South Africa’s food prices increased at a relatively slower pace in January 2020 compared to December 2019. The data released this morning by Statistics South Africa shows that the country’s food price inflation was at 3.7% y/y in January 2020, while the previous month was 3.8% y/y. This deceleration, however, was not across the food basket. Only price inflation of bread and cereals; fish; and vegetables decelerated. But this was enough to overshadow the increases in meat; milk, eggs and cheese; oil and fats; fruit; sugar, sweets and desserts. - Wandile Sihlobo, Agbiz chief economist
My last column two weeks ago painted a bleak picture of SA’s 2019/2020 agricultural outlook, highlighting prospects of drought in some regions of the country. Lately, conditions have improved notably, and farmers managed to plant the area they intended.- Wandile Sihlobo, Agbiz chief economist *Written for and first published in Business Day
For years Zimbabwe has maintained a ban on the importation or growing of genetically modified (GM) maize. While the policy disadvantaged farmers who couldn’t produce higher yields from GM seeds as neighbouring South Africa, it also provided protection through phyto-sanitary barriers that protected the country’s non-GM maize producers. The policy also disadvantaged consumers who were compelled to purchase higher-priced maize and its products, which would have been relatively cheaper if the country produced higher volumes from GM seed. -Wandile Sihlobo, Agbiz chief economist
In September 2019, Agbiz head of Legal Intelligence, Theo Boshoff, was granted the opportunity to present on climate change, Africa and the role of agricultural law at the International Bar Association (IBA)'s annual conference in Seoul, South Korea. Following this conference, the IBA has confirmed that Theo will serve a two-year term ending in December 2021 on the Legal Practice Division's Agricultural Law Section.
While South Africa’s 2019/20 summer crop production season started on a negative footing with delayed rainfall across the country, farmers managed to plant the area they intended. This was confirmed by the preliminary plantings data released this afternoon by South Africa’s Crop Estimate Committee (CEC) which shows South Africa’s 2019/20 summer crop area at 3.97 million hectares. This is up 1% and 8% from the intentions to plant data released in October 2019 and area planted in 2018/19 season, respectively. There is an improvement in area plantings of all crops with the exception of sorghum and dry beans whose area planting fell by 28% y/y and 13% y/y, respectively. - Wandile Sihlobo, Agbiz chief economist
Agbiz has submitted its written inputs on the Draft Constitution Eighteenth Amendment Bill to amend section 25 of the Constitution to allow expropriation without compensation to the chairperson of the Ad Hoc Commitee, Dr Mathole Motshekga. The Bill was approved in early December before it was opened for public comment. In the submission, Agbiz reiterated its position that land reform objectives can be achieved without resorting to expropriation at nil compensation, if the administrative process is overhauled to ensure efficient administration.
On Friday 17 January, the acting director general of the Department of Human Settlements, Water and Sanitation (DWS) published a notice in the Government Gazette requiring all irrigators to install water meters and report their monthly consumption. This notice specifically relates to those water users who do not form part of a water user association nor an irrigation board. Water users were given 30 working days to comply. - Theo Boshoff, Agbiz head of Legal Intelligence
This year’s Medium Term Budget Policy Statement (MTBPS) sees a marked deterioration in the budget deficit which is now at 6.2% of GDP from 4.7% in the February budget speech, which is far worse than expected. The key problem has largely been the lack of economic growth as well as mismanagement of Eskom finances. South Africa’s economy is now projected to grow by sub-1% this year and improve marginally to 1.2% in 2020. The efficient collection of tax remains a challenge but we trust this will change with the appointment of a new SARS Commissioner who is focused on rebuilding the institution. - Agbiz media statement
This has not been a good year for the global wool industry. The world’s top two wool-producing countries – Australia and South Africa — are experiencing different, yet growth-constraining, challenges. In South Africa, the challenge is trade-related. Earlier this year, China, which accounts for roughly 71% of South Africa’s wool exports, temporarily stopped buying the country’s wool. This was because of a foot-and-mouth disease outbreak in Limpopo. The impact of this ban was immediately felt across the industry and sheep-farming communities of South Africa. The local authorities responded to the cries and started engaging with their Chinese counterparts in efforts to ensure that wool trade resumes between the two countries. But there hasn’t been a complete success thus far. - Wandile Sihlobo, Agbiz chief economist