Saturday

July 13, 2024

Agribusiness Biweekly Insights Report – Standard Bank

Field Crops

The International Research Institute for Climate and Society (IRICS) and the Australian Bureau of Meteorology (ABM) confirmed the end of the El Niño cycle, which caused a scorching summer season and significant regional crop failure in its wake. Following this challenging summer production season, South African farmers remain on high alert as they now carry out their operations for the 2024 winter cropping season. Data released by the Crop Estimates Committee (CEC) on 25 April 2024 shows that farmer intentions to plant winter crops could dip by 2.6% year-on-year (y/y) to 798 800 hectares on aggregate. The intentions to plant wheat, barley, oats, and sweet lupines are all expected to contract slightly on an annual basis. The only winter crop anticipated to buck the trend is canola, with a planted area projected to increase by 7.5% y/y to 141 100 hectares. In a glimmer of positive news, the total production of summer crops for the just-commenced 2024/25 marketing year (MY) was revised slightly upwards by 1% to 16.024 million tons on aggregate from the previous month’s estimate. Gains recorded in maize, sunflower seed, and sorghum managed to more than offset a downward revision in groundnuts. Soya beans and dry beans remained unchanged on a monthly basis. Total maize production is now forecast at 13.392 million tons, up by 1% for the previous month’s estimate (13.256 million tons).

Click here for the report: Field_Crops_Biweekly_Insights-Report.pdf (standardbank.co.za)

Livestock

South Africa has renewed anti-dumping duties on chicken imported from the United States (US), following an investigation by the International Trade Administration Commission of South Africa (ITAC). From its investigation, ITAC concluded that the expiry of duties on some chicken portion imports from the US would likely lead to the recurrence of dumping or material injury to the local chicken industry. In April 2024, the Minister of Trade Industry and Competition approved a recommendation to maintain anti-dumping duties on frozen bone-in chicken portions originating in or imported from the US. However, the African Growth Opportunity Act (AGOA) trade deal allows the US to export 71 963 tons of chicken per year to South Africa duty free. The excess will then be subject to the R9.40/kg anti-dumping duty which has been in operation since the year 2000. Over the past several years, imports of US chicken have been below the annual quota due to the incidence of bird flu that spread throughout the US and limited chicken production capacity.

Click here for the report: Livestock_Biweekly_Insights-Report.pdf (standardbank.co.za)

Horticulture

A recent report by the Bureau for Food and Agricultural Policy (BFAP), analyzed the trade performance of the domestic agricultural sector in the fourth quarter of 2023 (Q4-2023). Agricultural exports declined in Q4-2023 to R59 billion from R75 billion when compared with Q3-2023, while imports remained stable over the same period. Despite the overall decrease in net trade, agriculture still maintained a trade surplus in Q4-2023. The decline in exports was primarily due to the seasonal slowdown in economic activity in the off-season of the horticultural subsector, particularly in the citrus industry. Citrus exports accounted for approximately one third of the value of agricultural exports in Q3-2023, but this declined by ten-fold to 3% in Q4-2023. Overall, agricultural exports declined by 21% quarter-on-quarter (q/q), while cereal exports decreased by 24% q/q. The largest sub sectoral decreased was in horticulture, by 58% q/q, which was largely driven by citrus exports that declined by more than 90% q/q (almost R22 billion in Q3-2023 to less than R2 billion). It should be highlighted that seasonality played a huge role in this performance as economic activity tends to decline in the post-harvest period. With the 2024 citrus export season now underway, concerns about possible logistics constraints have been raised. It is forecast that between weeks 26-35 of 2024, heavy production from the Northern producing regions may result in limited cold storage capacity, trucks, and port plug points. The Citrus Growers Association of South Africa (CGA) has urged growers and exporters to plan ahead accordingly.

Click here for the report: Horticulture_Biweekly_Insights-Report.pdf (standardbank.co.za)