The positive effect of solid institutions and good stakeholder engagements in South African agriculture should not be underestimated

At the start of last week, the release of the Agbiz/IDC Agribusiness Confidence Index for quarter 2 of 2022 showed a slight decrease in index value, although still above the 50-point mark, which signals positive sentiment. The decrease in confidence highlights that some issues are starting to weigh on the outlook for the industry. These include surging input costs and local and global logistical pressures. In this regard, the Bloomberg Green Markets Fertilizer Index suggests that global fertiliser prices are around 30% higher compared to the corresponding time last year, while average global logistical costs, according to the Freightos Container Index, are on average 10% higher than in June 2021, with some global shipping routes still very expensive, battling with issues such as port congestion and container availability. Closer to home, recent bouts of load shedding and the disruption of the N3 last week have yet again highlighted the vulnerability related to local roads and ports, added on top of ongoing inefficiency.

On 23 and 24 June, key decision-makers from across the agricultural and agro-processing sector will convene at Sun City for the Agbiz Annual Congress, where speakers will present on some of the important issues facing the industry, mentioned above. The congress theme is “Building resilient and sustainable agri-food ecosystems”. Agbiz, which is short for the Agricultural Business Chamber, plays a pivotal role in bringing various stakeholders in the agricultural industry together, working strategically and tactically towards fruitful solutions. Following the postponement of the Agbiz Congress in 2020 due to the pandemic, this gathering is bound to provide a productive platform where stakeholders can engage on important issues. With agriculture being a shining star of the economy over the past two years, rising pressures should not take away from the positives in this sector. These include the current favourable prices for grains and oilseeds, another quarter where agricultural GDP grew 3.6% year on year (Q1 2022) and events and institutions such as Agbiz and its congress, which create room for further positive momentum to build.

Written by: Marlene Louw - Agricultural Economist ? Absa AgriBusiness