketing boards who on-lend production (short-term) finance to individual farmers. Click here to read the full article by Prof. Johann Kirsten and Wandile Sihlobo for theconversation.com.

The case for AGOA’s renewal

Readers who follow international relations will know that the United States Congress is due to review the countries included in the African Growth and Opportunity Act. AGOA, as it is commonly called, is not a trade agreement but a concession made to qualifying countries in sub-Saharan Africa to export duty free to the United States. It aims to promote market-based economies in Africa and development through the philosophy of ‘trade, not aid’. The list of qualifying countries is reviewed on a regular basis but what makes the review particularly topical is the fact that South Africa is due to host the US-Africa AGOA forum later this year. That is unless the event is moved in retaliation to what some congressmen view as South Africa’s close ties with Russia. Agbiz and Business Unity South Africa (BUSA), submitted written inputs to the US Congress on 7 July to underscore the reasons why we believe South Africa should remain within AGOA. Read the full column by Agbiz CEO Theo Boshoff, first published in Farmer's Weekly here.


Buffering against instability: workshop with ISS on violence prevention


Agbiz hosted a workshop for an extended Agbiz working group on buffering against instability with the Institute for Security Studies (ISS)’s Violence prevention team. The ISS’s violence prevention team convene the Violence Prevention Forum. This is a collaboration between government, civil society, researchers, international organisations, development partners and the private sector. The intention behind the forum is to ensure that the best knowledge and evidence are used to prevent violence in South Africa. The forum was initiated in 2015 to share knowledge and experience about researching and implementing interventions and programmes to prevent violence since then a provincial and local forum have been established in the Western Cape. Click here to read the full article by Agbiz head of Legal Intelligence Annelize Crosby.


Russia’s decision to halt the Black Sea Grain Initiative presents risks to global food security

The start of this week has been eventful in global agriculture. The focus is on the Black Sea, an essential region for grain supplies although engulfed in the RussiaUkraine war. The exports of grain, specifically from Ukraine, were disrupted when Russia invaded the country in February 2022. But the rising concerns about global food security resulted in the United Nations and Turkey brokering a deal in July 2022 between Russia and Ukraine to allow a safe grain movement from Ukraine to the world market while the war continued. But this week, Russia halted the Black Sea Grain Initiative. The reasons are unclear, but the attack on Kerch Bridge connecting the Crimea peninsula to the Russian mainland angered Russia. But this is possibly not the only reason. Prior to this week’s events, Russia wanted to increase the exports of ammonia and other fertiliser material to the world market and this required the EU to reconnect the Russian Agriculture Bank to the global electronic payment network, SWIFT. Russia demanded that this be done for them to renew the Black Sea Grain Initiative, which had not happened. Click here to read the full article by Agbiz chief economist Wandile Sihlobo. Or you can click here to watch a Morning Live interview with Wandile Sihlobo and Agri SA president Jaco Minnaar discussing the implications of Russia's decision to terminate the Black Sea Grain Initiative.

India's possible ban on rice exports presents a risk to global food prices

One important development this past week in global agriculture was the news that India is considering a temporary ban on rice exports. The rationale cited in various media articles is that India's government is worried about inflation ahead of the upcoming elections. However, the problem with this view is that India faces far less inflation pressure than other regions. For example, in June 2023, India's annual consumer inflation was at 4,8%, down significantly from the start of the year when inflation was at 6,5% in January 2023. Food inflation has moderated at roughly the same pace, measured at 4,5% in June 2023, down from 5,9% in January. Importantly, India is a significant producer of rice globally, accounting for a 26% share in the expected 2023/24 global rice production of 525 million tonnes, according to data from the International Grains Council (IGC). Of the 50 million tonnes of rice for global exports projected for the 2023/24 season, India is expected to account for about 40%. Other notable rice exporters are Pakistan, Thailand, the US, Vietnam, China, Cambodia, and Myanmar. But India is the largest exporter of all these countries. This means if the Indian government proceeds with a temporary ban on rice exports, as the recent reports suggest, there could be major disruptions in global rice trade and upside pressure on prices. Read the full article by Wandile Sihlobo here.

Expected large global grain supplies will benefit consumers


This past week the United States Department of Agriculture (USDA) released its monthly flagship report, World Agricultural Supply and Demand Estimates. The report's focus has shifted from the 2022/23 season to the 2023/24 season, currently under way in the northern hemisphere and starting around October in the southern hemisphere. The past few weeks, specifically in the US, they brought drier weather conditions, leading to fears of a potential downward revision in the crop forecasts. But the latest estimates still present a positive picture of the 2023/24 global agricultural prospects. For example, the 2023/24 global wheat production is forecast at 797 million tonnes, up 1% from the previous season. The larger harvest is anticipated in the EU region, the US, Canada, China, India, and Turkey. As a result of the expected large harvest, the 2023/24 season's global maize stocks could increase by 1% year-on-year to 270 million tonnes. Read the full article by Wandile Sihlobo here.

South Africa's consumer food inflation slowed in June 2023

South Africa's consumer food inflation slowed in June 2023, recorded at 11,1% from 12,0% in the previous month. The product prices underpinning this deceleration are mainly bread and cereals; meat; fish; milk, eggs and cheese; and oils and fats. While there are renewed risks in global agriculture, such as India threatening to ban the exports of rice and the Black Sea Grain Initiative that facilitated grains and oilseeds exports from Ukraine terminated, we are still positive that South Africa's consumer food inflation will continue to slow during this second half of the year. The products that could underpin the slowing food inflation trend will be similar to those in June. Notably, red meat prices, which have softened at the farm level, should continue on this trend at the retail level in the coming months. Fruit prices, although no longer in deflation, should remain affordable because of improved domestic supplies. The decline in 'oils and fats' products is in line with a softening price trend we are seeing in the global environment, as South Africa still imports its palm oil usage. For example, in June 2023, the FAO's vegetable oil price index was at 117 points, down 22% y/y. Read the full article by Wandile Sihlobo here.

Risks to feed prices for SA livestock and poultry industry

The livestock and poultry industry has had a difficult last few years. Various external shocks including animal diseases and rising input costs – yellow maize and soybean prices – made for a challenging operating environment for many farmers and agribusinesses. While the spread of diseases may be slowing, and organised agriculture and government continued to collaborate to address biosecurity risks, concerns about renewed increases in animal feed prices persist. This is particularly the case in the El Niño period, which might result in a lower harvest compared to recent seasons of bumper crops. Click here for more details and to listen to the latest episode of the Agricultural Market Viewpoint with Wandile Sihlobo.


Crypto needs comprehensive policies to protect economies and investors

The Indian G20 Presidency drives clearer crypto asset policies, but more action is needed. Recent failures highlighted the urgency for investor protection. Policymakers must address the broader implications of crypto assets, including stablecoins' potential impact on economies. three key pillars were proposed: macro-policy foundation, clear legal treatment, and effective implementation. Recommendations include robust domestic institutions, no legal tender status for crypto assets, and strong AML/CFT rules. Coordination and international collaboration are essential for effective policies. The International Monetary Fund (IMF) supports G20 with joint synthesis paper and capacity building. Comprehensive measures safeguard monetary sovereignty and promote stability in the digital age. Read the full article first published on IMF Blog here.

China's efforts to enhance bilateral trade and investment through diversification of African agricultural imports

China's efforts to diversify African agricultural product imports are set to boost bilateral trade and investment opportunities. China and several African countries, including Madagascar, Zimbabwe, and Ethiopia, proposed a liaison mechanism for SPS cooperation to align inspection and quarantine standards and facilitate agricultural food exports to China. The initiative signifies a significant step in promoting trade and economic cooperation. The trade value of agricultural products between China and Africa has been steadily growing, with an average annual growth rate of 5,8%. The proposed mechanism aims to ensure the safety and quality of products while reducing trade barriers and enhancing market access. African countries see this move as an opportunity to stimulate agricultural production, generate employment, and boost economic growth. Recently, China's largest food trader, COFCO Group, imported feed corn from South Africa, marking a positive development in agricultural trade between the two regions. Read the full article first published on chinadaily.com here.

BRICS Business Council aims to better balance SA’s trade patterns

The BRICS Business Council aims to address trade imbalances and promote economic growth among Brazil, Russia, India, China, and South Africa. Ahead of the BRICS Summit, South Africa's chairman of the council, Stavros Nicolaou, highlighted the need for more exports of finished products and less importation. The trade among BRICS nations has grown by 44% from 2017 to 2021. The summit's theme revolves around Africa and BRICS promoting multilateralism, with South Africa playing a key role in leveraging the African Continental Free Trade Area to enhance trade and investment in the continent. Additionally, discussions on a new BRICS currency challenging the US dollar as the world's reserve currency are ongoing, but it is in the early stages and may take years to develop. Read the full story, first published on iol.co.za here.

What this year’s El Niño means for wheat and global food supply

The World Meteorological Organization has declared the onset of the first El Niño event in seven years, which is expected to be of moderate strength. El Niño brings extreme weather patterns, such as droughts and wildfires in some regions, and floods in others. It can have complex global impacts, affecting agricultural production and food prices, although evidence suggests relatively modest and ambiguous global price impacts. However, local effects can be severe, particularly for crops grown in concentrated regions. El Niño-induced food availability and affordability issues may lead to social consequences, including conflict and hunger. While crop failures in one region may be offset by production in others, some people will still bear the direct costs. El Niño's wider economic impacts and potential societal issues, such as famine and conflicts, are concerns. The effects of El Niño will exacerbate existing socio-economic conditions in some countries. Read the full article by Prof. David Ubilava first published on theconversation.com here.

IFPA Southern Africa Conference focuses on creating opportunities from challenges

Leaders from every segment of the fresh produce supply chain will convene at Cape Town’s Century City Conference Centre for the International Fresh Produce Association’s (IFPA’s) Southern Africa Conference, the largest fresh produce conference and trade show in Southern Africa from 1 to 3 August. “The Southern Africa Conference is a truly vibrant and engaging event where growers, exporters, retailers, wholesalers, market agents, and many more throughout the supply chain convene to make strategic connections and exchange new ideas,” said Stephanie van der Walt, regional manager for the International Fresh Produce Association (IFPA) Southern Africa. “This year, we’re thrilled that attendees will get to enjoy a variety of new networking and education opportunities as they gain first-hand insights into global trends and business opportunities in the produce industry.” Conference sessions will include the state of the industry, perspectives on the industry’s future, global trends and African strategies for optimising fresh produce logistics, global supply chain disruptions and how they are being addressed by the Global Produce Coalition, and the top 10 global consumer trends for 2023. Click here to read the full media statement by IFPA.

BUSA Covid-19 cargo movement update

Business Unity South Africa (BUSA) released its 145th update on the South African supply chain and international trade revealing challenges in port operations, including adverse weather, equipment breakdowns, congestion, and load-shedding. Delays in Cape Town and Durban ports impacted vessel arrivals and marine fleet operations. A "stop-order" at the Port of Richards Bay and a cable theft incident further disrupted operations. Globally, the container industry improved with low rates and improved schedule reliability, but rate stability requires more capacity cuts. International air cargo remained low, and domestic demand remained weak. Cross-border road freight trade experienced delays at South African and SADC borders due to queues and transport unrest. The truck violence emphasised discord in the supply chain, necessitating collaboration and shared vision for sustainable solutions. Read the full update in the latest BUSA Cargo Movement Update.


Urgent swift disaster declaration needed to aid flood-stricken farmers and communities in the Western Cape

The Citrus Growers’ Association of South Africa (CGA) welcomes the recent update by the Western Cape Department of Agriculture (WCDoA) on the estimated damage to agricultural infrastructure by floods in the province in mid-June. The CGA trusts the National Disaster Management Centre will now act with the urgency that the situation requires and declare the floods a provincial disaster. It is crucial that funding and support are made available to the stricken farmers and communities as soon as possible. The CGA has written to the Western Cape minister of agriculture, Ivan Meyer, to thank him and his department for their swift response to the floods. The association has also offered any assistance, should it be needed, in securing a rapid declaration of disaster. Click here to read the full statement by Justin Chadwick, CEO of the Citrus Growers’ Association of Southern Africa.

The latest news from CGA

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. 

Get the latest news from the FPEF

In the latest edition of Keeping it Fresh, the Fresh Produce Exporter's Forum (FPEF)'s newsletter, you will get a summary of the most pertinent information as well as reminders of important upcoming events. Please click here to peruse.


Export Awareness & Networking Day 2023

28 July 2023 | Swellendam

RSVP here

International Fresh Produce Association (IFPA) Southern African Conference

1–3 August 2023 | Century City Conference Centre | Cape Town

More information

95th SASTA Congress

15–17 August 2023 | International Convention Centre (ICC) | Durban

More information

5th Eastern Cape Export Symposium

17–18 August 2023 | East London International Convention Centre | East London

More Information

Agbiz Grain Symposium

5–8 September 2023 | Virtual

More information: annelien@agbizgrain.co.za

AFMA Forum 2023

Theme: "Feed & Food – The 4th Agricultural Revolution"

5–7 September 2023 | Sun City | South Africa

More information

Asia Fruit Logistica

68 September 2023 | Hong Kong

More information

Why join Agbiz?
  • Agbiz is the only organisation that serves the broader and common over-arching business interests of agribusinesses in South Africa.
  • Agbiz addresses the legislative and policy environment on the many fronts that it impacts on the agribusiness environment.
  • Agbiz facilitates considerable top-level networking opportunities so that South African agribusinesses can play an active and creative role within the local and international organised business environment.
  • Agbiz research provides sector-specific information for informed decision-making.
  • Agbiz newsletter publishes members' press releases and member product announcements.

Facebook  Twitter  Linkedin  
The Agbiz Newsletter may contain a few links to websites that belong to third parties unrelated to us. By making these links available, we are not endorsing third-party websites, their content, products, services or their events. Agbiz seeks to protect the integrity of its newsletter and links used in it, and therefore welcomes any feedback.