https://www.thexchange.co.za/ Agricultural Market Viewpoint with Wandile Sihlobo Investing en Sun, 31 Jul 2022 19:33:49 +0200 Sun, 03 May 2026 14:22:34 +0200 30 http://blogs.law.harvard.edu/tech/rss iono.fm 2.5.2.0 The Xchange Platform no Wandile Sihlobo Weekly feeds@iono.fm (Feed Manager) https://cdn.iono.fm/files/p2517/logo_7455_20250909_211316_1400.jpeg https://www.thexchange.co.za/ Agricultural Market Viewpoint with Wandile Sihlobo The Xchange Platform episodic The Xchange Platform talk@thexchange.co.za false ZA https://iono.fm/e/1671915 https://iono.fm/e/1671915
Secondly, South Africa has experienced favourable rainfall at the start of the 2026-27 winter crop season. However, we may encounter below-normal rainfall later in the season, which could impact the production of wheat, barley, canola and oats this year.

Overall, in the coming weeks and months, we’ll need to closely monitor weather developments. The outlook is concerning across the board. Wandile Sihlobo website]]> Investing Sun, 03 May 2026 14:22:00 +0200 0 0 Two points about the uncertain weather outlook and its impact on South Africa’s agriculture over the coming months 0 0 Wandile Sihlobo full 7:33 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1670522 https://iono.fm/e/1670522
I often write about South Africa's soybean success story, whose production increased from 67,700 tonnes in the 1993-94 production season to an expected record harvest of 2,8 million tonnes in 2025-26. This, in turn, has been driven by increased demand for high-protein foods, particularly poultry products.

But soybeans aren't the only success story in South Africa's vegetable oils cluster.

Canola is one of South Africa's agricultural success stories. Since South African farmers began commercial planting of the crop on 17,000 hectares in 1998-99, the area has increased to an estimated 174,515 hectares in 2025-26. For the 2026-27 season, the farmers plan to increase the area to 189,175 hectares.

Like soybeans, the catalyst behind the increase in canola plantings, among other things, is a rise in domestic demand or usage for oils and oilcake. There has also been a switch in some areas from wheat to canola due to higher profitability in recent times. South Africa is now a net canola exporter, having shipped to countries such as Germany and Belgium in recent years.

Canola is a winter crop. Hence, production is primarily in the Western Cape, a winter-rainfall region in South Africa.

Considering the farmers' intentions to plant 189,175 hectares, up by 8% from the previous season. If we assume relatively favourable weather conditions and a decent yield, applying a five-year average yield of 1,89 tonnes per hectare, South Africa could harvest 357,541 tonnes, up 16% from the previous season. This could be a fresh high.

Admittedly, it is still too early to tell with certainty where the canola crop harvest will be and whether farmers will successfully plant the area they intend to till. The key determinant will be the weather conditions, amongst other things.

Placing the current weather forecasts aside, I think it's fair to say that canola is one of the success stories of South Africa's agriculture, alongside the soybean industry and many of our fruits.

Listen to the podcast for more information. Wandile Sihlobo website]]> Investing Tue, 28 Apr 2026 15:35:00 +0200 0 0 Canola production in South Africa may reach a fresh high in 2026-27 0 0 Wandile Sihlobo full 5:23 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1670127 https://iono.fm/e/1670127 Wandile Sihlobo website]]> Investing Mon, 27 Apr 2026 15:20:00 +0200 0 0 Will the current rains distort grain quality in South Africa? 0 0 Wandile Sihlobo full 8:17 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1665100 https://iono.fm/e/1665100
To some observers of the South African agricultural sector, the report signalled a change from the long period of strong tractor and combine harvesters sales to a much slower pace. Tractor sales declined for the first time in 14 months, down 8% year-on-year, to 618 units. At the same time, combine harvester sales fell by 22% from March 2025 to 29 units.

While such a decline is not desirable, it is also not alarming, and we should be careful not to read too much into the state of the sector from a one-month slowdown in agricultural machinery sales.

Moreover, the March 2026 tractor and combine harvest sales levels remain well above the long-term averages. Therefore, the base effects are also another factor to consider when interpreting these data.

Indeed, the Middle East war and concerns about fuel prices have, to an extent, negatively impacted the sector, as reflected in the first-quarter results of the Agbiz/IDC Agribusiness Confidence Index (ACI).
Listen to the podcast for more information. Wandile Sihlobo website]]> Investing Sun, 12 Apr 2026 20:44:00 +0200 0 0 Are cooling agricultural equipment sales in South Africa a temporary blip? 0 0 Wandile Sihlobo full 7:57 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1663259 https://iono.fm/e/1663259 The Western Cape produces much of our winter crops: half of South Africa’s winter wheat, and the majority of our barley, canola and oats. Planting of these crops begins at the end of this month.
Some farmers likely bought their fertiliser before the start of this war and benefited from better prices. But some may not have bought it then and will have to start planting at these higher fertiliser prices.
As I have said before, fertiliser accounts for 35% of South African grain farmers’ input costs, and fuel accounts for about 13%, meaning roughly half of the input cost component is exposed to the challenges posed by the ongoing war in the Middle East.
It is unclear how many farmers also managed to secure fuel before the recent hikes. But the core point is that South Africa is starting the 2026-27 winter crop season at a challenging time.
Things would have been better if the previous winter crop season in 2025-26 had been excellent. But it was not. Farmers across the Western Cape had to replant their crops twice or more. There was a snail infestation that attacked the seedlings.
Spraying and replanting meant farmers incurred even higher input costs than in normal seasons. What made things worse is that these commodities are traded on the global market, where their prices are determined.
Farmers don’t have the market power to pass on costs directly to consumers. Therefore, they were strained from the previous season. We are now starting the 2026-27 season from that back foot.
We will know how much area they intend to plant at the end of this month when the Crop Estimates Committee releases the farmers’ intentions-to-plant data.
As bleak as these views are, from a consumer perspective, there should be no cause for concern in the near term.
The world is awash with wheat, keeping prices under pressure. But the downside for farmers is that it weighs on their profitability, in a season when input costs are already higher due to the war.
For example, the International Grains Council forecasts 2025-26 global wheat production at a record 842 million tonnes, up 5% year-on-year. This is due to ample harvests in the EU, Russia, the U.S., Canada, Australia, Argentina, Ukraine, and Kazakhstan, among others.
It is partly these ample global supplies and lower global wheat prices that have led to calls to increase the domestic wheat import tariff.
The wheat import tariff exists to provide some level of protection for domestic wheat producers while ensuring that consumer welfare is not sacrificed in the process. The key is to find some level of balance. At this time, when farmers are under pressure, we will be thinking more about this at the policy level.
Ultimately, we are entering a stressful season for farmers, but consumers are getting a breather from ample global wheat supplies.
-Wandile Sihlobo
Presidential Envoy on Agriculture and Land Wandile Sihlobo website]]> Investing Mon, 06 Apr 2026 17:35:00 +0200 0 0 The Western Cape farmers face an immediate challenge from the Middle East war 0 0 Wandile Sihlobo full 6:38 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1661169 https://iono.fm/e/1661169
Indeed, the continent’s prominence differs product by product. Still, there is no way we would have been able to enjoy this export success, where we are now ranked 32nd among global agricultural exporters and the only African country in the top 40, without the preferential access to the broader continent.

As we continue to work to access more of Asia, the Middle East, and various parts of the world, it's equally important to take a step back and acknowledge the value this continent has played in our agricultural success journey.

We discuss more in this podcast. Wandile Sihlobo website]]> Investing Mon, 30 Mar 2026 08:40:00 +0200 0 0 The African continent is at the heart of South Africa’s agricultural export success 0 0 Wandile Sihlobo full 7:54 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1660316 https://iono.fm/e/1660316
Shipping costs are rising. Agricultural businesses that export to the Middle East will now be exploring whether other markets can absorb their products. South Africa's citrus, strawberry, and maize harvest seasons will soon begin across the country, and as the conflict in the Middle East drags on, trade interruptions will persist.

While the conflict will impose major costs on businesses, South Africa must remain focused on its long-term agricultural export growth strategy, which targets the Middle East as a key market. In times of peace and reconstruction, this region would be a key agricultural export market. We believe there remains room to increase exports in peacetime. Wandile Sihlobo website]]> Investing Thu, 26 Mar 2026 13:08:00 +0200 0 0 The Middle East remains a key potential export market for South Africa’s agriculture 0 0 Wandile Sihlobo full 7:28 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1656696 https://iono.fm/e/1656696
Agricultural products are also processed in certain regions and then transported to various consumption points. This means that fuel price changes affect food prices through adjustments in distribution costs.

Still, such fuel price changes in some products take a while to be passed through. Therefore, any sudden worry or urge to adjust prices is something to watch closely.

There is still a lot we don’t know about this Middle Eastern war, including how long it will last. Indeed, all indications point to a potential notable increase in fuel prices this coming month.

Still, it is probably fair to assume that we won’t see a sudden jump in most food products, as there are various adjustments the many role-players have to make and time lags.

I typically don’t encourage unnecessary close monitoring of food price adjustments, but if we continue to see such headlines, it may be useful to pay attention to these things. We are already seeing worrying price increases in farm inputs in some regions of our country. Wandile Sihlobo website]]> Investing Wed, 18 Mar 2026 08:11:00 +0200 0 0 Is it not too soon to be considering food price increases in South Africa? 0 0 Wandile Sihlobo full 6:34 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1655747 https://iono.fm/e/1655747
Listen to the podcast for more. Wandile Sihlobo website]]> Investing Mon, 16 Mar 2026 08:09:00 +0200 0 0 South Africa will likely miss its maize export forecast for the 2025-26 marketing year 0 0 Wandile Sihlobo full 8:05 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1654870 https://iono.fm/e/1654870
In data released on March 11, we learned that after rising for much of last year, the Agbiz/IDC Agribusiness Confidence Index (ACI) fell by 18 points in Q1 2026 to 49, the lowest level since Q3 2024. The current ACI level of 49 is just under the 50-neutral mark, suggesting that South African agribusinesses are becoming somewhat pessimistic about business conditions in the country.

But this story requires some context; we provide it in this podcast. Wandile Sihlobo website]]> Investing Thu, 12 Mar 2026 11:17:00 +0200 0 0 Why are South African farmers feeling downbeat about business conditions in the country? 0 0 Wandile Sihlobo full 10:17 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1653406 https://iono.fm/e/1653406
Listen to the podcast for our early impression. Wandile Sihlobo website]]> Investing Sun, 08 Mar 2026 15:35:00 +0200 0 0 How the Middle East issues will likely impact South Africa's agriculture 0 0 Wandile Sihlobo full 8:05 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1633636 https://iono.fm/e/1633636 Listen to the podcast for more information.
Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Sat, 10 Jan 2026 12:11:00 +0200 0 0 South Africa’s agricultural outlook for 2026 remains positive 0 0 Wandile Sihlobo full 10:42 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1626316 https://iono.fm/e/1626316
Favourable weather conditions, strong exports throughout the year on the back of ample grains, oilseeds, and horticulture harvests, as well as better port efficiencies, are among the key drivers of optimism in the sector.

We suspect that the announcement of nationwide vaccination of cattle against foot-and-mouth disease also contributed to the upbeat mood, as the disease is a national challenge that, for some time, seemed out of control.

The current ACI level of 67 is well above the 50-neutral mark, suggesting that South African agribusinesses are generally optimistic about business conditions in the country. This survey was conducted in the last week of November and covered agribusinesses operating across various agricultural subsectors nationwide.

Listen to the full podcast for more information. Wandile Sihlobo website]]> Investing Sun, 07 Dec 2025 13:51:00 +0200 0 0 SA farmers are upbeat about business conditions in the sector 0 0 Wandile Sihlobo full 11:11 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1623921 https://iono.fm/e/1623921
One aspect of the agricultural sector that has posed a significant challenge is the livestock industry, which struggles with foot-and-mouth disease. But South Africa is embarking on vaccination nationwide. This will be a considerable undertaking to vaccinate over 12 million cattle (about 7.2 million are in the commercial herd).

The better weather outlook, combined with the vaccination campaign, provides us optimism that we may transition from a “mixed recovery” in 2025 to a “better recovery” in 2026. We remain optimistic.

Listen to the podcast more. Wandile Sihlobo website]]> Investing Sun, 30 Nov 2025 19:08:00 +0200 0 0 SA agricultural conditions 0 0 Wandile Sihlobo full 8:22 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1621231 https://iono.fm/e/1621231
Listen to the podcast. Wandile Sihlobo website]]> Investing Sun, 23 Nov 2025 16:26:00 +0200 0 0 The G20 places a spotlight on the global hunger problem 0 0 Wandile Sihlobo full 9:16 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1618927 https://iono.fm/e/1618927 Wandile Sihlobo website]]> Investing Mon, 17 Nov 2025 11:38:00 +0200 0 0 The rainy weather is an excellent start to the 2025-26 agricultural season in South Africa 0 0 Wandile Sihlobo full 8:23 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1618677 https://iono.fm/e/1618677
South Africa is an exporter of various agricultural products to the U.S., including citrus products, table grapes, macadamia nuts, wine, ostrich products, and ice cream, among others. It appears that oranges, macadamia nuts and fruit juices will benefit from the exemption.[1] The U.S. accounts for approximately 4% of South Africa’s agricultural exports, valued at U.S.$13.7 billion in 2024.

In the second quarter of 2025, South African agricultural exporters took advantage of the temporary tariff pause and front-loaded their products. This resulted in a 26% year-over-year increase in South Africa’s agricultural exports to the U.S. in the second quarter, reaching U.S.$161 million. There remain concerns that going forward, the higher tariffs will weigh on agricultural product exports, particularly those not covered in these modified rates, such as table grapes, macadamia nuts, and wine, among others. South Africa is entering the table grape export season, and access to the U.S. market remains a challenge due to higher tariffs compared to South African competitors. Wandile Sihlobo website]]> Investing Sun, 16 Nov 2025 12:51:00 +0200 0 0 The US recent tariff modification may be favourable for some SA agricultural industries 0 0 Wandile Sihlobo full 10:23 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1618409 https://iono.fm/e/1618409
But there are times when extreme heat and dryness can cause worries about the vegetation, and there were certainly areas where farmers were starting to rely on feed because of dryness.

But I was delighted to hear from various farmers in recent days that some areas are starting to receive rains, which if it continues, will help boost the grazing veld.

Another aspect of the Karoo region, which many South Africans have yet to explore, is agritourism.

I discuss more in the podcast. Wandile Sihlobo website]]> Investing Fri, 14 Nov 2025 15:09:00 +0200 0 0 The unforgiving winters and summers of the beautiful Karoo region of South Africa 0 0 Wandile Sihlobo full 9:25 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1617809 https://iono.fm/e/1617809
In the past, when confronted with disasters and food shortages, we had relied on organisations such as the World Food Programme for assistance.

This time around, the World Food Programme is no longer fit to assist if we run into challenges.

Hence, thinking about the future, we have to do whatever we can to help farmers get out into the fields and till the land, so they can have an ample or decent harvest in the upcoming season and ensure household food security in the near term.

There are also long-term policy considerations for reforming our agriculture, which we must seriously reflect on.

I discuss more in the podcast. Wandile Sihlobo website]]> Investing Thu, 13 Nov 2025 10:47:00 +0200 0 0 The African governments must help farmers 0 0 Wandile Sihlobo full 10:11 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1617509 https://iono.fm/e/1617509
If we look at the high-frequency data for a moment, the number of farm jobs in South Africa has increased slightly from the second quarter of 2025, by 2% to 920k in the third quarter. We see the quarterly improvements mainly in some field crops, horticulture, forestry, and in the production of organic fertiliser. The increase in jobs reflects the optimism generated by the abundant harvest in these subsectors, which we have highlighted on numerous occasions. The one subsector that remains under pressure is the livestock industry, mainly due to the foot-and-mouth disease.

Notably, the jobs of 920k are far above the long-term average level of 799k jobs, signalling that while the sector faces challenges such as animal diseases, wage pressures in some industries and inept municipal service deliveries, among other issues, the employment conditions remain at encouraging levels. Wandile Sihlobo website]]> Investing Wed, 12 Nov 2025 15:30:00 +0200 0 0 Agricultural job prospects remain positive in South Africa 0 0 Wandile Sihlobo full 12:14 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1616262 https://iono.fm/e/1616262
South Africa’s 2025-26 winter wheat season began at the start of October. But we are seeing that farmers have begun delivering the new season crop, which was planted from the start of May.

In the first five weeks of this year, farmers have delivered about 425,190 tonnes of wheat to commercial silos.

These are still early days, and the harvest is expected to gain momentum in the coming months. South Africa’s 2025-26 winter wheat harvest is forecast at 2.03 million tonnes, a 5% increase from the previous year.

The annual improvement is boosted by the expected better harvest in the Northern Cape, Free State, Eastern Cape, and Limpopo.

The Western Cape, which accounts for over half of South Africa’s winter wheat production, is expected to experience a mild decline in the harvest this year compared to the 2024-25 season due to unfavourable weather conditions in some parts of the province.

A potential wheat harvest of 2.03 million tonnes implies that South Africa may need to import approximately 1.74 million tonnes in the 2025-26 season to meet our annual needs. These imports are expected to be down 5% from the 2024-25 season. The import activity is unlikely to pose a significant challenge, given the ample global wheat supplies available.

Listen more to the linked audio. Wandile Sihlobo website]]> Investing Sun, 09 Nov 2025 16:53:00 +0200 0 0 South Africa's 2025-26 winter crop production prospects remain positive 0 0 Wandile Sihlobo full 8:38 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1616177 https://iono.fm/e/1616177
We are now the only African country in the top 40 global agricultural exporters. If there were indeed an attack on the farming sector, we wouldn’t be seeing such success. Another danger we must not underestimate is the negative image the false narratives create. We are an export-oriented farming sector, and therefore, we must protect the image of this sector in the world market.

Listen to the podcast for more information.

Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Sat, 08 Nov 2025 18:11:00 +0200 0 0 Dispel false narratives about the South African farming sector 0 0 Wandile Sihlobo full 11:37 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1613765 https://iono.fm/e/1613765
This figure comprises maize, soybean, sunflower seed, groundnuts, sorghum, and dry beans. The upward revision was mainly on maize, while other production estimates remained unchanged from the September figure.

The current estimate for the 2024-25 summer grain and oilseed season is up 30% from the previous season. There is an annual uptick in all the crops, mainly supported by favourable summer rains and the decent area plantings.

The base effects also help, as we struggled with a drought last year that weighed on the harvest. This ample crop will likely continue to put downward pressure on prices, which bodes well for a moderating path of consumer food price inflation.

Listen to the podcast for more information.

Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Sun, 02 Nov 2025 14:08:00 +0200 0 0 Grain abundance in South Africa bodes well for moderating food price inflation 0 0 Wandile Sihlobo full 12:25 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1611337 https://iono.fm/e/1611337
Farmers across the country are tilling the land to mark the start of the 2025-26 summer crop season. We also see some activity in the vegetable fields as farmers prepare for the season ahead. The outlook is positive as we are in a La Niña period.

There is also increased activity in the winter crop-growing regions of the country, with farmers beginning harvest of the 2025-26 crop, which was planted in May 2025. We may also soon see an uptick in the export activity of some fruits.

Overall, the season for all these commodities is looking positive, promising better yields.

Listen to the podcast for more information.

Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Sun, 26 Oct 2025 16:36:00 +0200 0 0 SA agriculture is in a busy period, with a promising outlook 0 0 Wandile Sihlobo full 10:48 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1606745 https://iono.fm/e/1606745
What then is happening here? Listen to the podcast for more information.

Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Mon, 13 Oct 2025 10:23:00 +0200 0 0 South Africa's maize exports to Zimbabwe continue, as the import ban seems to have been eased 0 0 Wandile Sihlobo full 7:28 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1603850 https://iono.fm/e/1603850
There is an annual uptick in all the crops, mainly supported by favourable summer rains and the decent area plantings. The base effects also help, as we struggled with a drought last year that weighed on the harvest. This ample crop will likely continue to put downward pressure on prices, which bodes well for a moderating path of consumer food price inflation.

In a few weeks, the focus will be on the 2025-26 season, which also promises to be favourable, with prospects of La Niña rains.

Listen to the podcast for more information.

Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Fri, 03 Oct 2025 13:37:00 +0200 0 0 Another boost to SA's 2024-25 summer grains and oilseed harvest 0 0 Wandile Sihlobo full 10:47 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1601492 https://iono.fm/e/1601492
South African maize exporters are unlikely to participate in the Kenyan market due to the country's reduced annual maize needs and its long-standing ban on imports of genetically modified crops. Over 80% of South Africa's maize is genetically modified, which is typically used as a non-tariff barrier by various African countries. Still, South Africa's maize exports are likely to focus on the neighbouring SACU countries, including Zimbabwe, and the Far East markets in the coming months. The East African region is unlikely to be a primary focus for many domestic maize exporters.

Listen to the podcast for more information.

Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Sat, 27 Sep 2025 14:59:00 +0200 0 0 Kenya's maize production has recovered 0 0 Wandile Sihlobo full 11:06 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1598302 https://iono.fm/e/1598302
A key product that many are watching is meat, particularly beef (and red meat products), which has remained elevated, although slaughtering has resumed in major feedlots across the country. The issue is that South Africa is experiencing a foot and mouth disease outbreak.

Initially, the panic buying, not necessarily a shortage of product, was the main driver of meat prices. This is when the country's largest feedlot announced the cases in its facility. This led to concerns about red meat supplies and some panic buying, thus pushing up prices. The slaughtering has now resumed in the major feedlots, although foot and mouth remains a profound challenge in the country.

Listen to the podcast for more information.

Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Wed, 17 Sep 2025 14:09:00 +0200 0 0 South Africa's food price inflation eases 0 0 Wandile Sihlobo full 10:44 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1597829 https://iono.fm/e/1597829
Listen to the podcast for more information.

Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Tue, 16 Sep 2025 13:18:00 +0200 0 0 South African farmers will start planting summer crops in October, and the outlook is encouraging 0 0 Wandile Sihlobo full 5:10 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1597132 https://iono.fm/e/1597132
As the close observers of the sector know, the quarterly data tend to be somewhat volatile, influenced by times of harvest and crop deliveries, amongst other factors. It is particularly such issues that the second-quarter growth figure was much softer compared to the start of the year.

We experienced a delay in our summer grain harvest, with more momentum occurring at the start of the third quarter than is typically seen in the second quarter of the year. Indeed, we have ample summer grain and oilseeds, estimated at 19.55 million tonnes (up 26% year-on-year). But the season was late by roughly a month and a half because of the excessively prolonged summer rains, amongst other factors.

We have also continued to struggle with the foot and mouth disease and a few avian influenza cases, particularly in the second quarter. It was at the end of the second quarter that the foot and mouth disease vaccines arrived in South Africa for the start of the vaccination campaign.

But of course, not all crops were late. The citrus harvest season started in the second quarter, and we have an ample harvest. Farmers moved quickly to take advantage of the tariff pause window in the U.S., which allows for faster harvesting and adds to the general upside in the second quarter performance, although much softer than the start of the year.

Listen to the podcast for more information.

Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Sun, 14 Sep 2025 19:48:00 +0200 0 0 South Africa’s agricultural sector will likely see a mixed recover in 2025, with livestock experiencing challenges 0 0 Wandile Sihlobo full 11:37 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1594474 https://iono.fm/e/1594474
If we consider the details, the tractor sales have increased for the past eight consecutive months, while the combine harvester sales only cooled in the recent few months, having started on solid momentum.

The recent data for August also paints a mixed picture. For example, the tractor sales are up 22% y/y, with 700 units sold. Meanwhile, the combine harvester sales were flat, with five units sold. The soft sales in combine harvester sales are not a significant concern given the higher volume of sales in the past few months.

The increase in agricultural machinery sales primarily reflects the positive sentiment in the sector regarding the 2024-25 field crop, horticulture, and wine grape harvest, supported by the favourable weather conditions. The sentiment in the sector is also reasonably optimistic, with the Agbiz/IDC Agribusiness Confidence Index at 63 points in the third quarter, which is well above the 50-neutral mark.

We expect South Africa's agricultural machinery to remain strong throughout the year. In addition to the better agricultural production conditions, the interest rates have eased somewhat from last year's levels.

Also worth noting is that some farmers may continue with machinery replacement in the coming months, which ultimately supports the sales.

Ultimately, the machinery industry is benefiting from the positive agricultural conditions in South Africa.

Listen to the podcast for more information.

Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Fri, 05 Sep 2025 13:55:00 +0200 0 0 South Africa's agricultural machinery sales remain strong 0 0 Wandile Sihlobo full 10:12 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1592532 https://iono.fm/e/1592532
Zimbabwe’s 2024-25 maize production is forecast at 1.3 million tonnes, according to recent data from the Pretoria-based unit of the United States Department of Agriculture (USDA). This is just more than twice the output from the previous season, which was a drought period.

This recovery in Zimbabwe’s maize production is primarily driven by improved weather conditions and an increase in the area that farmers managed to plant for maize. If this production level materialises, then the ban may be temporary.

Zimbabwe’s potential maize harvest of 1.3 million tonnes will not be sufficient to meet the country’s domestic needs of 2.0 million tonnes per annum, leaving it to import the balance.

Listen to the podcast for more information.

Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Mon, 01 Sep 2025 11:15:00 +0200 0 0 Zimbabwe bans maize imports 0 0 Wandile Sihlobo full 12:01 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1589841 https://iono.fm/e/1589841
My writing on agricultural economic matters is available on my blog: https://wandile.substack.com/

Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Sat, 23 Aug 2025 15:38:00 +0200 0 0 South African agricultural exports were up 10% in the second quarter of 2025 0 0 Wandile Sihlobo full 11:31 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1587150 https://iono.fm/e/1587150
Richard Humphries and Sam Mkokeli produce this podcast.

*Wandile Sihlobo is chief economist of the Agricultural Business Chamber of South Africa Wandile Sihlobo website]]> Investing Fri, 15 Aug 2025 14:59:00 +0200 0 0 South Africa’s agricultural sector may see an uneven recovery in 2025 0 0 Wandile Sihlobo full 10:41 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1584816 https://iono.fm/e/1584816
Last season, we did not see many maize exports to the Far East. Our export activity focused on Africa. The region was hit by the drought and needed maize more than other regions for staple food. South Africa channelled its maize exports, mainly white maize, to this region.

And yes, South Africa was also hit by the drought, but we still had a relatively decent yield, and also benefited from supplies from the past season. This enabled South Africa to export more maize to the African continent. Zimbabwe accounted for 56% of South Africa's maize exports of 2.3 million tonnes last year.

We are now back in the season of abundance. Zambia has surplus maize, and Zimbabwe has a better yield, although it may still need about 700,000 tonnes of maize imports later in the season. Zambia, the second largest maize producer in the Southern Africa region, has seen a recovery in its 2024-25 maize production (this season corresponds with the 2025-26 marketing year), now estimated at 3.66 million tonnes, up from 1.50 million tonnes in the previous season, according to Zambia's government data.

Zimbabwe's 2024-25 maize production is forecast at 1.30 million tonnes, according to recent data from the Pretoria-based unit of the United States Department of Agriculture (USDA). This is just more than twice the output from the previous season. Still, it is below the 2.00 million tonnes Zimbabwe requires for its domestic annual consumption. Thus, the country may still import later in the year. South Africa and Zambia may be the major maize suppliers to Zimbabwe.

In South Africa, our maize production is at 15.03 million tonnes, which is 17% higher than the crop for the 2023-24 season. Importantly, these forecasts are well above South Africa's annual maize needs of approximately 12.00 million tonnes, implying that South Africa will have a surplus and remain a net exporter of maize.

Indeed, in the week of July 25, South Africa exported 63,897 tonnes of maize. About 79% was exported to Taiwan, and the rest to the Southern African region. This placed South Africa's 2025-26 maize exports at 428,975 tonnes, out of the expected seasonal exports of 2.0 million tonnes. The current marketing year only ends in April 2026.

In the 428,975 tonnes of South Africa's maize exports in the first 13 weeks of the 2025-26 marketing year, nearly half is the Far East markets (25% to Vietnam, 12% to Taiwan, and 11% to South Korea). These are South Africa's traditional maize export markets, mainly yellow maize for animal feed. But we didn't export during the years of drought. It is good to see them back buying South Africa's high-quality maize.

We will likely see more robust export activity later in the year once farmers have completed the harvest and there is grain in the silos for export.

Listen to the podcast for more insights.

Richard Humphries and Sam Mkokeli produce this podcast.

*Wandile Sihlobo is chief economist of the Agricultural Business Chamber of South Africa Wandile Sihlobo website]]> Investing Fri, 08 Aug 2025 17:20:00 +0200 0 0 The Far East countries are back buying SA's maize 0 0 Wandile Sihlobo full 10:04 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1581504 https://iono.fm/e/1581504
There is an annual uptick in all the crops, mainly supported by favourable summer rains and the decent area plantings. This ample harvest will likely add downward pressure on prices, which bodes well for consumer food price inflation.

The recent surge in maize prices was linked to the slow harvest process and quality issues, but that should be short-lived and does not change our view of potentially moderating prices going forward.

A closer look at the data reveals that the monthly upward revisions were primarily in maize (+2%) and soybeans (+3%). Meanwhile, the rest of the other crops were roughly unchanged from the previous month. However, the sunflower seed and groundnuts were each lowered by 3% from last month.

More specifically, South Africa's maize harvest is now forecast at 15.03 million tonnes, which is 17% higher than the crop for the 2023-24 season. Importantly, these forecasts are well above South Africa's annual maize needs of approximately 12.00 million tonnes, implying that South Africa will have a surplus and remain a net exporter of maize.

Regarding oilseeds, the soybean harvest is estimated at 2.72 million tonnes, representing a 47% year-over-year increase. Sunflower seeds are up 12% from the last season and are estimated at 708,300 tonnes.

The groundnut harvest is estimated at 61,389 tonnes (up 18% y/y), sorghum production is estimated at 137,970 tonnes (up 41% y/y), and the dry beans harvest is at 74,299 tonnes (up 47%). The base effects and favourable agricultural conditions boosted the yields.

In essence, South Africa is experiencing a recovery season for its grains and oilseeds production, although some areas may face quality challenges, particularly white maize.

Still, the quality issues do not fundamentally change the available volume for milling acceptability, and food supplies, although it may weigh on farmers' profitability. We see the benefit of the solid harvest in generally softening commodity prices, now lower than last year, boding well for consumer food price inflation.

Listen to the podcast for more insights.

Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Wed, 30 Jul 2025 14:14:00 +0200 0 0 SA's ample grain harvest may help ease food price inflation concern 0 0 Wandile Sihlobo full 11:37 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1579977 https://iono.fm/e/1579977
Current forecasts indicate a neutral season, which would be generally favourable and with average rainfall. But the occurrence of La Niña rains also remains a possibility, which helps to ease the worries of a swing from a La Niña rainy season in 2024-25 to the opposite, an El Niño.

Admittedly, South African farmers will only start looking into these prospects with greater intensity in October, when the 2025-26 summer crop season begins. For now, the focus remains on the harvest activities of summer grains, oilseeds, and citrus, among other crops.

We also continue to closely monitor winter crop conditions in the Western Cape province, which has been receiving excellent rainfall. The major crops currently grown during this winter season are wheat, barley, canola, and oats. The Western Cape produces over two-thirds of the crops, and therefore is a focus province for South Africa's winter crops.

The crop conditions are generally favourable in the province, although farmers incurred much higher costs than usual in some regions due to the snail challenge for canola. Still, they seem to be managing well at the moment. In other provinces, the winter crop is benefiting from higher dam levels following a prolonged summer rain season in 2025.

For the citrus industry, the harvest is proceeding well, and the focus remains on export markets, particularly the U.S. market. August 1 will be the end of the suspension period for the U.S. reciprocal tariffs announced in early April, and it is not clear whether South Africa will continue to benefit from the 10% duties or if they will be readjusted back to the 30% duties we faced at the onset of the Liberation Day tariffs.

The South African government, alongside organised agricultural groups and other business groupings, have all been engaged with the matter and is pushing for better market access in the U.S., along with the formulation of a trade offer for a long-term trade agreement. These deliberations may take longer than desired, resulting in additional costs to businesses. The hope is for an extension of the current access while the discussions are underway. Many agricultural industries are at risk if the talks do not yield a favourable outcome. These include the table grapes, nuts, and wine, amongst others.

Indeed, the conversation about the potential diversification of export markets has been tabled by some. However, it has limitations in the near term, as businesses cannot switch to new regions overnight. There must be market development work.

Moreover, other areas, such as China and India, also continue to present various limitations to South African agricultural products, including higher tariffs and phytosanitary barriers, despite recent pronouncements by China about their willingness to reduce tariffs on products from Africa. This suggests that the South African authorities and businesses will have to continue engaging with the U.S., while also exploring new markets for future diversification. However, this approach cannot be viewed as a replacement for the U.S., but rather as an extension of it.

The logistics at the ports have not been as challenging as they were in past years. The ongoing collaboration among Transnet, business, and government is helping to improve planning and operations, enabling better service to the sector. Still, we are far from achieving the desired efficiency, and the improvements will involve increasing investments.

Beyond the trade and harvest matters, biosecurity remains a challenge in South Africa. The foot-and-mouth disease continues to present increasing costs to businesses.

Listen to the podcast for more insights. Wandile Sihlobo website]]> Investing Fri, 25 Jul 2025 14:06:00 +0200 0 0 Factors shaping the state of South African agriculture 0 0 Wandile Sihlobo full 11:14 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1577717 https://iono.fm/e/1577717
Brazil is also a major coffee exporter to the U.S. Consequently, the 50% tariffs that will take effect on August 1 will likely cause Americans headaches. Brazil's coffee is inescapable due to its significance in global coffee production.

Coffee prices have been relatively high since the start of the year due to unfavourable weather conditions in Vietnam and Brazil, which have weighed on global supplies. The U.S. tariffs will pose a challenge for American consumers.

We are watching the impact of all this on the global coffee prices, which have surged recently on the back of the U.S. tariffs and the preexisting challenges of unfavourable production conditions in South America.

As South Africa, we import coffee, and Brazil can surely have room to increase supplies to South Africa. I know our domestic tea and coffee producers won't like me saying this. But hey, we have a decent demand for coffee (just like we do with other "substantive beverages” like whiskies, where we spend over US$300 million on imports annually).

Anyways, if one looks at South Africa's coffee imports by volume, we imported, on average, about 23,921 tonnes per annum in the past five years. Brazil and Vietnam accounted for 54% of South Africa's coffee imports. Other suppliers of coffee to South Africa include Uganda (8% of SA's imports), Tanzania (7%), Colombia (4%), Guatemala (4%), Ethiopia (3%), and Honduras (3%).

So, if Brazil can offer competitively priced, high-quality products, it can take a market share from the likes of Vietnam and many African suppliers. The South African consumer is not asking for much – just high quality and a better price.
In these times of export diversification, while South Africa is a small importer, it certainly can take a few more tonnes of coffee imports from Brazil.

Listen to the podcast for more insights.

Richard Humphries and Sam Mkokeli produce this podcast.

Wandile Sihlobo is the chief economist of the Agricultural Business Chamber of South Africa. Wandile Sihlobo website]]> Investing Fri, 18 Jul 2025 15:56:00 +0200 0 0 South Africans can take a few more tonnes of Brazilian coffee 0 0 Wandile Sihlobo full 10:29 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1576234 https://iono.fm/e/1576234
We also had haunting memories of the 2023 avian influenza in South Africa, which led to significant financial losses for poultry producers and higher prices for eggs and other poultry products for consumers. At the same time, we were seeing the perverse spread of the various strains of bird flu in the U.S. and parts of the UK, which had crossed from poultry to dairy, and then to humans. Having witnessed such cases, it only seemed fair to ensure that South Africa takes a careful approach to the imports.

After it was established that the ban was only in a few areas, South Africa started applying a regionalised poultry import restriction and opened some regions for imports. This was to ease the poultry supplies in the domestic market, while ensuring there were careful considerations for the potential spread of the disease. This was also on the back of the recognition of the importance of Brazil in South Africa’s poultry imports. South Africa imports roughly 20% of its poultry products, which is about 350,000 tonnes a year, and approximately 70% of those imports are from Brazil.

Having received convincing data on the successful containment and eradication of the disease, the South African authorities have sufficient confidence to lift the ban on Brazil’s poultry product imports. This was effective on July 4, 2025. With imports now back on a regular schedule, it is fair to assume that the fears of a meat price inflation uptick should subside. The resumption of imports bodes well for moderating food price inflation that we hold for the year. Wandile Sihlobo website]]> Investing Tue, 15 Jul 2025 08:58:00 +0200 0 0 South Africa lifts the ban on Brazil’s poultry imports 0 0 Wandile Sihlobo full 6:23 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1575285 https://iono.fm/e/1575285
Currently, South African agricultural exports to the BRICS remain relatively low (at less than 10% of our agricultural exports to the world, which are US$13.7 billion as of 2024). The BRICS group is not a trade bloc, which partly explains our low agricultural penetration.

However, this may be an opportune time to change this reality and explore a more ambitious agricultural trade arrangement that aims to address the low intra-trade challenge in agriculture within this grouping.

What has proven to be a constraint in the past is not the low demand, but rather the relatively high import tariffs and some non-tariff barriers (phytosanitary barriers) within this group, which continue to distort agricultural trade.

The BRICS countries represent a substantial agricultural market, with annual imports exceeding US$300 billion.

Listen to the podcast for more insights.

Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Fri, 11 Jul 2025 12:41:00 +0200 0 0 It's time for BRICS countries to deepen agricultural trade 0 0 Wandile Sihlobo full 11:31 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1573030 https://iono.fm/e/1573030
However, if one is in horticulture or field crop production, the operating conditions are more favourable. The message I continue to receive from farmers of various fruits, vegetables, grains, and oilseeds, as well as other field crops, suggests a promising agricultural season. The yields are up from last year's drought period.

For a moment, I was worried that the excessive rains throughout April would cause quality damage to some crops. At the start of the harvest season, particularly in some grains, that was indeed the observation of some farmers. But things seem to have changed quite significantly. I've heard that the quality of crops, especially soybeans, is not as bad as we anticipated, although there are indeed areas with challenges.

Nevertheless, what is also encouraging is seeing a continuous upward revision of the harvest. For example, on June 27, the Crop Estimates Committee (CEC) released its fifth production estimate for the 2024-25 season in South Africa, lifting the expected harvest.

While there are five more estimates to come in the following months, when we reach the fifth estimate, we generally have more confidence in the size of the crop, as well as its quality, as some areas would have delivered a sizable share of their crop to the silos.

The CEC raised South Africa's 2024-25 summer grains and oilseeds production by 3% from the May 2025 estimate to 18,43 million tonnes. This represents a 19% increase from the previous season.

A closer look at the data reveals that the monthly upward revisions were primarily in maize (+1%), soybeans (+14%), and dry beans (+4%). Meanwhile, the rest of the other crops were roughly unchanged from the previous month.

More specifically, South Africa's maize harvest is now forecast at 14.78 million tonnes, which is 15% higher than the crop for the 2023-24 season. Of these 14.78 million tonnes, about 7.65 million tonnes is white maize, and 7.13 million tonnes is yellow maize. Importantly, these forecasts are well above South Africa's annual maize needs of approximately 12.00 million tonnes, implying that South Africa will have a surplus and remain a net exporter of maize.

Regarding oilseeds, the soybean harvest is estimated at 2.65 million tonnes, representing a 43% year-over-year increase. The annual uptick is primarily due to improved yields resulting from favourable rainfall. A significant portion of the soybean crop has already been delivered to commercial silos, and the quality is generally encouraging. Importantly, this is the second-largest harvest on record, and it is not even final. The record harvest of 2,77 million tonnes was recorded in the 2022-23 production season. This ample harvest also means South Africa will remain a net exporter of soybeans and soybean products. We are far from the time when we were a net importer of soybean products for animal feed, mainly oilcake. We are now in a net exporter position.

Sunflower seeds are up 15% from the previous season and are estimated at 727,800 tonnes.

The groundnut harvest is estimated at 63,510 tonnes (up 22% y/y), sorghum production is estimated at 137,970 tonnes (up 41% y/y), and the dry beans harvest is at 74,299 tonnes (up 47%). The base effects and favourable agricultural conditions boosted the yields.

In essence, South Africa is experiencing a recovery season for its grain and oilseed production, although some areas may face quality challenges. We see the benefit of the solid harvest in generally softening commodity prices, which are now at lower levels than last year, boding well for the moderating food price inflation for the year.

Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Fri, 04 Jul 2025 12:12:00 +0200 0 0 SA’s ample grain and oilseed harvest bodes well for food price inflation 0 0 Wandile Sihlobo full 12:19 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1570725 https://iono.fm/e/1570725
In the 2025-26 marketing year, Zimbabwe's maize demand is expected to be smaller but remain substantial. The previous season presented unique challenges, primarily the mid-summer drought. This led to a 60% decline in Zimbabwe's maize production, leaving the country with only 635,000 tonnes of harvest. This was far below the 2,0 million tonnes Zimbabwe required for its domestic annual consumption. Thus, imports played a crucial role in meeting domestic needs.

But the current season has brought some recovery. Zimbabwe's 2024-25 maize production is forecast at 1.3 million tonnes, according to recent data from the Pretoria-based unit of the United States Department of Agriculture (USDA). This is just more than twice the output from the previous season. This recovery is primarily driven by improved weather conditions and an increase in the area that farmers managed to plant for maize. Still, Zimbabwe's potential maize harvest of 1.3 million tonnes will not be sufficient to meet the country's domestic needs of 2.0 million tonnes, leaving it to import the balance.

In the last marketing year, South Africa supplied nearly all of Zimbabwe's maize imports. However, in the 2025-26 marketing year, there may be some changes, with Zambia becoming an exporter again. Zambia, the second largest maize producer in the Southern Africa region, has seen a recovery in its 2024-25 maize production, now estimated at 3.66 million tonnes, up from 1.5 million tonnes in the previous season, according to Zambia's government data. Similarly to Zimbabwe, and South Africa, this increase in the harvest is due to favourable weather conditions and decent area plantings. The harvest is underway in the country. This means Zambia could return to being a net exporter of maize, as its domestic maize consumption is about 2.8 million tonnes, far surpassed by the expected harvest of 3.66 million tonnes.

Listen to the podcast for more insights.

Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Fri, 27 Jun 2025 15:29:00 +0200 0 0 Zimbabwe will remain a net importer of maize in 2025-26 0 0 Wandile Sihlobo full 10:53 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1568128 https://iono.fm/e/1568128
After a notable uptick in the first quarter of 2025, the ACI fell by 5 points in the second quarter of the year to 65. Any level of the ACI that is above the 50-neutral point signals optimism.

Regarding the slight decline, most respondents identified the uncertain global trade environment, lingering geopolitical tensions, and the domestic animal disease challenge as key factors constraining the sector.

Despite the slight quarterly decline, the current level of the ACI implies that South African agribusinesses remain optimistic about business conditions in the country. The better summer rains and improvements at the ports, which have enabled exports with minimal interruptions, are among the positives.

This survey was conducted in the second week of June, covering various agribusinesses operating in all agricultural subsectors across South Africa.

A crucial point to remember when reviewing the Index is that sustained optimism, at levels above the 50-neutral market, is fundamental, especially in the long run, for fixed investment in the agriculture and agribusiness sectors.

The ACI also serves as a leading indicator of agricultural growth prospects over time. We can thus expect slightly better farming output data for the second quarter of the year. The favourable production conditions for field crops, wine grapes, and various fruits and vegetables will be the primary drivers of the sector's performance.

Indeed, we are yet to see the full impact of the Foot and Mouth Disease that is currently challenging the sector. This has started to impact the sentiment and is likely to continue in the coming months.
In essence, the ACI results for the second quarter of 2025 indicate that the sector's mood remains upbeat about the recovery this year. Still, the results also show that the recovery will likely be uneven as some key subsectors struggle with animal disease.
Notably, the dominance of geopolitical concerns in respondents' views illustrates the strong dependence of South Africa's agricultural sector on export markets and the need to diversify these markets. China, India, Saudi Arabia, and Egypt are among the key markets we should target for expansion.
Still, as we drive diversification, we must work vigorously to retain access in various markets across the EU, UK, Africa, Asia, the Middle East, and the Americas, among others.

Also significant are the collaborative efforts between business and government in addressing biosecurity issues in South Africa's agriculture, as well as efforts to promote more efficient network industries, better municipal management, and the implementation of the Agriculture and Agro-processing Master Plan, which is crucial to the long-term growth of the sector.

Listen to the podcast for more insights.

Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Fri, 20 Jun 2025 10:20:00 +0200 0 0 Optimism in South Africa’s agriculture 0 0 Wandile Sihlobo full 11:33 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1566117 https://iono.fm/e/1566117
China has profound importance in global agriculture. In 2023, China was a leading importer, accounting for 11% of global agricultural imports, with imports valued at US$218 billion. The leading suppliers of farm products to China are Brazil, the U.S., Thailand, Australia, New Zealand, Indonesia, Canada, Vietnam, France, Russia, Argentina, Chile, Ukraine, the Netherlands, and Malaysia.

However, China has been on a journey to diversify its agricultural exports beyond these suppliers, which has accelerated following the U.S. initial tariffs in 2018 and is ongoing in 2025.

South and Latin American countries, as well as Australia, have been the primary beneficiaries of China's diversification strategy so far.

But South Africa must also be part of this conversation. And what the Chinese authorities have signalled is a starting point for a deeper conversation on agricultural trade.

The first step will have to be for South African authorities to approach China to present a range of products that can be exported, and then build from there.

South Africa remains a negligible player in the Chinese agricultural market, accounting for a mere 0.4% (US$979 million) of China's agricultural imports of US$218 billion in 2023. These exports include a variety of fruits, wine, red meat, nuts, maize, soybeans, and wool.

However, there is room for more ambitious agricultural export efforts.

The South African agricultural sector, comprising organised agriculture and researchers, consistently emphasises the need to lower import tariffs in China and remove phytosanitary constraints on various products.

There is now a pathway to have a productive conversation about this matter and move with speed. Of course, once more details are available on tariffs, we will also need to examine the phytosanitary issues related to agriculture.

Overall, this is welcome news.

Listen to the podcast for more insights.

Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Fri, 13 Jun 2025 13:55:00 +0200 0 0 Will China open up for more agricultural products from South Africa? 0 0 Wandile Sihlobo full 10:32 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1563762 https://iono.fm/e/1563762
Encouragingly, the start of the year has remained positive for the sector. In the first quarter of 2025, South Africa's agricultural exports totalled US$ 3.36 billion, up 10% from the same period a year ago. This is a function of both higher volumes of various product exports and better commodity prices.

The products that dominated the exports list in the first quarter were mainly grapes, maize, apples, pears, apricots, cherries, peaches, wine, wool, fruit juices, nuts, dates, avocados, pineapples, and beef, among other products.

While the ports remain a challenge and require further improvement and investment, the agricultural export season in the first quarter experienced less friction than in the recent past..

South Africa does not engage in one-way trade. The country imports various agricultural products. In the first quarter of 2025, South Africa's agricultural imports totalled US$ 1.94 billion, a 19% increase year-over-year. The increase resulted from higher value and volume of major products South Africa imports, such as wheat, palm oil, rice, poultry, and whiskies.

Listen to the podcast for more insights.

Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Fri, 06 Jun 2025 10:19:00 +0200 0 0 South Africa's agricultural exports up 10% in the first quarter of 2025 0 0 Wandile Sihlobo full 10:55 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1561402 https://iono.fm/e/1561402
The harvest is underway in the country, and the message we are hearing about the quality of the crop remains encouraging. This also means Zambia could return to being a net exporter of maize as its domestic maize consumption is about 2,8 million tonnes, far surpassed by the expected harvest of 3,66 million tonnes.

Importantly, one can expect the domestic maize prices to continue moderating as the harvest continues, thus easing the general food price inflation.

Zambia is also not the only fortunate country in the Southern Africa region. The entire region received better rains, even excessive rains in some areas. We continue to hear encouraging news of the better grain harvest in Zimbabwe. For example, Zimbabwean farmers likely planted 1.7 million hectares of maize this year, slightly lower than last year but decent.

We will know more about the yields in the coming weeks and months. What is clear at the moment is that Zimbabwe will, too, have a better maize harvest compared to the 2023-24 drought year.

The South African story is even more optimistic. For example, South Africa's 2024-25 maize harvest is forecast at 14,66 million tonnes. There is an increase in white and yellow maize, with harvests now at 7,75 million tonnes and 6,91 million tonnes, respectively.

Overall, the maize harvest of 14,66 million tonnes is up 14% year-on-year, primarily benefiting from expected yield improvements on an annual basis. Importantly, these forecasts are well above South Africa's yearly maize needs of about 11,8 million tonnes, which implies that South Africa will have a surplus and remain a net exporter of maize.
The 2024-25 season is a positive change for Southern Africa's staple crop, maize. Importantly, it is encouraging to see Zambia bounce back. This country is vital in maize supplies to the region as the second largest producer after South Africa.

Listen to the podcast for more insights.

Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Fri, 30 May 2025 15:02:00 +0200 0 0 Southern Africa's grain production rebounds 0 0 Wandile Sihlobo full 12:05 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1559174 https://iono.fm/e/1559174
The South African farming sector or farming community is not under siege. And yes, the country has devastating crime incidents, which should remain a major worry for all.

However, it is necessary to state that there is no land expropriation without compensation in the country, that the recent Expropriation Act has been massively misrepresented, and that property rights remain intact. Land Reform is still under the market principles of the willing buyer-willing seller.

The agricultural sector, which some have portrayed as a victim, has actually made enormous progress over time, contributing significantly to the country's overall economic growth. The sector has more than doubled in value and volume terms since 1994.

This expansion was broadly shared across all major subsectors of the South African farming economy, including horticulture, field crops, and livestock.

South Africa has seen growth in its agricultural exports over time, reaching a record US$13,7 billion in 2024. South Africa is now ranked the world's 32nd largest agricultural exporter, the only African country in the top 40 in terms of value.

Listen to the podcast for more insights.

Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Fri, 23 May 2025 11:44:00 +0200 0 0 South African farms are not under siege 0 0 Wandile Sihlobo full 12:41 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1556319 https://iono.fm/e/1556319
The big help in that season came from the gains of the previous ones. For example, the season started with 2,40 million tonnes of opening/carryover stocks from the past season, ultimately boosting the available maize supplies in the country. This added to the harvest of 12,85 million tonnes. These overall maize supplies were against the domestic needs of 11,6 million tonnes, leaving the country with substantial maize for exports.

The available exports were of great help to the southern Africa region, which was severely hit by the drought. For example, Zimbabwe lost 60% of their maize crop, Zambia lost half of its crop, and other neighbouring countries experienced significant losses. This meant that there was increased reliance on South Africa.

Thankfully, South Africa was better placed to help export more maize. At the end of the 2024-25 marketing year in April 2025, South Africa had exported 2,2 million tonnes, substantially well above the long-term average levels. About 66% of these exports were white maize and 34% were yellow maize.

Several countries benefited from these exports, especially in southern Africa. But no country benefited more than Zimbabwe, which accounted for 57% of South Africa's maize exports between May 2024 and April 2025, or about 1.3 million tonnes of white and yellow maize.

South Africa was exporting to the southern African region, so it had to import to supplement supplies, mainly in the coastal areas. However, another factor behind the increase in imports was the price competitiveness of imports. South Africa ended the 2024-25 season with 938,116 tonnes of maize imports, which mainly originated in Argentina, Brazil, and the United States.

Still, when one accounts for these imports and exports of 2.2 million tonnes, it remains clear that South Africa was a net exporter of maize in the 2024-25 season. South Africa did not experience a massive decline in maize production as its neighbouring countries did, in part, because of the improved seed cultivars and arguably better farming methods.

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Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Thu, 15 May 2025 15:12:00 +0200 0 0 South Africa cushioned the southern Africa region from a maize supply crisis 0 0 Wandile Sihlobo full 13:18 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1554720 https://iono.fm/e/1554720
SA Wine and Vinpro forecasts South Africa’s wine grapes harvest to be 1.244 million tonnes, an 11% recovery from the exceptionally poor harvest in 2024. Importantly, the quality promises are also to be excellent.

With the harvest like this, our preoccupation for the coming months will continue to be the export markets and logistics.

Indeed, the US market has dominated the trade conversation in recent weeks. However, long before the Trump tariffs, the South African wine industry and the entire agricultural sector had been focused on expanding export markets beyond the existing ones.

South Africa’s agricultural sector is export-oriented, with exports reaching a record US$13,7 billion in 2024, up 3% from the previous year, according to data from Trade Map. This reflects both an increase in the volume of agricultural exports and higher prices of some products.

The top exported products by value include citrus, grapes, maize, apples and pears, wine, nuts, fruit juices, sugar, berries, dates, pineapples, avocados, wool, apricots and peaches, ciders, and beef.

The focus on broadening export markets becomes even more urgent as we continue to see better quality and volumes in wine and other agricultural product output. One of the primary areas we focus on is China, which has a large population and buying power. China accounts for 11% of global agricultural imports.

However, the South African agricultural sector, specifically the wine industry, faces some constraints. For example, we face tariffs of 14% in wine exports in China, while our competitors, such as Australia, face 0% duties as they have a trade agreement with China. We have been vocal about such issues for some time. Now, the environment is even more urgent and appropriate to open these new markets, as China also looks to increase its agricultural trade with South Africa.

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Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Mon, 12 May 2025 08:15:00 +0200 0 0 The excellent wine grapes harvest of 2025 signifies the recovery in SA agriculture generally 0 0 Wandile Sihlobo full 12:13 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1552148 https://iono.fm/e/1552148
There are seven more monthly estimates to come. But on the third estimate, we begin to have some comfort about the accuracy of the data.

At a time when we have been worrying about the excessive rains, there was predictably a lot more attention on these figures. Notably, the CEC slightly increased South Africa's 2024-25 summer crop production estimate by 0.05% from March 2025 to 18.01 million tonnes.

Indeed, this is a mild uptick, but it remains crucial at a time when some worried that we might see a downward revision of the crop due to the excessive rains. This estimate comprises yellow and white maize, sunflower seed, soybeans, groundnuts, sorghum, and dry beans.

In essence, this harvest estimate is 16% higher than the 2023-24 production season, representing a decent recovery from the drought season

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Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Sat, 03 May 2025 18:44:00 +0200 0 0 South Africa expects an ample grain harvest this year 0 0 Wandile Sihlobo full 11:11 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1550172 https://iono.fm/e/1550172
Since we had a late start to the season, roughly a month behind the typical schedule, some areas aren't harvest-ready yet. Still, there is a need for sunshine for crops to mature. The frequent rains and scant sunshine also mean there are areas where, for example, some soybeans may start to germinate – an awful thing if it happens.

Of course, we aren't changing our optimistic view about South Africa's 2024-25 summer crop season. We remain optimistic that this will be a recovery season for South Africa's agriculture. However, I am concerned about the crop's quality and the harvest's timing.

The Crop Estimates Committee places South Africa's 2024-25 summer grain and oilseeds production at 18,0 million tonnes, up 16% of the prior season's crop. This comprises maize, sunflower seed, soybeans, groundnuts, sorghum and dry beans.

I never thought one would say this, but we badly need sunshine in South African agriculture.

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Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Sat, 26 Apr 2025 12:25:00 +0200 0 0 The excessive rains present some challenges for South Africa's agriculture 0 0 Wandile Sihlobo full 12:13 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1548578 https://iono.fm/e/1548578
In recent weeks, the focus has primarily been on trade matters and the U.S. tariffs, understandably so, because the U.S. is a valuable market for South Africa's agriculture. The U.S. reciprocal tariffs are imposed when the citrus industry is at its export season; therefore, our focus on these issues should be paramount. Equally, concerns about the sustainability of the Government of National Unity and the fiscal problems that dominate the domestic conversation are warranted as these place a sharp spotlight on South Africa's political futures and the plight of economic renewal.

Yet still, we must not allow other important domestic issues affecting the sector to be drowned by political noise. One such area is the continuous effort to control animal diseases. South Africa has made enormous progress following challenging years of avian influenza, African swine fever, and foot and mouth disease. However, we continue to learn about the foot and mouth disease outbreaks in parts of KwaZulu-Natal and some lingering cases in the Eastern Cape. This means animal health should remain a priority for South African agricultural authorities and organized agriculture.

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Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Tue, 22 Apr 2025 09:04:00 +0200 0 0 Remain focused on domestic matters that are key to SA's agricultural growth 0 0 Wandile Sihlobo full 14:01 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1546185 https://iono.fm/e/1546185 presidency of the grouping until the end of November 2025. During this time, it could help drive the African continent’s food security agenda.

For agriculture, South Africa has set four G20 priorities:
* the promotion of policies and investments that can lead to improved food and nutrition security
* empowering youth and women to participate in agrifood systems
* fostering innovation and the transfer of useful technologies in agriculture
industries
* building climate resilience for sustainable food production.

These priorities could benefit the African continent, especially as many other African countries have long struggled with food insecurity and low agricultural productivity.

Based on my work as an agricultural economist, I would argue that South Africa could make use of its G20 presidency to support other African countries in building food security and raising the productivity of their agricultural sector.

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Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Sat, 12 Apr 2025 15:50:00 +0200 0 0 Four ways South Africa can use to lift the global food security matters in the G20 0 0 Wandile Sihlobo full 13:59 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1543928 https://iono.fm/e/1543928
We know now that a baseline tariff of 10% will apply to imports from all countries. It remains unclear if there are differences in the remaining 21% (that makes up the rest of the 31%) duties levied against South Africa.

Under this environment, it is prudent to assume that South Africa will be out of the AGOA (the African Growth and Opportunity Act), which afforded us duty-free access to the US for a range of products, including the auto industry and agriculture.

We suspect there may be some differences product by product, but that will be clear as soon as the US authorities release more information. We know that the reciprocal tariffs will generally range from 10% to 60% (and to 31% in the case of South Africa). The exact levy will be based on what the White House Council of Economic Advisers thinks is the sum of tariffs and non-tariff barriers on US goods to a specific country.

Indeed, some products face higher tariffs in the South African market, but there are rebates through the International Administration Commission of South Africa (ITAC) to assist any country that requires relief. South Africa is arguably amongst the countries with the lowest tariffs, which some local stakeholders have previously argued was a policy mistake at the onset of South Africa rejoining the global economy after 1994, following years of isolation.

The details of how the various domestic industries engage with this will also be precise in the coming days and weeks. But what I must stress regarding agriculture is that the US accounted for 4% of the total US$13,7 billion in exports in 2024. While this may seem small, it is significant for specific industries, particularly citrus, grapes, wine, and fruit juices. Since the inception of AGOA, South Africa's share of agricultural exports to the US has remained at similar levels.

With a 31% tariff now, while South African agricultural competitors such as Brazil, Chile, and Australia will face only 10% of the tariff, we will surely face a competitiveness problem in the US market. And yes, the tariff is a tax on the US consumer, not South Africa. However, it affects South African products' penetration rate in these markets.

It may not be easy, and diverting products to other friendly markets will take time. Still, this should be the main preoccupation of the Department of Agriculture, assisted by the Department of Trade, Industry and Competition. The Middle East and Asia should be the primary focus for South Africa to build access, mainly in China, India, and Saudi Arabia.

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Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Mon, 07 Apr 2025 06:37:00 +0200 0 0 SA must work to diversify its agricultural export markets 0 0 Wandile Sihlobo full 12:26 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1541411 https://iono.fm/e/1541411
For example, the 2024-25 summer grain and oilseeds production is forecast at 18,0 million tonnes, up 5% from the previous month's estimate and 16% of the prior season's crop. This comprises maize, sunflower seed, soybeans, groundnuts, sorghum and dry beans.

Listen to the podcast for more insights.

Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Sat, 29 Mar 2025 11:38:00 +0200 0 0 SA summer crop harvest set to recover robustly in 2024-25 0 0 Wandile Sihlobo full 12:23 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1539372 https://iono.fm/e/1539372
The Agbiz/IDC Agribusiness Confidence Index (ACI) – a sentiment indicator in South Africa’s agriculture -- increased 11 points from Q4 2024 to 70 in Q1 2025. This is the third consecutive improvement, placing the ACI at its highest level since Q4 2021, a year of La Niña rainfall that boosted agricultural output.

The current level of the ACI implies that South African agribusinesses remain optimistic about business conditions in the country. This optimism is a result of a combination of factors, including La Niña rains that support the 2024-25 agricultural season, improvements in port efficiency that supported exports in 2024, and the progress in controlling animal diseases.

This survey was conducted in the third week of February, covering various agribusinesses operating in all agricultural subsectors across South Africa.

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Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Mon, 24 Mar 2025 08:32:00 +0200 0 0 There is rising optimism in South Africa’s agriculture 0 0 Wandile Sihlobo full 11:52 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1537130 https://iono.fm/e/1537130
We believe that an accurate diagnosis of the problem and its underlying causes is critical to formulating a suitable policy response.

In February 2025, Statistics South Africa released the Food Security Report for 2019, 2022 and 2023 (COVID-19 affected the ability to collect data in 2020 and 2021 ). The report utilized data from the General Household Survey (GHS) for those years.

The report's most striking observation was that ‘the proportion of households in South Africa that experienced moderate to severe food insecurity was estimated at 15,8% in 2019, 16,2% in 2022, and 19,7% in 2023. Over this period, the proportion of households that experienced severe food insecurity was estimated to be 6,4%, 7,5%, and 8,0%, respectively’.

It is not the lack of supply of nutritious, high-quality food and safe food products, or prices that has caused the deteriorating food security. Access seems to be the fundamental challenge, especially for households with no regular income sources.

Therefore, addressing income poverty at the household level must be at the center of any strategy to deal with food insecurity. Clearly, this is not a challenge that can be resolved by the agricultural sector alone but through coordinated efforts to grow the South African economy, lift employment across various sectors and providing appropriate support to vulnerable households.

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Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Sat, 15 Mar 2025 10:43:00 +0200 0 0 The conundrum of rising agricultural output and worsening food security in South Africa 0 0 Wandile Sihlobo full 12:30 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1534492 https://iono.fm/e/1534492
The top exported products by value include citrus, grapes, maize, apples and pears, wine, nuts, fruit juices, sugar, berries, dates, pineapples, avocados, wool, apricots and peaches, ciders, and beef, amongst other products.

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Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Fri, 07 Mar 2025 13:46:00 +0200 0 0 South Africa’s agricultural exports reached a record level in 2024 0 0 Wandile Sihlobo full 13:22 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1532384 https://iono.fm/e/1532384
The first production estimates for 2024-25 summer grains and oilseeds point to the possibility of a better harvest. The Crop Estimates Committee forecasts the 2024-25 overall summer grains and oilseeds harvest at 17,2 million tonnes, up 11% from the previous season. This comprises maize, sunflower seed, soybeans, groundnuts, sorghum and dry beans.

The expected yield improvements primarily back better harvest prospects. The overall area planting is 4,4 million hectares, roughly unchanged from the last season. Provided this is a first production estimate and possibly does not fully account for the gains of the recent rains, we could see further upside revision in the coming months. After all, there are nine more estimates to follow monthly.

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Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Sat, 01 Mar 2025 13:42:00 +0200 0 0 Encouraging crop production prospects for SA in the 2024-25 season 0 0 Wandile Sihlobo full 13:07 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1530167 https://iono.fm/e/1530167
The jobs data for the fourth quarter of 2024 illustrate the difficulty the sector experienced, although much milder than we anticipated. For example, primary agriculture employment fell by 1% from the third quarter to 924k jobs in the last quarter of 2024. The field crops, game and hunting, and forestry are the subsectors that registered notable losses.

However, from an annual perspective, the employment was roughly unchanged from the last quarter of 2023. Positively, the primary agricultural employment of 924k people is well above the long-term jobs of 799k.

Given the resilience of recent quarters' job performance, it is possible that we may see a recovery in employment conditions in 2025, assuming that there aren't pressing trade-related challenges that will weigh on the sector's profitability in the near term. The mild increase in the minimum wage this year, while challenging for some commodities and adding to already higher input cost pressures, may also not be a major hindrance.

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Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Sun, 23 Feb 2025 10:53:00 +0200 0 0 There are positive prospects for farm jobs in SA 0 0 Wandile Sihlobo full 12:47 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1527716 https://iono.fm/e/1527716
When the market closed today, February 14, 2025, South Africa's white maize spot price was R5 559 per tonne, well below the R6 700 per tonne mark we saw at the start of January 2025. However, it is still up 30% from a year ago.

The yellow maize price is R4 940 per tonne, down from R5 110 per tonne at the start of January 2025. Still, this was up by roughly 30% from the same period in 2024.

The tight maize supplies underpinned the generally high prices over the past few months. South Africa was hard hit by the mid-summer drought in the 2023-24 season, leading to a 21% decline in maize production to 12,9 million tonnes.

The Southern Africa region was also hit hard, with Zimbabwe losing 60% of its maize crop, Zambia's maize harvest down 50%, and significant crop losses across the region. This led to a strong demand for maize, and South Africa remained one of the significant maize suppliers to Southern Africa.

South Africa's poor maize harvest of 12.9 million tonnes was supplemented by better stocks of about 2.4 million tonnes, enabling the country to remain a net exporter.

Between May 2024 and the end of January 2025, South Africa exported 1.80 million tonnes out of the expected 1.90 million tonnes (down from 3.44 million tonnes in the 2023-24 marketing year because of the mid-summer drought).

In essence, the primary price drivers in recent months were the poor domestic maize harvest of the 2023-24 season, strong regional demand for maize, and uncertainty about the new 24-25 season outlook.

So, what changed in these past few weeks?

The focus is shifting to the new 2024-25 season, and the crop is generally in good condition across South Africa.

Broadly, the farmers have managed to plant well in most regions, although the timing of the planting seems to differ vastly in some areas, partly because of the erratic rains at the start of the season. The crop conditions are favourable.

South Africa's 2024-25 maize preliminary plantings were 2.64 million hectares, up 0.4% year over year (y/y). White maize was 1.59 million hectares (up 3% y/y), and yellow maize was 1,05 million hectares (down 3% y/y).

Admittedly, while the crop fields are visibly green and in good condition, the heat of November to early December 2024 strained some regions.

While the crop has recovered from the recent rains in such areas, it is not in its usual health state for this season, especially in the various small towns in the eastern Free State. We suspect that the North West, the western regions of Mpumalanga and the northern parts of Limpopo may have similar experiences. These areas saw erratic and late rains.

Still, the overall view of the maize crop and the general agricultural conditions is far better than that of the past season.

Therefore, optimism about the season ahead and favourable rainfall forecasts through March are the key drivers of the market's price decline. We also see some selling pressure, which further moderates this price decline.

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Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Fri, 14 Feb 2025 16:57:00 +0200 0 0 What to make of the recent major decline in South Africa's maize prices? 0 0 Wandile Sihlobo full 12:20 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1525733 https://iono.fm/e/1525733 performed well recently.
Inept municipalities, poor road infrastructure, stock theft, and port inefficiencies all
contribute to this narrative of failure and despair. Stories of the failings of land reform
farms also add to this sentiment of regression in agricultural progress.
The government's failings over the past decade and the lack of implementation of
many development policies also catalysed this narrative.
But this narrative is far from the reality of the South African farming sector.
Regardless of how experts feel about the state's capacity and the government's
policy stance since the dawn of democracy, the one undeniable fact is that the sector
has grown tremendously – and certainly not failing.

Listen to the podcast for more insights.

Richard Humphries and Sam Mkokeli. Wandile Sihlobo website]]> Investing Sun, 09 Feb 2025 12:11:00 +0200 0 0 South Africa’s agriculture is thriving 0 0 Wandile Sihlobo full 13:11 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1523352 https://iono.fm/e/1523352
The preliminary plantings data released by the Crop Estimates Committee this afternoon shows that South African farmers likely planted 4,45 million hectares of summer grains and oilseeds in the 2024-25 season, up mildly by 0,3% from the previous season.

Some of these plantings likely happen outside the typical optimal window because of some regions' unfavourable weather conditions at the start of the season. In such areas, there will be a need for better rains through to March, when the crops will likely pollinate.

Encouragingly, the La Niña prospects suggest we may receive favourable rains during this period. This supports the view that the 2024-25 season could be a recovery period for South Africa's agriculture. Listen to the podcast for more insights.

Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Fri, 31 Jan 2025 16:48:00 +0200 0 0 South African farmers likely planted a bigger area in the 2024-25 season 0 0 Wandile Sihlobo full 13:25 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1521252 https://iono.fm/e/1521252
Central and South Americans seem to be on the way to becoming the major winners. They have a surplus of agricultural products that China imports, such as grains, oilseeds, red meat, wine, and nuts. The African continent has not benefitted much.

I have recently discussed President Trump's trade policy's possible impact on agriculture and how China retaliated against his administration's tariffs in 2018. The Chinese retaliation hurt the US soybean, maize, and pork farmers at the time.

What we can expect in the coming months will depend on whether President Trump proceeds with the higher tariffs on China, he promised in his recent speeches.

What is clear now is that South America, like in 2018, may be amongst the winners as China searches for new sources of agricultural products.

However, South Africa should also position itself among the key suppliers of agricultural products to China in addition to its current export activity.

I sometimes doubt if South Africans appreciate enough how big China is in global agricultural trade; thus, we keep discussing it. China is a dominant player in the export and import of agricultural products.

In 2023, China was a leading agricultural importer, accounting for 11% of global agricultural imports, which totaled over US$200 billion. The US, Germany, the Netherlands, the UK, France, and Japan trailed China.

Similarly, China played a notable role in exports. In 2023, it was the fifth-largest agricultural exporter in the world. The leading countries ahead of China were the US, Brazil, the Netherlands, and Germany.

Few African countries benefit from these imports due to low agricultural productivity in Africa. Most don't have volumes to export.

The leading suppliers of agricultural products to China are Brazil, the US, Thailand, Australia, New Zealand, Indonesia, Canada, Vietnam, France, Russia, Argentina, Chile, Ukraine, the Netherlands, and Malaysia.

The only African country in China's top 30 agricultural suppliers is South Africa, which ranked 28 in 2023. Still, South Africa remains a negligible player in the Chinese agricultural market, accounting for a mere 0.4% (US$979 million) of China's agricultural imports of US$218 billion in 2023.

Sudan and Zimbabwe are other African agricultural suppliers to China, ranked 33 and 34, respectively.

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Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Sun, 26 Jan 2025 11:09:00 +0200 0 0 Can South Africa deepen agricultural exports to China? 0 0 Wandile Sihlobo full 12:00 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1518630 https://iono.fm/e/1518630
Consider the 2023-24 production year, when Zimbabwe had a challenging season due to the mid-summer drought that affected Southern Africa. Zimbabwe's maize harvest fell nearly 60% to around 635 000 tonnes, the lowest since the 2015-16 production season when the country experienced a drought.

Although a significant factor, the drought is not the only reason for the fall in Zimbabwe's maize harvest. The decline in fertilizer usage also contributed to poor yields. While fertilizer prices are down from the previous year, they remain well above the pre-COVID-19 levels, thus adding financial strain on farmers. Fertilizer makes up roughly a third of grain farmers' input costs.

This significant decline in Zimbabwe's maize production led to a sharp increase in imports, and South Africa played an important role in supplying maize to Zimbabwe (at market prices).

To understand how much maize Zimbabwe needs to import, consider its annual consumption of about two million tonnes. Therefore, with a harvest of 635 000 tonnes, the country needs at least a million tonnes in the 2024-25 marketing year, which ends in April 2025, to meet domestic needs (the 2024-25 marketing year corresponds with the 2023-24 production season).

Of course, this is a significant increase from Zimbabwe's maize imports of 637 327 tonnes in the 2023-24 marketing year, all from South Africa.

Between May 2024 and the first week of January 2025, South Africa exported 907 318 tonnes of maize to Zimbabwe. This is about 57% of South Africa's total maize exports to the world market during this period.

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Richard Humphries, Sam Mkokeli and Amanda Murimba produce this podcast. Wandile Sihlobo website]]> Investing Thu, 16 Jan 2025 17:35:00 +0200 0 0 Helping a neighbor – SA continues to supply maize to Zimbabwe 0 0 Wandile Sihlobo full 12:30 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1517007 https://iono.fm/e/1517007
But with all these benefits, the sorghum industry has not taken off. The challenge is not that farmers refuse to plant it. It is due to weak demand for it – consumers are just not buying sorghum products in a way they do with other staple grains.

The issue of weak demand partly gave farmers hope that the use of sorghum in biofuels would provide a much-needed market for farmers. But this venture also did not take off. Thus, sorghum production has continued to decline in South Africa.

South African farmers planted 42 100 hectares of sorghum in the 2023-24 production season, down 75% from the area we planted in 1990-91. The production was 95 830 tonnes in 2023-24, down by 68% from 1990-91.

This is a disappointing picture, and with the promise of the biofuel industry remaining bleak, we may continue to see small plantings.

Listen to the podcast for more insights.

Richard Humphries, Sam Mkokeli and Amanda Murimba produce this podcast. Wandile Sihlobo website]]> Investing Sun, 12 Jan 2025 11:32:00 +0200 0 0 The troubling decline of the South African sorghum industry 0 0 Wandile Sihlobo full 12:54 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1515406 https://iono.fm/e/1515406
First, the mid-summer drought led to a 23% decline in South Africa's 2023-24 summer grains and oilseeds to 15,40 million tonnes. Second, animal disease continued to be a major challenge for farmers. This is understandable because we have had various cases of foot-and-mouth disease in cattle, African swine fever in pigs, and avian influenza in poultry over the past three years.

Third, there were also positive developments in South Africa's agriculture this year. One such positive development, which is not necessarily agriculture-specific, is the improvement in electricity supply. This positively contributed to the sector and partly to the robust horticulture production. For example, when one considers the dependence of South Africa's agriculture on horticulture, it is always worth highlighting that all of South Africa's horticulture – fruits and vegetables depends on irrigation that needs an adequate power supply. In crucial field crops, roughly 20% of maize, 15% of soybean, 34% of sugarcane, and nearly half of wheat are produced under irrigation.

As we start 2025, the sector has renewed optimism regarding expected better rainfall and improvements in the animal disease control front. This year's focus should remain on the opening of export markets, improvement of the network industries, and improving municipality performance.

Listen to the podcast for more insights.

Richard Humphries, Sam Mkokeli, and Amanda Murimba produce this podcast. Wandile Sihlobo website]]> Investing Mon, 06 Jan 2025 09:31:00 +0200 0 0 South Africa's agriculture in 2024 and outlook for 2025 0 0 Wandile Sihlobo full 12:27 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1512376 https://iono.fm/e/1512376
Already, South Africa's cumulative agricultural export value for the first three quarters of 2024 is up 4% from last year, at US$10,55 billion. The top exported products by value include citrus, nuts, maize, apples and pears, wine, fruit juices, sugar, dates, figs, avocados and mangos, berries, and grapes, amongst other products.

While logistics infrastructure efficiency remains a primary concern for the farming sector, the ongoing collaboration between Transnet, private industry, and the various logistical organizations assists in ensuring the continuous flow of products, even if there are delays in specific periods.

From a regional perspective, the African continent maintained the lion's share of South Africa's agricultural exports in the third quarter of 2024, accounting for 39% of the total value.

As a collective, Asia and the Middle East were the second-largest agricultural markets, accounting for 25% of the share in overall agricultural exports in the third quarter of 2024.

The EU was South Africa's third-largest agricultural market, with a share of 20%. The Americas region accounted for 6% of South Africa's agricultural exports in the year's third quarter. The rest of the world, including the United Kingdom, accounted for 10% of the exports.

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Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website]]> Investing Fri, 13 Dec 2024 16:11:00 +0200 0 0 SA sees robust agricultural exports 0 0 Wandile Sihlobo full 13:09 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1510430 https://iono.fm/e/1510430
This level of the ACI implies that South African agribusinesses remain generally optimistic about business conditions in the country. This optimism is a result of a combination of factors, including favourable weather conditions, with expectations that La Niña rains will be supportive of the 2024-25 agricultural season.

Moreover, the stable energy supply, improvements in port efficiency, and the better political climate following the formation of the Government of National Unity are some of the aspects the respondents cited as key factors underpinning their optimism.

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Richard Humphries, Sam Mkokeli, and Amanda Murimba produce this podcast. Wandile Sihlobo website]]> Investing Mon, 09 Dec 2024 13:29:00 +0200 0 0 There is rising optimism in South Africa’s farming sector 0 0 Wandile Sihlobo full 15:33 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1507885 https://iono.fm/e/1507885
Such imports will also depend on whether many American farmers planted white corn. Remember, the biggest white maize producers in the world are South Africa and Mexico. The U.S. and South Americans are big on yellow corn — which is for feed and industrial use.

Still, with all the tight supply issues, we have continued to export maize to the Southern African region to stabilize food supplies. We forecast South Africa’s overall maize exports at 1.9 million tonnes through to April 2025 marketing year (about 1.2 million tonnes is white maize and 700k tonnes is yellow). Over a million tonnes have already been exported, mainly to the Southern Africa region.

So, any possible imports from the U.S. will help ease the maize needs in the coastal areas, and some may be for reexports to the continent. We already have some yellow maize imports from Argentina which have helped our feed industry in the coastal regions massively.

The possible imports would likely be at the end of December through to the first quarter of 2025. This will add downward pressure on maize prices, which have rallied in recent months, with white maize reaching record levels sometime last week.

These challenges are for the near term. We remain optimistic about the new season as farmers continue to till the land across South Africa, and the weather prospects are encouraging. We hope the broader Southern Africa region plants its usual maize area.

Yes, the La Nina rains are delayed by roughly a month. Still, I don't think we could call it off. The La Nina forecasts from various weather organizations remain active.

Listen to the podcast for more insights.

Richard Humphries, Sam Mkokeli and Amanda Murimba produced this podcast. Wandile Sihlobo website]]> Investing Sun, 01 Dec 2024 13:58:00 +0200 0 0 South Africa eases a path for possible maize imports from the US 0 0 Wandile Sihlobo full 16:09 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1505588 https://iono.fm/e/1505588
With all these countries under the customs union, the Southern African Customs Union (SACU), such a policy reaction is outside the spirit of free trade. While South African fruit exports could be redirected to other markets worldwide, the vegetable industry had to bear the financial impact of the reduced regional demand.

Beyond the trade breaching of the customs union spirit, Botswana and Namibia also have limitations regarding the land's potential to produce sufficient high-quality vegetable products. Thus, there have been various reports of food inflation challenges in these countries.

Fortunately, South Africa did not react irresponsibly to the ban on its vegetable and citrus exports. The major objective should always be to enhance regional agricultural production and discourage the fragmentation these bans attempt.

With a new administration under President Duma Boko, there is an opportunity to reverse the prohibitions of the previous administration and encourage stronger regional agricultural production and trade. The priority should be to ensure that the people of Botswana can access high-quality agriculture and food products.

Listen to the podcast for more insights.

Richard Humphries, Sam Mkokeli, and Amanda Murimba produce this podcast. Wandile Sihlobo website]]> Investing Sun, 24 Nov 2024 13:53:00 +0200 0 0 The easing agricultural trade friction in SACU is crucial 0 0 Wandile Sihlobo full 12:03 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1503835 https://iono.fm/e/1503835
Some subsectors showing a quarterly increase in employment include livestock, horticulture, game hunting, and the production of organic fertilizers. Meanwhile, forestry and aquaculture recorded job losses from the year's second quarter.

The Western Cape, Northern Cape, Eastern Cape, North West, Gauteng, and Limpopo showed significant quarterly job gains. The livestock and horticulture industry may have boosted the employment prospects in these provinces. Meanwhile, the Free State, KwaZulu-Natal and Mpumalanga showed job losses in the year's second quarter. The dominant types of agricultural activity in these provinces partly explain the job losses, especially in the Free State, primarily the grains and oilseed growing region.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Richard Humphries and Sam Mkokeli produced this podcast. Wandile Sihlobo website]]> Investing Tue, 19 Nov 2024 10:06:00 +0200 0 0 SA's agricultural employment improves 0 0 Wandile Sihlobo full 12:27 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1500934 https://iono.fm/e/1500934
The data released by the Crop Estimates Committee on October 29 shows that South African farmers intend to plant 4,47 million hectares of summer grains and oilseeds in the 2024-25 season. This is up mildly by 1% from the previous season.

The planting intentions for white maize are at 1,58 million hectares (up 1% y/y), and yellow maize is at 1,06 million hectares (down 2% y/y). The overall maize planting intentions are at 2,64 million hectares (up 0,2% y/y), which aligns with the five-year average area. The planting intentions for soybeans are at 1,2 million hectares (up by 0,2% y/y), the largest area on record.

The sunflower seed planting intention is 540k hectares (up 2,1% y/y), slightly below the average planting of 554k hectares. The planting intentions for groundnuts are 40k hectares (down 2,9% y/y), sorghum at 54k hectares (up 28% y/y), and dry beans at 45k hectares (up 14% y/y).

We think there are three primary drivers of this optimism. Listen to the podcast for more insights.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Richard Humphries, Sam Mkokeli, and Amanda Murimba produce this podcast. Wandile Sihlobo website]]> Investing Sun, 10 Nov 2024 08:02:00 +0200 0 0 South African farmers intend to plant slightly bigger area for grains this new season 0 0 Wandile Sihlobo full 12:35 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1498582 https://iono.fm/e/1498582
The cost of diseases in the livestock industry is felt through the loss of livestock and reduced exports to the world market in times of outbreaks.

However, the county is now taking significant steps to control the spread of the disease.

On October 25, 2024, the Department of Agriculture released even more positive news, which we believe will further support the recovery path of the industry. The Department announced that the "foot and mouth disease outbreak, which occurred during 2021-2022, has been successfully resolved in the North West, Free State, Gauteng, and Mpumalanga Provinces. These provinces, initially impacted by the outbreak, have now completed comprehensive testing of animals on quarantined farms. The results indicate that the foot and mouth disease virus is no longer present."

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

This podcast is produced by Richard Humphries, Sam Mkokeli and Amanda Murimba. Wandile Sihlobo website]]> Investing Sun, 03 Nov 2024 15:01:00 +0200 0 0 Government and industry's efforts to control animal disease spread must be lauded 0 0 Wandile Sihlobo full 15:04 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1496995 https://iono.fm/e/1496995
This has raised fears in the grains markets about another tough season, partly contributing to the surge in maize prices we continue to see on SAFEX. Of course, the fundamental driver of maize prices is that we have tight supplies because of the bad crop in the 2023-24 season.

Still, I think it's too early to make a call as to whether the upcoming season will be tough. The prospect of La Nina is still active. In all likelihood, it may be a late season.

Until we see a material change in the weather prospects, we will maintain our view of a possible better season.

Another essential point to underscore is that even if we move from "La Nina" to "normal" weather conditions. Normal weather in the summer season does not translate to drought; it's normal rains.

We have gotten so used to the cycle of moving between "La Nina" and "El Nino" that we no longer talk of a regular season.

Still, I want to underscore that we are probably in for a late season. There are still convincing signs of La Nina. The planting has also not occurred in any meaningful way across South Africa.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

This podcast is produced by Richard Humphries, Sam Mkokeli, and Amanda Murimba Wandile Sihlobo website]]> Investing Tue, 29 Oct 2024 17:56:00 +0200 0 0 There is reason to be optimistic about SA’s 2024-25 maize production season 0 0 Wandile Sihlobo full 10:29 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1496183 https://iono.fm/e/1496183
Notably, roughly 90 cents in every dollar of South Africa’s agricultural exports to the African continent is from the Southern Africa region. Grains, fruits, vegetables, and selected beverages are typically high on South Africa’s list of agriculture and food exports to the Southern Africa region.

Not all countries rely equally on South Africa’s agriculture and food industry. There are just seven dominant countries, namely, Botswana, Namibia, Mozambique, Zimbabwe, Lesotho, Eswatini, and Zambia, which accounted for 81% of South Africa’s agricultural exports to the African continent in 2023. In fact, over the past five years, these countries have accounted, on average, for 80% of South Africa’s agricultural exports to the African continent a year.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

This podcast is produced by Richard Humphries, Sam Mkokeli and Amanda Murimba Wandile Sihlobo website]]> Investing Sun, 27 Oct 2024 18:37:00 +0200 0 0 SA’s immense responsibility of stabilizing Southern Africa’s food security 0 0 Wandile Sihlobo full 15:16 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1493786 https://iono.fm/e/1493786
In this podcast, we argue that South Africa should expand market access to some key BRICS countries, such as China, India, Egypt, and Saudia Arabia.

Other strategic export markets for South Africa's agricultural sector include South Korea, Japan, Vietnam, Taiwan, Mexico, the Philippines, and Bangladesh. Currently, the significant challenges in these markets are high import tariffs and phytosanitary barriers. Listen to the podcast for more.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

This podcast is produced by Richard Humphries, Sam Mkokeli, Nelisiwe Tshabalala, and Amanda Murimba Wandile Sihlobo website]]> Investing Sat, 19 Oct 2024 13:59:00 +0200 0 0 South Africa must push agricultural exports within BRICS 0 0 Wandile Sihlobo full 13:17 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1491718 https://iono.fm/e/1491718
The Agbiz/IDC Agribusiness Confidence Index (ACI), a sentiment indicator about business conditions in the sector, has risen from its low levels in the second quarter of 2024. The ACI increased by 10 points to 48 in the third quarter. While the index remains below the neutral 50-point mark, the jump by 10 points is encouraging. It signals that things are moving in the right direction.

A sustained lift in sentiment matters, especially over the long run, for fixed investment in the agriculture and agribusiness sectors. The ACI also serves as a leading indicator of agricultural growth prospects over time. We can thus expect slightly better farming output data for the third quarter of the year.

Several factors underpin the improvement in sentiment. One of them is the better electricity supply in the country. South Africa's horticultural production – fruit, vegetables and floriculture – is under irrigation, requiring a sustainable energy supply. Furthermore, roughly a third of field crops are produced under irrigation, benefiting from improved energy supply. The livestock, poultry, and dairy industry are also among the major energy users in the sector. Aquaculture industries like abalone farms also require a sustainable energy supply to pump fresh water.

Indeed, there has been a significant increase in renewables and other alternative energy sources, but the broad stability in the national energy supply has helped.

Moreover, the fact that the 2024-25 summer season starts, at least for field crops and horticulture, with relatively better-priced input costs compared with the past season, is another reason to be optimistic.

For example, in rands terms, most fertilizer product prices were down by roughly 10% year-on-year in September 2024 compared with the previous year. Since fertilizer accounts for approximately a third of the grain farmers' input costs in South Africa, such a price decline significantly improves farmers' finances.

The prospects of a La Niña-induced rainfall in the 2024-25 summer season is another additional factor to be optimistic about the agricultural outlook in South Africa. The weather arguably matters more than other factors regarding the sector's performance.

Listen to the podcast for more details.

Podcast production by Richard Humphries, and Sam Mkokeli

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/ Wandile Sihlobo website]]> Investing Mon, 14 Oct 2024 09:10:00 +0200 0 0 In search for optimism in South Africa's agriculture 0 0 Wandile Sihlobo full 13:08 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1489470 https://iono.fm/e/1489470
The Australian Bureau of Meteorology states, "The ENSO Outlook is at La Niña Watch, meaning there are some signs that a La Niña may form in the Pacific Ocean in 2024". Meanwhile, the IRI sees a strong likelihood of La Niña now through January 2025, and after that, it weakens as the weather normalizes.
Overnight, the South African Weather Service (SAWS) also published a cautiously optimistic note. The SAWS stated that the "current predictions indicate the development of a La Niña state during the start of the summer season; however, there is still significant uncertainty in the predictions."

The SAWS added that "it is advised to monitor the ENSO system during the start of the summer season, as it may change the rainfall outlook for the summer rainfall regions if and when the La Niña materializes. Current predictions focus on the early- and mid-summer seasons and indicate wetter conditions over the interior of the country. The northeastern parts, however, at this stage, indicate drier conditions extending through to the mid-summer period."

What we draw from these statements is that (1) South Africa and indeed the Southern Africa region is out of an El Niño cycle, which typically brings drought and has had a devastating impact on agriculture in the 2023-24 summer season; (2) there is reason to be optimistic about the La Niña possibilities and favourable rains in the 2024-25 season (but must be mindful of the regions the SAWS suggests may be slightly dry for some time), and that (3) even if we are out of a La Niña cycle soon and in the "neutral" state, the agricultural conditions could still be favourable as the "neutral" state implies normal conditions.

Listen to the podcast for more details.

Podcast production by Richard Humphries, and Sam Mkokeli

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/ Wandile Sihlobo website]]> Investing Mon, 07 Oct 2024 10:07:00 +0200 0 0 There is reason to be optimistic about SA's 2024-25 summer crop season 0 0 Wandile Sihlobo full 11:55 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1487259 https://iono.fm/e/1487259
But this has not been a typical season, and the lower producer deliveries we have been observing over the past few weeks are not only a function of on-farm storage but a poor harvest. Indeed, we struggled with a mid-summer drought in February and March, undermining crop yield potential in various regions.

On October 26, South Africa's Crop Estimates Committee lowered again the 2023-24 summer grain and oilseeds production estimate by 2% from August to 15,45 million tonnes. The major downward revision was in maize, sunflower seed, and groundnut harvest. The 2023-24 summer grain and oilseeds harvest is now down 23% from the previous season.

Listen to the podcast for more details.

Podcast production by Richard Humphries and Sam Mkokeli

My writing on agricultural economic matters is available on my blog:
https://wandilesihlobo.com/ Wandile Sihlobo website]]> Investing Mon, 30 Sep 2024 09:52:00 +0200 0 0 The 2024 mid-summer drought continues to weigh on the summer crop harvest 0 0 Wandile Sihlobo full 15:21 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1484928 https://iono.fm/e/1484928
The trade issues are not purely economic but political, which means that the South African political leadership must take a clear stand and focus on retaining the existing markets through dialogue with the political leadership of the countries where we continue to experience challenges. The Department of Trade Industry and Competition and the Department of International Relations and Cooperation must be at the forefront of these efforts, supported by scientific insights from the Department of Agriculture.

Also very important in the near term is the upcoming BRICS+ summit in October, which will take place in the city of Kazan in Russia. While this grouping is not a trade bloc, utilizing the structure to push more ambitious trade matters is vital. The agricultural sector is one of the South African economic sectors that would benefit from deeper trade relations with the BRICS+ countries. As things stand, South African agriculture has not benefited much from trade with this grouping. Before adding other members to the 15th Summit in Johannesburg in 2023, the original BRICS countries accounted, on average, for just 8% of South Africa's agricultural exports. For comparison, the UK accounts for roughly 7% of South Africa's agricultural exports.

Yet, between 2019 and 2022, the original BRICS countries' agricultural imports averaged US$255 billion annually, according to Trade Map data. China accounted for 71% of all the agricultural imports into the group, followed by India at 11%, Russia at 11%, Brazil at 4% and South Africa at 3%. Despite these sizeable agricultural import figures, the intra-BRICS agricultural trade remained relatively low. Remarkably, the products these countries imported include soybeans, beef, maize, berries, wheat, palm oil, poultry meat, cotton, barley, dairy products, pork, apricots and peaches, sugar, wool, sunflower seed, nuts, sorghum, goat meat, wine, grapes, bananas, avocados, mangos, guavas, and fruit juices, among other products. South Africa produces some of these products in abundance and has surplus export volumes. Thus, South Africa championed a need to deepen trade in the 2023 BRICS Summit.

This year, the message going to Kazan should focus on building on the spirit of the 2023 Johannesburg Summit, which promoted the dialogue about deeper agricultural trade. This year, the message is even more urgent as the newly added BRICS+ members also present an opportunity for widening agricultural exports. The South African authorities should lobby for a more pragmatic approach beyond the high-level talk so that businesses can see the full benefit of BRICS+ engagements.

Listen to the podcast for more details.

Podcast production by Richard Humphries, and Sam Mkokeli

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/ Wandile Sihlobo website]]> Investing Mon, 23 Sep 2024 12:29:00 +0200 0 0 What message should SA agriculture take to Kazan for the BRICS+ summit 0 0 Wandile Sihlobo full 12:27 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1481276 https://iono.fm/e/1481276
From now on through the season, the weather outlook will remain a primary focus for the agricultural stakeholders. We are, after all, emerging from a challenging 2023-24 summer grains and oilseed season that resulted in major crop losses. The latest figures from the Crop Estimates Committee show that the 2023-24 summer crop may have fallen as much as 22% from the previous season to 15,69 million tonnes.

The 2024-25 season seems likely to be a recovery period. So far, global weather forecasters such as the International Research Institute for Climate and Society at Columbia Climate School (IRI) continue to indicate an optimistic outlook about rainfall prospects. For example, the IRI sees a possibility of La Niña occurrence from this month to April 2025. This weather event typically brings above-normal rainfall for South Africa and the entire Southern Africa region.

The critical period for rainfall for South Africa's summer grains and oilseed is between October and the end of February the following year. This is a period between planting and pollination of the crop. The months after are essential, but the crop could still have decent yields even if there is less rain after the pollination.

Listen to the podcast for more details.

Podcast production by Richard Humphries, and Sam Mkokeli

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/ Wandile Sihlobo website]]> Investing Mon, 16 Sep 2024 12:03:00 +0200 0 0 Will the 2024-25 season be a recovery period for SA agriculture? 0 0 Wandile Sihlobo full 12:13 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1478722 https://iono.fm/e/1478722
Similarly, China played a notable role in exports, and it was the fifth-largest agricultural exporter in the world in 2023. The leading countries ahead of China were the US, Brazil, Netherlands, and Germany.

Commentary on China trade is under spotlight again following the Forum on China–Africa Cooperation (FOCAC) taking place in early September. Some African countries used the opportunity to advocate for deeper trade, especially in agriculture. This is understandable in view of China's dominant role in global agriculture. According to Trade Map data, China spends just over US$200 billion a year on the imports of agricultural products.
Few African countries benefit from these imports due to low productivity. The leading suppliers are Brazil, the US, Thailand, Australia, New Zealand, Indonesia, Canada, Vietnam, France, Russia, Argentina, Chile, Ukraine, the Netherlands, and Malaysia.

The only African country that features in China's top 30 agricultural suppliers is South Africa, ranked 28 in 2023. Accounting for a mere 0,4% (US$979 million) in China's agricultural imports of US$218 billion in 2023, South Africa remains a negligible player in the Chinese agricultural market. Sudan and Zimbabwe are other African agricultural suppliers to China, and are ranked 33 and 34, respectively.

The African continent has weak productivity and low agricultural output, which explains its underperformance in agricultural exports to China. The exceptions are South Africa and, to some extent, the Maghreb region. In light of this concerning picture, African leaders must, in future, prioritise agriculture trade in their deliberations with their Chinese counterparts.

Crucially, technology cooperation and transfer must be uppermost in those conversations as Africa’s future productivity lies in deployment of technologies that can boost productivity. Examples of the use of such technologies include on-farm solutions like irrigation technologies, better seed cultivars, and significant infrastructure challenges such as roads and rail that much of the continent still needs. The absence of functioning infrastructure will always remain a headache, even if China were to open its agricultural markets for imports from most African countries. These interventions and possible deals would essentially entail loans for developing the African continent's infrastructure.

We know a lot has been done in the past, and reviews of such engagements are mixed, but the problem remains – Africa needs better improvement in the network industries to support agriculture. Aside from this, African leaders must do their part to formalize land rights in their countries and miniminise arbitrary policy interventions, such as occasional blockage of exports by countries like Zambia. Such actions drive away private sector participation in Africa's agricultural market.

Podcast production by Richard Humphries, and Sam Mkokeli

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/ Wandile Sihlobo website]]> Investing Mon, 09 Sep 2024 08:49:00 +0200 0 0 South Africa must deepen agricultural trade with China 0 0 Wandile Sihlobo full 12:56 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1476526 https://iono.fm/e/1476526
This comes after growth of 6% y/y in the first quarter of the year. The slight decrease in the second quarter reflects the moderation in the prices of some agricultural products and the decline in the volumes.

The top exported products by value include citrus, apples and pears, maize, wine, dates, pineapples, avocados, sugar, grapes, fruit juices, nuts, and wool.
Notably, while the value of the exports is down mildly from the second quarter of 2023, the efficiency at the ports this year was arguably much better than what the stakeholders experienced in 2023.

This again shows that the decline in export value is largely due to lower prices of some commodities and a decline in volumes after a challenging domestic production environment, specifically in grains and oilseed.
Listen to the podcast for more details.

Podcast production by Richard Humphries, and Sam Mkokeli

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/ Wandile Sihlobo website]]> Investing Mon, 02 Sep 2024 10:05:00 +0200 0 0 South Africa's agricultural export growth cooled off in the second quarter of 2024 0 0 Wandile Sihlobo full 12:22 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1474263 https://iono.fm/e/1474263 In appreciating this progress, some often ask about the black farmers' contribution. The data on this is shaky, but based on various industry research, we can state that black farmers account, on average, for around 10% of the commercial agricultural output. This gives one an indication of their contribution to exports. The matters of why black farmers account for this much produce thirty years in democracy and how we could build an even more inclusive agricultural sector are issues we discussed at length in our recent book, A Country of Two Agricultures. We encourage all caring South Africans to read the book.
However, another critical discussion is the issue of gender dynamics in South Africa's agriculture. As a country, we should continue to improve this area. The data about the current state of women's participation is also shaky. Still, one can lean on a few indicators, such as the recent census of agricultural statistics from Statistics South Africa, to make a point. The census report found that we have about 40k commercial farm units in South Africa. To be super clear, the census only considers farmers registered for VAT (the threshold is a turnover of R1 million a year). Therefore, there are many more farmers not accounted for in this figure who are involved in commercial farming as their primary source of income and those who practice farming as a secondary source of income.
Still, if we go with the 40k farming units, about 20% are owned or operated by women. However, we also know anecdotally that women's participation in the subsistence farming sector is perhaps much larger in various areas.
In such cases, the question remains: what can we do to ensure mobility where women can progress to the commercial level if they aspire to do so?
Another vital aspect is jobs, where women accounted for roughly a third of the 896k jobs in the second quarter of 2024. More could be done to improve women's participation, particularly in agro-processing.
Let's all agree that agriculture, as an important sector of the economy, could still deliver more jobs and expand in underutilized land. This makes the gender discussion even more valuable.
The South African government has about 2,5 million hectares of land acquired through the Pro-Acitive Land Acquisition Strategy. This land should be released to beneficiaries with title deeds and help boost inclusion in the sector and growth, such as growing the South African agricultural pie.
In selecting the beneficiaries of the land, the government will have to be guided by the existing Beneficiary Selection and Land Allocation Policy. One important aspect of this policy that is less talked about is its focus on boosting women's participation in agriculture. It states that 50% of land redistributed must be transferred to (black) women. If we follow this approach as a country, along with ensuring that there are financial instruments to assist, perhaps we could improve in the coming years in racial and gender inclusiveness in the sector.
There are many young women interested in agriculture that one sees online, and some even write to me enquiring about a range of agricultural matters. This means there is interest amongst women in joining agriculture and playing a meaningful role in addition to the gains we have made as a country. The policy environment is also supportive. Wandile Sihlobo website]]> Investing Mon, 26 Aug 2024 10:11:00 +0200 0 0 Reflections on women's participation in South Africa's agriculture 0 0 Wandile Sihlobo full 14:52 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1471973 https://iono.fm/e/1471973
Some subsectors showing a decline in employment include field crops, livestock, and forestry. The job performance in these subsectors is unsurprising as the mid-summer drought has notably impacted them, specifically field crops. Moreover, the livestock industry faces relatively higher feed costs and lingering animal disease, which all explain these subdued job data in the subsector.

The Western Cape, Northern Cape, North West, and Gauteng are the provinces that showed significant quarterly job losses. Meanwhile, other provinces showed a mild improvement, which was insufficient to change the overall picture of a decline in employment in South Africa's agriculture.

The Western and Northern Cape provinces do not have significant summer crop production, which means that the quarterly job losses in these particular provinces mirror the generally financially constrained environment in the farming businesses. The mid-summer drought primarily added pressures in the country's northern regions.

Listen to the podcast for more details in other commodities.

Podcast production by Richard Humphries, and Sam Mkokeli

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/ Wandile Sihlobo website]]> Investing Mon, 19 Aug 2024 10:06:00 +0200 0 0 SA farm jobs remain well above the long term averages 0 0 Wandile Sihlobo full 11:23 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1470034 https://iono.fm/e/1470034
And yes, I appreciate that the Western Cape has received excessive rain recently; the picture certainly is not all rosy. Some fields have puddles of water, which may undermine the crop's growth potential. Our members in the area tell me that the southern regions of Swartland may be too wet, and the northern regions should do well.

South Africa's Crop Estimates Committee will release the area planted estimate and first production forecast for this season's crop on August 28. We will know more about the production prospects then.

What we know at the moment is that South Africa's preliminary area plantings for wheat are at 502k hectares, down by 7% from the 2023/24 season. This is the lowest area planting in seven years. The sharpest declines in area plantings are in the Free State and Limpopo.

The Western and Northern Cape provinces show a minor decline in area plantings. Other provinces, which are relatively small producers, such as the Eastern Cape, KwaZulu-Natal and Mpumalanga, also show a mild decrease in area plantings.

The major decline in winter wheat plantings in the Free State and Limpopo is unsurprising. The northern regions of South Africa experienced a harsh mid-summer drought, which led to significant crop losses. The farmers in some of these regions are under financial strain and, thus, understandably reluctant to increase the winter wheat plantings.

Moreover, the wheat prices have moderated this year, down by roughly 5% year-on-year. Therefore, in an environment with reduced soil moisture because of the mid-summer drought, lower wheat prices, and some financial pressures, farmers are likely focused on utilising more area plantings for the 2024/25 summer crop plantings that start in October 2024.

If weather conditions, particularly in the Western Cape, remain favourable for the rest of the season and we achieve a five-year average yield of 3,78 tonnes per hectare in the area of 502k hectares, then we could have a winter wheat harvest of 1.89-million tonnes. This would also be down 7% year-on-year and well below the five-year average winter wheat harvest of 2.02-million tonnes.

Podcast production by Richard Humphries, and Sam Mkokeli

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/ Wandile Sihlobo website]]> Investing Tue, 13 Aug 2024 08:18:00 +0200 0 0 South Africa's wheat crop looks promising from a distance 0 0 Wandile Sihlobo full 12:03 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1467586 https://iono.fm/e/1467586
The world endured elevated food prices in the past few years for various reasons, ranging from drought in the major agricultural-producing regions of South America to the Black Sea wars. But in recent months, global agricultural prices and consumer food prices have softened. Food prices globally are roughly 25% less than the peak levels reached in March 2022, which was right after Russia invaded Ukraine and caused much disruption and panic in the agricultural markets.

At the moment, the global agricultural observers are shifting their focus to the new production season, which is 2024/25, of grains and oilseeds. The production has recently started in the northern hemisphere, which is in the summer season.

Farmers may begin tilling the land in the southern hemisphere around October 2024.
Still, as early in the season as we are, and a lot yet to unfold, the International Grains Council (IGC) forecasts a decent harvest. For example, in their latest update, the IGC placed the 2024/25 global grains and oilseed production forecast at 2.3-billion tonnes, up mildly from the previous season. The stocks are expected to be healthy, around 582-million tonnes, although having declined somewhat from the 2023/24 season because of the expected increase in the industrial use of grains.

We see an encouraging outlook if we consider the significant grains such as rice, wheat, maize and soybeans. For example, the IGC forecasts a 1% year-on-year increase in the 2024/25 global rice production to 528-million tonnes.

This is based on an anticipated large crop in all the major rice-producing regions, such as India, Vietnam, Thailand, the US, China, Pakistan, Indonesia, Bangladesh and the Philippines. Subsequently, the stocks could also increase by 1% to 175-million tonnes.

The production prospects for 2024/25 global soybeans are also positive, estimated at 415-million tonnes, up by 6% year-on-year. This is based on the expected large harvest in the US, Brazil, Argentina, India, and Paraguay.

Still, given that nearly half of the production is by the southern hemisphere producers, specifically South America, we view these data as tentative until the start of the season in the region in about two months.

Assuming the current estimates materialise, the 2024/25 global soybean stocks would lift by 16% year-on-year to 79-million tonnes. Such an increase in the harvest and supplies would add downward pressure on worldwide soybean prices, which is favourable for the animal feed industry.

A less optimistic view is in the major grains such as wheat and maize, although their supplies will still remain at levels above average. For example, the IGC forecasts the 2024/25 global wheat production at 793-million tonnes, slightly lower than the 2023/24 season's crop of 804-million tonnes. This is due to the expected production declines in the EU, UK, Ukraine and Russia. These overly wet weather conditions in these countries during the season are the reason for the anticipated poor yields.

With food and industrial use of wheat expected to remain strong, the IGC placed the 2024/25 global wheat stocks at 261-million tonnes, down 3% year-on-year. Be that as it may, international wheat prices have not reacted to these expectations and have remained on a moderating path in recent weeks, which is a welcome development from a consumer perspective.

Listen to the podcast for more details in other commodities.

Podcast production by Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/ Wandile Sihlobo website]]> Investing Mon, 05 Aug 2024 09:20:00 +0200 0 0 The better global agricultural conditions paint a comforting food price path 0 0 Wandile Sihlobo full 10:54 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1465329 https://iono.fm/e/1465329 These data are crucial to understanding the country's food security conditions and often influence the market prices of grains and oilseeds in season. For each season, the Crop Estimates Committee typically releases about ten reports. From the fourth monthly report, there is generally some certainty about the expected crop.
We are now at the tail end of the 2023/24 summer grains and oilseed season. This comprises white maize, yellow maize, sunflower seed, soybeans, groundnuts, sorghum and dry beans. Thus, the crop size estimates we have at hand are unlikely to change much and possibly represent an actual picture of the harvest.
For example, in its sixth production estimate released on July 27, the Crop Estimates Committee placed South Africa's 2023/24 summer grains and oilseed harvest at 15,9 million tonnes. This is 0,5% less than last month. The monthly downward revisions are primarily in yellow maize, groundnuts and dry beans. The expected harvest of 15,9 million tonnes is down 21% year-on-year, signifying the sharp impact of the mid-summer drought on the grains and oilseed production.
Maize
A closer look at the data shows that white and yellow maize harvest could be 6,35 million tonnes (unchanged from last month) and 6,99 million tonnes (down 1% m/m). These revisions place the total maize production estimate at 13,34 million tonnes (down 0,53% m/m).
When viewed annually, white maize harvest is down 26%, with yellow maize down 12% from the 2022/23 season. The disparity in the crop decline is due to regions where each crop variety is planted, with white maize predominantly in the western areas of South Africa while yellow maize is in the east. Moreover, yellow maize is typically planted a month earlier than white maize. Rainfall impacts these regions and timeframes differently, ultimately affecting the expected harvest sizes. The expected harvest of 13,34 million tonnes is down 19% from the 2022/23 season.
This expected harvest will meet South Africa's annual maize consumption of roughly 12,00 million tonnes, leaving the country with approximately 1,40 million tonnes for exports (there is also support from the carryover stocks from the previous season). In this export forecast, about 840 000 tonnes will likely be white maize, with 600 000 tonnes likely to be yellow maize, according to data from the South African Grains and Oilseed Supply and Demand Estimates Committee. Still, the estimated exports of 1,40 million tonnes are down notably from 3,40 million tonnes in the previous season.
With that said, maize prices will likely remain elevated for some time because of potentially tighter supplies later in the season and into the first quarter of 2025. The white maize prices are over 40% higher than the levels we saw a year ago, with the spot price closing at R5 490 per tonne on July 26, 2024. At the same time, yellow maize spot prices is about 10% up from a year ago, ending the week at R4 180 per tonne.
The yellow maize prices have not increased much, as the supply risk could be manageable through imports. There are ample maize supplies (yellow) in the world market. The International Grains Council (IGC) forecasts the 2023/24 global maize harvest to be 1,2 billion tonnes, up 6% year-on-year. The prospects for the 2024/25 season are also positive. A majority of this expected global maize is yellow. The stocks are also robust, thus keeping the international yellow maize prices moderate. Wandile Sihlobo website]]> Investing Mon, 29 Jul 2024 12:23:00 +0200 0 0 The mid-summer drought was harsh, but SA will still have sufficient grain supplies for domestic consumption 0 0 Wandile Sihlobo full 12:52 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1462918 https://iono.fm/e/1462918
Secondly, the various regions of the Western Cape were affected by heavy storms. There are reports of infrastructure damage. Whether agricultural activities in the province experienced damage and what the degree of such damage could be remains unclear. We suspect the impact will mainly be on public infrastructure rather than agricultural activities. For this region, this is a busy citrus harvesting period, and the bad weather conditions have delayed activities in some fields. Moreover, the winter crop season (i.e., wheat, canola, barley and oats) is at its early stages, which would have also spared the fields from major damage, given there was no heavy erosion.

Thirdly, in the Eastern Cape, the rains in the southern regions also slowed the citrus harvest. At this early stage, we have not heard of any damage to the harvest. The field and agricultural logistics activity should gain momentum during the week as weather conditions improve. But not all things are well in the province. Foot and mouth disease remains a challenge in the dairy industry. The dairy industry and government regulators are currently engaged in possible pathways to address this challenge in the province.

Listen to the podcast for more information.

Podcast production by Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/ Wandile Sihlobo website]]> Investing Mon, 22 Jul 2024 06:40:00 +0200 0 0 These are three major challenges facing SA agriculture at the start of July 0 0 Wandile Sihlobo full 11:44 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1460454 https://iono.fm/e/1460454
Early indications of weather prospects are encouraging, showing a firm likelihood of a La Niña occurrence. The International Research Institute for Climate Change and Society at Columbia University places the probability of a La Niña occurrence at over 50% between now and April 2025. Such weather events typically bring above-average rainfall across South Africa and the entire Southern region.

There is hope that after a challenging 2023/24 summer production season, South Africa could transition into a favourable agricultural season, similar to what we experienced four seasons before the 2023/24 season.

Given that South Africa had one of the most prolonged periods of La Niña induced rains, from the 2019/20 season to the 2022/23 season, the news of an end to the 2023/24 season El Niño is a welcome development.

Listen to the podcast for more information.

Podcast production by Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/ Wandile Sihlobo website]]> Investing Mon, 15 Jul 2024 12:02:00 +0200 0 0 La Niña prospects in the upcoming 2024/25 season are a welcome development 0 0 Wandile Sihlobo full 11:50 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1458366 https://iono.fm/e/1458366 Horticulture — fruits and vegetables — had a reasonably positive start to the year, benefiting from improved dam levels for irrigation and a stable electricity supply. All of South Africa’s fruit and vegetables are under irrigation. 
The livestock industry is recovering after an intense period of animal diseases (although there remain cases of foot-and-mouth disease in some regions of the country). The better grazing veld due to early rains in the season and late rains in April have helped somewhat. The poultry industry is also recovering following an intense avian influenza spread at the end of 2023.
Meanwhile, the field crops have suffered from the midsummer drought. For example, South Africa’s 2023/24 summer grains and oilseed harvest is estimated at 16.0 million tonnes, down by 20% year on year. 
Considering the developments in these subsectors, it is unsurprising that South Africa’s agricultural gross value grew by 13.5% quarter on quarter (seasonally adjusted) in the first quarter of 2024. Indeed, the base effects also contributed to the robust performance as South Africa’s farming economy contracted in 2023. The trade figures were also strong in the first quarter, a signal for a better harvest of fruits and improvements in port performance. 
Still, we worry that the poor harvest of summer grains and oilseed may suppress the figures for the third-quarter performance in the sector. Perhaps the slowdown may even show in the second-quarter figures when they become available. 
Farming jobs
Also worth noting is that employment in primary agriculture remained robust, increasing by 6% year on year to 941,000 in the first quarter of 2024. This is also up, by 2%, from the last quarter of 2023. 
Admittedly, the significant drought damage has been concentrated on the summer grains and oilseed regions, not across all agricultural subsectors, which somewhat explains the resilience in job data. Moreover, there could also be a lag in fully accounting for agriculture’s financial pressures and the impact on employment after that. 
Quite remarkably, the sentiment in the sector paints a contrasting picture of these economic realities. For example, the Agbiz/IDC Agribusiness Confidence Index remained depressed in the second quarter of 2024, reaching 38 points from 40 in the previous quarter. This is the lowest level since Q3 2009, which was the global financial crisis, and implies that agribusinesses remain downbeat about business conditions in the country. 
Reviewing the survey respondents’ comments, we found that the midsummer El Niño-induced drought’s impact on summer grains and oilseed production was one of the major factors that weighed on the sentiment. The drought coincided with the long-standing challenges of inadequate road infrastructure and municipal service delivery.
The lingering animal disease challenges and heightened geopolitical tensions are also the primary concerns for the sector. Moreover, while the farming community recognises the improvements in Transnet’s operations, they highlight the need for continuous work to address the inefficiencies of the ports and rail network. 
The uncertainty about the formation of the government at the time of the survey may have added to the downbeat mood among the agribusinesses. This survey was conducted between 10 and 19 June, covering businesses operating in all agricultural subsectors across South Africa.

The path ahead

Looking ahead, we remain optimistic about South Africa’s agricultural conditions. The weather forecasters tell us that we have exited the El Niño drought period and are transitioning into a La Niña event, which typically brings rain. Such a weather outlook would boost agricultural production and performance in the sector. 
Listen to the podcast for more information. Wandile Sihlobo website]]> Investing Mon, 08 Jul 2024 13:35:00 +0200 0 0 South Africa’s agricultural economic performance in the first half of 2024 is mixed 0 0 Wandile Sihlobo full 14:50 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1456141 https://iono.fm/e/1456141 The summer grains and oilseed harvest comprises white maize, yellow maize, sunflower seed, soybeans, groundnuts, sorghum and dry beans.

The monthly slight upward adjustment of the summer grains and oilseed harvest size is mainly because of the notable uptick in the yellow maize production estimate, while other crops remained roughly unchanged from last month. This again confirms our earlier point that the data we have, which is the fifth production estimate, may not be adjusted much from now on.

This data illustrates the scale of damage caused by the mid-summer drought to the South African summer grains and oilseed harvest. Still, from a consumer perspective, South Africa is not in a crisis regarding supplies of grains and oilseed. With that said, there are upside risks to white maize prices, especially considering the potentially ample demand from the Southern Africa region later in the year and into the first quarter of 2025 when their domestic supplies are depleted.

Listen to the podcast for more information.

Podcast production by Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/ Wandile Sihlobo website]]> Investing Mon, 01 Jul 2024 12:54:00 +0200 0 0 South Africa's summer grains and oilseed production estimate lifted mildly 0 0 Wandile Sihlobo full 14:38 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1454522 https://iono.fm/e/1454522
Recently, there have also been pragmatic plans such as the Agriculture and Agro-processing Master Plan (AAMP) that set out practical steps to realize a vision to grow the sector and bolster its global competitiveness while achieving inclusion and transformation.

The sector must not be a casualty of politics. It is a force for good in growing the South African economy and advancing the country's place on the global map. The Government of National Unity must keep the agricultural sector uppermost in their mind. This is a sector that should offer an avenue of convergence across the political spectrum: it is crucial for rural development, food security, and employment creation.

What should priority areas be in achieving a consensus across the different political persuasions?

Some of the critical areas that deserve emphasis include protecting property rights. Moreover, the government should continue to release the state's over two million hectares of land acquired over the past few decades to appropriately selected beneficiaries. Title deeds should be a priority as they lend these beneficiaries much-needed dignity and a source of financing.

Still, releasing the government's land should not be the end-all for the land reform programme. Land reform should continue through all its existing levers: redistribution, restitution, and land tenure.

To successfully achieve transformative outcomes in agriculture, state capacity should be reinforced. The various directorates in the government that run programmes associated with land reform must be bolstered, and corruption must be dealt with decisively so that the resources for land reform reach the intended beneficiaries.

Listen to the podcast for a detailed reflection.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Tue, 25 Jun 2024 16:57:00 +0200 0 0 Achieving inclusive growth in South Africa's agriculture under the Government of National Unity 0 0 Wandile Sihlobo full 21:00 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1451846 https://iono.fm/e/1451846
Admittedly, the deciduous fruit industry faced many challenges at the Port of Cape Town at the start of 2024 related to delays that proved costly to farming businesses. Still, continuous collaboration to ensure improvements is the only viable path forward.

We are already seeing the benefits of the improvements in the agricultural sector through the rise in the value of exports. In the first quarter, agricultural exports increased 6% year on year, reaching $3.1bn according to Trade Map data, a result of both higher volumes and prices. The products leading the export list were grapes, apples and pears, maize, wine, apricots, sugar, wool, fruit juices, peaches and apricots.

From a regional perspective, Africa received the lion’s share of SA’s agricultural exports, accounting for 42%. The main export products were maize, cereal meals and pellets, sugar, prepared foods, apples and pears, fruit juices, wheat, ciders and other fermented beverages, and soya bean oil.

The EU regained its position as SA’s second-largest agricultural market, overtaking Asia, with a share of 22%. Grapes, apricots, peaches, cherries, plums, wine, apples and pears, dates, figs, avocados, guavas, mangos, wool and fruit juices were the primary products exported to the EU in the first quarter.

Asia and the Middle East as a collective were the third-largest agricultural markets for SA, accounting for 19% of exports. The main products were apples and pears, grapes, wool, sugar, beef, citrus, apricots, cherries and peaches, mutton and lamb, and soya beans.

The Americas region accounted for 6% of SA’s agricultural exports in the first quarter, manly grapes, wine, fruit juices, apples and pears, nuts, apricots and cherries. The rest of the world, including the UK, accounted for the remaining 10% of our exports.

Of course, SA doesn’t engage in one-way trade — the country imports various agricultural products. In the first quarter, these imports amounted to $1.6bn, down 4% year on year, according to data from Trade Map. The drop resulted from slightly lower volumes and prices of the major products SA imports, such as wheat and rice, whose prices cooled off at the start of this year from the rally we saw in 2023.

As in most years, SA’s major imports in the first quarter were wheat, rice, palm oil, poultry products and whiskies. SA lacks favourable climatic conditions to grow rice and palm oil, and thus relies on imports of these products. In the case of wheat, we import nearly half of our annual consumption because of unfavourable climatic conditions to expand domestic wheat production beyond the regions where we already cultivate winter wheat.

Accounting for both exports and the imports, SA’s agriculture recorded a trade surplus of $1,4bn in the first quarter, up 20% from the first quarter of 2023. The sharp rise resulted mainly from imports falling, while exports lifted slightly.

Overall, SA should stay focused on improving the logistical infrastructure efficiency and on the export market expansion mission for the agricultural sector. There is a need for increased investment in port and rail infrastructure and improving roads in the farming towns that continue to constrain the sector’s growth. Listen to the podcast for a detailed reflection.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Tue, 18 Jun 2024 11:46:00 +0200 0 0 SA sees a 20% rise in agricultural trade surplus in the first quarter of 2024 0 0 Wandile Sihlobo full 15:34 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1449604 https://iono.fm/e/1449604
Importantly, South Africa's agricultural gross value added grew by 13,5% quarter-on-quarter (seasonally adjusted) in the first quarter of 2024. This improvement is based on the robust production conditions of various horticulture products, the livestock and poultry industry recovery after a few challenging months of animal diseases that weighed on production, and the base effects. Admittedly, the production conditions in some livestock and poultry businesses may not be fully back to their normal levels, but the general subsector performance is on a recovery path.

The mid-summer drought, which has led to a 21% year-on-year decline in South Africa's summer grains and oilseed production to an expected harvest of 15,9 million tonnes in the 2023/24 season, will likely reflect on the second and third quarter figures of the sector performance.

The horticultural industry was not severely affected by the mid-summer drought because the production was all under irrigation. Also, the dam levels across South Africa had benefitted from heavy rains at the end of 2023 and into the start of 2024 before we experienced a mid-summer drought. These better dam levels, mild load-shedding, and better energy supply from various sources all catalysed the excellent production in the horticulture subsector.

Overall, the first quarter recovery of the South African farming economy is a welcome development and aligned with our general observations in various travels across the country. Still, we worry that the poor harvest of summer grains and oilseed may suppress the figures for the next two quarters.

Listen to the podcast for a detailed reflection.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/ Wandile Sihlobo website]]> Investing Mon, 10 Jun 2024 11:44:00 +0200 0 0 SA’s agricultural fortunes improved in the first quarter of 2024 0 0 Wandile Sihlobo full 11:45 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1447364 https://iono.fm/e/1447364
Thus, reflecting on the latest Crop Estimates Committee's (CEC) forecasts for the 2023/24 summer crop production season is valuable. This is a fourth production estimate for the season, and the harvest across the country is underway, so we may put more weight on the accuracy of this figure than our tentative view in the previous estimates.

At the end of May 2024, the CEC placed South Africa's 2023/24 total summer grains and oilseed production forecast at 15,9 million tonnes, down 0,5% from the previous month's forecast and 21% lower than the last season's harvest.

Maize

A closer look at the data shows that white and yellow maize harvest could be 6,4 million tonnes (down 0,9% m/m) and 6,9 million tonnes (down 0,3% m/m). These revisions place the total maize production estimate at 13,3 million tonnes (down 0,6% m/m).

When viewed annually, white maize harvest is down 25%, with yellow maize down 13% from the 2022/23 season. The expected harvest of 13,3 million tonnes is down 19% from the 2022/23 season.

We are optimistic that this harvest may materialize, although we are unsure of the quality. Suppose we are correct; this harvest would meet South Africa's annual maize consumption of roughly 12,00 million tonnes, leaving the country with over a million tonnes for exports.

With that said, maize prices will likely remain elevated for some time because of potentially tighter supplies later in the season.

Oilseeds

The 2023/24 soybean harvest was lowered by 2% from last month to 1,7 million tonnes (down 36% y/y). This annual decline results from lower yields in various regions of South Africa. We now believe South Africa may not play a robust position in soybean exports like the previous season. If anything, soybean oilcake imports this new season are now a possibility.

Meanwhile, the sunflower seed harvest estimate was again lifted from last month by 6% to 649 250 tonnes (down 10% y/y). The area plantings are moderately down from the previous year, which means the primary driver of the annual decline in the harvest is the expected poor yields, especially as most of South Africa's sunflower seed is planted in the western regions that experienced dryness and heatwave in February and March.

Other grains

The 2023/24 groundnut harvest estimate is 54 440 tonnes (up 3% y/y), sorghum is at 95 830 tonnes (up 2%), and dry beans are at 52 190 tonnes (up 4%).

Concluding remarks

The current production data illustrates the scale of damage caused by the mid-summer drought to the South African agricultural sector. The complete scale of the financial impact of this drought on the farming businesses is yet to be clear.
Still, from a consumer perspective, South Africa is not in a crisis, in our view. The recent drought presents upside risks to food price inflation but not the overall basket. The challenge is primarily the white maize, especially considering the potentially more robust regional demand later in the year.

Listen to the podcast for a detailed reflection.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 03 Jun 2024 10:18:00 +0200 0 0 SA's summer grains and oilseed production estimate slightly lowered 0 0 Wandile Sihlobo full 13:36 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1445279 https://iono.fm/e/1445279
The data recently released by Statistics South Africa shows that employment in primary agriculture lifted by 6% year-on-year to 941,000 in the first quarter of 2024. This is also up 2% from the last quarter of 2023.

Admittedly, the significant drought damage has been concentrated on the summer grains and oilseed regions, not across all agricultural subsectors, which somewhat explains the resilience in job data. Another consideration is that there could also be a lag in fully accounting for agriculture's financial pressures resulting from the drought and the impact on employment afterwards.

We can observe from the current data that jobs generally increased across most subsectors of agriculture in the first quarter compared with the corresponding period last year. The decline in employment was only in the production of organic fertilisers, fishing, and fish hatcheries. Again, this could indicate the potential delay before the subsectors heavily impacted by the mid-summer dryness fully reflected the financial impact and subsequent jobs effect. We may have a complete picture of such in the second quarter jobs data.

From a regional perspective, the Eastern Cape, Northern Cape, North West, Gauteng, and Mpumalanga were behind the annual uptick in agricultural employment. These provinces broadly comprised various agricultural commodities or value chains. Thus, the uptick in jobs is not primarily on the back of a particular value chain but spread across a range.

Surprisingly, the Western Cape, KwaZulu Natal and Limpopo are amongst the provinces that recorded a mild decline in employment in the first quarter compared to 2023. These provinces are amongst those that hold significant shares of horticulture production, which benefitted from the irrigation throughout the harsh mid-summer season.

Meanwhile, the mild reduction in employment in the Free State could be somewhat explained by the province's vast grains and oilseed production and the expected decline in production because of the drought.

As we look in years ahead, the agricultural sector remains crucial for employment creation in South Africa's rural communities.

Listen to the podcast for a detailed reflection.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 27 May 2024 09:30:00 +0200 0 0 Jobs in South African farming sector 0 0 Wandile Sihlobo full 12:52 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1443096 https://iono.fm/e/1443096
The ample harvest allowed South Africa to maintain its position in export markets. South Africa is the world's ninth largest maize exporter, trailing the US, Brazil, Argentina, Ukraine, Romania, France, Paraguay and Poland. Data from the South African Grains Information Services shows that in the 2023/24 marketing year, the exports amounted to 3,4 million tonnes, down by 6% from the previous year. About 63% of the exported maize was yellow, with 37% being white maize.

In the past, South Korea, Japan and Taiwan were the leading markets for South Africa's maize exporters. But in the 2023/24 marketing year, Zimbabwe took the lion's share of the exports, accounting for 18% of the 3,4 million tonnes of exports. The surge in exports to Zimbabwe comes after a few years of modest exports to the country because of decent domestic harvest and the restrictions on genetically modified maize, which the government often used as a barrier to imports in certain seasons.

However, the regulations have changed, and Zimbabwe now imports genetically modified maize. Other large maize export markets in the African continent are Botswana and Mozambique, which accounted for 9% and 6% of South Africa's total maize exports, respectively. South Korea, Japan and Taiwan remained significant export markets for South African maize, accounting for 14%, 13% and 13% shares in the total exports, respectively. Another important maize export market for South Africa in the Asian region is Vietnam. Still, its exports were slightly lower than other countries, accounting for a 5% share in the overall export markets.

While the export season was a success, the coastal regions of South Africa started worrying about the maize supplies at the end of the 2023/24 marketing year, specifically pricing when considering the transport costs from central regions of the country that are the main maize producers. Disappointingly, the excellent 2022/23 maize production season is followed by a less promising season. In the 2023/24 production season (which corresponds with the 2024/25 marketing year), South Africa's maize harvest is forecast to fall by 19% year-on-year to 13,3 million tonnes. This is according to data from the CEC.

This decline in harvest is primarily due to unfavourable weather conditions in February and March, where dryness and heatwave caused widespread crop damage in various regions of South Africa.

Subsequently, the coastal areas in South Africa worry about tight supplies in the new marketing year. This led to 32 691 tonnes of yellow maize imports from Argentina in the last week of the 2023/24 marketing year. We suspect there will be additional imports in the 2024/25 marketing year, primarily for the country's coastal regions. These imports will help increase supplies for the animal feed industry.

Notably, while South Africa expects a significantly lower harvest this year, the country could remain a net exporter of maize.

With an annual maize consumption of approximately 12,0 million tonnes and a harvest of 13,3 million tonnes, South Africa will have over a million tonnes of maize for exports. We also believe there are decent carryover stocks from the past season, which will help increase the maize supplies for the new marketing year of 2024/25.

Listen to the podcast for a detailed reflection.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by Lwandiso Gwarubana, Richard Humphries Wandile Sihlobo website]]> Investing Mon, 20 May 2024 10:25:00 +0200 0 0 South Africa ends an excellent maize export season 0 0 Wandile Sihlobo full 12:47 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1440250 https://iono.fm/e/1440250
Admittedly, Egypt and the Kingdom of Saudi Arabia have recently joined the BRICS+ grouping, and market access is part of the long-term bilateral engagements with South Africa. South Africa has access to selected fruits, wine, wool, meat and grains.

However, South Africa aims to broaden market access in BRICS+ for most of the country's agricultural products. For this reason, through the 2023 BRICS Summit in Johannesburg and the prior engagements, South Africa prioritized trade as a significant point on the agenda for discussion.

The political principals broadly agreed that deepening trade was necessary for the BRICS countries. Still, each country's trade and agricultural authorities are responsible for taking the lead and seeking market access from member countries.

The idea of a BRICS agricultural trade agreement that some argued for has not yet been thoroughly ventilated. The priority so far was for each BRICS member to work to reduce import tariffs and address the phytosanitary constraints for various products that BRICS member countries would present.

Even before adding the new members, the original BRICS countries were already significant importers of agricultural products. Between 2019 and 2022, this group's agricultural imports averaged US$255 billion annually, according to Trade Map data.

China accounted for 71% of all the agricultural imports into the group, followed by India at 11%, Russia at 11%, Brazil at 4% and South Africa at 3%. Despite these sizeable agricultural import figures, the intra-BRICS agricultural trade remained relatively low.

The products these countries imported include soybeans, beef, maize, berries, wheat, palm oil, poultry meat, cotton, barley, dairy products, pork, apricots and peaches, sugar, wool, sunflower seed, nuts, sorghum, goat meat, wine, grapes, bananas, avocados, mangos, guavas, and fruit juices, among other products.

South Africa produces some of these products in abundance and has surplus volumes for exports. Thus, the country championed a need to deepen trade in the 2023 BRICS Summit.

Admittedly, the positive reception that South Africa has received from some BRICS countries lately is not entirely because of the groupings' focus on trade. Indeed, some discussions regarding market access to China have been underway for some time. Still, when agricultural trade is prioritized in various political forums, there is naturally urgency to deliver some results.

With BRICS adding new members to form a bigger BRICS+, the agricultural trade opportunities have increased.

Listen to the podcast for a detailed reflection.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 13 May 2024 09:24:00 +0200 0 0 SA agriculture should explore trade opportunities within BRICS+ 0 0 Wandile Sihlobo full 11:50 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1438163 https://iono.fm/e/1438163
The data released last week by the Crop Estimates Committee showed mild upward adjustments in the crop size from last month's figures. South Africa's 2023/24 summer grains and oilseed harvest is estimated at 16,0 million tonnes, up 1% from last month.

Indeed, this is not a cause for celebration. The figure does not change the reality that we have been through a challenging season of El Niño-induced drought and heatwave in February and March that weighed on the summer grains and oilseed harvest in various regions of the country. The current estimated harvest of 16,0 million tonnes is down 20% from the 2022/23 production season.

Maize

A closer look at the data shows that white and yellow maize harvest could be 6,4 million tonnes (up 2% m/m) and 6,9 million tonnes (roughly unchanged from last month). These revisions place the total maize production estimate at 13,3 million tonnes (up 1% m/m).

When viewed annually, white maize harvest is down 25%, with yellow maize down 13% from the 2022/23 season. The expected harvest of 13,3 million tonnes is down 19% from the 2022/23 season.

If it materializes, the expected harvest will be sufficient to meet South Africa's annual maize consumption of roughly 12,00 million tonnes, leaving the country with a small export volume. Still, we will likely see prices remaining elevated for some time because of the potentially tight supplies.

The Southern African regional demand, particularly for white maize, also remains a significant upside driver of prices.

Oilseeds

The 2023/24 soybean harvest remained unchanged from last month, estimated at 1,8 million tonnes (down 35% y/y). This annual decline results from lower yields in various regions of South Africa. We now believe South Africa may not play a robust position in soybean exports like the previous season. If anything, soybean oilcake imports this new season are now a possibility.

Meanwhile, the sunflower seed harvest estimate was lifted from last month by 4% to 615 000 tonnes (down 15% y/y). The area plantings are moderately down from the previous year, which means the primary driver of the annual decline in the harvest is the expected poor yields, especially as most of South Africa's sunflower seed is planted in the western regions that experienced dryness and heatwave in February and March.

Concluding remarks

The recent rains in much of South Africa's summer crop-growing regions are too late. The damage to the crop occurred in February and March during the heatwave and the El Niño-induced dryness. The current crop forecasts reflect this challenge, as the major crops are down notably compared to the 2022/23 production season.

Listen to the podcast for a detailed reflection.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 06 May 2024 10:44:00 +0200 0 0 South Africa's summer crop production estimate has been lifted mildly 0 0 Wandile Sihlobo full 12:56 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1436194 https://iono.fm/e/1436194
Regardless of how experts feel about the capacity of the state and the policy stance of the South African government since the dawn of democracy, the one undeniable fact is that the sector has grown tremendously. Data from the Department of Agriculture, Land Reform and Rural Development show that domestic agricultural output in 2022/23 was twice as much as in 1993/94.

Whether this growth has been inclusive and transformative is a question I will return to later in this piece.

For now, it's important to emphasize the growth of the industry and the drivers of its expansion. Significantly, this expansion was not driven by a few sectors but has been widespread -- livestock, horticulture and field crops have all seen strong growth over this period.

Of course, the production of some crops, most notably wheat and sorghum, has declined over time. This, however, had a lot to do with changes in agroecological conditions and falling demand in the case of sorghum, not policies.

These higher production levels have been underpinned, mainly by adopting new production technologies, better farming skills, growing demand (locally and globally), and progressive trade policy. The private sector has played a major role in this progress.

Listen to the podcast for a detailed reflection.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/ Wandile Sihlobo website]]> Investing Mon, 29 Apr 2024 11:52:00 +0200 0 0 Farming for 30 years in a democratic South Africa 0 0 Wandile Sihlobo full 12:41 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1433885 https://iono.fm/e/1433885 February and March. The impact of harsh weather conditions on agriculture across
the country is visible through crop failures. The 2023/24 summer grain and oilseed
production is down 21% year-on-year, estimated at 15.8 million tonnes.

We are now at an advanced stage of crop development where there would be
minimal to no improvement, even if it rains. Indeed, if one reflects on the past few
days, we have received some excellent rainfalls in various regions of South Africa,
but this has had minimal benefit on crops.

The soil moisture is enhanced, but this will unlikely improve our summer grain and
oilseed production outlook. However, the grazing veld for the livestock will be
improved somewhat.

The map below illustrates the increased soil moisture levels in the central and
eastern regions of South Africa following the recent rains. The improved moisture will help in the winter crop season, which starts at the end of this month in most regions of the country.

Regarding summer grain and oilseed production prospects, South Africa is in a
better condition than the rest of the southern African region, where there are massive crop failures and countries have to rely on grain imports.

South Africa has sufficient grain for domestic consumption; if the forecast crop
materialises, we hope it does.

Listen to the podcast for more insights.

My writing on agricultural economic matters is available on my blog:
https://wandilesihlobo.com/

Podcast production by Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 22 Apr 2024 09:34:00 +0200 0 0 Recent rains in South Africa will improve grazing veld and winter crops 0 0 Wandile Sihlobo full 11:25 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1431841 https://iono.fm/e/1431841
As farmers, various feedlots, and the government worked to control the spread of the FMD, the impact was deepening on the revenues of farming businesses as they suddenly had to limit the movement of animals, and various export markets were temporarily closed. In the case of the beef industry, in 2022, the exports fell below the prior five-year average, totalling 26 881 tonnes, down 16% year-on-year, according to data from Trade Map. The exports recovered slightly in 2023, up 3% year-on-year to 27 675 tonnes.

Even as the beef industry confronted these challenges, it had already resolved that widening the export market would catalyze its long-term growth. There was evidence pointing to the expansion of exports. For example, between 2017 and 2021, South Africa's overall beef exports averaged 31 169 tonnes.

This was notable progress as the beef exports had averaged 26 670 tonnes five years prior, and the years before that were less than 15 000 tonnes. The spread of animal diseases threatened this export growth.

Between 2017 and 2021, the exports comprised, on average, 49% fresh beef and 51% frozen beef. The export markets were also diverse. For fresh beef, Kuwait, Jordan, United Arab Emirates, Mozambique, Lesotho, Qatar, Zimbabwe, Mauritius, and the Netherlands were some of the largest and most consistent markets. Similar markets and new ones were at the top of the list for frozen beef.

These included Lesotho, Mozambique, China, the United Arab Emirates, Jordan, Egypt, the Netherlands, Qatar, Hong Kong, and Kuwait. Fortunately, while some regional markets had temporarily closed off the red meat products from South Africa, some remained open. Thus, the exports did not collapse in 2022 and 2023, when animal disease was a major challenge.

This challenge was not limited to the cattle industry. Although the wool industry was not directly affected by FMD, some export markets temporarily closed due to concerns related to the disease. China, which accounts for more than two-thirds of South Africa's wool exports, temporarily closed for various periods in 2022 and 2023.

The impact of those temporary closures is visible on export volumes of wool. For example, in 2022, South Africa's wool exports fell by 19% year-on-year to 42 239 tonnes. The major decline in volume was in the Chinese market.

Fortunately, the engagements between the South African and Chinese authorities to reassure them of the safety measures in place to ensure that there is no spread of disease led to the resumption of exports. In 2023, South Africa's wool exports recovered 18% year-on-year to 49 715 tonnes.

The higher feed costs were a factor outside the control of the farmers and regulators. This was also not unique to South Africa but a global phenomenon. The rise in Chinese demand for grains, coupled with drought in South America, higher shipping costs, and the Black Sea war, were major drivers of grain prices in the past two years.

South Africa is interlinked to the global market; thus, the rise in international grain prices was also a reality here at home. For this reason, the livestock farmers had to contend with higher feed prices while simultaneously being squeezed in export markets.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 15 Apr 2024 10:37:00 +0200 0 0 SA red meat and wool exports are recovering 0 0 Wandile Sihlobo full 13:33 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1422916 https://iono.fm/e/1422916
The production of winter crops outside the Western Cape has sizable irrigation support. These regions should benefit from the relatively higher dam levels from the early summer rainfall.

In major winter grains such as wheat, nearly half of the production in South Africa is produced under irrigation. The irrigation share in overall wheat production is essential in an environment where drier weather conditions and heat waves are causing significant damage to summer grains and oilseed regions.

The weather outlook remains uncertain for rainfed regions, which could negatively affect the planting in the 2024/24 season.

Listen to the podcast for more details and our outlook.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 08 Apr 2024 08:51:00 +0200 0 0 SA starts its winter crop season with some uncertainty about the weather outlook 0 0 Wandile Sihlobo full 12:47 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1421181 https://iono.fm/e/1421181
The CEC now forecasts South Africa's 2023/24 total grain and oilseeds production at 15.8 million tonnes, down 9% from last month and 21% lower than last season's harvest. This year's overall decline in production prospects is primarily due to poor yields, not the area reduction, as farmers tilled more land than in the 2022/23 season.

In essence, while we started the 2023/24 summer crop season with optimism and even estimated that harvest would be decent at above-average levels, the outlook is now challenged by the excessive heat and limited rainfall across the major crop-growing regions.

Notably, this week marks nearly two months since some regions of South Africa last received adequate rainfall. Throughout February and March, the rainfall has been scant across South Africa, with an intense heatwave that made the summer crop growing conditions difficult. These months are also critical for crop pollination, a growth stage that typically requires higher moisture levels. We have gone through pollination with limited moisture, reinforcing fears of a potentially bad summer crop in South Africa this year.

Another challenge of the 2023/24 season is the difficulty of forecasting the size of the summer crop as we face a moving target and continuous unfavourable weather conditions. The crop forecasts for later in the year will likely show a more realistic picture of the crop conditions.

From a consumer perspective, the current drought presents upside risks to food price inflation. But the major issue is white maize. The favourable supplies of other grains in the world market, mainly yellow maize (also rice and wheat), and the moderating prices mean South Africa could be slightly cushioned in these commodities.

Still, the exchange rate will be an important consideration when assessing the possible imports of wheat and rice (and possibly yellow maize) into South Africa, assuming we see further downward revision of the crop forecasts.

The Southern African maize-producing countries such as Zambia, Zimbabwe and Malawi are also under pressure because of the drought. This means tight white maize supplies in South Africa could also face regional demand, further presenting upside price risks.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Tue, 02 Apr 2024 10:26:00 +0200 0 0 South Africa’s summer crop production prospects remain bleak 0 0 Wandile Sihlobo full 11:53 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1419124 https://iono.fm/e/1419124
For example, the 2023/24 global maize harvest forecast at 1,2 billion tonnes, up 6% year-on-year. This improvement is due to better crop expectations in the US, Argentina, Ukraine, China, the EU, and Russia. Consequently, the stocks will also lift by 5% year-on-year to 294 million tonnes.

The IGC forecasts that the 2023/24 global wheat harvest will reach 789 million tonnes, well above the long-term average levels (albeit down 2% year-on-year). A poor harvest in parts of Russia, Canada, Ukraine, Australia, the United Kingdom and Kazakhstan underpins the decline in the overall harvest. Still, the global wheat consumption will likely remain strong, particularly in Asia. As such, the IGC forecasts a 5% decline in stocks to 267 million tonnes. But from a long-term perspective, these will still be healthy stocks.

There is a lot of rice globally, with the 2023/24 global harvest forecast at 511 million tonnes, well above the long-term average (but down 0,6 year-on-year). The minor decline in the harvest is primarily in India, Thailand, China and Indonesia. The global rice consumption will likely remain stable this marketing year, and thus, the IGC also left the ending stocks roughly unchanged from the 2022/23 marketing year at 43 million tonnes. These stock levels are broadly favourable for rice price moderation in the months ahead, which had started softening since the beginning of the year. This followed an uncomfortable price surge at the end of 2023 when India decided to limit the exports of the product.

It is also worth noting that the 2023/24 global soybean harvest is estimated at 391 million tonnes, up 5% year-on-year. The robust harvest in Argentina, China, Canada, Russia, Ukraine, and Paraguay significantly drove this expected uptick in the global soybean harvest. With global soybean consumption reasonably stable, the increase in production resulted in an improvement in the global soybean stocks, now forecast at 66 million tonnes, up 12% year-on-year.

The global agricultural prices already reflect this environment of improved supplies. For example, the Food and Agriculture Organization of the United Nations (FAO) recently released its Food Price Index for February 2024. This index measures the monthly change in international prices of agricultural commodities, not final food products. The FAO Food Price Index averaged 117.3 points in February 2024, down 1% from its revised January level and 11% from last year's corresponding period. The broad decline in grains and oilseed prices underpinned this moderation, again underscoring the importance of improved supplies in the 2023/24 season.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 25 Mar 2024 16:28:00 +0200 0 0 The global grain and oilseeds supplies remain plentiful, but the drought in South Africa will still hurt 0 0 Wandile Sihlobo full 12:40 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1416950 https://iono.fm/e/1416950
However, the underlying drivers of the increase in food inflation in the past two years were mainly the international agricultural commodity prices and, to a much lesser extent, idiosyncratic domestic factors. Still, towards the latter part of 2023, local factors such as animal diseases, weaker domestic currency, and load-shedding-related costs were some of the key drivers of food inflation.

The drought in South America, China's strong demand for grains and oilseed, rising shipping costs, higher energy prices, and the Russia-Ukraine war were some of the factors that were behind the higher global agricultural producer prices, which, in turn, boosted the domestic prices, and thus leading to relatively elevated consumer food price inflation in 2022 and 2023.

Also worth noting is that South African food manufacturers had to absorb some of the increases and did not pass on the full increases to consumers who were already under pressure because of weak economic conditions and higher unemployment in the country. For example, in 2022, while consumer food inflation averaged 9.5%, the producer price inflation for agricultural products was 15.0%, and the food manufacturers inflation was 12.3%. This means manufacturers did not pass on the total costs to consumers, contrary to what some regulators have argued.

The factors that underpinned higher consumer food inflation in 2022 and 2023 have somewhat subsided. There are ample grain supplies in the global market.

Aside from the international factors, other major factors driving South Africa's food inflation this past year was the increase in vegetable and poultry products prices. The poor harvest caused the vegetable price increases after load-shedding at the start of the year, undermining crop quality. Things have changed this year. While it has been quite dry across the country since the beginning of February 2024, vegetable production has not taken a strain because all commercial production in South Africa is under irrigation and load-shedding, while risk has not been hard since the start of 2023. Some farmers are better prepared this year for possible regular power cuts.

Considering the above developments, the major risks to consumer food inflation in South Africa in 2024 will primarily be white maize products, while other products within the food basket may moderate or show sideways movement in prices.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 18 Mar 2024 10:13:00 +0200 0 0 South Africa’s food inflation risks amid the drought 0 0 Wandile Sihlobo full 12:22 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1414708 https://iono.fm/e/1414708
Given that South Africa, Zambia and Zimbabwe are among the largest maize producers within the Southern Africa region, a potential decline in the harvest in these countries suggests there could be an increase in the risk of food insecurity. This would necessitate imports to meet the shortfall in the region’s maize supplies.

The dryness in an El Niño event is not unexpected in the Southern Africa region as this weather phenomenon is typically accompanied by dryness. The year started favourably, with excellent rains. But the dryness intensified from the end of January. Major damage has been caused to crops since then. The unusual pattern may be part of the broader climate change challenges.

Based on research into grains markets in the region, and recent observations from our fieldwork across the summer crop-growing regions of South Africa, it is clear that the region faces a difficult time ahead.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 11 Mar 2024 13:09:00 +0200 0 0 Southern Africa’s agriculture is struggling with persistent dryness and extreme heatwave 0 0 Wandile Sihlobo full 13:18 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1412178 https://iono.fm/e/1412178
The products that dominated the export list were citrus, maize, apples and pears, nuts, wine, soybeans, sugar, wool, grapes, berries, avocados and fruit juices. This improved export activity was a function of improvement in volumes and prices. That said, pricing developments over the year were significantly more varied than the average data suggest. While fruit prices picked up, grains and oilseed prices have declined notably from the 2022 levels.

Notably, the exports were widely spread across various key markets. The African continent remained a leading market, accounting for 38% of South Africa's agricultural exports in 2023 in value terms. Asia was the second largest agricultural market, accounting for 28% of exports, followed by the EU, the third largest market, accounting for 19%. The Americas region was the fourth largest, accounting for 6%, and the remaining 9% went to the rest of the world.

The UK was one of the leading markets within the 'rest of the world' category, accounting for 7% of total exports. The products of exports to these markets were primarily the same, with the African continent and Asia importing a reasonably large volume of maize, soybeans, wool and beef. Meanwhile, exports to other regions were primarily fruits and wine.

Listen to our podcast for more insights.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 04 Mar 2024 13:33:00 +0200 0 0 SA agricultural exports reach a record US$13.2 billion 0 0 Wandile Sihlobo full 12:42 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1409950 https://iono.fm/e/1409950 After a notable jump in the third quarter of 2023 to 956,000, South Africa's primary agricultural employment fell by 4% quarter-on-quarter to 920,000 in the last quarter of 2023. Jobs declined mainly in the Eastern Cape, Western Cape, Gauteng, Mpumalanga and Limpopo. Wandile Sihlobo website]]> Investing Mon, 26 Feb 2024 16:06:00 +0200 0 0 SA farm jobs up 7% year-on-year 0 0 Wandile Sihlobo full 13:35 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1407367 https://iono.fm/e/1407367
According to data from the Crop Estimates Committee, the farmers managed to plant a sizable summer grain and oilseed area of 4,4 million hectares, up by 0,4% from the 2022/23 season. For a while, it appeared as though South Africa was on track for yet another excellent harvest.

But since the start of February, the rain has been scant across the summer crop-growing regions of South Africa, thus raising concerns about the yield potential of the crops.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 19 Feb 2024 08:23:00 +0200 0 0 Excessive heat across SA summer crop regions is worrying 0 0 Wandile Sihlobo full 12:14 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1405558 https://iono.fm/e/1405558
For example, South Africa's tractor sales for 2022 amounted to 9,181 units, up 17% y/y and the highest annual sales for the past 40 years. The combine harvesters also had an excellent performance of 373 units in 2022, up 38% y/y and the highest yearly sales figure since 1985. The sales for the year before were also exceptional. These generally strong agricultural machinery sales these past few years were primarily on the back of large grain and oilseed harvests. In 2023, the tractor sales were down marginally from the previous year, while the combine harvester sales held the last year's momentum.

Thus, we think the January 2024 sales begin a correction period. While in the past, agricultural machinery sales would be read as one of the early indicators of the health of the farming sector, this time around, the sales should be read differently for the reasons we stated above.

The summer crop production conditions are relatively robust in the fields across South Africa. For example, the recently released by the Crop Estimates Committee puts the preliminary area plantings for 2023/24 summer grains and oilseeds at 4,41 million hectares, up by 0,4% y/y. This increase is not limited to a few crops but across most summer crops except for soybeans, where plantings possibly fell by 10% y/y to 1,04 million hectares (which is still well above the 5-year average area of 867 240 hectares). The area plantings for other major grains, such as maize and sunflower seed, is also well above the 5-year average. Notably, the weather conditions have been broadly favourable since the start of the 2023/24 production season, thus supporting crop growth. We currently expect harvest that will be broadly above the long-term average levels in major summer crops, which again illustrates that the weak sales are not mainly a production conditions issue but a lower replacement rate of machinery after excellent years of sales.

Moreover, the rising interest rates added pressure to farmers' finances. The relatively weaker rand exchange rates also negatively influenced the farmers' machinery buying decisions. Also worth noting is that while other input cost prices, such as fertilizer and agrochemicals, have softened in 2023, the price levels were still well above long-term levels, thus adding pressure on farmers' finances.

We discuss more in this week's podcast segment.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Tue, 13 Feb 2024 08:19:00 +0200 0 0 Weak agricultural machinery sales 0 0 Wandile Sihlobo full 11:35 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1402587 https://iono.fm/e/1402587
This increase is not limited to a few crops but across most summer crops except for soybeans, where plantings possibly fell by 10% y/y to 1,04 million hectares (which is still well above the 5-year average area of 867 240 hectares). The area plantings for other major grains, such as maize and sunflower seed, is also well above the 5-year average.

White maize plantings are forecast at 1,56 million hectares, up 2% y/y, with yellow maize planting at 1,08 million hectares, up 2%/y. This places the total commercial maize planting estimate at 2,64 million hectares, 2% more than the 2022/23 production season.

If we consider a 5-year average maize yield of 5,78 tonnes per hectare in an area of 2,64 million hectares, South Africa can have a maize harvest of 15,25 million tonnes. This crop would be well above South Africa’s 5-year production of 14,95 million tonnes, although down 7% y/y.

Notably, a maize harvest of this size against South Africa’s annual maize consumption of roughly 12,00 million tonnes implies that the country would remain a net exporter of maize.

Similarly, applying a 5-year average soybean yield of 2,09 tonnes per hectare on an area planning of 1,04 million hectares would lead to a possible harvest of 2,17 million tonnes. While this would be 21% down y/y, it would be well above the 5-year average harvest. Importantly, it would mean South Africa remains a net exporter of soybeans.

Sunflower seed area is forecast to recover notably to 613 200 hectares in the 2023/24 production season, up 10% y/y. With a 5-year average yield of 1,37 tonnes per hectare, this area provides a possible harvest of 840 084 tonnes (up 16% y/y).

The ground nuts area is 41 200 hectares (up 32% y/y), with sorghum at 39 600 hectares (up 17% y/y) and dry beans at 39 400 hectares (up 8% y/y).

We discuss more in this week's podcast segment.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 05 Feb 2024 13:46:00 +0200 0 0 A promising summer grain outlook 0 0 Wandile Sihlobo full 12:53 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1400732 https://iono.fm/e/1400732
The Kingdom of Saudi Arabia has not featured prominently in South Africa's beef export markets in the past, with only small volumes last exported in the early 2000s. The renewed access to this market is critical to South Africa's ambition to expand beef exports, as the Saudi beef market is sizable at over US$647 million in 2021, according to data from Trade Map.

About 62% of the Saudi beef imports were frozen beef, while 38% were chilled or fresh beef imports. Some leading suppliers to Saudi Arabia include Brazil, Australia, Pakistan, The US, New Zealand, and Canada. Beyond beef, the Saudi meat market is large, with all meat imports valued, on average, at US$1,9 billion annually over the past five years. This means over time, as South Africa increases its production in other meat value chains, Saudi Arabia could remain a strategic country for growing exports.

Broadly, these positive news of export markets development provides some relief when the South African beef industry has faced a challenging operational environment for several reasons. One of the significant challenges was the rise in feed prices since 2020, especially for maize and soybeans.

The rise in animal feed prices coincided with a worsening financial strain on consumers due to the Covid-19 pandemic's damaging effects. 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 specific export markets, extending to auctions and livestock movement, mainly cattle, for some time in 2022.

Fortunately, the feed prices have now softened somewhat. This is in response to large domestic maize and soybean harvests and the easing of global grain prices (irrespective of lingering worries about the Black Sea Grain Deal).

Therefore, the opening of beef export opportunities to the Kingdom of Saudi Arabia adds to this improving operational environment going forward.

Despite the foot-and-mouth disease challenge, South African beef exports did not collapse. Some markets remained open, although with strict controls. This is evident in South Africa's beef exports for 2022, which amounted to 28 422 tonnes (albeit down 12% from 2021), according to data from Trade Map. This is only mildly below the ten-year average.

Fresh beef accounted for 54% of overall exports, while the balance was frozen beef. Within this total figure, a significant decline was recorded in frozen beef exports, which were 12 945 tonnes in 2022, down 24% year-on-year. Meanwhile, fresh beef exports increased by 2% year-on-year to 15 477 tonnes.

We discuss more in this week's podcast segment.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Tue, 30 Jan 2024 08:45:00 +0200 0 0 SA to export beef to Saudi Arabia 0 0 Wandile Sihlobo full 12:04 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1398353 https://iono.fm/e/1398353
Still, this excellent performance did not translate into overall robust agricultural machinery sales as it has been in the past. South Africa's agricultural machinery sales painted a mixed picture in 2023. Tractors amounted to 8 380 units, down by 9% from 2022.

The decline in tractor sales is unsurprising, as we expected the sales to cool off following a few years of excellent activity. For example, South Africa's tractor sales for 2022 amounted to 9,181 units, up 17% y/y and the highest annual sales for the past 40 years.

Meanwhile, the combine harvesters amounted to 505 units, up notably by 35% y/y. This follows an excellent performance of 373 units in 2022, up 38% y/y and the highest yearly sales figure since 1985. These strong combine harvester sales are primarily on the back of large grain and oilseed harvest.

There are several factors behind the slight decline in tractor sales. Chief amongst them is the lower replacement rate of older tractors, as the past three years saw increased new machinery sales. Moreover, the rising interest rates added pressure to farmers' finances.

The relatively weaker rand exchange rates also negatively influenced the farmers' machinery buying decisions.

We discuss more in this week's podcast segment.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 22 Jan 2024 14:50:00 +0200 0 0 South Africa’s 2023 agricultural machinery sales were mixed 0 0 Wandile Sihlobo full 11:45 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1396373 https://iono.fm/e/1396373
In its fifth production estimate for the 2023/24 season, the CEC kept the wheat harvest estimate unchanged from the previous month, at 2,15 million tonnes. This is 2% up from the last season's crop. The only concern some producers had was the crop quality following heavy rains earlier in the season. Still, we have not heard many complaints so far.

Broadly, the provinces behind the current robust national wheat harvest forecast are the Western Cape (53% of the overall harvest), Northern Cape, Free State and Limpopo. Admittedly, while the Northern Cape and Free State are still amongst the leading wheat producers, their expected harvest is less than the 2022/23 season.

The expected large harvest in the Western Cape and Limpopo overshadows the decline in harvest in other provinces. There are also likely decent wheat harvests in KwaZulu-Natal, Eastern Cape and North West regions.

The harvest of this crop is nearly complete. Farmers had delivered 1,7 million tonnes of wheat to the commercial silos in the first week of January 2024. The rest of the deliveries will likely follow in the coming weeks. The deliveries of other winter crops are also nearly complete.

The expected winter wheat crop of 2,15 million tonnes is well above the 10-year average harvest of 1,80 million. Suppose there are no significant changes in the crop forecast in the coming months. In that case, South Africa will likely need to import about 1,60 million tonnes to meet domestic consumption in the 2023/24 season (down from the forecast of 1,68 million tonnes in the 2022/23 season).

Furthermore, the 2023/24 canola crop was unchanged from November estimates and is at a record 237 450 tonnes (up 13% y/y). The annual increase is also due to increased plantings and expected better yields.

Regarding barley and oats, however, the CEC also kept their harvest forecast unchanged from last month at 360 220 tonnes and 36 200 tonnes, respectively. The recent floods damaged these crops more than wheat and canola. Notably, barley reportedly has quality issues due to the floods earlier in the season.

In sum, while the overall crop size is encouraging, and no major wheat quality issues have been reported so far, this remains a significant concern to us and would influence the import requirements for the season we currently have at a consecutive estimate of 1,60 million tonnes.

The quality challenges in barley will also present significant financial pressure on farmers, which is worth monitoring, particularly from agribusinesses and financial institutions that have clients in the barley production regions.

Overall, the South African winter crop season has turned out better from a volume perspective than some may have feared days after the Western Cape floods last year.

We discuss more in this week's podcast segment.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Tue, 16 Jan 2024 05:51:00 +0200 0 0 SA has a decent winter crop harvest 0 0 Wandile Sihlobo full 12:59 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1393157 https://iono.fm/e/1393157
The vegetation was welcoming and green throughout the way, having benefitted from the early summer favourable rainfall. In areas planted early in the season, the maize fields looked healthy. Other crops were also visibly in good condition.

One would not expect such favourable conditions amid an El Nino season. But the typical dryness of an El Nino may only start to intensify from March 2024. This is mainly the case for the central and eastern regions of South Africa, which could receive above-normal rainfall in the month before that, according to the South African Weather Service.

Meanwhile, the country's western regions could experience below-normal rain in the coming months. The soil moisture levels in the West are already low and thus concerning for farmers. Still, the agricultural conditions currently are favourable.

In a few exchanges with farmers, they appreciated the recent rains, although some were excessive. The issue they worry about more these days is extreme heat, which the country's northern regions are already experiencing. Higher temperatures, when not followed by rain, can damage agriculture.

Still, this is not a significant issue for now, as there are hopes the country could still have a decent season (bearing in mind the risks of harsh production conditions in the North West province).

When the season started, South African farmers intended to plant a total area of 4,5 million hectares for that 2023/24 summer grains and oilseed. This is up by 2% year-on-year. Moreover, the view from farm inputs organizations suggests that they also saw reasonably encouraging sales, further supporting the optimistic view about crop planting.

Regarding the livestock industry, green pastures are a welcome development, especially as the feed prices remain relatively high compared to pre-COVID-19 levels. The challenge for livestock farmers is the biosecurity weaknesses that should be resolved to curb the spread of animal diseases in the country and minimize the outbreaks.

Overall, I believe we are in for another good agricultural season, especially if January and February present favourable rainfall. The South African Weather Service (SAWS) captured the optimism about the country's central and eastern regions in the 19 December 2023 Seasonal Climate Watch. SAWS stated that "…multi-model rainfall forecast indicates mostly below-normal rainfall over most of the country during Jan-Feb-Mar (JFM), Feb-Mar-Apr (FMA) and Mar-Apr-May (MAM) with the exception of the central and eastern coastal areas indicating higher likelihood of above-normal rainfall."

This worries me about the western regions of the country and provides hope for the central and eastern regions.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Fri, 05 Jan 2024 10:56:00 +0200 0 0 SA agricultural outlook for 2024 0 0 Wandile Sihlobo full 11:44 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1390893 https://iono.fm/e/1390893 First, the intense and persistent load-shedding right from the start of the year was a significant challenge for South Africa's agriculture and agribusinesses. The impact became apparent when one considers that all of South Africa's horticulture – fruits and vegetables depend on irrigation that needs an adequate power supply. In field crops, nearly a third are produced under irrigation. In red meat, poultry, piggery, wool, and dairy production, electricity is also heavily used across various processing activities.
Similarly, agribusinesses and other food producing businesses faced similar challenges in various downstream processing activities, such as milling, bakeries, abattoirs, wine processing, packaging, and animal vaccine production.
In the first quarter, the economic impact of the load shedding was felt across the food, fibre and beverages value chains. Farmers and businesses searched for capital to invest in their own energy generation, and some experienced losses in their stock.
In addition, the Department of Agriculture, Land Reform and Rural Development, Eskom management and organized agriculture formed an Agricultural National Energy Task Team. This Task Team introduced interventions to ease the load-shedding burden on farms, such as load curtailment, expansion of the diesel rebate to the food value chain, and the Agro-Energy Fund.
Through these efforts and heavy investment in renewables and other own energy generation measures, South African agriculture, along with the food, fibre and beverages value chains, managed to minimise the damage of load shedding and ensured a consistent supply of high-quality food for consumers.
Second, the weaknesses of South Africa's biosecurity system – ability to control animal disease spread -- were a dominant challenge this year. Admittedly, biosecurity breaches are not uniquely South African and have become a significant challenge globally. We frequently hear of Foot and Mouth Disease (FMD) in cattle, African Swine Fever in pigs and Avian Influenza in poultry worldwide. However, very few countries have had to deal with the scale of these disease outbreaks almost simultaneously as South Africa has had to do.
In 2022, six provinces reported FMD outbreaks. By the start of 2023, the conditions hadn't changed much, as we continued to see cases throughout the year. Also noteworthy is that at the end of 2022, we learned of the outbreaks of the African Swine Fever, which put the pig industry under additional pressure. This remains an ongoing challenge in the pig industry.
Most recently, the focus has been on Avian Influenza, where more than a hundred commercial poultry facilities have reported cases. There have been significant losses in parent stock for breeders of layers and broilers, thus leading to imports of fertilized eggs to rebuild the parent stock flock decimated by the disease.
South Africa's biosecurity breaches, as seen in the recent outbreaks, signal some serious capacity challenges in farm biosecurity measures and the country's veterinary and related support services. This is mainly in the laboratories, control of the movement of livestock and vaccine production. Therefore, the South African government and organized agriculture and industry bodies should work closely together to address the biosecurity challenges.
Lastly, the congestion at the ports is another aspect that dominated the conversation, especially in the last quarter of the year. For the first three quarters, the agricultural sector successfully collaborated with Transnet to keep exports flowing to export markets. South Africa's agricultural exports amounted to US$10,2 billion in the first nine months, up 1% from the same period in 2022. Wandile Sihlobo website]]> Investing Mon, 18 Dec 2023 10:42:00 +0200 0 0 Key challenges that constrained SA's agricultural fortunes in 2023 0 0 Wandile Sihlobo full 12:12 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1389346 https://iono.fm/e/1389346
This solid export activity was both a function of improvement in volumes and prices, specifically of fruits. This more than offsets the effects of lower grains and oilseed prices, which have declined notably from their 2022 levels. Overall, South Africa's agricultural exports amounted to US$10,2 billion in the first nine months of the year, up 1% from the same period in 2022.

This export activity was mainly before the intensified challenges at the South African ports. Given that the inefficiency challenges at the ports and in railway lines are not new, the agricultural export's success resulted from continued collaboration between the industry and Transnet to improve the logistics at the ports.

The South African agricultural industry has established forums to continuously engage with Transnet and enhance communication about problems at the ports so that the response could be swift to drive the exports of high-value and perishable products. Still, as evidenced by the worsened logistical efficiency since the start of the fourth quarter of this year, more work and investment are needed to improve the efficiencies.
From a regional perspective, the African continent remained the largest market for South Africa's agricultural exports, accounting for 32% of the exports in the third quarter of 2023. Asia and the Middle East were the second largest regions, with a 31% share. The E.U. was the third largest region, accounting for 19% of the agricultural exports, with the Americas region at 7%. The U.K. is also one of the largest single markets for South Africa's agricultural exports, accounting for 6% of the exports in the third quarter. The remaining 5% was spread to other various regions of the world.

Regarding imports, South Africa's agricultural imports fell by 7% y/y in the third quarter of this year to US$1,8 billion (This is according to data from Trade Map). As with the previous quarters, the products that still dominate the import list are wheat, rice, palm oil, whiskeys, sunflower oil and poultry. Wheat and palm oil were the main drivers of the decline in the value of imports. South Africa's agricultural imports amounted to US$5,3 billion for the first nine months of the year, down by 7% from the same period in 2022.

Positively, South Africa had an agricultural trade surplus of US$2,1 billion in the third quarter of 2023, up 15% y/y.

We discuss more in this week's podcast segment.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Tue, 12 Dec 2023 10:29:00 +0200 0 0 SA agricultural exports were robust in Q3, 2023 0 0 Wandile Sihlobo full 11:46 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1387303 https://iono.fm/e/1387303
The primary issue on farmers' minds is perhaps not crop size but the deterioration in quality following heavy floods in the Western Cape in September.

The Western Cape is a significant producer of winter crops, accounting for roughly two-thirds of South Africa's total winter crop output.

The Crop Estimates Committee, in its fourth production estimates for the 2023/24 season, lowered the wheat harvest by 0,7% from October to 2,15 million tonnes. The marginal downward revision was mainly on the Western Cape's crop. Still, this projected overall harvest is 2% up from the last season.

Broadly, the provinces behind the current robust national wheat harvest forecast are the Western Cape (53% of the overall harvest), Northern Cape, Free State and Limpopo. Admittedly, while the Northern Cape and Free State are still amongst the leading wheat producers, their expected harvest is less than the 2022/23 season.

The expected large harvest in the Western Cape and Limpopo overshadows the decline in harvest in other provinces. There are also likely decent wheat harvests in other provinces such as KwaZulu-Natal, Eastern Cape and North West.

The current expected crop of 2,15 million tonnes is well above the 10-year average harvest of 1,80 million tonnes. If there are no significant changes in the crop forecast in the coming months, South Africa will likely need to import about 1,60 million tonnes to meet domestic consumption in the 2023/24 season (down from the forecast 1,68 million tonnes in the 2022/23 season).

Furthermore, the 2023/24 canola crop was unchanged from October estimates and is at a record 237 450 tonnes (up 13% y/y). The annual increase is also due to increased plantings and expected better yields. Regarding barley and oats, however, the Crop Estimates Committee lowered its production forecasts by 5% and 13% from last month to 360 220 tonnes and 36 200 tonnes, respectively.
We discuss more in this week's podcast segment.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Tue, 05 Dec 2023 10:55:00 +0200 0 0 Winter crops in South Africa 0 0 Wandile Sihlobo full 12:14 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1384494 https://iono.fm/e/1384494
Positively, from March 2023, South Africa's consumer food price inflation began to slow, from 14,4% at that time to 8,0% in September 2023. The product prices underpinning this deceleration throughout this period were primarily bread and cereals; meat; fish; and oils and fats.

But October 2023 disrupted the six months consecutive decline, with South Africa's consumer food inflation having quickened to 8,8%, from 8,0% in the previous month. The product prices underpinning this increase were mainly milk, eggs and cheese; fruit; and vegetables. Still, I believe that for all these products, the recent price rises will likely be a temporary blip. They are a reaction to brief supply constraints in the past few months.

The avian influenza was the main issue behind the eggs supply constraints, which remain a challenge although not as acute as we saw in September and October. Regarding the vegetables, potatoes were mainly the driver of the prices in the basket as the harvest was limited following quality challenges caused by irrigation disruptions in some fields due to load-shedding in much of the year's first half.

But with interventions underway in the poultry sector, such as importing fertilized eggs to rebuild the parental bird stock lost from avian influenza, importing table eggs (powder and liquid eggs that would help in the baking process and free the whole eggs for human consumption), and the ongoing processes about the possible vaccinations to curb the spread of the disease, I am hopeful that the prices will likely normalize in the coming months.

Furthermore, the eggs have a lower weight within the food inflation basket, at 0.4%, which means their impact may not be as pronounced in an overall inflation figure.

I expect a similar recovery in vegetable and fruit supplies in the coming months, which will help ease the current upside price pressures. The load-shedding has reduced somewhat, and farmers have invested in alternative energy sources, which is helpful for production conditions.
Overall, I remain optimistic that South Africa's consumer food price inflation will return on a moderating path going into 2024. Some products that will likely drive such a price trend include grain-related products, as well as fats and oils.

We discuss more in this week's podcast segment.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 27 Nov 2023 10:26:00 +0200 0 0 Food prices in South Africa 0 0 Wandile Sihlobo full 14:13 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1382601 https://iono.fm/e/1382601
From a regional perspective, the Western Cape, Eastern Cape, Northern Cape, KwaZulu-Natal, North West and Gauteng significantly drove this uptick in sectoral employment. Meanwhile, the Free State, Mpumalanga and Limpopo saw declining jobs.

As with the previous quarter, the robust production conditions of various field crops, forestry and aquaculture were behind the improvement in agricultural jobs in the third quarter.

Meanwhile, the livestock industry registered a decline, which is unsurprising as the industry is confronted by various animal diseases such as foot-and-mouth, avian influenza and African swine fever. Moreover, we saw a notable decline in the game industry and production of organic fertilizer facilities.

Overall, this notable improvement in employment in the third quarter is unsurprising as South Africa has a robust field crop and horticulture harvest following favourable rainfall and farmers' strategic interventions to adapt to load-shedding interruptions.

We discuss more in this week's podcast segment.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Tue, 21 Nov 2023 11:01:00 +0200 0 0 SA farm jobs up 0 0 Wandile Sihlobo full 12:33 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1379753 https://iono.fm/e/1379753
In 2022, six of our nine provinces reported MFD outbreaks. The conditions haven't changed much. In fact, on November 4 this year, the Department of Agriculture, Land Reform and Rural Development (DALRRD) announced "a suspicion of an outbreak of foot–and–mouth disease (FMD) in cattle in Ramatlabama under the Ngaka Modiri Molema District Municipality in North West Province." The DALRRD added, "At this point, it is just a suspicion of an outbreak based on positive serology results. Epidemiological investigations are underway to confirm the presence or absence of virus circulation." This means that the FMD issue that was identified a year ago remains a challenge. Notably, these outbreaks weigh heavily on the cattle industry's fortunes, and the 2022 massive outbreak led to the suspension of beef and livestock product exports to a range of markets for some time.

The impact was not limited to cattle as the sheep industry was also affected. We saw the suspension of wool exports for a couple of months in China, a significant export market. At the time, China had cited the FMD disease outbreak as a reason to suspend South Africa's wool imports. But as we have highlighted before, China may have also had capacity issues at its ports at the time because of the tail-end effects of COVID-19 and the restrictions that lasted longer than in parts of the world. We say this because there is a unique protocol to handle the wool shipments and avoid any containment during an FMD disease outbreak in South Africa. South Africa and China agreed on this protocol following the 2019 outbreak, which weighed on wool exports that year, resulting in a major financial impact on the wool industry and farmers.

Towards the end of 2022, we learned of the outbreaks of the African Swine Fever, which put the pig industry under additional pressure. This remains an ongoing challenge in the pig industry. Most recently, the focus has been on Avian Influenza, where more than a hundred commercial poultry facilities have reported cases. There are major losses in parent stock for breeders of layers and broilers, thus leading to imports of fertilized eggs to rebuild the parent stock flock decimated by the disease. The financial impact of this outbreak is evident in the recent losses announced by the major producers and the price increases of some products from a consumer perspective.

We discuss more in this week's podcast segment.
My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/
Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 13 Nov 2023 10:22:00 +0200 0 0 Biosecurity challenges in SA agriculture 0 0 Wandile Sihlobo full 12:54 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1375137 https://iono.fm/e/1375137
The South African Weather Service expects the El Niño induced dryness or below-normal rainfall to mainly be a reality from the start of 2024 and the current year to bring favourable showers still. Furthermore, farmers in our various engagements across the country have generally signalled that they would still plant the typical summer grain and oilseed area.

The data released by the Crop Estimates Committee (CEC) this afternoon reaffirmed our positive view. The CEC indicates that South African farmers intend to plant a total area of 4,47 million hectares of summer grain and oilseed in the 2023/24 season, up 2% y/y.

A deep dive into the numbers shows that 2023/24 maize planting intention is 2,63 million hectares, up 2% y/y, and well above the 10-year average area of 2,53 million hectares. About 1,58 million hectares is white maize (up 4% y/y), and 1,05 million hectares is yellow maize (down 1% y/y). The sunflower seed planting could increase by 15% y/y from the 2022/23 season to 640 000 hectares, which is also well above the 10-year average.

Sorghum area could lift by 12% y/y to 38 000 hectares (which is still below the 10-year average of 51 102 hectares). The groundnut area will likely increase significantly by 36% y/y to 42 550 hectares (slightly lower than the 10-year average of 43 143 hectares). The dry beans planting intentions are up by 15% y/y, estimated at 42 300 hectares. Surprisingly, the soybean area plantings could fall 7% y/y to 1,07 million hectares.

It is still early in the season, and we will only have a preliminary area planting estimate for the 2023/24 season at the end of January 2024. Still, these intentions to plant paint an encouraging picture. From now on, we will be watching the rainfall and the temperature conditions across the country.

We discuss more in this week's podcast segment.
My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/
Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 30 Oct 2023 17:31:00 +0200 0 0 Prospects for solid summer crop harvest in SA in 2023/24 season 0 0 Wandile Sihlobo full 12:53 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1372738 https://iono.fm/e/1372738
Thus, today, we revisit an aspect we discussed a year ago: food security conditions in South Africa. One of the measures some researchers often use to evaluate the food security condition of each country relative to the world is The Economist's Global Food Security Index. In 2022, South Africa ranked 59th out of 113 countries in the index and was the most food secure in Sub-Saharan Africa. This is an improvement from the previous year's ranking of 70th in 2021. South Africa ranked the second most food-secure country in the African continent after Morocco.

The Global Food Security Index comprises four subindices, namely: (1) food affordability, (2) food availability, (3) food quality and safety, and (4) sustainability and adaptation. The affordability and availability subindices carry a combined weighting of two-thirds of the total index. The affordability subindex includes the change in average food costs, agricultural trade, food safety net programs, proportion of population under the global poverty line, and funding for food safety net programs. Meanwhile, the availability subindex includes the sufficiency of supply, access to inputs, agricultural research and development, farm infrastructure, supply chain infrastructure, food loss, as well as political and social barriers to food.

In 2022, South Africa experienced a mild deterioration in the food affordability subindex of 7 points. Meanwhile, the rest of the other subindices improved significantly. This decline in the affordability subindex is unsurprising as the country has witnessed a broad acceleration in consumer food price inflation since the start of the year. South Africa's consumer food price inflation averaged 9,5% y/y in 2022, from 6,5% up from in 2021. Food inflation was also elevated in the first half of 2023, with only the second half that showed moderation. In the first eight months of this year, South Africa's food inflation averaged at 12,2%.

Notably, the higher food inflation these past months was a global challenge not unique to South Africa. Admittedly, in an environment such as South Africa with higher unemployment, the effects of food inflation shocks tend to be more severely felt by consumers. Over the last few years, several factors have added upward pressure on global food prices.

We discuss more in this week's podcast segment.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/
Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 23 Oct 2023 14:04:00 +0200 0 0 South Africa's food security conditions 0 0 Wandile Sihlobo full 12:48 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1370574 https://iono.fm/e/1370574
We understand that over a hundred mostly commercial facilities have reported avian influenza cases so far. Notably, there are reported losses in parental stock for breeders of layers and in broilers. For this reason, there are now constraints to egg supplies, as evident in various retail shelves across South Africa.

Over the past week, we participated in two critical meetings addressing the immediate challenge. First, the Department of Agriculture, Land Reform and Rural Development (DALRRD) met with the retailers. The aim was to assess the severity of the egg supplies at the retail level and assess various response measures.

Second, the DALRRD met with the poultry industry to receive an update on the spread of the disease and for the industry to obtain insights into the state's veterinary services.

We discuss more in this week's podcast segment.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Tue, 17 Oct 2023 07:47:00 +0200 0 0 Eggs and poultry supply constraints in South Africa 0 0 Wandile Sihlobo full 13:18 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1368157 https://iono.fm/e/1368157 Significant damages to farm infrastructure, electricity supply and road networks are reported in various small farming towns of the province, mainly the southern areas. Still, the impact of the floods on wine grapes and table grapes remains unclear as industry horticulturalists continue assessing the fields. We have seen anecdotal evidence of damages in some storage facilities and crop fields in the southern regions of the province.

Another challenge caused by wet soils has been the difficulties of tractors spraying herbicides and fertilizers, so some farmers now use drones to spray the fields. Perhaps this is a positive step toward technological advancement accelerated by unfavourable weather conditions.

Regarding the winter crops, mainly wheat, barley and canola, the focus has been on whether the excessive rains would undermine the yield potential. As best as we can tell, and from various interactions with farmers in the Western Cape, we suspect the impact on crops will be minimal, but the harvest quality may be an issue. The southern regions could have some damage, but its scale remains unclear. We maintain a positive view of South Africa's 2023/24 winter crop harvest.

On 27 September 2023, the Crop Estimates Committee (CEC) released its second production estimates for winter crops and kept wheat harvest at 2,1 million tonnes, up 1% from the previous season. Importantly, this is well above the 10-year average harvest of 1,8 million tonnes. This is supported by an expected large crop in the Western Cape and Limpopo, which overshadowed the anticipated decline in the Free State, Northern Cape and other provinces. This means that the crop conditions in the Western Cape are far more consequential for South Africa's winter wheat harvest size. Monitoring crop conditions in the coming weeks remains crucial to us.

Assuming that there will be no major changes in the crop forecast in the coming months, one can be confident that a wheat harvest of 2,1 million tonnes implies that South Africa will likely need to import about 1.6 million tonnes of wheat to meet domestic consumption in the 2023/24 season (down from the forecast 1.7 million tonnes in the 2022/23 season). Still, we must keep an eye on the CEC report of 26 October, as this would have accounted for the impact of the heavy rains in the Western Cape.

Moreover, the 2023/24 barley production is estimated at 389 920 tonnes (up 29% y/y). This will be the largest crop in three years and will mainly be supported by an expansion in the area planted and the anticipated better yields. The 2023/24 canola crop is estimated at a record 230 950 tonnes, slightly down from last month (up 10% y/y). The annual uptick is also due to increased plantings and expected better yields. The following CEC report will also provide further insights into the yield expectations of these crops and whether the recent floods have had a more severe impact than we currently see

We discuss more in this week's podcast segment.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 09 Oct 2023 17:11:00 +0200 0 0 Western Cape Floods and Agricultural Conditions 0 0 Wandile Sihlobo full 15:23 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1367036 https://iono.fm/e/1367036 Wandile Sihlobo website]]> Investing Thu, 05 Oct 2023 13:12:00 +0200 0 0 Quick Comment on the Avian Flu in SA 0 0 Wandile Sihlobo full 7:09 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1365573 https://iono.fm/e/1365573
For example, if we can highlight maize, the 2022/23 commercial harvest is 16,4 million tonnes, roughly unchanged from August figures (-0,09% m/m). This crop is 6% more than the 2021/22 season and the second-largest harvest on record. The expected ample harvest is primarily on the back of large yields, as the area planted is slightly down from the 2021/22 season.

Notably, a crop of 16,4 million tonnes implies South Africa will have sufficient supplies to meet domestic maize needs of roughly 11,4 million tonnes and have approximately 3,3 million tonnes for export markets in the 2023/24 marketing year (this marketing year corresponds with the 2022/23 production season).

Furthermore, the soybeans harvest was unchanged from August's record estimate of 2,8 million tonnes (up 24% y/y). The annual crop improvement is due to an expansion in the area planted and higher yields. The ample soybean harvest means South Africa could meet its domestic demand and remain with about 420 000 tonnes of soybeans for export markets (from 277 504 tonnes in the previous season).

There were, however, 2% month-on-month downward revisions on the sunflower seed harvest, which is now estimated at 729 110 tonnes (down 14% y/y). The annual decline is on the back of both the reduction in the area planted and the lower yields in the far western regions of the country. Consequently, South Africa will likely remain a net importer of sunflower seed. The Supply and Demand Committee forecasts South Africa's 2023/24 sunflower seed imports at 8 000 tonnes, marginally up from last season's 6 805 tonnes. There were no major adjustments in the production forecast for other small grains, such as groundnuts and dry beans.

Notably, given that we are at the tail end of the season, the attention is shifting to the 2023/24 upcoming summer crop. The primary focus as we approach this new season will be the weather outlook. As I recently stated in the Business Day, the uncertainty regarding the intensity of the El Niño weather event and the possible higher temperatures and lower-than-normal rainfall that this could bring is still a concern. However, the latest message from the South African Weather Service (SAWS) through their Seasonal Climate Watch on 28 August 2023 was encouraging, stating that "the multi-model rainfall forecast indicates above-normal rainfall for most of the country during mid-spring (Sep-Oct-Nov) and late-spring (Oct-Nov-Dec)."

We discuss more in this week's podcast segment.
My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 02 Oct 2023 13:49:00 +0200 0 0 SA summer crop harvest and prospects for new season 0 0 Wandile Sihlobo full 17:06 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1363514 https://iono.fm/e/1363514
However, the latest message from the South African Weather Service (SAWS) through their Seasonal Climate Watch on 28 August 2023 was encouraging, stating that "the multi-model rainfall forecast indicates above-normal rainfall for most of the country during mid-spring (Sep-Oct-Nov) and late-spring (Oct-Nov-Dec)."

The Weather Service added that “the early-summer (Nov-Dec-Jan), however, indicates below-normal rainfall over the central parts of the country and above-normal rainfall for the north-east." This means that some regions of the country, mainly central to western, may not have a similar start of the season to the eastern areas. Still, the broad sentiment is that showers will likely support crop germination during the beginning of the 2023/24 production season. This is also an encouraging message for horticulture and livestock, as the rains will help production conditions in these subsectors.
The central message from the SAWS report is that there are concerns about potentially below-normal rainfall, mainly from the start of 2024, while the current year could have showers in most regions. Aside from the planting and germination, the other critical point of crop development is pollination, which requires moisture and is typically around February if farmers plant crops from mid-October in the eastern regions and mid-November in the country's western areas.

Importantly, with improved soil moisture from the last rainy seasons, mainly in east and central South Africa, the expected El Niño will likely have minimal impact on the agricultural conditions. With that said, we remain concerned about the far western regions of South Africa.

Firstly, there is anecdotal evidence that soil moisture in these regions is not as conducive as in the other regions of South Africa because of drier weather conditions towards the end of the 2022/23 production season. Secondly, the SAWS indicates stronger prospects of rainfall in the coming months in the northern and eastern regions of South Africa, with less emphasis on the far western areas. The production conditions in these regions requires constant monitoring.

The northern hemisphere countries experienced excessive heat during their summer season. Thus, we remain concerned about whether this could be a reality for South Africa in the coming season. There is no clarity about this thus far, but it will need constant monitoring.

The SAWS's view is also unclear, stating that "minimum and maximum temperatures are expected to be mostly above-normal countrywide for the forecast period." The possibility of maximum temperatures in an environment where moisture is already constrained would not be ideal for crop production

We discuss more in this week's podcast segment.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Tue, 26 Sep 2023 09:17:00 +0200 0 0 Summer crop planting prospects in South Africa 0 0 Wandile Sihlobo full 14:41 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1361171 https://iono.fm/e/1361171
But it is worth highlighting that South Africa's consumer food price inflation has started to decelerate from the high levels of 14,4% we saw in March 2023. In July 2023, consumer food inflation was recorded at 10,0%, from 11,1% in the previous month. The product prices underpinning this deceleration in recent months are primarily bread and cereals; meat; fish; and oils and fats, which are crucial for low-income households.

Notably, as the cabinet's economic cluster prepares to start its work, it is vital to have a common understanding of the key drivers of food prices in recent years and an appreciation that this is a global challenge, not unique to South Africa. For example, two primary drivers of global food prices existed before the covid-19 pandemic.

First, the drought in South America in the 2019/20 season reduced the harvest notably, primarily in Brazil and Argentina. These countries collectively account for 14% and 50% of global maize and soybean production. The drought has spread for roughly three seasons since 2019/20, further exacerbating the grain price increases from 2020 to the end of 2022.

Secondly, China's continuous imports of grains and oilseed as the country was rebuilding its pork industry after a devastating African Swine Fever also added to the surge in demand at a period when global stocks were tight. China's growing demand had a consequential impact on global grain prices because of its share size of imports — for example, the country imports about 60% of globally traded soybeans.

As covid-19 spread in early 2020, several major grain producers, such as India, Kazakhstan and Vietnam, worsened global price increases by temporarily banning exports. As this unfolded, shipping costs soared, increasing global grain prices. In sum, a combination of trade policy actions by other countries, logistics and weather conditions placed upward pressure on food prices.

These all-important fundamentals challenge food supplies, further worsened by the Russia-Ukraine war. Russia and Ukraine are substantial players in the grains and oilseeds market.

As a small, open economy, South Africa, interlinked with the world, was not insulated from these agricultural and food price shocks. Admittedly, South Africa was in a reasonably better place, with abundant supplies, as the La Niña weather event brought good rains across the country and supported agricultural activity. Still, the prices did not reflect the increased domestic supplies as the global shocks mainly underpinned them.

Over the period of higher global commodity prices, the food producers and processors had to deal with higher agricultural commodity prices and process such commodities further to produce the food products available at the retail level. The activities between the producer and retailer do not happen without costs, and time lag. The food value chain first depends on expansive logistical systems and networks, while processing involves labour, energy, packaging and finance costs. Once the food is processed, it must be distributed to retail outlets, bearing these costs. On top of that, we can add the dramatic costs of load-shedding and crime.

If food processors and retailers accounted for all these cost increases across the value chain, consumers would face a much sharper price increase. But this was not the case in South Africa. Food prices increased at a moderate pace (compared to other countries), averaging 9,5% in 2022, compared with 6,5% year on year in 2021. Countries like the US, Brazil, and the EU saw higher consumer food price inflation rates. This suggests that food processors and retailers if anything, absorbed some costs.

Notably, while the consumer food price inflation averaged 9,5% in 2022, the produc Wandile Sihlobo website]]> Investing Mon, 18 Sep 2023 16:01:00 +0200 0 0 What underpins food prices in South Africa 0 0 Wandile Sihlobo full 14:54 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1358990 https://iono.fm/e/1358990
The prices of some agricultural products have declined notably from the 2022 levels. The improvement in agricultural exports also partly demonstrates the results of continued collaboration between the industry and Transnet to improve the logistics at the ports. However, more work is needed to improve the efficiencies.

The South African agricultural industry has established forums to continuously engage with Transnet and enhance communication about problems at the ports so that the response could be swift to drive the exports of high-value and perishable products.

From a regional perspective, the African continent remained the largest market for South Africa's agricultural exports, accounting for 36% of the exports in the second quarter of 2023. Asia and the Middle East were the second largest region, with a 30% share.

The EU was the third largest region, accounting for 18% of the agricultural exports, with the Americas region at 6%. The UK remained one of the largest single markets for South Africa's agricultural exports, accounting for 7% of the exports in the second quarter. The remaining 3% was spread to other various regions of the world.

Regarding imports, South Africa's agricultural imports fell by 6% y/y in the second quarter of this year to US$1,8 billion. The products that still dominate the import list are rice, wheat, palm oil, whiskeys, and poultry.

The whiskeys, wheat and poultry products were the main drivers of the decline in the value of imports in the first half of the year. Overall, South Africa had an agricultural trade surplus of US$1,6 billion in the first half of 2023, up 9% y/y.

We discuss more in this week's podcast segment.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 11 Sep 2023 16:38:00 +0200 0 0 SA agricultural exports remained robust in Q2,2023 0 0 Wandile Sihlobo full 14:04 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1356455 https://iono.fm/e/1356455
There is no doubt that South Africa’s agriculture stands to benefit enormously from close cooperation with Saudi Arabia. As chair of the 15th BRICS Summit, South Africa championed the need to deepen trade and investments amongst the BRICS countries, a point that other members overwhelmingly supported.

The agribusiness working group of the BRICS Business Council, in particular, raised the trade aspect and the need to resolve non-tariff barriers that would distort agricultural trade amongst BRICS countries.

Initially, South African agribusinesses had their eyes on China and India as countries with reasonably higher tariffs on some agricultural products and a range of non-tariff barriers. With the inclusion of Saudi Arabia in the BRICS, South Africa would now look at three significant markets to broaden agricultural exports. It is important for a country like South Africa to push for geographic diversification of trade especially in the light of intensifying geoeconomics tensions and the growing protectionism in traditional markets.

The original BRICS countries are already an important agricultural market. According to data from Trade Map, they collectively import about US$320 billion of agricultural products from the world market in 2022. About 74% of the Group's agricultural imports come from China, 12% from 12% from India, 8% from Russia, 4% from Brazil and 3% from South Africa.

The key agricultural products the BRICS grouping imports are soybeans, palm oil, beef, maize, berries, wheat, cotton, poultry, pork, apricots and peaches, sorghum, rice, and sugar. These are products that are produced at scale by some BRICS countries. Yet, intra-BRICS trade remains low because of tariffs and non-tariff barriers.

Saudi Arabia is a major agricultural importer. Over the past five years, Saudi Arabia imported, on average, $21bn of agricultural products.

The dominant suppliers of farm products to Saudi Arabia are Brazil, India, the U.S., the United Arab Emirates, Germany, France, Turkey and Egypt. The top imported agricultural products were meat and edible offal, rice, barley, milk and cream, cigars, cheese, live sheep and goats, sugar cane, maize, chocolate, citrus, palm oil, oilcake, bananas, tea, vegetables and fruit juices.
South Africa is a minor player in the Saudi Arabian agricultural market, accounting for less than 2% of all the imports. The essential exportable products to the Saudi kingdom were oranges, lemons, pears, grapes, mandarins, apples, plums, grapes and avocados. An additional product likely to join this list in the coming months will be beef as South Africa recently established market access for exports to Saudi Arabia.

Notably, South Africa is generally a net exporter of some of the products mentioned above that Saudi Arabia imports from the world, albeit mainly concentrated in European, African and Asian markets. Therefore, the possibility of close cooperation and deepening of agricultural trade through the BRICS+ forum from early 2024 will benefit South Africa.
Again, this is not to minimize South Africa's close relationship with the E.U., the U.S., the African continent and other regions. These current markets remain strategically crucial to South Africa's agriculture.

We discuss more in this week's podcast segment.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 04 Sep 2023 09:18:00 +0200 0 0 Saudi Arabia is a strategic market for RSA agriculture exports expansion 0 0 Wandile Sihlobo full 13:02 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1354006 https://iono.fm/e/1354006
The renewed access to this market is critical to South Africa's ambition to expand beef exports, as the Saudi beef market is sizable at over US$647 million in 2021, according to data from Trade Map.

About 62% of the Saudi beef imports were frozen beef, while 38% were chilled or fresh beef imports. Some leading suppliers to Saudi Arabia include Brazil, Australia, Pakistan, The US, New Zealand, and Canada. Beyond beef, the Saudi meat market is large, with all meat imports valued, on average, at US$1,9 billion annually over the past five years.

This means, over time, as South Africa increases its production in other meat value chains, Saudi Arabia could remain a strategic country for growing exports.

Regarding China, the country has an established trade relationship with South Africa. Over the past six years, China has been the leading importer of South Africa's frozen beef cuts in value terms.

Therefore, easing import restrictions that were put in place following an outbreak of the foot-and-mouth disease is a welcome development, as that could lead to an increase in exports.

These positive developments provide some relief when the South African beef industry has faced a challenging operational environment for several reasons. One of the significant challenges was the rise in feed prices since 2020, especially for maize and soybeans.

The rise in animal feed prices coincided with a worsening financial strain on consumers due to the Covid-19 pandemic's damaging effects. 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 specific export markets, extending to auctions and livestock movement, mainly cattle, for some time in 2022.

Fortunately, the feed prices have now softened somewhat, with both maize and soybean prices, on average, down 13% y/y. This is in response to large domestic maize and soybean harvests and the easing of global grain prices (irrespective of lingering worries about the Black Sea Grain Deal).

Therefore, the resumption of exports to China and the opening of export opportunities to the Kingdom of Saudi Arabia adds to this improving operational environment going forward.

We discuss more in this week's podcast segment.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 28 Aug 2023 09:31:00 +0200 0 0 The re-opening of beef export markets is positive for SA 0 0 Wandile Sihlobo full 13:45 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1351715 https://iono.fm/e/1351715
While SA's agricultural exports have remained relatively solid in the first few months of the year, we are expecting the effects of these challenges to be more evident in the second half. South Africa's agricultural exports for the first five months of this year were still robust, amounting to US$5,06bn, roughly unchanged from the corresponding period in 2022.

The export destinations remained the same as the previous years, with the African continent as a leading market, followed by the EU and selected Asian and Middle-East markets.

Outside these regions, the US was also a prominent export market. With the citrus industry and nuts benefiting from AGOA in the US market, its continuation is vital for these industries. In terms of products, citrus, maize, apples and pears, soybeans, wine, wool, sugar, flour meals, fruit juices, and various nuts were the leading products in the exports.
The citrus challenges in the EU are not new. In the 2022 export season, South Africa experienced another challenge in that market, where the EU proposed changes to its plant safety regulations for citrus without notifying its trading partners within a reasonable time.

These changes purported to protect the EU from a quarantine organism, the false codling moth, by introducing stringent new cold treatment requirements, particularly on citrus imports from Africa, mainly impacting South Africa, Zimbabwe and the Kingdom of Eswatini. But South Africa had already put rigorous measures to control false codling moth. As such, we viewed this as a measure to protect the EU's citrus-growing countries like Spain.

The engagements on this issue between South Africa and the EU are ongoing, and the citrus black spot disease issue adds to this challenging environment. The appropriate channel for resolving the matter is through the continuous engagement of the South African government with the EU authorities. From a South African perspective, the EU is a crucial export market for the citrus industry. A speedy resolution of these matters and clarity for long-term rules is important beyond the near-term dissatisfactions on both sides.

Regarding foot-and-mouth, the livestock industry continues to struggle with the tail-end challenges of last year's outbreaks. As we stated in a previous note, the South African government, organized agriculture, and industry bodies should closely work together to address biosecurity challenges in the country. Notably, the government must assist at such times to ensure the sustainability of farming businesses and jobs in rural South Africa. Fortunately, this year, wool exports have not been interrupted, as was the case in 2022 when China temporarily banned wool from South Africa because of fears of foot-and-mouth disease. Hence, wool was amongst South Africa's top ten agricultural export products in the first five months of this year.

Beyond these industry challenges, another constant matter worth continuous engagement is the effectiveness of the ports. This year is arguably better than last year regarding delays the agricultural sector faces. The ongoing engagements between Transnet and the industry help ensure effective communication and that glitches in logistics are resolved quickly. Still, more work is needed to improve the logistics and, by extension, lower the cost of exporting.
South Africa's agricultural sector will remain a net exporter in 2023. But the value may not be as robust as in 2022 when the sector reached a record US$12,8bn. At the time, the increase in the volume and value of exports was the key driver.

We discuss more in this week's po Wandile Sihlobo website]]> Investing Mon, 21 Aug 2023 15:13:00 +0200 0 0 SA agricultural exports could soften in 2023 0 0 Wandile Sihlobo full 13:39 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1344450 https://iono.fm/e/1344450
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.

We discuss more in this week's podcast segment.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 14 Aug 2023 09:21:00 +0200 0 0 What keeps SA agribusinesses up at night 0 0 Wandile Sihlobo full 16:45 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1342365 https://iono.fm/e/1342365
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.

The weather outlook is a downside risk to production for the upcoming summer crop season, although not severe for the reasons we have outlined above -- improved soil moisture following four consecutive seasons of rain.

Notably, we are not the only ones holding this optimistic view. In the past few weeks, the International Grains Council (IGC) forecasted South Africa's 2023/24 maize production at 15,6 million tonnes, down marginally from the current crop of 16,4 million tonnes.

Moreover, the United States Department of Agriculture's Pretoria office recently released their forecast placing South Africa's 2023/24 maize production forecast at 15,8 million tonnes, marginally above the IGC's figures. These institutions have assumed a mild El Niño, and soil moisture is currently good. Still, while we are optimistic about the upcoming season, we doubt the crop could be this large and see 13-14 million tonnes as more likely.

Beyond the weather outlook, the farmers are also ready as they continue to receive high volumes of tractors ordered in the past few months on the back of incomes of the favourable seasons. For example, in the first six months of this year, South Africa's tractors sales amounted to 4 061 units, down marginally by 2% from the corresponding period in 2022. Given that the past few years saw solid sales, one wouldn't have assumed to continue seeing numbers like this in 2023. Admittedly, these orders were made in the past few months when farmers were still enjoying the gains of the past few seasons' ample harvests combined with higher prices, thus improving farm profitability. But they also signal farmers' confidence about the sector's outlook beyond the El Niño worries.

Also worth noting is that farmers will be on the fields with much better input costs this year than in the past season. For example, most agrochemicals prices are down by roughly 15% year-on-year. In addition, fertilizer prices are down by about 50% compared to 2022. This softening of input costs makes production conditions far better for farmers if we consider that fertilizer accounts for a third of grain farmers' input costs, and other agrochemicals account for roughly 13%.

We discuss more in this week's podcast segment.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Sun, 06 Aug 2023 13:32:00 +0200 0 0 Some observations as we approach South Africa's 2023/24 summer crop season 0 0 Wandile Sihlobo full 15:21 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1337991 https://iono.fm/e/1337991
I feel the need to post the article here as its core message is that there are a lot of grains and oilseeds in the world. So, we see the price reaction mainly because of the events I mentioned above, not the tight supplies.

So, on July 12, 2023, the United States Department of Agriculture (USDA) released its monthly flagship report, the World Agricultural Supply and Demand Estimates report. The report's focus has shifted from the 2022/23 season to the 2023/24 season, currently underway in the northern hemisphere and starting around October in the southern hemisphere.

The past few weeks, particularly in the US, 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 wheat stocks could increase by 1% year-on-year to 270 million tonnes.

Moreover, the USDA forecasts 2023/24 global maize production at 1,2 billion tonnes, up 6% from the previous season. The countries underpinning this improvement in production are the US, Brazil, Argentina, China and the EU region.

Regarding South America, the El Niño weather event will present much-needed change of a prolonged four years of below-average rain during a La Niña event. (the El Niño event has the opposite effect in Southern Africa, it brings below normal rainfall, while La Niña of the past four seasons presented above normal rainfall and supported agriculture in the region). The ending stocks could also increase by 6% to 314 million tonnes in the 2023/24 season because of the expected robust harvest.

Another important staple crop is rice, whose 2023/24 global harvest is estimated at 521 million tonnes (slightly below the 524 million tonnes estimate by the International Grains Council). This is up by 2% from the previous season. Vietnam, Thailand, the US, Pakistan, China, Indonesia, Bangladesh, the Philippines, and Brazil are the key drivers of this increase in the global rice harvest. Because of the solid consumption, the global stocks could remain roughly unchanged from the previous season at around 170 million tonnes.

Moreover, the 2023/24 global soybean crop is estimated at 405 million tonnes, up 10% from the previous season. The significant recovery in South America's soybean harvest after a few years of drought and an expected large harvest in the US, Brazil, Argentina, China, Russia, Ukraine and Uruguay are the maize drivers of the expected large global soybean crop. Importantly, the 2023/24 global soybean stocks could increase by 18% from the previous season to 121 million tonnes.

While we are still early in the season, and a lot could change depending on the weather conditions over the coming weeks and crop development in the southern hemisphere when the season starts, the current prospects are positive. If this optimistic crop production materializes, we could see a recovery in the global grains and oilseeds stocks, adding downward pressure on the prices.

We discuss more in this week's podcast segment. My writing on agricultural economic matters is available on my blog: https:// Wandile Sihlobo website]]> Investing Tue, 01 Aug 2023 15:56:00 +0200 0 0 There are ample grain supplies in the global market 0 0 Wandile Sihlobo full 12:36 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1334795 https://iono.fm/e/1334795
But this past week, Russia halted the Black Sea Grain Deal. The reasons are not clear but it appears that the attack on the 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 Deal, which had not happened.

Regardless of what Russia's true reasons are, this is an important event in global agriculture, whose implications will be clear over the coming days and weeks. Still, we can appreciate that one of the major contributors to the current slowing global agricultural commodities prices (food prices) is the Black Sea Grain Deal, which allowed for a safe grain movement from Ukraine and Russia since July 2022.

Second, India officially announced a ban on rice exports this week. But it does not cover all rice categories as some analysts, myself included, initially feared. It is mainly on the non-basmati white and broken rice. Still, this affected category is significant. It accounts for 45% of the 22 million tonnes of rice that India exports to the global market annually.

The rationale cited in various media articles in that India's government is worried about inflation ahead of the upcoming elections.

Understandably, many people are worried about this development because India is a significant producer of rice globally. The country accounts 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%. But the affected non-basmati white and broken rice accounts for 18% of global rice exports, which is still a significant share, and thus raises worries about potential upside on prices.

Other notable rice exporters are Pakistan, Thailand, the US, Vietnam, China, Cambodia, and Myanmar. But India is the largest exporter of all these countries.

At the end of June 2023, global rice prices softened from the surge we saw in May as the global production prospects improved. This price decline was positive for an already declining global agricultural commodities basket from the peak levels we saw after Russia invaded Ukraine in March 2022.

But the export ban, combined with the non-renewal of the Black Sea Grain Deal, will likely change this constructive view of global food prices.

We discuss more in this week's podcast segment.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Sun, 23 Jul 2023 15:46:00 +0200 0 0 Russia and India's agricultural policies add risks to global food prices 0 0 Wandile Sihlobo full 15:55 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1332802 https://iono.fm/e/1332802
The livestock and poultry sector hardly enjoyed the gains of a large domestic harvest of the past two seasons because this did not bring any meaningful reduction in feed prices. For example, since December 2020, yellow maize prices have broadly traded over R3 000 per tonne, while soybeans have generally been over R5000 per tonne. This has been a different experience compared with prior seasons, where a large harvest would have led to a substantial price decline to much lower levels than we observed in the past two years. The major reason for this were higher global maize and soybean prices on the back of drought in South America, rising demand in China, Covid-19-related supply chain disruptions and the Russia-Ukraine war. As a small open economy, South Africa is interlinked with the global grains and oilseeds market, and domestic prices tend to follow the global price movements, and this is what we observed.

With global maize and soybean prices declining notably since the start of the year, South Africa's maize and soybean prices have followed a similar trend and are roughly 15% lower than the levels we observed in 2022. This benefits the livestock and poultry industry, which is currently struggling with more domestic-related costs such as load shedding and failing municipalities where various businesses have had to use their resource to maintain basic services. This has added to their cost of doing business. In addition to mainly following global price trends, large grains and oilseed supplies are in the market, which adds downward pressure on animal feed prices. For example, the Crop Estimates Committee forecasts 2022/23 maize production at 16,35 million tonnes. This crop is 6% more than the 2021/22 season and the second-largest harvest on record. The 2022/23 soybeans harvest is forecast at a record estimate of 2,76 million tonnes (up 24% year-on-year).

Still, there are fears that harvest could decline notably as we transition into an El Niño weather phenomenon, which may result in below-average rainfall in Southern Africa. Such a scenario would increase maize and soybean prices and further strain the livestock and poultry sector. However, the expected El Niño weather phenomenon might not be as harsh as the 2015/16 season, where grains and oilseed harvest fell below long-term averages, necessitating imports.

We discuss more in this week's podcast segment.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/
Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Tue, 18 Jul 2023 10:47:00 +0200 0 0 Risks to feed prices for the SA livestock and poultry industry 0 0 Wandile Sihlobo full 16:42 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1329763 https://iono.fm/e/1329763 Regarding exports, the slowing agricultural commodity prices reduced profitability from the levels farmers enjoyed a year ago, specifically grains and oilseeds. Moreover, some logistical challenges persisted in Cape Town port and thus negatively affecting the table grapes and various horticultural products exports. Still, this was not as harsh as in the previous years. The cooperation between organized agriculture groups and Transnet has helped improve agricultural export efficiencies somewhat. With that said, there is still room for improvement, which is essential for all the ports as South Africa has an export-oriented agricultural sector.

Against this backdrop, South Africa's agricultural exports fell by 2% y/y in the first quarter of 2023 to US$2,9 billion. However, when viewed quarterly, the exports are up 5% from the last quarter of 2022. The top exportable products were grapes, maize, apples and pears, wine, wool, apricots and peaches, sugar, fruit juices, and soybeans, amongst other products. We expect some of these products to continue dominating the export list, with the additions being citrus, where harvest and export activity is underway. While the start of the year was rough with excessive rains, improving weather conditions from the end of January supported agricultural activity.

From a destination point of view, the African continent remained the largest market for South Africa's agricultural exports in the first quarter of this year, accounting for 39% in value terms. The European Union was South Africa's second-largest market, accounting for 23% of all agricultural exports. Asia and the Middle East combined accounted for 21%. The Americas region accounted for 8% of South Africa's agricultural exports. The United Kingdom is one of the most important agricultural markets for South Africa and accounted for 7% of overall exports in the first quarter. The balance of 2% value constitutes other regions of the world.

South Africa's trade approach is not one-sided, perusing only exports. The country imports a significant amount of agricultural products. And thus, in the first quarter of 2023, South Africa's agricultural imports amounted to US$1,7 billion, down 9% y/y (but up 4% quarter-on-quarter). The imported products are primarily wheat, rice, palm oil, sunflower, and poultry. Because of unfavourable climatic conditions, rice and palm oil cannot be sustainably produced in South Africa. The annual decline in the import bill is mainly because of the relatively lower agricultural commodity prices compared to a year ago. We believe rice, wheat, and palm oil will continue leading the annual agricultural import product list.

Ultimately, South Africa recorded an agricultural trade surplus of US$1,20 billion in the first quarter of 2023, up 9% from last year's corresponding period. The widening trade surplus is mainly a result of a notable decline in import value, not necessarily a growth in exports, as the figures above illustrate.

We discuss more in this week's podcast segment.
My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/
Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 10 Jul 2023 14:46:00 +0200 0 0 SA agriculture records a decent trade surplus in Q1,2023 0 0 Wandile Sihlobo full 16:53 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1327209 https://iono.fm/e/1327209
This crop is 6% more than the 2021/22 season and the second-largest harvest on record. The expected ample harvest is primarily on the back of large yields, as the area planted is slightly down from the 2021/22 season. About 8,64 million tonnes is white maize, with 7,71 million tonnes being yellow maize.

A crop of 16,35 million tonnes implies South Africa will have sufficient supplies to meet domestic maize needs of roughly 11,40 million tonnes and have over 3,00 million tonnes for export markets in the 2023/24 marketing year.

The soybeans harvest was unchanged from May's record estimate of 2,76 million tonnes (up 24% y/y). The annual crop improvement is due to an expansion in the area planted and higher yields. The ample soybeans harvest means South Africa could meet its domestic demand and remain with over 300 000 tonnes of soybeans for export markets. This soybean export expansion is a new territory for South Africa, which until recently, had been a net importer of soybeans and soybean products, and positive for the agricultural trade balance.

However, the sunflower seed production estimate was lowered by 5% from last month at 758 610 tonnes (down 10% y/y). The annual decline in the sunflower seed production forecast mirrors the reduced planted area and yields in some areas.

Sorghum production estimate is down 1% from last month and now estimated at 103 870 tonnes (up 1% y/y). Other small crops, such as groundnuts and dry beans, were left unchanged from last month at 51 510 tonnes (up 6% y/y) and 48 560 tonnes (down 8% y/y), respectively.

Overall, South Africa has big summer grain and oilseed harvest, and the recent rains did not cause quality issues as some may have feared.

From a grain’s consumer perspective, these data bode well with the already softening maize and oilseed prices and reinforce our view of a possible moderation in grains-related food product prices in the food inflation basket.

We discuss more in this week's podcast segment.
My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/
Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 03 Jul 2023 13:07:00 +0200 0 0 SA has the second-largest maize harvest on record 0 0 Wandile Sihlobo full 14:13 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1324789 https://iono.fm/e/1324789
This ample harvest materialized through farmers' persistent efforts to plant even beyond the optimal planting window, which closed in December before the entire area of 2,6 million hectares was planted as heavy rainfall disrupted farmers' activity. Thus, farmers planted some hectares outside this window, and some feared there would be poor yields and frost risks later in the season. Fortunately, the worst did not materialize, and South Africa expects an ample maize harvest.

However, neighbouring Zimbabwe was not as fortunate as South Africa. Initially, Zimbabwe's 2022/23 maize production season had a better start than South Africa's. The favourable rainfall from October to November allowed farmers to till the land and start planting. But the season hit a dry spell in December, adversely affecting the maize crop in the southern and western areas of the country. Zimbabwe's fortunes worsened when the country was hit by Cyclone Freddy in late January 2023, leading to crop damage.

Hence, Zimbabwe's 2022/23 maize production could reach 1,5 million tonnes, almost half of the ample harvest of 2,7 million tonnes in the 2020/21 production season, according to the latest estimates by the Pretoria Office of the United States Department of Agriculture (USDA). With that said the expected harvest of 1,5 million tonnes is a mild improvement from the 2021/22 production season's maize harvest of 1,4 million tonnes but 32% lower than the annual maize needs of 2,2 million tonnes. At face value, Zimbabwe might have to import about half a million tonnes to fulfil the yearly maize needs in the marketing year 2023/24.

It is also worth considering that the Zimbabwe Grain Marketing Board is mandated to maintain a minimum of half a million tonnes of strategic maize reserve in physical stocks. Therefore, Zimbabwe will likely require a million tonnes of imports in the 2023/24 marketing year. Still, given the poor economic conditions in Zimbabwe, it is unclear at this stage if the Zimbabwe Grain Marketing Board will procure the half million tonnes strategic reserve in full within the 2023/24 marketing year. We will closely monitor the country's maize import pace in the coming months, as it would lead to a substantial increase in regional maize demand.

Fortunately, South Africa's 2023/24 marketing year maize surplus of over 3 million tonnes will help meet the potential rise in imports in Zimbabwe. While Zimbabwe could import a particular share of maize from Zambia, the country will likely rely more on South Africa.
We discuss more in this week's podcast segment.
My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/
Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 26 Jun 2023 15:06:00 +0200 0 0 Zimbabwe may face a significant maize shortfall 0 0 Wandile Sihlobo full 15:08 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1322066 https://iono.fm/e/1322066
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.

It would not be South Africa's first time in such a fortunate position. The summer of 2018/19 had a weather El Niño event. Still, the rains fell in critical periods, and South Africa attained a decent crop harvest, with commercial maize at 11,2 million tonnes, soybeans at 1,2 million tonnes and sunflower seed at 678 000 tonnes.

Other field crops and horticulture also achieved decent yields that year. Notably, the 2018/19 season was not preceded with favourable four years of favourable rainfall that improved soil moisture. Therefore, the current position is better than the most recent El Niño period.

Various weather forecasters all share the same view in terms of the likelihood of the occurrence of an El Niño. In the past few months, we reflected on forecasts by the South African Weather Service and Columbia University's International Research Institute for Climate and Society, which all point to a higher probability of El Niño occurrence towards the end of this year. The latter has placed its possibility at over 80% at the start of this month.

Under such conditions, the agricultural sector and agribusinesses must plan for this changing operational environment from the conducive four years that supported growth in the sector. Still, this weather outlook should not necessarily imply less investment in agriculture or elevated risk.

Such fears are likely as some people still remember the harsh drought of the 2015/16 production season, where maize output fell to 7,8 million tonnes, soybeans at 742 000 tonnes, and sunflower seed fared better at 755 000 tonnes as farmers switched white maize hectares to sunflower seed and cotton in the western regions of South Africa. That season, the livestock industry, various field crops and horticulture also suffered major losses across the country. Importantly, the 2015/16 season was preceded by a drier production period in 2014/15, and soil moisture was too low in various regions. Thus, the fall in yields was notable.
We discuss more in this week's podcast segment.
My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/
Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 19 Jun 2023 11:25:00 +0200 0 0 Expected El Niño in 2023/24 summer does not necessarily foretell a bad harvest 0 0 Wandile Sihlobo full 15:02 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1319865 https://iono.fm/e/1319865
First, the field crops had a tough start to the season because of excessive rains, which disrupted and delayed plantings by over a month in some areas.

Second, the cattle industry still feels the adverse effects of foot and mouth disease, leading to a decline in slaughtering activity. We see similar issues of animal disease challenges also in the pork industry.

Lastly, one can not underestimate the impact of load-shedding disruptions on poultry production. However, the government has since introduced various measures to ease the load-shedding burden on farmers, such as load curtailment, expansion of the diesel rebate to the food value chain, and, most recently, the launch of the Agro-Energy Fund.

Also worth noting is that South Africa's agriculture quarterly gross value-added figures tend to be quite volatile; hence our communication always focuses on the annual performance. Importantly, we expect the coming quarters in the sector to show a robust performance and boost the annual growth figure to around 3% (from a revised 0,9% in 2022).

While the summer crop season started on bad footing, and the planting of some crops was delayed by roughly a month, the weather conditions improved in January and allowed for the completion of the planting.

Moreover, the load-shedding interventions we mentioned above assisted some farming entities. However, the effectiveness of these energy support measures differs across farming enterprises, and the costs are high mainly for those not fully benefiting from the above efforts and have had to rely on diesel generators to maintain production.

We discuss more in this week's podcast segment.

My writing on agricultural economic matters is available on my blog: https://wandilesihlobo.com/

Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 12 Jun 2023 12:52:00 +0200 0 0 Why did SA agriculture GDP contract by 12,3% in the first quarter of 2023 0 0 Wandile Sihlobo full 13:55 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1317368 https://iono.fm/e/1317368
But progress so far remains limited, as the focus shifted to energy security at the beginning of the year because of the intensified load-shedding. With various interventions such as the load-curtailment, extension of diesel rebate, and Agro-Energy Fund under implementation, the sector should refocus its attention on the Agriculture and Agro-processing Masterplan and explore means of implementation. Admittedly, the operating environment in the sector is more challenging than when the plan was drafted. Still, neglecting or delaying implementation will only allow the present challenges to worsen.

The growth constraints such as biosecurity, infrastructure, widening of export markets, registration of new crop protection chemicals, and various commodity-specific and regionalized plans are some of the aspects that the Agriculture and Agro-processing Master Plan reflected on.

Notably, the broad sector support behind the plan could wane over time if the implementation is slow, and we may again find ourselves with another "good on paper but not implemented plan". Getting out of this state of inertia requires the Department of Agriculture, Land Reform and Rural Development (DALRRD) to reconvene the social partners with an implementation proposal at hand to propose.

We discuss more in this week's podcast segment.
My writing on agricultural economic matters are available on my blog: https://wandilesihlobo.com/
Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 05 Jun 2023 12:26:00 +0200 0 0 Agriculture Master Plan is ripe for implementation 0 0 Wandile Sihlobo full 13:02 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1315005 https://iono.fm/e/1315005
About 8,5 million tonnes is white maize, with 7,6 million tonnes being yellow maize. A crop of 16,1 million tonnes implies South Africa will have sufficient supplies to meet domestic maize needs of roughly 11,4 million tonnes and have over 3,0 million tonnes for export markets in the 2023/24 marketing year.

The soybeans harvest was unchanged from April's record estimate of 2,8 million tonnes (up 24% y/y). The crop improvement is due to an expansion in the area planted and the expected higher yields. The ample soybeans harvest means South Africa could meet its domestic demand and remain with over 300 000 tonnes of soybeans for export markets.

This soybean export expansion is a new territory for South Africa, which until recently, had been a net importer of soybeans and soybean products, and positive for the agricultural trade balance.

The sunflower seed production estimate remained unchanged from last month at 797 610 tonnes (down 6% y/y). The annual decline in the sunflower seed production forecast mirrors the reduced planted area and yields in some areas.

Other small crops, such as groundnuts and dry beans, were lifted from April estimates to 51 510 tonnes (up 6% y/y) and 48 560 tonnes (down 8% y/y), respectively.

Farmers across the country are hard at work harvesting the summer crops at the momentum. The recent rains have not caused quality issues; thus, we anticipate a large harvest of high-quality summer grains and oilseed.

From a grains consumer perspective, these data bode well with the already softening maize and oilseed farm prices and reinforce our view of a possible moderation in grains-related food product prices in the food inflation basket

We discuss more in this week's podcast segment.

My writing on agricultural economic matters are available on my blog: https://wandilesihlobo.com/

Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 29 May 2023 11:53:00 +0200 0 0 Ample maize supplies in South Africa 0 0 Wandile Sihlobo full 13:53 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1312639 https://iono.fm/e/1312639
The data released by Statistics South Africa paints an encouraging picture of agricultural employment on the domestic front. In the first quarter of 2023, about 888 000 people were employed in primary agriculture, up 3% q/q and 5% y/y.

This is well above the long-term agricultural employment of 780 000. From a regional perspective, the Western Cape, KwaZulu-Natal, and Gauteng were the significant drivers of this employment. At the same time, other provinces showed a slight decline compared to levels seen in the first quarter of 2022.

The robust production conditions of various field crops, fruits, forestry and aquaculture were behind the improvement in agricultural jobs in the first quarter. Meanwhile, the livestock industry saw a decline in employment, which is unsurprising given the pressures presented by the higher feed costs at the start of the year and animal diseases for much of 2022 and into 2023.

Globally, the extension of the Black Sea Grain Deal for two more months is a positive development and helps support the moderation in global grain prices and food inflation.

A brief background for folks that haven't been following this stuff; the "Black Sea Grain Deal" started in July 2022, facilitated by the United Nations representatives, the Turkish government, and the Russian and Ukrainian governments.

Its goal is to allow grain movement from Ukraine to the world market without military attack by the Russians. This has been a success, as Ukraine has exported over 25 million tonnes of grains and vegetable oils since the deal started.

Notably, global food prices have also moderated considerably over time, partly due to increased shipments of grains and vegetable oils from the Black Sea region to the world market. In April 2023, the FAO Global Food Price Index was at 127 points, down by 9% from July 2022, when the deal was reached, and down 20% y/y.

We discuss more in this week's podcast segment.

My writing on agricultural economic matters are available on my blog: https://wandilesihlobo.com/
Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 22 May 2023 10:20:00 +0200 0 0 Farm jobs in SA, Black Sea Grain Deal 0 0 Wandile Sihlobo full 11:45 Agricultural Market Viewpoint with Wandile Sihlobo https://iono.fm/e/1310422 https://iono.fm/e/1310422
We think such a view may be an overstatement. First, South African maize is currently competitively priced, and it is of good quality, and this might have influenced China’s decision. Second, this was not the first time China bought South African maize, but the volumes were always small in the past. For example, China’s maize imports from South Africa averaged 3 780 tonnes per annum over the past ten years. This was only the first time China imported a large volumes in recent memory.

Third, one consider South Africa’s 2022/23 total maize exports of 3,64 million tonnes, China’s recent purchase of 108 104 tonnes is a relatively small volume. South Africa’s leading export markets for maize include Taiwan, Japan, Vietnam, Mexico, Italy, South Korea, Botswana, Zimbabwe, and various markets within the African continent. One should also remember that China is a large maize producer, accounting for 22% of global maize production, an average of 277 million tonnes. Still, because of their significant usage, China imports maize from the world market.

Over the past three seasons, China’s maize imports averaged 25 million tonnes a year. The leading suppliers of maize to China included the United States, Ukraine, Bulgaria, Russia and Kazakhstan, and South Africa. Therefore, we doubts that South Africa’s recent maize exports to China are an attempt to replace the U.S., as some media houses have argued.

One has to appreciate that the U.S. maize exports to China averaged 17 million tonnes yearly in the past two seasons. This far exceeds South Africa’s total maize production of 15,9 million tonnes this year. In good seasons, South Africa’s maize exports are usually just over 3 million tonnes to a range of markets. Hence, we believe China’s recent maize imports from South Africa were a general market activity, i.e., supply diversification, and one shouldn’t read too much into it.

My writing on agricultural economic matters are available on my blog: https://wandilesihlobo.com/

Podcast production by: Lwandiso Gwarubana, Richard Humphries, and Sam Mkokeli Wandile Sihlobo website]]> Investing Mon, 15 May 2023 16:09:00 +0200 0 0 Can SA expand its maize export footprint in China? 0 0 Wandile Sihlobo full 15:17 Agricultural Market Viewpoint with Wandile Sihlobo