Diesel (0.05% Wholesale Inland) and petrol (95 ULP Inland) prices could increase by 21 cents per litre (c/l) and 1 (c/l) respectively, on 01 November 2017. This increase could lift the wholesale diesel price to R12.33 per litre from R12.12 per litre in October 2017. At the same time, the retail price of petrol could increase to R14.02 per litre from the current level of R14.01 per litre.

This expected fuel price increase is largely driven by relatively higher Brent crude oil prices, which averaged US$56.83 a barrel this month, up by 3% from September 2017. The ZAR/USD exchange also played a major role, after weakening by 3% from the previous month, averaging R13.55 at the time of writing.

Overall, the expected uptick in diesel prices will increase farmers’ and agribusinesses’ input costs, particularly in summer crop growing areas which have recently started planting the 2017/18 production season’s crops.  As we set out in our previous fuel note, the agribusinesses that operate in the transport industry will also feel the pressure on input costs due to their exposure on road transport. An example of this is maize which has more than 80% stock that is transported by road.

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FUEL UPDATE: 2% increase in diesel price on the cards in November 2017

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Unlike the past three years when the third quarter figures presented an uptick in agricultural employment, the sector continued to experience job losses this year due to reduced activity in field crops and horticultural sector. This placed South Africa’s agricultural labour force at 810 000 jobs (see Chart 1). The most affected province of all is the Western Cape, although it remains the largest agricultural employer, with a share of 20%.

The Eastern Cape, Free State, Kwa Zulu Natal, North West and Limpopo provinces saw a notable reduction in employment of 5% quarter-on-quarter (q/q), 6% q/q and 2% q/q, 8% q/q and 4% q/q, respectively. Meanwhile, the Northern Cape, Gauteng and Mpumalanga provinces saw job gains of 7% q/q, 29% q/q and 5% q/q, respectively (see Chart 2).

In terms of sub-sector performance – The reduction in employment were in field crops and horticulture, livestock, mixed farming, and production of organic fertilizer. Meanwhile, the other sub-sectors, such as the game farming, forestry, as well as aquaculture showed job gains (see Chart 3). Above all, the South African agriculture’s share of total employment is 5%, down by 0.2 percentage points from the second quarter of the year.  This is still above sectors such as the mining, and slightly below the transport industry.

Looking ahead – The persistent drought in the Western Cape province remains a key risk that could potentially undermine the performance of agricultural labour market. Although the summer crop-producing provinces could experience an increase in activity in the fourth quarter of this year, there’s limited chance of notable improvement in employment. Most summer crops are not labour intensive, particularly grains and oilseeds.

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25 000 job cuts recorded in SA agriculture in Q3, 2017

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The planting activity for the 2017/18 production season is underway in the summer rainfall areas of the country. South African farmers intend to increase the total area plantings by 1% from the 2016/17 production season to 4.03 million hectares. The optimal planting window for maize in the eastern parts of the country closes in mid-November. The western areas only begin planting maize in mid-November, with the optimal planting window closing at the end of December. For oilseeds, the optimal planting window closes in early January.

As we set out in our previous reports, there is optimism regarding the 2017/18 production season. The South African Weather Service suggests that the summer crop growing areas of the country could receive above normal rainfall between November 2017 and February 2018, which will benefit the crops.

The combine harvester sales were up five folds from the previous month and 11% y/y, with 20 units sold in October 2017 (Chart 1). This is in line with an increase in activity in winter crop growing areas as harvest process commences, particularly wheat growing areas of the Western Cape province.

Looking ahead – We expect the tractor sales to soften in the near term as summer grain and oilseed planting process approaches the completion stages. The combine harvesters’ sales could remain solid over the near term as winter crop harvest process continues. An important factor to monitor in the long term is the cost of servicing the farm debt as that would have direct implications on the agricultural machinery sales.

Note: In 2016, South Africa’s total farm debt was at R144.9 billion, which is a record level in a database starting from 1980.

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UPDATE SA tractor sales at a highest level in 20 months

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4 December 2017

 All stakeholders in the agricultural sector must work together to combat the unacceptable level of crime farm communities are facing, especially during the festive season. On November 2, a group of concerned stakeholders came together in Pretoria to share ideas on how to tackle rural safety. During this meeting, the Agri Sector Unity Forum (Asuf) was tasked with forming an inclusive subcommittee to facilitate coordinated efforts between farming communities, service providers and other stakeholders to combat crime. Asuf is an inclusive, representative body comprising of Agri SA, the African Farmers’ Union (Afasa), the National African Farmers’ Union (Nafu) and the TAU SA.

 Accordingly, Asuf recently held a meeting in Centurion to discuss the safety of all farmers, farm workers and rural communities.  Japie Grobler, chairperson of Asuf, called on all farmers and farm workers to work closely with the police and their neighbours to bring an end to crime and to ensure a safe environment for everyone. Grobler also called on the public to financially support the Agri Securitas Trust Fund in their efforts to secure farming communities.

 Farmer unions need cameras, drones, two-way radios and other technologies to help them to advance the safety of farming communities. Over the years, Agri Securitas has played a huge role in delivering a range of practical interventions to advance the safety of farmers and farm workers.

 “Criminals pose a huge threat to food security and ultimately socio-economic stability,” says Grobler. “Extra precaution, high levels of vigilance and the establishment of collaborative networks at grass roots level between farmers and the police and amongst farmers are therefore of critical importance – especially during the festive period.”

 Grobler commends the establishment of rural safety partnerships between various organised agricultural organisations in certain provinces and their efforts to stop crime and apprehend criminals. He welcomes the efforts by a wide array of stakeholders to bring about a safe rural environment within the ambit of the law.

 Regardless of their farm output, ethnicity or gender, farmers and farm workers are continuously targeted by unscrupulous criminals. Criminals have no regard for the human and constitutional rights of farmers and their workers, their contribution to food security, job creation and the economic advancement of local communities.

 The levels of crime on farms in South Africa are above international averages. The direct and indirect costs of crime to individuals, families, neighbourhoods, business, government and the economy pose a serious threat to food security and socio-economic stability. It causes a great financial loss, breakdown of trust relationships between local communities and instigates fear. Victims of crime also live with untold trauma and lasting physical and psychological scars.

 The situation has become untenable. Criminals become more brazen by the day. Not only do they target and raid livestock, farm produce and infrastructure of commercial, emerging and subsistence farmers, but they are also brutalising and killing farmers, their family members and farm workers. In some instances, livestock is brutalised and maimed while still alive.

Asuf plans on arranging meetings with the Minister of Police and Cabinet in due course and will keep the public informed about the outcomes of these meetings and the actions that will follow.

Issued by Agri SA, Directorate:  Corporate Liaison on behalf of Asuf

Enquiries

Mr Japie Grobler, Chairperson, Asuf, 0828258018

Christo van der Rheede, Secretariat Asuf, 012-643 3400 of 083 380 3492

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Maize:

The maize crop conditions across South Africa paint a mixed picture. The eastern regions which predominately produce yellow maize, are in fairly good shape, although currently experiencing heat stress due to the heatwave. This area mainly covers Mpumalanga, Kwa-Zulu Natal, northern parts of the Eastern Cape, as well as the eastern Free State province. In Limpopo province, farmers managed to plant the intended area and the crop also appears to be in good condition.

Meanwhile, the western regions which largely produce white maize, are in bad shape. In fact, farmers have not managed to plant all intended hectares in the North West, as well as the western parts of the Free State province.

The most recent survey from Grain SA suggests that farmers in the North West province have only planted 70% of the intended area. The crop that has been planted also appears to be in poor condition due to persistent dryness and heatwave. In the central and north-western parts of the Free State province, the crop conditions are the same as the North West province, but the area planted is at 75% of the intentions.

As indicated in our note yesterday, the South African farmers planned to plant 2.47 million hectares of maize this season, which is 6% lower than the 2016/17 production season. About 56% of the area is set to be for white maize, with 44% for yellow maize. However, this might change due to the aforementioned delays in planting in the western regions of the country. An update will be released on 30 January 2018.

In the near term, the weather forecasts promise improvements, with chances of showers of between 16 and 60 millimetres across the South African maize belt within the next eight days. If this materialises, crop conditions could improve, but there is a limited chance for additional plantings as the ‘optimal window’ has already passed.

Wheat:

It is an off-season period in the South African wheat growing areas, therefore the current dry weather conditions are not much of an issue. However, they have already negatively affected the 2017 harvest, which is estimated at 1.48 million tonnes, down by 23% from the previous season. An update of this estimate will also be released on 30 January 2018.

While imports are set to increase significantly this season in order to fulfil domestic needs, the market is well supplied for now. South Africa’s wheat stocks were at 1.05 million tonnes in November 2017, double the previous month’s volume due to large deliveries on the back of the harvest activity. However, this is 30% lower than the corresponding period in 2016.

Soybean:

South Africa’s soybean crop looks promising in Mpumalanga and Kwa-Zulu Natal provinces. With that said, some areas experienced hail damage in the past few weeks, but the extent of it is still yet clear. There are rising concerns that the current heatwave could negatively affect the crop. Fortunately, the weather forecasts for the next two weeks shows a possibility of rainfall which should ease concerns and improves crop conditions.

As indicated in yesterday’s note, the South African farmers intended to plant an area of 720 000 hectares in the 2017/18 production season. Most provinces managed to achieve the targeted area with the exception of provinces such as North West – a relatively small soybean producer – which planted roughly 85% of the intended area thus far, and it is negatively affected by dryness.

Sunflower seed:

The key sunflower seed growing areas of the country, particularly North West and north-western parts of the Free State province last received good rainfall in the second week of December 2017. As a result, the planting process has been delayed due to lower soil moisture.

A recent survey by Grain SA shows that farmers have planted roughly 40% of intended sunflower seed area in the North West province. In the north-western parts of the Free State province, the progress is much slower, with only 20% of the intended area planted thus far.

More concerning is that crops in areas that managed to plant have been negatively affected by the current heatwave. For areas that have not yet planted, the optimal planting window has narrowed. To be precise, the optimal planting window for sunflower seed closes next week in the north-western parts of the Free State and North West provinces.

Planting outside the ‘optimal planting window’ implies that crops could be negatively affected by frost later in the season, which will, in turn, lower the yields.

Overall, the weather forecasts currently paint a constructive picture of rainfall of between 16 and 60 millimetres across the sunflower seed growing areas within the next two weeks. While this will not be sufficient to replenish soil moisture, it is a welcome development following weeks of dryness.

As indicated in yesterday’s note, the South African farmers planned to plant 665 500 hectares of sunflower seed in the 2017/18 production season, up by 5% from the previous season. At the moment, there is still uncertainty as to whether this will be achieved or farmers will actually plant more. The weather developments this week will be a key deciding factor. In the end, the National Crop Estimate Committee will release the preliminary area planted estimates on 30 January 2018

RSA Potatoes:

The South African potatoes market started the week on a negative footing with the price down by 0.28% from the previous day, closing at R42.53 per pocket (10kg). These losses were on the back of large stocks of 824 387 pockets (10kg bag) at the beginning of the trading session.

However, during the day the market saw strong commercial buying interest, coupled with relatively lower deliveries on the back of slow harvest activity over the weekend. This subsequently led to a 30% decline in daily stocks to 577 342 pockets (10kg bag).

RSA fruit:

The market was again mixed in yesterday’s trade session. The prices of apples and bananas declined by 9% and 3% from the previous day, closing at R7.92 per kilogram and R7.42 per kilogram, respectively. This followed a 15% increase in apples daily stocks to 158 000 tonnes and a 3% uptick in bananas stocks to 208 000 tonnes.

Meanwhile, the daily price of oranges marginally increased by 1% to R4.98 per kilogram due to lower stocks of 24 000 tonnes (down by 4% from the previous day).

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Agbiz Morning Market Viewpoint on Agri-Commodities 09 January 2018

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 The National Disaster Management Centre (NDMC) on 13 February 2018 declared the ongoing drought in the Western Cape, Eastern Cape and Northern Cape Provinces a National Disaster.  This means that, in terms of the National Disaster Management Act of 2002 (DMA), the National Executive (i.e. Cabinet) must deal with the national disaster in terms of existing legislation and contingency arrangements. 

The declaration of a National Disaster entails that the Minister of Cooperative Governance and Traditional Affairs, Minister Des van Rooyen may, in consultation with other Cabinet Ministers, make regulations and authorise the issuing of directions concerning, amongst other things:

• The release of any available resources of the national government;
• Steps to alleviate, contain and minimise the effects of the disaster;
• Steps that may be necessary to prevent an escalation of the disaster; and
• The facilitation of response and post-disaster recovery and rehabilitation.

The National Agricultural Marketing Council (NAMC), which advises the Ministry of Agriculture, Forestry and Fisheries, has undertaken to bring together a group of stakeholders, including Agri SA, to deal with the devastating effects which the drought has had on the agricultural sector and to come up with a smart drought disaster management plan. Agri SA, which has been calling for a national disaster declaration since 2016, presented its Smart Disaster Aid Plan at its National Congress held in October 2017. It is hoped that the recommendations contained therein and the wealth of experience within the organisation will be called upon to assist the NDMC in dealing with the current National Disaster.

President of Agri SA, Dan Kriek, reiterated the organisation’s offer of the full support to the National Government, in particular the incumbent President of South Africa, Mr Cyril Ramaphosa, during the current drought, particularly in the midst of the present turbulent political times.   

Issued by Agri SA, Directorate:  Corporate Liaison

Enquiries

Mr Janse Rabie, Head of Natural Resources, Agri SA, 076 451 9601

Dr Requier Wait, Head of Economics and Trade, Agri SA, 073 304 0932

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Game Of Stars Project

On Tuesday 13 February 2018 a ground breaking venture between Limpopo farmers and the Mark Fish Foundation (MFF) was launched by Mark Fish in Polokwane. At a Agritable event of Agri Limpopo at Bolivia Lodge, attended by banks, insurance companies, agriculture input providers, agri businesses, SAPS, the CCMA, DAFF, farmers’ organizations, Womens Agricultural Union, farmers and friends of Limpopo agriculture, Fish announced the project that “will use the game of soccer to build relationships on farms, give hope to workers and youth, develop life skills and scout for soccer talent on farms and in rural areas in general”. 

The Project will be known as the Game of Stars Project. The initial survey amongst farmers in Limpopo drawn interest from no less than 80 existing farm soccer teams. After the announcement indications are that this number may well double prior to the first finals to be played in August 2018.

According to Mark Fish, the shortened version of soccer, the project will be based upon, called “Fast Footie”, will grow spectator numbers. This version of soccer makes for a faster, more entertaining game. In this tournament players will play 20 minutes a side with a power play of 5 minutes called by the respective captains of the teams. During power play 3 players of the opposing team will be asked to leave the veld. Goals further out as the 18 meter circle will count for 2 goals. Penalties will be scored by hitting the cross bar of the goal post of an undefended goal box!

“We are committed to develop and train team coaches, game officials, team managers and players alike” Fish indicated. “Although we are going to play soccer, we are focusing on the people and families involved with the game. Every individual deserves the chance to become the best person possible. This  is our aim” he added.

Enquiries:

Willem van Jaarsveld: CEO Agri Limpopo 082 451 7913

Lourika Vlietstra: MFF Coordinator 083 632 7223                                

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The season is just kicking off in the warmer areas of Limpopo Province like Mooketsi and Levubu with Fuerte and Maluma, and the very first export consignments have left to reach the market in week 12. Early South African exports are primarily Fuerte. The South African harvest will get underway in all earnest by the beginning of March.

Source: Fresh Plaza

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From summer crops perspective, the 2017/18 production is set to decline by 25% y/y to 14.6 million tonnes. White maize and sunflower seed production are the key reason for this overall downswing. Meanwhile, winter wheat production estimate was revised up by 3% from the previous month to 1.5 million tonnes, which is however 21% lower than the 2016 harvest.

Overall, this data was slightly better than market expectations but had limited impact on this week’s prices. The grain and oilseed market ended the week on a positive footing, with commercial buying interest, slightly weaker domestic currency and higher international prices providing support

Apart from grains and oilseeds, the fruit and vegetable prices were volatile this week with large daily stock levels underpinning the market. The SAFEX beef carcass market recorded marginal gains from levels seen last week.

Click below for the full report by Wandile Sohlobo

South African Agricultural Commodities Weekly Wrap 02 March 2018

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A well-known farmer, benefactor and community leader, Dirk Steenkamp, was murdered early Sunday morning on his farm in the Vredefort district. “Murders and other violent crime afflicting the farming community bear testimony to the serious shortcomings in people’s values and lack of respect for life,” said Agri SA president Dan Kriek.

Steenkamp was known in the community as a benefactor who never hesitated to help people in need. The murder once again highlighted the senselessness and cowardliness of such deeds, as well as the vulnerability of farmers and farm workers who perform their work outdoors in the interest of the country. The murder has enraged and caused immeasurable heartache to his family, farm workers and the community. Kriek, on behalf of Agri SA, expressed his condolences to the Steenkamp family and called on the police to arrest the attackers as soon as possible.

“The irresponsible and reckless utterances around the land issue that are regularly reported in the media lead to the polarisation of people and communities, and incite violence aimed at a certain group of society. These types of statements do not belong in a society where mutual respect and tolerance are essential for nation-building and stability,” said Kriek.

Kriek added that “unqualified statements on land are catastrophic for agricultural development and further investment in agriculture, especially since they are based on unfounded and incorrect assumptions. Such utterances could be interpreted by certain individuals as justification for attacking and murdering members of the farming community.”

“We believe there is still sufficient commitment within government to the principles of the Constitution to make sure that agriculture maintains its rightful place in the economy, to create jobs and to ensure that the sector can adhere to the principle of food security,” said Kriek.

Kriek called on agricultural communities to support their local security structures and to work with the police within community context to improve their own safety. However, no protection measure serves as a guarantee that a farm attack will not take place, but it could delay an attack and give residents a chance to take emergency measures.

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