Key challenges that constrained SA’s agricultural fortunes in 2023

Key challenges that constrained SA’s agricultural fortunes in 2023

As the year draws to a close, it is worth reflecting on critical events that dominated the South African agricultural scene this year. There are three in particular that stood out.

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 depends 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 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 – the 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.

But the last quarter exports are at risk, mainly the deciduous fruits and table grapes and wines in the Port of Cape Town, which is typically busy with agricultural exports this time of the year compared with other ports.

Overall, while there were numerous other challenges in the sector, the three points I discussed above were perhaps the most notable and cross-cutting across each commodity and its value chain.

Written for and first appeared in the Business Day.


Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za

Observing agricultural conditions while driving from Pretoria to the Wild Coast

Observing agricultural conditions while driving from Pretoria to the Wild Coast

I typically drive annually from Pretoria to the Wild Coast in the Eastern Cape each December. This trip allows me to assess South Africa’s agricultural conditions after the first few months of the summer season.

Whether one enjoys this trip largely depends on weather conditions and the subsequent impact on crops and vegetation. In drought seasons like 2015, traversing dry grains, oilseed fields, and dry grazing veld could be depressing. Conversely, this could be an uplifting drive in rainy seasons, with green and lush fields visible from the highway.

This year’s drive qualifies for the latter. From Pretoria to the Wild Coast, the vegetation was welcoming and green, having benefitted from the early summer favourable rainfall. In areas planted early in the season, the maize fields looked healthy from a distance. 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 throughout the season. The soil moisture levels in the West are already low and thus concerning for farmers.

Still, not all areas have fully completed the areas they intended to plant. Some fields in Free State and Eastern Cape have yet to complete grains and oilseed plantings, and such areas are behind the typical planting calendar.

Ordinarily, the regions to the east of the N1 highway plant maize and soybeans between mid-October and mid-November. Meanwhile, the regions to the west plant maize and sunflower seed, amongst other crops, between mid-November and mid-December. We have passed this period with some areas on both sides of the N1 highway yet to be fully planted.

The delays in summer grains and oilseed plantings are neither unique nor worrisome and were caused by excessive moisture in some regions. Also, the heat has disrupted activity for some weeks. The 2021/22 and the 2022/23 seasons, which delivered large yields, were some of such seasons that planted behind typical schedules.

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.

I still 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.

Merry Christmas and Happy New Year, folks!


Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za

Key challenges that constrained SA’s agricultural fortunes in 2023

What underpinned South Africa’s agricultural underperformance in the third quarter?

The regular readers of this blog may know that I have consistently painted a positive picture of South Africa’s agricultural performance this year, following favourable rainfall across the country.

Therefore, I suspect it shocked some to read that after an encouraging recovery of 2,8% quarter-on-quarter (seasonally adjusted) in the second quarter of 2023, South Africa’s agricultural gross value added contracted by 9,6% in the third quarter.

I was equally surprised as I thought the ample field crop, whose harvest was a month behind the typical schedule, would still be reflected in the third-quarter data.

For example, the 2022/23 maize harvest is at 16,4 million, which is 6% higher than the 2021/22 season’s harvest and the second-largest harvest on record. Soybean harvest is at a record 2,8 million tonnes. South Africa’s sugar cane crop is forecasted to be 18,5 million tonnes in 2023/24, up 3% y/y. Other field crops and fruit harvests were also decent this year.

Ultimately, the base effects and headwinds in the livestock and poultry industry weighed on the sector. The livestock and poultry industry, which accounts for nearly half the sector’s value, has been hit by animal diseases such as foot-and-mouth, avian influenza and African swine fever. There are weaknesses in the country’s biosecurity system, including the measures in place to reduce the risk of infectious diseases being transmitted to crops, livestock, and poultry.

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, with the downbeat growth figures of the recent quarters, I now think the sector could show mild contraction this year instead of the solid growth we initially anticipated.

Aside from the quarterly growth figures, the sector also has a growing downbeat mood, which could undermine investment and long-term growth prospects. The causes of pessimism in the sector are primary challenges such as rising geopolitical tensions, deteriorating infrastructure, poor port performance, weakening municipalities, crime, and energy supply, which all influence farm profitability and growth prospects.

The South African government, collectively with the private sector, should address these issues to support the sector in the long term.

Also crucial for the outlook of the agricultural sector, at least in the medium term, is highlighting that El Nino’s impact on the 2023/24 summer season is another aspect to keep an eye on, although we remain optimistic that it will have a mild impact on the sector and thus keep production at decent levels and, by extension, support growth.

As stated elsewhere, the weather forecasters, including the South African Weather Service, have consistently painted a promising picture that rain may continue until early March 2024, when the El-Nino-induced dryness may begin. These promising production conditions favour broader field crops, horticulture, and livestock and poultry subsectors.

The one aspect worth monitoring is heat levels or temperatures. The South African Weather Service has recently signalled that “Minimum and maximum temperatures are expected to be mostly above-normal countrywide.”

Given the challenging conditions and excessive heat presented to farmers in the northern hemisphere, this will be something livestock and poultry farmers will have to watch and try to find ways to minimize animal heat stress.


Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za

Beyond building a unifying and growth-enhancing vision for SA agriculture

Beyond building a unifying and growth-enhancing vision for SA agriculture

When structuring growth-enhancing reforms, there is value in crafting a unifying overarching vision where each role-player has a sense of ownership, responsibility, and clarity about the possibilities of success. When such a vision is implemented, each party should continuously communicate success and glitches along the way.

The success stories offer encouragement and a sense of progress while outlining the snags in the process, assists other stakeholders know that there is work underway, helping them understand the challenges, and even collaborating to resolve them. When all this is missing, a vital economic reform plan may fail to receive much-needed support and full implementation. The responsibility for any collaborative reforms lies on all parties involved to check in with each other and ensure supportive energy and focus from all sides. When there is a sense that one party is not applying themselves fully, the challenge should be rectified quickly to maintain momentum in implementation. This also helps ensure that all stakeholders keep an eye on the broader vision or outcome of the policy or programme reform.

The South African agricultural sector had the opportunity to create an ambitious and unifying vision through the Agriculture and Agro-processing Master Plan (AAMP). Admittedly, the AAMP is not perfect, and some aspects were contested during its drafting stages. This is to be expected given the breadth of social partners that were involved in crafting it – it would be next to impossible to make everyone happy due to varied and diverse interests.

Still, most social partners, such as the business community, government, and labour, agreed that the AAMP offers a framework to grow the agriculture and agro-processing sector, build competitiveness, attract more investment, improve inclusion, and create jobs. These bold prospects directly address South Africa’s social challenges, such as rising poverty, low economic growth, and high unemployment. Each party involved in the AAMP has a bigger mission of resolving these broad societal challenges through relentless work in their businesses.

Notably, the AAMP was not a fluffy document; it was rooted in evidenced-based research that outlined the possibilities for growth and the current growth-inhibiting factors. For example, 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 AAMP aimed to address.

These were to be tackled simultaneously with managing the financial needs in the sector, specifically for new entrant farmers through the blended finance instrument, and the land needs for expansion through the yet-to-be-launched Land Reform and Agricultural Development Agency that was mentioned several times in the State of the Nation Address (SONA) by President Cyril Ramaphosa. The promise of these bold reforms in South Africa’s agricultural economy led to estimates that the gross value added to the sector could expand by over 15% in the following decade.

Disappointingly, the vision that excited most role-players in the agricultural sector over the past two years is beginning to wane. Various challenges took focus away from the implementation of the AAMP, such as persistent loadshedding at the start of the year, logistical constraints at ports, protectionism in export markets, and the spread of animal disease. These events meant that the government and various industry stakeholders moved into “crisis” mode, and the attention shifted from the AAMP and its promise for growth in the sector.

The political economy tensions that often arise between industry role-players and government while resolving these urgent and near-term issues further strain trust and the collaborative vision. Thus, these headwinds are weighing significant against the AAMP’s prospects. Additionally, with the general elections ahead of us, the political leadership across the board may also devote more time to aspects outside the AAMP, further slowing the implementation prospects.

Still, given the importance of this developmental and progressive plan for the sector. There is a need for leadership across all stakeholders to realign and rekindle the AAMP’s vision and outline steps for implementation. Implementation and operational planning is therefore critical across various levels of government, particularly provincial and municipal governments, to ensure alignment and coherence in policy implementation. Failure to operationalize the AAMP will be tragic for the agricultural sector, and create a precedent of premature abandonment of yet another well-conceived plan that was never fully implemented.

There are further negative implications that will emerge – a damaging loss of confidence in the government and questions regarding the credibility, competence and capability of the state to implement government mandates. The loss of trust will imply that any other plan in the future will not receive the seriousness and commitment it deserves. The first step may not necessarily be deeply technical but more geared towards the design of implementation and operational modalities where each role-player has a sense of ownership, responsibility, and clarity about the steps they must take to see the AAMP through. Again, the government will have to be at the center of this process to lead the way.


Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za

South Africa’s winter crop size is decent, but quality concerns remain

South Africa’s winter crop size is decent, but quality concerns remain

The data released this past week by the Crop Estimates Committee continue to paint a reasonably positive picture of South Africa’s winter crop harvest, albeit with minor downward monthly revisions of the crop size.

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.

The recent floods damaged these crops more than wheat and canola. Notably, there are reportedly quality issues in barley, and the extent of it will be clear in the coming weeks.

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

Still, it is too early to formulate a strong view on this matter. It will be some time before we start having a better sense of the wheat quality across the Western Cape’s major wheat-producing regions. For now, one could consider this matter a potential downside risk worth monitoring.

We will have better insights into the crop conditions and yield size when the Crop Estimates Committee releases its fifth winter crop production estimates on the 19th of December 2023.


Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za

Some initial impressions about South Africa’s 2023/24 agricultural season

Some initial impressions about South Africa’s 2023/24 agricultural season

Over the past few weeks, we travelled across most regions of South Africa for meetings with our members, which was also an opportunity to view the summer crop planting progress.

Positively, in the various areas, farmers planted early in the season, with soil preparations having started as early as September, particularly in the eastern and central parts of South Africa.

The planting is in full swing in these parts of the country, with mainly the western regions yet to see notable progress. The advantageous part of the season was the favourable soil moisture of the past season. Furthermore, the rains of the past couple of weeks further improved field conditions and added to the already existing optimism about the season.

Still, the concerns of an El Nino are not lost in the minds of South African farmers. They are watching this, and they are worried about its impact.

What has provided comfort so far are the favourable rainfall we have received and the weather forecasts that consistently paint a promising picture that rain may continue until early March 2024, which is when the El-Nino-induced dryness may begin.

Be that as it may, the famers we have interacted with were not deterred by these concerns. They believe that the South African Crop Estimates Committee’s estimates that 2023/24 summer grains and oilseed planting would increase by 2% to 4,5 million hectares will likely materialize.

Moreover, the view from farm inputs organizations suggests that they also saw reasonably encouraging sales, further supporting the optimistic view about crop planting.

These promising production conditions are also favourable for broader field crops, horticulture, and livestock and poultry subsectors. For the horticulture industry, all production is under irrigation, and the dam levels have improved notably and above average levels in most areas.

Still, with consistent electricity interruptions, rainfall plays a pivotal role in supplementing the irrigation system. So, the expected showers over the next three months will support production conditions in fruit and vegetables.

The same is true for the livestock industry, where the past rainy seasons improved the grazing veld and thus supported the industry. The next few months’ rainfall is vital to further improve the vegetation conditions and thus provide necessary feed when the time of need arises during the winter season and the dry patch of an El Nino.

Notably, the livestock and poultry sectors mainly depend on feed availability and affordability, mostly yellow maize and soybeans. Therefore, the conducive production conditions for such crops, in turn, support the livestock and poultry industry.

The one aspect worth monitoring, as we have communicated previously, is heat levels or temperatures. The South African Weather Service has signalled that “Minimum and maximum temperatures are expected to be mostly above-normal countrywide.” Given the challenging conditions and excessive heat presented to farmers in the northern hemisphere, this will be something livestock and poultry farmers will have to watch and try to find ways to minimize animal heat stress.

Assuming the positive outlook we have painted above materializes, the fears of an El Nino impact on food prices will be eased in the first quarter of 2024. In recent South African Reserve Bank Monetary Policy Committee communications, this weather phenomenon was rightly outlined as a potential risk to watch.

But if it only intensifies from March 2024, as the South African Weather Service recently noted, South Africa would have a good agricultural season, with ample supplies, which should help to ease the food price inflation concerns.

While constant risk of weather will be top of mind over the coming months, it is also important to keep a close eye on geopolitics and their impact on global agriculture. South Africa is a small, open economy, and agricultural prices mainly follow the global trend. So, in addition to domestic production conditions, global factors are also worthwhile monitoring.

Overall, all else being equal, we remain optimistic about South Africa’s 2023/24 agricultural production performance.

Note: The featured photo is from a few years ago. I took it outside Bethlehem in the Free State.

Written for and first appeared in the Business Day.


Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za

The weather outlook bodes well for South Africa’s agriculture

The weather outlook bodes well for South Africa’s agriculture

We continue to receive evidence that the 2023-24 summer crop season might not be as bad as some feared when discussing the El Niño prospects.

For example, on October 31, the South African Weather Service (SAWS), in its monthly Seasonal Climate Watch, noted that the “multi-model rainfall forecast indicates above-normal rainfall for the north-east of the country during November-December-January, December-January-February and January-February-March with below normal rainfall predicted for the central and south-western parts of the country”.

SAWS added, “Predictions still favour above-normal rainfall conditions over the north-eastern parts of the country, even with an El Niño in place.”

Considering that the soil moisture is excellent across most regions of the country from the past rainy seasons, the possibility of favourable rainfall through to early next year means that South Africa could have a better summer crop season in 2023/24.

Notably, this recent update is slightly different from the message the SAWS shared in the previous month, where it said the prospects of dryness were from the start of 2024. The most recent message speaks of good rains through to February 2024 in the north-eastern regions. This means favourable rains could also cover the pollination stages of the summer crop, where moisture is needed the most, and thus lead to better yields.

In addition, while the central and western regions could see below-normal rainfall from the start of 2024, the crops could still be in good condition. We base this view on the fact that soil moisture would be healthy, having benefited from rains through to the end of the year, adding to better moisture levels from the past rainy seasons.

Still, what is essential is for grain and oilseed farmers to plant on time so that, by the start of 2024, the crop is in its growing stages. While the country’s western regions typically plant from mid-November to the end of December, we think starting the planting as soon as possible would be ideal so that the crop has an extended growing period before the El Niño-induced lower rainfall period in these regions.

Also encouraging is that recently released data by the Crop Estimates Committee reaffirmed our positive view about the 2023/24 summer crop season. The committee stated 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% year-on-year. The farmers were this upbeat, possibly basing their views on soil moisture conditions on their farms. These positive rainfall prospects further strengthen their view.

As we stated last week, these are “intentions” to plant, not plantings yet. 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 data paint an encouraging picture and the planting progress is evident when one drives across South Africa.

From now on, we will be watching the rainfall and the temperature conditions across the country. On the temperature aspect, the SAWS notes that “minimum and maximum temperatures are expected to be mostly above normal countrywide for the forecast period”.

Having observed the scorching temperatures in the northern hemisphere and the negative impact on agriculture in their recent summer season, this will require constant monitoring in South Africa as the season continues.

Overall, the weather prospects continue to paint an encouraging picture of the 2023/24 summer crop season and the farmers will probably respond by expanding their planting areas, as they have signalled.

We have commented mainly on grains and oilseeds but the improved weather conditions will benefit all agricultural sub-sectors, thus boding well for growth and food production.

Written for and first published in the Mail and Guardian.


Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za

Global Food Price Index roughly unchanged from the previous month in September 2023

Global Food Price Index roughly unchanged from the previous month in September 2023

Last week, the Food and Agriculture Organization of the United Nations (FAO) released its monthly Food Price Index for September 2023, averaging 121.5 points. The Index primarily measures the monthly change in international prices of a basket of agricultural commodities. The current price level is roughly unchanged from August 2023.

The declines in the price indices of vegetable oils, dairy and meat offset increases in the sugar and grains price indices. Favorably, the Index is 11% below its corresponding period in 2022 and 24% below the all-time high reached in March 2022 following the invasion of Ukraine by Russia.

If we focus on grains, the major upside driver of prices, according to the FAO, is “a confluence of factors, including strong demand for Brazil’s supplies, slower farmer selling in Argentina and increased barge freight rates due to low water levels on the Mississippi River in the United States of America.”

In addition to these factors, the lingering concerns about rice exports after India banned non-basmati rice exports on July 20 remain a potential upside risk to grain prices. After the news of the rice export ban, we saw cases of panic buying (in the United States and Canada), additional export restrictions (such as export licensing requirements in Myanmar), and price controls (retail price caps in the Philippines), which further adds upside risk to prices.

While these restrictions are worrying, it’s worth highlighting that there are generally large global rice supplies in the world market. Thus, we were disappointed by India’s actions and the resultant steps by other countries.

For example, in September 2023, the United States Department of Agriculture (USDA) estimated the 2023/23 global rice harvest at 518 million tonnes. This is up by 1% 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 decline somewhat from the previous season to about 168 million tonnes. With such supplies, one wouldn’t have expected the export restrictions.

As we stated a few weeks ago, South Africa is one of the rice-importing countries, the world’s eleventh largest rice importers, with a typical import volume of about a million tonnes a calendar year. The International Grains Council forecasts South Africa’s rice imports at 1,1 million in 2023 and a similar volume for the following year.

Roughly 90% of the imported rice is for the domestic market, and the balance is typically exported to neighbouring countries. Thailand is the leading rice supplier to South Africa, accounting, on average, for 74% of South Africa’s rice import volume a year in the past five years. India is the second largest rice supplier to South Africa, boasting an average annual share of 21% over the past five years.

Other rice suppliers to South Africa include Pakistan, Vietnam, China, Australia, the US, and Brazil. Thus, we continue to pay closer attention to global rice dynamics and its potential impact on prices.

Regarding sugar price increases, the FAO states that they “stemmed from increasing concerns over a tighter global supply outlook in the upcoming 2023/24 season. This mainly reflects early forecasts pointing to production declines in key sugar producers, Thailand and India, due to drier-than-normal weather conditions associated with the prevailing El Niño event.”

Overall, the broad global agricultural prices are roughly sideways, which is a positive development that bodes well for domestic food prices. The one aspect that one should keep an eye on for the near term is rice, and wheat prices on the back of lingering Black Sea war and trade disruptions following Russia’s non-renewal of the Black Sea Grain Deal.


Follow me on Twitter (@WandileSihlobo). E-mail: wandile@agbiz.co.za

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