As countries continue to implement “risk-adjusted” responses to COVID-19, global leaders and analysts alike continue to assess the evolving implications of the pandemic on global markets.

 The ongoing COVID-19 crisis has brought uncertainty in global trade because of disruptions in supply chains and weakening demand.

Experts in the agricultural sector are confident that the introduction of level 3 lockdown restrictions will bring relief to the food supply chain, which has experienced significant disruptions over the past two months.

Professor Ferdi Meyer, Managing Director of the Bureau for Food and Agricultural Policy (BFAP), says that disruptions experienced by the agro-food chain during levels 4 and 5 include decreased sales as a result of restaurant closures, lower overall demand due to reduced economic activity, and challenges at ports causing considerable congestion in exports.

‘However, since mid-May, most agribusinesses reported that they were operating at 80% capacity and weren’t wasting significantly more product compared to the business-as-usual scenario,’ he says.

 Despite these disruptions, Dr John Purchase, Chief Executive Officer of the Agricultural Business Chamber (Agbiz), says that South Africa’s agricultural sector is not expected to be as hard hit by the Covid-19 pandemic as the global agricultural sector; in fact, we could see a 10% year-on-year recovery in GDP in the sector for 2020 because of bumper grain and fruit harvests.

For example, the current maize harvest is up 38% from the 2018/19 harvest and is the second-largest harvest on record. This essentially means that South Africa would remain a net exporter of maize and could also export maize beyond the African continent to markets such as Japan, Taiwan, Vietnam and South Korea that were not prominent in previous years,’ says Purchase.

However, both Meyer and Purchase agree that medium-to-long-term strategies are needed to further stimulate agricultural growth and job creation in South Africa. These include expansion of primary agriculture in the regions with higher poverty levels such as KZN, the Eastern Cape and Limpopo Province; improvement of land governance in the former homelands; enhanced ability of state funding institutions to attract private capital; and improved local government delivery.

Purchase and Meyer will discuss the impact of Covid-19 on South Africa’s agricultural sector as well as learnings from the pandemic and the way forward in an agriculture webinar hosted by Nedbank Business Banking on Thursday, 4 June. To register, please click here.

I’ve recently cautioned that dryness in parts of Europe and North America could lead to poor grain yields, which would mean that anticipated record harvests in 2020/21 might fail to materialise.

The role of the South African and Zambian maize industries in the Southern and East African regions will remain significant in the 2020/21 marketing year which ends in April 2021. Within the Southern Africa region, the recent data released by Zimbabwe’s ministry of lands and agriculture placed its 2019/20 maize harvest at 907 628 tonnes which is up by 17% from the previous season.

The South African agriculture sector has the potential to be amongst the sectors that will drive economic growth and job creation during the post-COVID-19 recovery phrase.

 One of the key questions that consistently arises amid the COVID-19 pandemic’s impact on the economy is about the effects on employment.

The high-frequency data on both domestic and global markets reinforced our view that grain prices could be under pressure this year and that, in turn, could lead to subdued food price inflation.

 This past week, the Economic Transformation Committee of the African National Congress (ANC) and Business for South Africa (B4SA), each released their discussion documents about the post-COVID-19 inclusive economy for South Africa.

In the second week of June 2020, the Economic Transformation Committee of the African National Congress (ANC)2 and Business for South Africa (B4SA)3 , released their respective strategy documents for the post-COVID-19 inclusive economy recovery for South Africa.

South Africa’s 2020/21 winter wheat season had a bad start because of dryness.

The South African agricultural sector has thus far successfully harvested summer crops and horticulture with minimal interruptions from the pandemic.

There is a growing volume of literature outlining what ought to be done to reconstruct the economy after the devastation of this pandemic.

 The reports of a potential La Niña event during the coming summer months present different risks for Southern and East Africa’s agriculture.

• We are now roughly a month and a half from the start of South Africa’s 2020/21 summer crop planting season.

• Taking stock of global grains monthly data and its implications for South Africa
  

  Although South Africa is a net exporter of some major grains such as maize and barley, the country is not insulated from the global grains market developments.

• South Africa farm economy on a firm footing
  

   South Africa’s agricultural sector was the only shining light in the second quarter of this year.

• USDA’s monthly data reinforce a positive outlook for 2020/21 global grain and oilseed supplies
  

  Over the past few days, we have reflected on 2020/21 global grain and oilseed production estimates from the International Grain Council (IGC).

• Agribusiness confidence rebounded in the third quarter of 2020
  

  After deteriorating from the 50-point mark to 39 in the second quarter, a period during which there was heightened uncertainty about whether the agriculture and agribusiness sectors would operate efficiently when most sectors of the economy were closed under the lockdown regulations, the Agbiz/IDC Agribusiness Confidence Index (ACI) rebounded to 51 in the third quarter of 2020.

• Sentiment conditions in South Africa agriculture and agribusiness
  

  My aim in this morning’s blog post is to discuss briefly the sentiment conditions in South Africa’s agriculture and agribusiness sectors. This follows the release of the third-quarter results of the Agbiz/IDC Agribusiness Confidence Index (ACI). For full disclosure, I lead the compilation of this Index.