• President Cyril Ramaphosa acknowledged that South Africa will not be able to reach the goal of reducing the unemployment rate to 6% by 2030 as outlined in the National Development Plan unless the country did something “extraordinary”.

  • South Africa is about 8,500 miles from Michigan.

    But it’s home for about 50 agricultural workers in Michiana this summer and some carnival employees at the St. Joseph County Grange Fair last month. 

  • Humans love honey. We spread it on things. We put it in our tea. The craftiest of us use it to make mead. Human love for honey goes way back – all the way to the ancient Egyptians, Greeks, Babylonians, Assyrians, and so on. One of the earliest names for Pharaohs was “Bee King”. Beekeepers have been moving hives from field to field for pollination for over 5,000 years, but bee culture has been a thing since 4500BC.

    That’s true in South Africa too: research has pointed to Khoisan honey consumption dating back almost 40,000 years, and several early Khoisan cave paintings depict bees and honey harvesting. The San living close to Oudtshoorn are thought to have travelled hundreds of kilometres with honey stored in sacks of springbok skin to trade honey with the Xhosa people. During the course of that trek, the sugar in the honey would ferment and create iQhilika, or the popular Eastern Cape honey brew. Outeniqua, in English, directly translates to “they who bear honey”.

    When 15 years ago bees started disappearing by the millions, conservationists worldwide began a crusade to save the honeybee.

    In the winter of 2006, beekeepers in America started reporting massive hive losses. Their colonies were dying, but there was something remarkably different to normal pesticide poisoning or disease: no dead bee bodies. The worker bees were just up and leaving, abandoning the queen and bee babies to fend for themselves, causing the hive to quickly die off. Colony Collapse Disorder was born, and soon beekeepers around the world were signalling red alert.

    News of the crisis swarmed mainstream media. Beekeepers and animal rights advocates blamed farming pesticides like neonicotinoids, a nicotine-based insecticide that interferes with a honeybee’s navigation so that it can’t find its way home to the hive. Farmers and the chemical pesticide lobby blamed parasites like the Varroa destructor, a honeybee parasite that spread globally in the late 20th century. Climate change crusaders blamed increasingly volatile weather. But experts like bee researcher Mike Allsop argue that the real problem is the beekeepers themselves.

    If pesticides and parasites are responsible, says Allsop, “why is it that Europe has banned pesticides and bee losses have continued? Why are parasites such a major issue there and not elsewhere? Because of the practices of the beekeepers themselves.”

    Overworked bees

    To understand this, we need to know a bit about bee history. In ancient times, there were only two types of honeybees: the European honeybee and the African honeybee. The Sahara Desert was – and for the most part, remains – a natural barrier between the two. Because of their calm temperament and easy maintenance (according to one local beekeeper, the European bee is a “2” on a scale of 1 to 10 for aggression while the African bee is a “9”), European honeybees became the primary honeybee for beekeeping worldwide. But breeding practices and mismanagement have made these bees very susceptible to disease.

    European breeders “have turned their bees into little poodles,” Allsop says. “Bees are being bred for passiveness and against defensive behaviour, stinging, and swarming. They can’t look after themselves.”

    When diseases or parasites hit, best practice is that the infected hive should be quarantined or destroyed. But beekeepers in America and Europe, in an attempt to save a buck, are keeping their hives alive rather than burning or destroying them. Keeping these colonies active means the bees aren’t developing a tolerance to pesticides and parasites over time. Allsop says this is like purebred dog breeds versus “street” dogs, who tend to be much hardier.

    Disease is still an issue with descendants of the African bee. Outbreaks of honeybee diseases aren’t uncommon, and the Varroa destructor pest has been a consistent problem since entering the Western Cape in the 1990s.

    But the reason that death rates are higher elsewhere is the practice of overworking the bees for commercial pollination and honey production.

    Many American beekeepers make top dollar sending their hives around the country to pollinate during various growing seasons, so some hives spend their whole lives on truck beds, being hauled thousands of miles. Without time to recuperate, the honeybees are sometimes too weak to pollinate, so the farmers give them sugar water to keep them buzzing about. 

    Overworked, stressed out, and with poor nutrition from sugar water and less diverse food sources due to monoculture farming, the bees are more susceptible to diseases, parasites, and the like.

    Thankfully, says Allsop, in South Africa beekeepers don’t typically push their bees to the limit. But the local bee industry is still at risk, though for a different reason: forage.

    Paul van Rensburg is a beekeeper in Somerset West with 60 hives. He explains, “Because the fynbos flowering season is so restricted, there are no indigenous flowers after November. So we rely a lot on eucalyptus trees and other non-native species.” But, unfortunately for our bees, the government’s Working for Water initiative is actively removing alien foliage countrywide. That includes the eucalyptus, which bees feed on to produce almost 70% of South Africa’s honey.

    This is particularly a problem for the country’s many wild bee species. Honeybees are only one in a thousand species of bees we have here. Because honeybees are domesticated and protected by beekeepers, experts like Allsop stress that they’re not at risk. Wild bees, on the other hand, are at risk, as they are being forced to compete with the protected honeybees for forage, which is becoming even more scarce as a result of urbanisation and habitat loss. And with eucalyptus rapidly disappearing, that competition is becoming fierce.

    An ageing industry

    All around the world, bee culture has taken flight. There are honey festivals, wildly popular Facebook groups, beekeeping classes at many major universities, and even a World Bee Day, 20 May, to celebrate the birthday of Anton Janša, one of the first modern teachers of apiculture. In “apitourism” hotspots like Slovenia, you can get honey massages or visit apitherapy chambers, where you can breathe beehive aromas said to help with asthma and respiratory problems (although there’s no evidence that these treatments work).

    Technology is keeping up. Enthusiasts can submit their bee sightings to bee research on an app called Bumble Bee Watch. The Flow Hive, a “honey on tap” beehive system invented by a father-son pair in Australia, broke a record on crowdfunding site Indiegogo for the highest-earning campaign in the site’s history, with over US$10-million raised.

    But in South Africa, our beekeeping numbers are on a steady decline. The industry is ageing, and few young commercial beekeepers are entering. Training infrastructure in South Africa is minimal.

    Alesha Otto is a graphic designer from Cape Town who started a bee sanctuary on her farm called Bijenbos Bee Sanctuary. Trained by a beekeeper in Malmesbury, Alesha says she has been shocked by the lack of beekeeping resources available from the government. Unlike Ethiopia, Tanzania, and Kenya, all of which are major honey exporters and have extensive government resources for the honeybee industry, resources for people starting out in South Africa are scarce.

    “There’s so much to learn and such little resources here,” Otto said. “There’s no formal, standardised education.”

    The training that does exist is expensive. Hobbyist Joshua Nel, who has 15 hives on his family’s smallholding in St. Lowry’s Pass, used YouTube. “I’m not going to pay R2,000 for something I can find on YouTube for free,” he said. He even imported his beekeeping suit from China, because the local options were more expensive and harder to come by.

    Chris Oosthuizen became interested in the honeybee industry last February and spent over 400 hours on YouTube during the Covid-19 shutdown training himself in beekeeping. He is completely self-taught from YouTube videos and from Beekeeping in South Africa by M. J. Johannesmeier. He has bought more than 450 empty hives and begun using a combination of lemongrass essential oil, beeswax, propolis, and olive oil to attract swarms. He caught his first one in just four days.

    Oosthuizen recently started Honey Bee Heroes, an adopt-a-hive programme where patrons can pay R1,500 and have a new hive dedicated to them. Patrons get twelve bottles of pure fynbos honey, cost-price honey when their hive starts producing, and a free beekeeping experience where they can suit up with Oosthuizen on the farm.

    For many hobbyists like Oosthuizen, it’s all about conservation, not profit. He has no plans to move his bees for pollination or put any undue stress on them. He will extract honey, but only from strong hives at appropriate times, when it won’t be of detriment to the bees.

    “It’s fundamentally financially flawed, but that’s conservation for you,” he says.

    Chinese imports

    South Africa used to produce enough honey to meet local demand, but as supply fell and demand skyrocketed, cheap imports have filled the gap.

    China has been flooding markets worldwide with “natural” honey imports. The problem is that most of the honey coming out of China is filtered, heated, and with many additives – and sometimes, it isn’t even honey at all, but a mix of corn and rice sweeteners. Countries like the United States have put massive tariffs on Chinese honey imports, but Chinese suppliers have found a way to get around this: by shipping through other countries and slapping on a new label with that country’s name on it, in a scheme colloquially called “honey laundering,” or transhipment.

    Chinese honey dumping is happening here, too. Some brands will even promote themselves as “a product of South Africa” but, if you read the fine print, the honey actually comes from China. It’s just bottled here. With Chinese honey prices so low, South African farmers can’t compete and many local beekeepers are getting out of the business.

    “We’re not protecting our own,” Oosthuizen says.

    He says consumers need to be educated about the products they’re buying. Consumers want to pay R55 per bottle, but R200 should still be considered cheap for quality local honey. “Our honey is way undervalued. It’s like bread. You’re paying threefold for artisan bread because it’s better for you and it’s less refined. The same goes for honey.”

    READ MORE -  The untapped potential of Africa’s honey bees

    Will it all bee all right?

    Beekeeping in South Africa is a predominately old, white, and Afrikaner gig. The government has made attempts to capitalise on beekeeping’s potential for income generation in impoverished communities with programmes like its Beekeeping for Poverty Relief Programme. But so far, those attempts have overwhelmingly failed.

    Why’s that? Partly, it’s a problem of land, Oosthuizen says. For urban or township populations, you need sites for hives: enough land, and enough greenery on it for the bees to eat. In rural communities, there is the space, but the problem is getting that honey to market. Those are major hurdles, and that’s not taking into account startup costs. It’s relatively cost-effective to start beekeeping, but the challenge is scale. “To generate a decent income, you need ten hives,” says Oosthuizen. “With that, you can make R20,000 a year, but that probably takes about R15,000 to start up including hives and equipment.” He says the owner of 20 hives can earn wages similar to a domestic worker for a full year.

    He hopes to solve some of these problems with Honey Bee Heroes, including a sponsorship programme where patrons can front the costs of setting up ten hives for a low-income South African, hosted on long-term sites he’s secured from local farmers. And what do the farmers get in return? Delicious honey and discounted brandy at the pub on Oosthuizen’s farm.

    But if Allsop had his way, no more South Africans would become beekeepers. He says there’s no more space for them because forage is disappearing.

    “Right now, every hobbyist beekeeper is putting a strain on the industry. Instead of more beekeepers, we need more trees.”

    Opening a conversation between honeybee experts like Oosthuizen and the Working for Water team may be the first step in making that happen. DM

    SarahBelle Selig is a freelance writer living in Cape Town and a second-year in the Master’s in Creative Writing programme at University of Cape Town. She freelances for Catalyst Press, an independent book publisher in the US, and is the publicity writer for the South African Bone Marrow Registry.

  • For ten years I have been doing ‘state of the nation’ breakfast presentations with Justice Malala in Johannesburg and Cape Town. We do them twice a year in each city.

    I would like to put my latest observations on South Africa’s future, which I shared with audiences last week, in the context of the ‘High Road/Low Road’ chart shown below. It was produced by the Anglo American scenario team in 1986.

    In retrospect, South Africa managed to take the High Road of negotiation in 1990 with the release of Nelson Mandela, and with the subsequent adoption of a new constitution which led to the general election in 1994. In the ensuing years of Nelson Mandela and Thabo Mbeki as leaders of the country, we continued along the same path at the top of the chart with fairly high economic growth rates.

    However, more recently, our economy has not performed for all the reasons we know about. We have followed the dotted line of descent entitled ‘Failure of Growth’ and have moved to the left with deep divisions among competing groups once again dominating our society.

    We are now approaching the very critical crossroads shown in the lower section of the chart. We either get out of trouble with strong leadership bordering on ‘authoritarian’ to revive the economy and promote unity of purpose; or we descend even further into outright conflict and possibly a ‘Waste Land’ devastated by civil war. It is as simple as that.

    Thus, Cyril Ramaphosa’s ascent to the presidency comes at a tipping point in the nation’s destiny. If he shows the positive qualities which I know he has from frequent meetings with him when he was the leader of the NUM, we have a chance of moving back once more to the High Road trajectory. If he is overwhelmed by internal divisions inside his own party, or by outside forces which render him powerless, the Low Road beckons with an extreme ending not to be dismissed.

    There are six flags to watch. The first is around corruption: will past perpetrators be pursued to ensure justice is seen to be done and will it be eliminated in future? Such has been the level of corruption that South Africa is now in danger of running out of money in addition to receiving junk status.

    The second flag is around improving the quality of our education system, health care and general infrastructure. No economy can grow fast without all three. The management of state owned enterprises has to be transformed for the better.

    The third flag is around style of leadership because winning nations are like winning soccer teams. People must feel they are on the same side even though they have differences of opinion. Nobody must feel excluded.

    The fourth flag is about pockets of excellence. South Africa has many and we should be replicating them instead of dumbing them down. Like soccer stars are essential to win championships, pockets of excellence ensure that a nation remains in the premier league of the global economy.

    The fifth flag which to me is the most important one of all is whether we open up our economy to achieve genuine economic freedom for all. We need an effective platform for the next generation of young entrepreneurs to launch themselves everywhere in the country. They are the ones who will be providing the millions of jobs required to get our unemployment rate down to single figures.

    The sixth and last flag is the one which in a worst case scenario can ignite a civil war and that is land reform. Reform has to happen but it must happen in a way that encourages enough goodwill on all sides to rule any form of conflict out.

    So what are the probabilities for the different paths represented on the chart? With the possibility of a new dawn arising from the new leadership, a return to the High Road with an economic growth rate of 5% per annum has increased to a 60% probability. The scenario of being stuck on the Low Road, depicted by the circle of economic stagnation in the middle of the chart and representing distribution without growth, is now assigned a 30% probability. That leaves a 10% probability of the wheels coming off altogether as we descend into the chaos of a failed state. Clem Sunter- 

    Watch the flags. They must turn green for a positive outcome. Otherwise prepare for the worst.

  •  The Department of Agriculture, Land Reform and Rural Development (DALRRD), agribusinesses and various social partners have been hard at work for months crafting the Agricultural and Agro-processing Master Plan and separately blended finance instruments. These aim to ignite growth and expansion in South Africa's agricultural sector as part of the government's broader Economic Reconstruction and Recovery Plan. Both these initiatives are set to be launched in the coming months whilst the first phase of the blended finance instrument has already started, as evidenced by the launch of the joint Agri-Industrial Fund of R1 billion by the Industrial Development Corporation (IDC), in partnership with the DALRRD. These are constructive programmes with the potential to ignite growth and transformation in the sector. As such, industry bodies such as Agbiz allocate most of their time and resources to pursue these goals. Sadly, much of this good work takes place behind the scenes whilst other significant policy developments that might deter the progress grabs social partners' attention and the media.

     

     A case in point is the renewed debate about Section 25 of the Constitution and the Expropriation Bill. Last week, the Portfolio Committee on Public Works hosted public hearings on the Expropriation Bill whilst the committee tasked to "make explicit what is implicit" in Section 25 of the Constitution continued with their public hearings. The outcome will have implications on public sentiment. We hope that it will not detract from the two initiatives above to drive growth and expansion in South Africa's agriculture. The success of any of these programmes depends on the private sector and other social partners jointly implementing the government's proposals. As such, policy actions that might be perceived as not aligned with the broader stakeholders' interests present a risk and could lead to a lack of participation and stalling the Master Plan and the blended finance implementation.

     

    Admittedly, the discussion of the potential amendment of Section 25 of the Constitution has gone beyond the realm of agriculture as various stakeholders are engaged with the national debate led by Parliament. Yet, its outcomes will likely have direct implications on the success of the DALRRD work programme. Hence, it is prudent that Parliament decides on the Section 25 matter, mindful of the broader impact on the agricultural sector and other sectors of the economy when South Africa is at an economic reconstruction phase.

     

    We have long argued at Agbiz that land reform is an important policy imperative, and we are in full support of it. Yet, we do not believe that an amendment of the Constitution will lead to the country's desired outcome of prosperity. Likewise, Parliament must finalize the Expropriation Bill. It provides the procedural guarantees required to bring the government and an expropriated owner or bondholder onto an equal footing if expropriation occurs. Unlike the Section 25 amendment, Agbiz is broadly supportive of the need for legislation to regulate expropriation but opposes the provisions relating to 'nil' compensation. Expropriation should always be used as a last resort and cannot substitute for well-formulated and well-implemented programmes to effect transformation in the sector. There are various private-public partnerships (p-p-p) for land reform, some of which were highlighted in the Presidential Advisory Panel on Land Reform and Agriculture and also chapter six of the National Development Plan, which the government could utilize to accelerate land reform. Importantly, there is also an ample land supply that the government has not efficiently distributed or transferred to potential beneficiaries, with estimates placing such land at over 2 million hectares.

     

     We are also bombarded daily with news headlines of corruption and inefficiencies at local government levels, some of which threaten the same black farmers government intends to support. Hence, the p-p-p approaches have been the desired approach to us for land reform. The ongoing Master Plan is designed in the spirit of the joint-venture or p-p-p. A continuation of this approach to policy implementation would potentially yield positive results for expansion in agricultural production and, after that, job creation in the sector.

     

     In sum, there is some level of unity in agriculture and agribusiness at the moment, and all stakeholders are working towards ensuring the success of the Master Plan implementation, anchored by blended finance and various regulatory support that DALRRD and multiple departments such as Water Affairs, DTIC, etc. would provide. However, the approach that will be taken in Parliament in as far as the discussions of Section 25 of the Constitution can sway the stakeholder's minds off these necessary economic reconstruction plans.

    Weekly highlights

    SA's 2020/21 summer grain and oilseeds harvest lifted from February estimates

     Last week, the South African Crop Estimates Committee (CEC) mildly lifted its forecast for 2020/21 summer grain and oilseeds production from the previous month by 1% to 18,7 million tonnes (this compared with 17,6 million tonnes in 2019/20 production season). The upward adjustments were on maize, soybeans and sorghum, whereas sunflower seed, dry bean and groundnut production estimates were revised. If we zoom into significant crops, the 2020/21 maize, soybean and sunflower seed harvests are forecast at 15,9 million tonnes (up 4% y/y, and second-largest harvest on record), 1,9 million tonnes (up 39% y/y, a record harvest), and 712 940 tonnes (down 12% y/y), as illustrated in Exhibit 1 (in the attached file).

     

    The maize production estimate is slightly below our estimated 16,7 million tonnes, and the Bureau for Food and Agricultural Policy's estimated 17,0 million tonnes. Considering the optimistic yield estimates we received from farmers and observations in places we have been in, we are inclined to think that there is still room for the CEC to lift further its maize production estimates in the coming months. Hence, we are not adjusting our view for now from an assessment of 16,7 million tonnes.

     

    The current maize production data essentially mean that South Africa would remain a net exporter in the 2021/22 marketing year, starting in May 2021 (corresponds with the 2020/21 production season). South Africa's annual maize consumption is roughly 11,4 million tonnes, which means there will likely be over 2,0 million tonnes of maize available for export markets, all else being equal.

     

    The expected large harvest could also add downward pressure on maize prices, although marginal as the global maize market remains supportive of prices. This is particularly the case as we forecast an excellent crop in South Africa and across the Southern and East Africa regions, a major importer in the previous year. For example, estimates from the United States Department of Agriculture show that Zambia's maize production could reach 3,4 million tonnes (up 69% y/y). In comparison, Malawi's maize harvest is estimated at 3,8 million tonnes (up 25% y/y), Mozambique's maize crop is estimated at 2,1 million tonnes (up 8% y/y), Kenya's maize is forecast at 4,0 million tonnes (up 5% y/y). There is optimism about the crop in other countries, including Zimbabwe.

    Over the past few months, the weaker domestic currency, growing demand for South Africa's maize in the Southern Africa region and the Far East, coupled with generally higher global grain prices, provided support to the domestic maize prices. But we believe that the domestic crop conditions will matter more for price movements in the future than has been the case over the past few months. On 25 March 2021, South Africa's yellow and white maize spot prices were down 18% y/y and 3% y/y, trading at R3 220 per tonnes and R3 123 per tonne, respectively.

     

     In the soybean case, the price drivers are somewhat similar to maize. Nevertheless, an increase in the soybean harvest will still not change much because South Africa imports around half a million tonnes of soybean meal (although this volume will fall notably this year on the back of the large domestic harvest). The country will most likely continue being dependent on imports, even at these harvest levels, to meet the growing demand for soybean meal by the poultry sector. Hence, global soybean market dynamics will continue to influence local prices. On 25 March 2021, the domestic soybean spot price was up 17% y/y, trading around R7 670 per tonne.

     

    In sum, the broadly large summer grain and oilseeds production estimate this season is on the back of increased area plantings for summer crops and favourable rainfall since the start of the season. We expect the maize production estimate to be adjusted somewhat in the coming month as farmers on the ground continue to express optimism about yield prospects. This will likely add downward pressure on maize prices, which bodes well for South Africa's consumer food price inflation for 2021.

     

                             

    SA consumer food price inflation decelerates further in February 2021

     

     After softening from 6,2% y/y in December 2020 to 5,6 % y/y in January 2021, South Africa's consumer food price inflation decelerated further to 5,4% y/y in February. The primary products underpinning this deceleration in price inflation are meat, fruit, vegetables, and bread and cereals. Importantly, this is in line with the price trends in agricultural commodity prices, which, while still elevated, are at lower levels than the corresponding period in 2020.

     

     From now on, we still expect South Africa's consumer food price inflation to remain at slightly elevated levels in the first quarter of the year, partly, because of generally higher grain and imported vegetable oils and fats prices. But from the second quarter of the year, grain prices could soften further and filter through, with a lag, on the "bread and cereals" products prices. The anticipated decline in prices is on the back of the large forecast harvest of 16,7 million tonnes mentioned in the previous section of this note. This product category also has a higher weighting of 21% in the food basket, and changes in its price inflation will be noticeable. In terms of meat, we expect a sideways price movement for the coming months. The cattle slaughtering could slightly improve in 2021, and the base effects on poultry meat, which increased in 2020 partly as a result of an import tariff hike, could also bode well for food price inflation.

     

    Overall, it is still our view that South Africa's consumer food price inflation could remain relatively higher in the first quarter of 2021, primarily underpinned by bread and cereals products (the pass-through of current higher grain prices will persist for the first quarter). But from the second quarter, we could see food price inflation decelerating somewhat. We maintain our baseline view for South Africa's consumer food price inflation to average around 5,0% y/y in 2021. The only upside risk that we continue to monitor and assess inflation's impact is the rising petrol prices. South Africa's agricultural commodities and processed food are primarily transported by road, and the increased transport costs could impact the final product prices. For example, South Africa is transporting roughly 81% of maize, 76% of wheat, and 69% of soybeans. On average, 75% of national grains and oilseeds are transported by road. This is an area worth monitoring over the coming months.

    Data releases this week

     

     This is a quiet week on the agricultural calendar. On Wednesday, the South African Grain Information Service (SAGIS) will release the weekly grain producer deliveries data for 26 March. This data cover summer and winter crops, although the focus is still on winter crops whose harvest has recently been completed. On 19 March, 6 327 tonnes of winter wheat were delivered by farmers to commercial silos. This placed the 2020/21 wheat producer deliveries at 1,99 million tonnes, which equates to 94% of the expected harvest of 2,11 million tonnes. From April onwards, the focus will shift to summer crops as the harvest process will soon be gaining momentum. We already see momentum in 2021/22 soybean producer deliveries. On 19 March, about 31 395 tonnes were delivered to commercial silos. This placed the deliveries for the first three weeks of the new marketing year at 42 090 tonnes. Similarly, about 17 095 tonnes of sunflower seed have already been delivered in the 2021/22 season.

     

    On Thursday, SAGIS will release the weekly grain trade data for the week of 26 March. In the previous week of 19 March, South Africa's 2020/21 total maize exports were at 2,31 million tonnes, which equates to 86% of the seasonal export forecast of 2,69 million tonnes. In terms of wheat, South Africa is a net importer. On 19 March, imports amounted to 705 027 tonnes, which equates to 45% of the seasonal import forecast of 1,58 million tonnes.

     

     Globally, the notable data release will be the US weekly export sales data released by the United States Department of Agriculture on Thursday. Here, we will continue to monitor China's buying activity of US maize and soybeans.

  • The South African Weather Service has recently highlighted that “the El Niño-Southern Oscillation is still in a neutral phase and although most models indicate a slight strengthening towards an El Niño phase, the uncertainty seems to be increasing to its potential strength and timing.

  • A mushroom extract fed to honeybees can greatly reduce virus levels, according to a new paper from Washington State University scientists, the USDA and colleagues at Fungi Perfecti, a business based in Olympia, Washington.

  • Reduce the number of guns and you will reduce crime in South Africa.

    That is what non-profit Gun Free South Africa (GFSA) said on Tuesday after the release of the 2017/18 crime statistics.

    Guns were the weapon of choice for more than four out of every 10 murders (41.3%) and almost six out of 10 aggravated robberies (59.5%).

    “Violent crime has not been this high since late 1990‚ when the number of guns in South Africa peaked.

  • In European countries, pineapple sales are going well. Many countries are still missing the demand from the hospitality industry, but the limited supply is keeping the market in balance. There is also a positive mood in the pineapple market in South Africa and the United States. Costa Rica produces pineapples all year round and has seen an increase in the demand ahead of Easter. In Australia, the market situation is less rosy. Due to a labor shortage, some pineapples cannot be harvested and remain in the fields. Taiwan is also having a difficult time. China has imposed an import ban on Taiwanese pineapples, so the country is looking for alternative buyers.  

    Netherlands: Steady pineapple market due to limited supply
    Pineapple sales are currently running smoothly. "From week 1 onwards, there is actually not a lot of fruit available. Delays are more the norm than the exception, and the pace of the arrival of shipments is far from normal," says a Dutch importer. "As a result, prices are at a reasonable level. But if more fruit had come onto the market, the pricing would have been more problematic. Now prices stand at around 9 Euro. Supermarkets are buying large volumes, although this does not compensate for the missing sales to the hotel and catering industry. Furthermore, the conditions in the free trade market are very volatile. When government leaders in Germany or France announce new rules, this has a direct impact on sales to, for example, schools and caterers. Furthermore, sometime in May, the natural flowering will come again, which means that there will be more pineapples on the market."

    Belgium: Pineapple market in balance
    Belgian pineapple sales are going reasonably well at the moment. The market is in balance, which means that prices are at an excellent level. This is largely due to the supply, which is rather limited. The fact that restaurants are closed also has some impact on the market, but supermarkets can absorb part of this. Most of the supply currently comes from Costa Rica. 

    Germany: Difficult market conditions due to shortage of air freight
    As in the case of other tropical fruits from overseas, the pineapple market is strongly affected by the lack of air traffic. Importers report that the air freight capacity remains very low, and that this persistent shortage of air freight is taking its toll on the supply and prices. The bulk of the supply currently comes from Costa Rica. Pineapples from West Africa are only arriving in limited volumes, which means that the prices for the average sizes are somewhat higher.

    Pineapples are increasingly perceived as a convenience item. Machines for ad hoc peeling and processing of pineapples into fruit salads are currently in great demand in the German retail. The higher retail segment in particular is betting big on this relatively new formula of German manufacture (Hepro GmbH).

    Italy: Good demand for pineapples despite closure of catering industry
    In Italy, the demand for pineapples is good despite the closure of the catering industry. The retail is mostly filling this gap. According to an importer from northern Italy, sales were almost at a standstill around this time last year, but that is not the case this time. Of course, there is no catering or cruise ships, but wholesale prices stand at an average level. Prices range from 0.70 Euro for the greenest pineapples to 1.00-1.20 Euro for the better-colored ones. There are some problems affecting global transportation. Finding refrigerated containers is difficult and costs have increased dramatically, which also has an impact on the final price. According to information from the importer, the Far East, especially China, is the one hoarding these containers.

    Spain: Volumes recover and prices stabilize
    Spain is currently importing pineapples from Costa Rica, the Dominican Republic and Kenya. In previous years, there has been a slight increase in the demand for pineapples during Easter, especially for those with a good color. However, this year, the restrictions and limitations imposed because of Covid-19 have had a direct impact on the catering channel, which has resulted in consumption practically not increasing at all. The improvement in sales has to do with the market supply.

    So far this year, the demand for green pineapples has remained fairly stable, especially for the top brands. There is more demand for well-colored pineapples, whose prices have remained fairly strong and stable in recent weeks, reaching selling prices of up to 15/16 Euro per box. These prices have been reached partly thanks to the limited volume on the market in this first part of the year. Volumes are now gradually recovering and prices are also stabilizing. As for air-shipped pineapples, the demand continues to rise, although high prices and volume constraints are slowing this growth somewhat. It looks like volumes will start to recover in the next few weeks. No quality problems have been reported so far.

    South Africa: Good balance between supply and demand
    There's currently a good balance between the pineapple supply and the demand, and according to one grower, the huge increase in pineapple sales is a result of what happened last year, when alcohol was banned due to the Covid lockdown and people started brewing pineapple beer. This created new pineapple consumers and raised product awareness.

    In the Eastern Cape, where the fruit is grown, rainfall is still scarce, but KwaZulu-Natal has recorded about 600 mm in six weeks. There were cases of sunburn affecting November's pineapple harvest, which caused a drop in the production in November and December, but currently growers are expecting a good season. Pineapples are harvested all year round.

    The scarcity and irregularity of air freight has had a negative impact on pineapple exports to markets such as the US. There has also been a significant drop in the demand from the catering and hospitality industry, which could put some pressure on the fresh produce supply.
    The average price of pineapples in Johannesburg's municipal market stands at around R7 (€0.4) per kg.

    United States: Easter gives boost to the demand for pineapples
    The pineapple supply is scarce at the moment. "This is due to the Easter season," says a California trader. "Also, suppliers are not working full time during Easter, so less is being packed." Overall, volumes are at the same level as last year and sizes 5, 6 and 7 are the most common, with some size 8, too. The supplies arrive mostly from Mexico and Costa Rica. Costa Rica supplies pineapples all year round. Mexico almost manages that, too. Ecuador also supplies some pineapples.

    The demand is greater than usual due to the Easter season and wholesale prices stand at around $12-$13. Looking ahead, the trader expects the market conditions to remain stable. "By mid to late April, the price will drop a little bit, by maybe $1-$2. I don't think the demand will be as high as it is now."

    Costa Rica: Demand and prices are up
    Costa Rica supplies pineapples all year round and the current volumes are large and of good quality. The good weather of recent months has allowed growers to take all the necessary measures to ensure a good harvest. In the months of January and February, the pineapple export volumes grew by 9% compared to the same period last year, and there is enough demand to absorb these additional volumes. The demand and prices increased slightly ahead of Easter and the prospect is that this will also be the case for Mother's Day. Costa Rica is seeing an increase in the demand from China as a result of the Chinese government's decision to suspend the imports from Taiwan, but China still remains a small market for Costa Rica due to the long distance.

    READ MORE OVERVIEW GLOBAL PINEAPPLE MARKET- May 2020

    China: Taiwanese pineapple imports temporarily suspended
    China's General Administration of Customs (GACC) announced on February 26 that pineapple imports from Taiwan would be temporarily suspended because several lots of Taiwanese pineapples were found to contain harmful insects that violate GACC standards. This ban took effect on March 1. Over 97% of all Taiwanese pineapples are intended for the Chinese markets, so the impact on Taiwan's pineapple industry is huge. The Taiwanese pineapple industry has already started looking for alternative destinations. Many have switched to the Japanese market. Local authorities are also calling on Taiwanese people to eat more pineapples and support the growers.

    The temporary ban on Taiwanese pineapples has led to a drop in the supply in the Chinese market and a rise in the demand for pineapples from other suppliers. The sale of pineapples from Guangdong and Hainan has taken off and prices have risen sharply. The Philippines, Costa Rica and Panama all export large volumes of pineapples to China. Some traders which used to sell Taiwanese pineapples now import from these countries.

    Australia: Pineapple sector hit by labor shortage
    The Australian pineapple sector has been hit by labor shortages that affect the entire horticultural industry. One grower said that he had to leave 400-500 tons of pineapples in the field in December because he didn't have enough staff to harvest them. Earlier this month, the main representative body of Australia's pineapple sector expressed concern over reports that six tons of fresh pineapples from Taiwan will be imported into Australia in May. The reason is that Taiwan has lost access to the Chinese market. Growcom is advising consumers to check and be aware of the origin of the fruit, fearing that the inferior quality of the imported pineapples could tarnish the reputation of Australian growers and their brands.

    According to the latest statistics from Hort Innovation, 66,069 tons of pineapples (6% less than in the previous year) worth $52.2 million (5% more than in the previous year) were produced in Australia in June 2020. Most of the production takes place in Queensland, where there is year-round supply. 36% of the total production went to the processing industry. No export volumes were recorded and the supply remains entirely limited to the domestic market. As regards consumption, 40% of Australian households buy fresh pineapples.

  • In an exercise to help potential investors make informed decisions in the midst of debate about expropriation of land without compensation, Statistics SA is going around the country to establish the size, structure and economic contribution of commercial farms.

  • Unequal access to land in South Africa continues to prevent citizens from enjoying human dignity, rights and security. The ongoing debates and recent public hearings about land reform policy in the country are therefore crucial from a justice and development perspective.

  • OK, folks, I know this platform is for agricultural economics related notes, but an exception once in a while won’t hurt. Last night I met up with an old schoolmate, Nikkie Korsten, who is in town for a conference.

  • The Civilian Secretariat for Police Service, headed by police minister Bheki Cele, is proposing to prohibit firearm licences for the purposes of self-defence. Their reasoning, however, is flimsy and full of holes (bullet holes? – Ed) 

    Last August, Koane Potlaki, accused in a house robbery case and allegedly involved in a farm attack, accosted a police officer and relieved him of his service pistol. He went to a farm north of Potchefstroom in the North West Province. There, he ambushed farmworkers, and forced them to lure the farmer to their location near a water tank. The 32-year-old farmer, who was a witness in the case against Potlaki, duly arrived, only to be shot in the chest by Potlaki. He returned fire, killing Potlaki. If he had not done so, Potlaki would certainly have finished the job of silencing the witness against him.

    The story is recounted on News24 and collected in a small archive of similar stories of self-defence maintained by Safe Citizen, a public interest group which holds that lawfully armed citizens make themselves, their families and their communities safe. 

    There is no data in South Africa on the use of firearms for self-defence. We simply don’t know how many people use legal firearms for this purpose and how such incidents turn out. We also don’t know how many legal firearms are used in the commission of crime. 

    This absence of data suggests that the Civilian Secretariat for Police Service, of which police minister Bheki Cele is the head, has no empirical basis for proposing to remove self-defence as a valid reason for obtaining a firearm licence.

    Eye-catching stats

    This doesn’t stop anti-gun lobbies, like Gun Free South Africa, from citing a bunch of eye-catching factoids. For example, it claims: ‘South African research undertaken in two Johannesburg police precincts shows you are four times more likely to be shot at if you use your gun in self-defence.’ 

    In the same media release, it states: ‘…the 1999 study conducted in two Johannesburg police precincts showed that you are 4 times more likely to have your gun stolen from you than to use it in self-defence when under attack.’

    Another group, Gun Safe Cities, states: ‘you are four times more likely to have your gun used against you than to be able to use it successfully in self-defence’.

    All of these claims rely on a single survey conducted by Anthony Altbeker. 

    ‘No research backs widely shared statistic about gun ownership risk in South Africa,’ announced AfricaCheck, a fact-checking service. 

    Altbeker’s study examined a mere 602 police dockets for gun-related crimes from Johannesburg suburbs Alexandra and Bramley, dating back to the first three months of 1997. 

    It found that in 8% of those cases the victims were armed, and of those, nearly 80% of victims lost their guns to their attackers without being able to defend themselves. It also found that those who used their own gun to defend themselves were ‘four times more likely to have been fired upon by their attackers’.

    Data quality issues

    The latter statistic is used by Gun Free South Africa to make the claim that you’re less safe if you use a firearm to defend yourself. However, this ignores the fact that correlation does not imply causation. In fact, the causation may well run the other way: people who get shot at are more likely to use guns to defend themselves.

      Corruption in South Africa’s firearms registry puts guns and ammo in the hands of gangsters

    It also doesn’t take into account the fact that many victims, who successfully deterred an attack by brandishing a firearm, may not have reported it to the police, knowing, as they do, that it is fairly useless to involve the police in any matter other than insurance claims or cleaning up after rioters.

    Neither statistic is supported by any comprehensive or recent data. Extrapolating from a small number of cases in one or two suburbs to the entire country is not justifiable. There is no way to tell whether they are close to the average or whether they are statistical outliers. 

    According to the AfricaCheck article, Altbeker revisited the question in a subsequent research report, this time commissioned by Gun Free South Africa. Although slightly more representative, it was also published more than 20 years ago, and suffers from what the author himself calls ‘data quality issues’. 

    Of course, the possibility of being disarmed by an attacker is a real threat and should be a focus of firearm proficiency training, but it is not a justification for disarming all legal firearm owners a priori

    Unarmed victims are just what criminals want.

    A drop in the bucket

    You’ll also hear that every year, some 10 000 licensed firearms, or thereabouts, are stolen. This, it is argued, contributes to the problem of illicit firearms. Cut off this supply and, they claim, you’re making inroads against the illegal use of firearms. 

    This is arrant nonsense. While every firearm stolen is one firearm too many, they are often stolen from police officers, who are not about to be disarmed by law. What the anti-gun lobby also won’t tell you is that the number of stolen firearms is down from some 30 000 in 1998. 

    More importantly, those firearm thefts are a drop in the bucket. According to the Small Arms Survey of 2018, there are approximately 5,4 million licensed and unlicensed firearms in circulation in South Africa. Of those about 3,2 million are licensed (based on 2015 numbers). 

    So there are likely north of 2 million illegal weapons in South Africa (although this number is admittedly an estimate with very wide error margins – it could be as low as 500 000 or as high as 4 million). Assuming 2 million is a reasonable estimate, 10 000 stolen firearms represent 0.5% of the illegal guns in circulation and just over 0.3% of the stock of legal firearms. 

    Arguing that firearm theft is the major driver of criminal firearm use in South Africa is spurious. If the government is concerned about illegal weapons, it should act to recover those weapons, instead of disarming law-abiding citizens and leaving them to face those illegal weapons unarmed.

    South Africa is nowhere near the most-heavily armed population in the world. The top 25 countries by number of firearms per 100 population include, of course, the United States (120,5) and war-torn countries like Yemen (52,8), but also peaceful and relatively crime-free countries such as Canada (34,7), Austria (30), Norway (28,8), New Zealand (26,3), and Sweden (23,1). France and Germany come in at 19,6 respectively, the same as Iraq. Number 25 on the list is Luxembourg at 18,9 guns per 100 people. By contrast, South Africa has only 9,7 firearms per 100 population, fewer than half of that.

    It is clear, then, that crime rates are not closely correlated to legal firearm ownership. On the contrary. 

    Crime deterrent

    In the US the Centers for Disease Control and Prevention (CDC), published a report commissioned by President Barack Obama, in which it cited research suggesting ‘self-defence can be an important crime deterrent’, and also that ‘the association between self-defensive gun use and injury or loss to the victim have found less loss and injury when a firearm is used’.

    ‘Studies that directly assessed the effect of actual defensive uses of guns (i.e., incidents in which a gun was ‘used’ by the crime victim in the sense of attacking or threatening an offender) have found consistently lower injury rates among gun-using crime victims compared with victims who used other self-protective strategies,’ the report says.

    This contradicts the view of the anti-gun lobby that owning a firearm for self-defence exposes you to greater risk than being unarmed.

    The Police Secretariat’s poorly-drafted socio-economic impact assessment of the proposed bill makes a great number of unsupported statements and inferences, suggesting strong preconceived opinions.

    For example, it claims that high levels of gun-related crime are caused by ‘increased availability and abuse of firearms’, which it says persists primarily because the Firearms Control Act ‘does not sufficiently limit the number of firearms’.

    The millions of guns that are beyond the remit of the Firearms Control Act, because they are unlicensed in the first place, are a mere afterthought. Those are the weapons most often used in gun-related crimes, yet the Secretariat takes it as a given that restricting legal firearm ownership would reduce gun-related crime. This belief is not supported by any evidence.

    It also cites the fact that murder rates in South Africa have steadily risen between 2011/12 and 2016/17, which it attributes in part to increasing availability of firearms. This ignores the fact that murder rates steeply declined between 1994 and 2011, and more importantly, ignores the fact that as the murder rate rose after 2011, the number of legal gun owners consistently decreased.

    Murder vs gun ownership

    It seems that legal gun ownership is inversely correlated with gun crime, which is the exact opposite of what the government’s documents appear to claim.

    If anything, the rising murder rate since 2011 is likely attributable to a captured and deteriorating police force. 

    Dubious data 

    Perhaps one of the reasons for these weak claims is that the Secretariat’s own data gathering is pretty dubious and is in part reliant on the anti-gun lobby. 

    Its 2016 White Paper on Safety and Security, for example (available in full only on the website of Safer Spaces, an NGO that helped develop and implement it), sources statistics about firearm licence issuance to Gun Free South Africa documents. Does the Secretariat not have direct access to its own Central Firearms Registry?

    There are also other questionable citations in that White Paper. In one case, it references data from 2009 and 2011 to a book by Robert Chetty that was published in 2000. This book, according to Ludwig Churr, head of research at Safe Citizen, does not itself give any data sources.

    Personal safety

    The National Development Plan 2030 states: ‘Personal safety is a human right. It is a necessary condition for human development, improved quality of life and enhanced productivity. When communities do not feel safe and live in fear, the country’s economic development and the people’s wellbeing are affected…’

    The Police Secretariat uses this passage to support its view that it has a mandate to remove firearms off the streets, starting not with illegal guns, but with legal firearm owners. 

    In truth, that passage suggests that law-abiding citizens have a right to defend their own personal safety, and that of their communities, especially in a country where the police is grossly derelict in its duty to secure safety for its citizens.

    The anti-gun activists are a small, if vocal, minority. A News24 poll found 89% of respondents believed citizens ought to be able to use firearms to protect themselves, while only 11% think it leads to increased availability and abuse of firearms.

    Unfortunately, their blinkered ideology has found favour with the Secretariat, since it plays perfectly into the hands of authoritarians, central planners, looters, and expropriating socialists. Can’t have people defending their land with guns when the government comes to take it, now can we?

    It is time for the rest of us, the 89% – whether or not we personally own firearms – to stand against this gross violation of civil rights. 

  • The United Kingdom's trade commissioner for Africa, Emma Wade-Smith, said on Tuesday that the UK had full confidence in South Africa's "stimulus package" and was more likely to continue to invest in South Africa despite the country's troubled economy going through a technical recession.

  • Agri-Expo Livestock and the Groot Plaasproe, honoured with the prestigious ROAR exhibition industry award as Best Trade and Consumer Exhibition in Africa in January this year, will be back this week from Thursday 11 to Saturday 13 October at Sandringham outside Stellenbosch.

  • The People’s Republic of China is, according to many market analysts and commentators, fast becoming the major economic power in the world which is a very important topic almost everywhere. 

  • "The interest rate policy of the Reserve Bank and the other central banks in the world is the single biggest delusion in economic science for which there is no evidence," says Fanie Brink, an independent agricultural economist.

     He says the Bank's claims that its interest rate policy can control the inflation rate within its inflation targets of 3% to 6% are not true or correct. Its policy can also not protect the value of the currency or stimulate economic growth.

    Brink referred to the article “Hoër rentekoerse is ‘onvermydelik’” ("Higher interest rates are 'inevitable'") which appeared in the “Rapport” yesterday.

    He says the “inflation rate is determined by all the local and international political and economic factors that have an influence on the demand and supply of goods and services, as well as the value of the currency, respectively.

    Economic growth is created by the supply and demand side of the economy, which is proven by Statistics SA every quarter, which is driven by the profit motive of the private sector.”

    The inflation rate rose to 5,9% in December 2021, mainly due to the increases in fuel and food prices but has absolutely nothing to do with its local consumption as it is purely the results of international market factors on which the interest rate policy of the Bank have absolutely no influence.

    Fuel prices

    The international price of crude oil fell last year due to the Covid-19 pandemic to the point where the financial position of some international oil producers weakened significantly that were responsible for the lower crude oil supplies. Now that the greatest danger of the pandemic has subsided, international demand for crude oil has risen sharply again, which the members of the Organisation of the Petroleum Exporting Countries (OPEC) and Russia (which is not a member of the organisation) have not yet been able to meet.

    The international price of Brent crude oil rose by more than 60% in 2021, which was the largest annual increase in 12 years spurred by the global economic recovery from the Covid-19 pandemic. Despite the travel restrictions, the demand for crude oil remained relatively solid, while the supply by the members of OPUL and Russia was reduced.

    Global oil prices are expected to rise further in 2022, while OPEC and Russia are likely to stick to their plan to increase crude oil supply to the market by only 400 000 barrels per day in February this year.

    The international price increases in crude oil are consequently out of control of the central banks who believe that they can correct the imbalance in the market by raising interest rates which is by no means possible, but which as in the past will once again punish local consumers for price increases for which they are in no way responsible for.

     In South Africa, fuel prices are controlled by the government and determined by a price mechanism on the basis of changes in the international crude oil price, weakening exchange rate which has already weakened significantly due to the destructive socialist ideology of the ANC government, as well as all the taxes and levies of the government on fuel that are increased annually but which have nothing to do with the consumption of fuel by consumers.

     The first question, then, is what can the Bank do about the imbalance in the international crude oil market and the government's fixed fuel price structure? The answer is absolutely nothing!

     Food prices

     International agricultural producer and food prices increased sharply in 2021 due to international increased demand for food, but even more so due to the "disruption of the global supply chain" that will continue in 2022, according to Cargill CEO, David MacLennan, an agricultural giant in the United States of America (USA), due to labour shortages that have become one of the biggest risks facing the food industry.1)

     According to MacLennan, “international food prices rose in October last year to a peak for the past decade which was responsible for even higher grocery bills for households and possible further global famine."

    Bad weather hit crops, freight costs skyrocketed and labour shortages hampered the food supply chain. The energy crisis has also caused a dramatic increase in fertilizer costs for farmers around the world.

    The search for 'greener' vehicles and aircraft, as well as biodiesel for production and road transport, led to greater competition between food and energy production, which led to limited edible oil supplies. Prices for palm oil, the most consumed vegetable oil in the world, have risen by about 50% in the past year, while soybean oil has risen by 60% and canola oil is near a record price level.

    The food and fuel competition for sugarcane, grains and vegetable oils will also, according to MacLennan, become more intense than it has ever been in the past 15 years. The day will come when more agricultural products for clean energy will be used as food, so it will be the duty of the agricultural producers in the world to become more innovative and productive.”

    In South Africa this will also have to happen despite the fact that the ANC government is well on its way to finally destroying the agricultural industry, food security and the economy.

    The United States of America (USA) already uses 40% of its maize crop to produce bio-ethanol for blending with petroleum produced from crude oil, while Brazil has long been the largest bio-ethanol producer from sugarcane in the world used in vehicles.

    The second question is therefore what can the Bank do about these developments that are responsible for the higher international food demand and the higher food prices?

    The local prices of agricultural products are traded in a futures market, the South African Futures Market (SAFEX), and are determined solely by the operation of the market forces of supply and demand in the market. The prices of local producers are in fact the international derivative prices of agricultural products traded on the USA futures market, the Chicago Board of Trade, which is also determined purely by the operation of the market forces of supply and demand.

     The third question that needs to be asked is what can the Bank do about the increasing and excessive profit margins on food for which consumers are not responsible and which are in no way related to the demand for food?

    In South Africa, the agricultural industry is expected to produce “cheap” food for the poor, according to the latest newsletter from Agri SA, while no farmer in the world can produce food at prices that the poor can afford. Food security can only be sustainable if food production is profitable. Food security is also not the responsibility of agricultural producers but the government that determines the macro and agricultural economic policy of the country.

    The fact of the matter is that the “consumer prices” used to calculate the Consumer Price Index (CPI) are not the prices consumers are willing to pay for goods and services, but the prices charged by suppliers based on their total production or manufacturing costs plus excessive profit margins are determined.

    The question is also why the international central banks believe that punishing consumers on the demand side with higher interest rates can also solve the problems caused by price increases on the supply side of the economy, such as the current lower crude oil production, disruptions in the global food supply chain or natural disasters that cause severe droughts and floods? How is it possible that they believe that higher interest rates can also solve these problems if they have absolutely no control over the supply-driven inflation2) and administered prices of the government.

    The interest costs that consumers pay which the Bank targets with its increases in interest rates is not more than 2% of their total consumption expenditure and the weight is so low that it does not even appear on the list of consumers items that Statistics SA use to compile the CPI, and it is therefore insignificant and negligibly small to make an impact on the inflation rate.

    Latest inflation trends

    The US inflation rate rose to 6,8% in December, the highest level since 1982 and the sixth month in a row of price increases. Petrol prices rose by 58,1% in November 2021 - the largest increase over 12 months since 1980. Within the food index, the prices of grocery stores rose for the third consecutive month.

    The inflation rate in South Africa shot up to 5,9% in December 2021, which is the highest rate in almost 5 years. The biggest contributing factor to the higher inflation rate was the fuel price, which has risen by 34,5% since a year ago. "

    The latest increases in inflation rates in the USA and South Africa are the results of very serious changes in the supply and demand of especially crude oil and food, which are very clearly outside the reach of the interest rate policy of the Reserve Bank and the Federal Reserve in the USA that have proven once again that there are no other forces in the economy that are stronger than the market forces of supply and demand.

    Prospects for crude oil

    International crude oil has so far continued its rise in January 2022 to the highest level in seven years as geopolitical tensions arose in the Middle East. Yemen's Houthi fighters have claimed to have launched a drone strike on the United Arab Emirates - the third largest OPEC producer - causing an explosion and fire on the outskirts of the capital Abu Dhabi and raising crude oil prices to the highest levels since October last year.

     The shrinking global oil stock is also a limiting factor as to why the Goldman Sachs Group raised its crude oil forecasts to $100 a barrel in the third quarter of this year.

     Electricity rates

    The next cause for a further large increase in the inflation rate in south Africa will be caused by the expected excessive increases in electricity tariffs which are also set by the government and will once again encourage the Reserve Bank to punish consumers further for price increases for which they are neither responsible for and therefore not the cause for higher electricity tariffs. The higher oil prices have also significantly increased the prices of gas for heating purposes.

    Inflation targets

    As fuel and food prices are responsible for the large increases in the inflation rate, it is usually excluded from the Consumer Price Index to calculate a "Core Inflation Index" which the Reserve Bank and economic commentators often use as a fallback position if the inflation rate is too close to the upper inflation target moves which is totally misleading and should therefore be abolished.

    The inflation targets should be scrapped anyway and interest rates should be determined based on the supply and demand of money and capital in a futures market. Exactly how various agricultural products, such as maize, wheat, soybeans, sunflowers, red meat and wool are traded on the South African Futures Exchange (SAFEX), which is the Agricultural division of the Johannesburg Stock Exchange (JSE) that was implemented on the same basis as the system used by the Chicago Board of Trade in USA. A futures market for money and capital will be the most accurate and fair way to determine or discover interest rate levels without the intervention of the Reserve Bank!

    Simple statistical analyses have shown that the changes in interest rates can in no way provide an explanation for the changes in inflation rate, the value of the currency or economic growth. The changes in interest rates are actually follow the changes in the inflation rate and do not determined it! The Reserve Bank is already planning to raise its interest rates four times by 25 basis points in each quarter this year because it is blinded by a computer model that can never take all the political and economic variables that affect the supply and demand in the economy into account. In any case, the Bank does not have a mandate to try to control the inflation rate but a mandate to protect the exchange rate (value of the currency) in terms of section 224(1) of the Constitution.

     "It is therefore unacceptable that the Reserve Bank, most economic commentators and the media continue to cling to the Bank's interest rate policy that cannot control the inflation rate, protect the value of the currency and stimulate economic growth for which there is no evidence to substantiate these claims. Consumers can by no means be longer held solely responsible for price increases caused by the operation of the international and local market forces of supply and demand and the excessive interference of the government in the economy," says Brink.

    Fanie Brink, Independent Agricultural Economist

     

    1) Cargill CEO Says Global Food Prices to Stay High on Labor Crunch

    https://www.bloomberg.com/news/articles/2021-11-17/cargill-ceo-says-global-food-prices-to-stay-high-on-labor-crunch?sref=q8seIhDd

    2)  Reserve Bank has no control over supply-driven inflation

    https://www.businesslive.co.za/bd/opinion/columnists/2022-01-16-isaah-mhlanga-reserve-bank-has-no-control-over-supply-driven-inflation/

  • Billionaire businessman and philanthropist Patrice Motsepe says South African farmers, both black and white, need to be safe in the knowledge that their right to land and assets are protected.

  • As Ben Cousins recently argued in Business Day, agriculture can be an important contributor to the creation of jobs in SA through a well-executed land reform programme. But then we need to do it right and learn from SA's history, which has a lot to offer.

  • Heritage apple and pear varieties that are no longer in commercial production are being saved for future generations in the Tru-Cape Heritage Orchard on Oak Valley Estate in Elgin.