SA grains prices are softening

by Wandile Sihlobo | Aug 21, 2025 | General Comments

The benefits of the ample grain and oilseed harvest are showing in the prices, although we have some quality issues with white maize and sunflower seed. The white maize spot prices are now down roughly 24% from a year ago (now at R4,071/tonne), while yellow maize prices are down approximately 10% from last year (now at R3,805/tonne).

We will see the benefits of the lower white maize prices at the consumer level in the coming months, and the moderating yellow maize prices continue to help ease the input costs for the livestock and poultry industries. The livestock industry continues to struggle with the foot and mouth disease, and I think any advantage of lower feed costs helps to ease the burden somewhat.

For people who may not have followed these things closely. We had a tough drought in 2024, which led to a poor harvest. This year is a recovery period. South Africa’s 2024-25 grains and oilseeds harvest is 18.74 million tonnes (up 21% year-on-year). There is an annual uptick in all the crops, mainly supported by favourable summer rains and the decent area plantings.

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.

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An extract from A Country of Two Agricultures

by Wandile Sihlobo | Feb 23, 2025 | General Comments

On the sunny morning of 5 April 2021, when the Covid-19 pandemic had provided a breather following a sharp wave of infection, I drove from my office at the Agricultural Business Chamber of South Africa in Pretoria to a farm in Bronkhorstspruit.

Bronkhorstspruit is a small town of roughly 3 720 people, located 50 kilometres east of Pretoria in the Gauteng province of South Africa. I was on a visit to Gift Mafuleka’s farm. Gift is a young, black commercial farmer who hails from the Esikhawini region of Richards Bay in KwaZulu-Natal. He started farming commercially in Bronkhorstspruit after a successful stint at McCain Foods South Africa (McCain), where he had progressed to crop manager on one of their farms. After he left McCain to start his own enterprise, he leased a farm from the South African government, which it had obtained from private owners for the purpose of land reform – known as Proactive Land Acquisition Strategy (PLAS) farms, one of the land redistribution strategies introduced in 2006. The farms acquired in this manner are not transferred to black land reform beneficiaries; instead, they are given non-tradable short-term leases, while the ownership of the land remains with the government.

These leases typically vary from five to 30 years, followed by the option to transfer ownership, which seldom happens. This time frame in itself is frightening, as it suggests that if one receives a lease at age 30, one might have an option to buy the land at the age of 60 – this in a country where World Bank data suggest that life expectancy was 64 in 2019. This means a person can farm their whole life without ever feeling ownership and making a tangible investment in a farm under legislative arrangements such as the Proactive Land Acquisition Strategy. There might be other arguments against this point, but this book is not about land reform, so I won’t dive into this further. Suffice to mention that this method of land reform has many downsides that constrain black farmers, some of which I discussed in my previous book, Finding Common Ground: Land, Equity & Agriculture. The commonly cited challenge is the lack of collateral, which leaves the land reform beneficiaries cash-starved and often causes their farming ventures to fail.

Gift’s story on the day of my visit was a positive one. The Cable News Network (CNN) was shooting a segment for its show, ‘Connecting Africa’, with journalist Eleni Giokos showcasing the success of African farmers and the untapped potential in this sector. They chose Gift, in part, to show the success of young black farmers. This is not mentioned in the show, but was shared with me by the producers in our conversations after the shoot. Gift was in the middle of cabbage harvesting, one of various vegetables produced on his roughly 350-hectare farm. My role there was to speak broadly about the untapped agricultural potential and avenues of investment in South Africa’s agriculture and in other parts of the African continent. The expansion in area of plantings that focus on labour-intensive and high-value agricultural commodities and investment in various value chains were some of the issues we discussed, along with opportunities for agricultural input providers.

After everyone had left, I sat down with Gift to chat about agricultural conditions, which in his case were positive as South Africa received a lot of rain in the 2020/2021 summer season. Gift was curious to know about the agricultural policy discussions in Pretoria and what we thought was the way forward to improving the participation of black farmers in commercial agriculture. After all, as of 2022, black farmers have produced between 5% and 10% of total agricultural output in South Africa. What Gift was essentially asking about were the practical means of confronting the dualism that exists in South Africa’s agricultural sector, while simultaneously ensuring the growth and sustainability of the sector.

The poor and slow implementation of land reform, inefficient government decisions and support systems, poorly structured financial support, bureaucratic delays, drought and diseases have all entrenched the divide between commercial agriculture (mainly white) and subsistence farming (mainly black).

Indeed, at the dawn of democracy, few people probably thought that South Africa would still be battling with the phenomenon of ‘two agricultures’ – or dualism – nearly three decades on. Although some progress has been made, as black farmers have joined commercial production and supply chains, the numbers are still disappointing, at less than 10%. Admittedly, there are commodities in which the inclusion of black farmers is much better than others. A case in point is the wool industry, tomato production and cattle, where black farmers’ contribution is more than 9%. There has been a deliberate effort by both the private sector and government to jointly support black farmers in these commodities; hence their inclusion at the commercial level is notable. I should also emphasise, however, that this is at best a guestimate and unfortunately hides the amazing progress in maize production, wool production, commercial beef output (where black farmers are responsible for a substantial share, of 34%), and some horticultural products.

In addition, the numbers also do not consider transactions in informal value chains and sales in small local markets. This is because the reported shares are largely extracted from records provided by the commodity organisations as part of their commitment to transformation. The incomplete picture is also a result of how the agricultural census conducted by Statistics South Africa was done by only including Value-Added Tax (VAT)-registered farmers. The 2017 agricultural census excluded 92 634 households that practised commercial farming as their main source of income, and a further 122 200 households that practised commercial farming as a secondary source of income (these are estimates from Statistics South Africa’s Community Survey of 20166).

Therefore, one can assume that around 214 800 farming households (black and white) who practise some forms of commercial farming were excluded from the agricultural census. Most of these are micro-enterprises with gross farm incomes below R500 000 per annum, but still are commercial since they sell produce.

Reasons for the slow progress of black farmers

There are several reasons behind the slow progress in black farmers’ total share of farm output. First, a lack of direction, critical and fast decision making in the national and provincial governments, as well as poorly designed programmes to support black farmers to become part of the commercial sectors. These have been a challenge for years.

Second, there has been poor adoption of the latest technology to increase productivity. The commercial farming sector, whose output has more than doubled in real terms since 1994, was able to leverage technological innovation and expansion in export markets when South Africa integrated into the world economy after years of isolation, but new entrants have not always succeeded in doing so.

Third, there is a lack of collaboration between the government and the private sector as manifested in commodity organisations, agribusinesses, commercial farmer organisations, etc. This results in the slow implementation of farmer development plans. The farmer organisations are frustrated with the lack of delivery and extreme bureaucracy.

Fourth is the inefficiency of many of the provincial departments of agriculture. This results in poor and non-delivery of critical programmes to support farmers with effective broad based support programmes, especially in the former homeland regions in KwaZulu-Natal, the Eastern Cape, Mpumalanga, North West and Limpopo.

This list is not exhaustive, but it is to provide a reader a feel of the challenges that confront new entrant black farmers in South Africa.

These many factors contributing to the continuation of dualism in South African agriculture, and frustrations for young black commercial farmers like Gift Mafuleka, only require effective policy making and the right incentives

Overall message

This book will focus less on history and more on the present and the future. My motivation in writing this book was to understand why the agricultural sector is still marked by inequalities nearly three decades after the onset of democracy.

The contribution of this book is to explain why these disparities have persisted in the democratic era, and what it would take to overcome them. I dissect these issues against the backdrop of major shifts in the agricultural landscape occasioned by the Covid-19 pandemic, Russia-Ukraine war, technological shifts, and changing external market conditions.

In the book, you will find the story of the evolution of South Africa’s agriculture since 1994, and the particular challenges facing the sector. Amongst other subjects, the often ignored importance of agricultural finance, the importance of trade for South Africa’s agriculture, as well as agriculture and technology. The book is intended to give the reader a full picture of the sector, painted less in arcane numbers and more in a narrative form.

A Country of Two Agricultures, by Wandile Sihlobo, is published by Tracey McDonald Publishers and is available in all major bookstores in South Africa. You can buy it online here.

The Kindle version of the book is here.

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What can Farmers and Agribusinesses harvest from the SONA?

by Wandile Sihlobo | Feb 6, 2025 | General Comments

President Cyril Ramaphosa’s State Of The Nation Address (SONA) has given us some nutritious nuggets to chew on. You see, although South Africa’s agriculture has grown tremendously over the past three decades (more than doubled), it faces some challenges.

Governance

Some of the challenges confronting the sector include port inefficiencies, deteriorating roads, rural crime and stock theft, rising global protectionism, and inept municipalities.

President Ramaphosa outlined the government’s plans to address many of these challenges in his State of the Nation Address. The need for professionalization of civil servants, planned improvement of water infrastructure and simplification of regulations, ongoing reforms of Operation Vulindlela in the broader network industries, interventions on logistics, and improving safety and reducing crime are some areas the SONA highlighted.

The President captured the core of agricultural matters by stating, “By supporting our farmers, improving our logistics network and rural supply chains, and opening new export markets for products, we can significantly expand our agricultural sector.”

Social

We believe South Africa’s agriculture will see its gross value added (fortunes) expand by 30% in the coming years, creating more jobs.

Still, we think the one fundamental area that the President should have highlighted is the urgent release of the 2,5 million hectares of state land for agriculture to appropriately selected beneficiaries with title deeds.

The release of this land, combined with the reforms outlined in the SONA and the opening of the export markets, would help us grow the sector and end the dualism that has made South Africa a “Country of Two Agricultures.”

This disparity limits the sector’s growth potential and must be addressed urgently. The Agriculture and Agro-processing Master Plan outlines the appropriate approach for inclusive growth.

A more inclusive sector would have a much stronger shared vision and possibly grow faster. The land currently in the government books is one area where the inclusive approach could be kicked off, including more young people and women and closing racial disparities.

Environment

Another point that is silent in the SONA but broadly discussed in agriculture is sustainability. You see, South Africa has already made inroads in improving the farming methods. We must continue caring for our farming environment to ensure the land sustainably serves the next generation.

Our efforts to improve farming will also provide continuous access to key markets such as the EU, where environmental issues in agriculture are becoming a big debate.

Closing remark

Overall, while the agricultural statement was brief in the SONA, the President addressed the fundamental matters.

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South Africans can expect to pay more for coffee

by Wandile Sihlobo | Jan 9, 2025 | General Comments

No one wants to hear about higher prices in January when there is so much stress on people returning to work and sending kids to school. But we can expect South African coffee prices to increase soon. Brazil and Vietnam are major producers of coffee beans. We import from both, and both have serious weather challenges – drought and heavy rains in the case of Vietnam, which have affected production.

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%). Trade Map data shows these countries make up 84% of South Africa’s coffee imports.

While other countries have relatively stable production, the largest producers, Brazil and Vietnam, have had bad seasons. The consequence is the lower global production, which has increased coffee prices globally.

More worrying is that the coffee bean production forecasts for 2025 are not looking good either. The production challenge may persist in Brazil and Vietnam, thus keeping coffee prices elevated for some time.

Others have asked if Brazil and Vietnam have these coffee production challenges, why don’t South Africa import more from other African coffee producers? This is a fair question. But there are two things to consider.

First, coffee is a globally traded commodity (like maize or wheat), and its prices are interlinked globally. So, the difference in where South Africa decides to import coffee would be the coffee variety and distance costs. Still, the broad price direction would be the same.

Second, it is difficult to emphasize Brazil’s and Vietnam’s prominence and influence on the global coffee market. Brazil accounts for 39% of global coffee production, Vietnam 16%, and Colombia 8%. Thus, these three countries account for two-thirds of global coffee production, which explains their impact on global coffee prices.

Only Ethiopia (5% of global production) and Uganda (4%) are African countries featured in the top ten global coffee producers. To be clear, I am using the 2023-24 production season data here, but the numbers do not change much, even considering the past few seasons.

Therefore, regardless of where South Africa imports coffee, we will not escape the current upside cost pressures that coffee shops will soon pass on to consumers.

So, we are not only facing the coffee production constraints. Another critical factor in the increase in coffee prices is the growing demand for coffee in China. In its recent report, the United States Department of Agriculture states that China’s coffee consumption surged almost 150% in the last 10 years and is forecast to reach 6.3 million bags (60 kilograms) in 2024/25. So, this increase in China’s coffee demand at a time when global production is under pressure will also further add to the upside price pressures.

Importing countries like South Africa must contend with these increasing prices in the coming months.

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A quarter of a century of service during the transformative period of the South African citrus industry

by Wandile Sihlobo | Jan 8, 2025 | General Comments

When one examines South Africa’s agriculture production and export data today, citrus typically ranks first. The country’s production of oranges, grapefruit, mandarins, and lemons has increased significantly over time.

But it was not always the case. About three decades ago, the industries at the top of the list were mainly maize, poultry, dairy, deciduous fruit, and other livestock production. In export data, maize, wool, wine, and various fruits were primarily on the top, and citrus didn’t feature prominently.

However, the citrus industry has seen tremendous growth in recent years. This growth is due to robust global demand (roughly half of total citrus production is exported), which led to an increase in investment and the expansion of the area planted. This process created more jobs on the farms and value chain and boosted the economies of small towns. The industry accounts for over 100,000 jobs in rural South Africa.

Many people were part of this progress and transformative period in the South African citrus industry. However, few have served for as long and with as much dedication as Mr Justin Chadwick, the outgoing CEO of the Citrus Growers of Southern Africa (CGA).

Justin will retire in 2025 after a quarter of a century of service building the robust citrus industry that South Africans pride themselves on today. The credit also goes to the CGA staff and growers, who continue to support Justin in leading the organization.

Justin also values regional agricultural cooperation. This is evident through the expansion of the South African Citrus industry, which includes many countries in the region and forms a well-organized industry across Southern Africa. For example, in recent years, we have seen CGA expand its reach to include growers from Zimbabwe and others in neighbouring countries in South Africa. The skills and technology that South African growers perfected were shared with growers in the region to build

Justin continues to nurture young talent, and CGA ensures that young people are well-equipped to serve growers and build a robust citrus industry. He also supports transformation and inclusiveness, exemplified through various initiatives at CGA and its development arm. For example, the CGA has a Vision 260 initiative, which aims to increase the volumes of citrus exported by South Africa and ensure that black farmers have a notable share of the exports.

When we experience challenges in various export markets, Justin rigorously works collaboratively with the government and organized agriculture to ensure South Africa has access to multiple aspects of markets. A recent example is South Africa’s citrus export challenges in the EU. The EU used non-tariff barriers by alleging a “False codling moth“, a citrus pest, in South Africa and requiring citrus products to be kept at certain temperatures before accessing the EU market.

This happens while South Africa has already treated the products to eliminate the chances of such pest occurrence. This was a subtle form of protecting Spanish farmers, who are also major citrus producers within the EU market. The CGA and South African government continue to work to ensure South Africa has fair trade with the EU in citrus. They also inform the EU officials of how much South Africa values its relationship with the region.

As Justin retries this year, I am looking at the recent South African agricultural exports data for the first three quarters of the 2024 calendar year. The cumulative export value for the first three quarters of 2024 is up 4% from the same period in 2023, at US$10,55 billion. And you guessed it right, the top exported products by value include CITRUS (the top product), then nuts, maize, apples and pears, wine, fruit juices, sugar, dates, figs, avocados and mangos, berries, and grapes, amongst other products.

Ultimately, one can conclude that Justin is passionate about the citrus industry and agriculture, driven by a big vision for its growth, and over the years, he has pushed everyone hard to show results — traits some could easily misread as brashness. He has had tough conversations with government officials when necessary. Still, no one could doubt that he is a patriot committed to the growth and transformation of the industry.

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