SIMON BROWN: I’m chatting now with Wandile Sihlobo. He is the chief economist on the Agricultural Business Chamber of South Africa, Agbiz. Wandile, I recognize the early morning time, as at all times. I used to be travelling over the vacations. I used to be down within the Eastern Free State, KZN Midlands, the south coast of KZN. Everywhere I went there was water. Dams that I’ve been seeing my total life have been fuller than I’ve ever seen. Is {that a} normal development that we’ve had, one other 12 months? I feel this may make it the third 12 months of actually good rains across the nation.
WANDILE SIHLOBO: Simon, blissful new 12 months. This is in regards to the fourth 12 months of actually excessive rainfall throughout South Africa. I feel this 12 months once more we’ve most likely acquired greater than we have been bargaining for in a few of the farming areas, to the extent that I feel that is going to be roughly a month behind their typical interval.
But nonetheless, it’s trying broadly comparatively [good] in some areas, although [there were] sections the place farmers needed to replant. In some they needed to face delays in planting due to these excessively moist circumstances.
SIMON BROWN: Yes. Too a lot rain is probably not at all times a very good factor. It’s good to fill the dams, but it surely’s robust in case you are a farmer. I’d think about that then means we’re going to have good crop yields once more. Are we nonetheless seeing good costs? We’ve chatted round getting some agri commodities out of Ukraine. That appears to be taking place, type of, however costs from the few agris that I examine – and I’m considering significantly of the maize and the wheat –nonetheless appear pretty elevated.
WANDILE SIHLOBO: Yes. Prices are nonetheless pretty elevated, Simon, although the grain is popping out of Ukraine. But I feel the dangers are nonetheless there as a result of everyone seems to be watching as a result of they don’t know what is going to occur subsequent – will Russia nonetheless enable that deal to proceed, and all of these issues. So that’s the realm that we’re watching.
But we’re additionally watching in South America the place in Argentina it’s pretty dry. This week, for instance, we noticed soybean costs rising, largely pushed up by what’s taking place in South America. I feel broadly the commodity costs are nonetheless pretty elevated from ranges that you’d usually see, however will come off the upper ranges that we noticed proper after the invasion of the Ukraine.
SIMON BROWN: So off these highs, however nonetheless elevated. What about enter prices? We have chatted on fertiliser costs [and] diesel, which is a giant enter value. It has in fact come down, however nonetheless stays elevated. Farmers are maybe getting extra income, however paying extra to get that further income. A slight squeeze on margins, possibly?
WANDILE SIHLOBO: That was a significant problem this time round, as a result of when farmers planted fertiliser costs have been nonetheless up, plus 30% [on a] year-on-year foundation. The similar factor with the agrochemicals. And in fact gas costs have been additionally up, elevated for a while. I feel because the farmers have been planning they needed to purchase all of their inputs at these greater ranges. Right now, although, when you take a look at the fertiliser costs, they’re slowly coming down from the degrees that we’ve seen over the previous few months. But I feel proper now many of the colleagues have already planted; they planted with the upper enter prices of the previous few months. So there’s going to be that squeeze on the margins.
But I feel probably the most optimistic factor is that the South African farmers went out and planted. In reality, when you have been to take a look at the planting intentions information, they’d indicated that they may really enhance the realm of planting by 1% in comparison with what [they] had planted final 12 months – someplace round 4.3 million hectares or so. So that for me was encouraging, that folk are nonetheless planting; they’re not holding again due to these greater enter prices.
SIMON BROWN: In my travels I noticed farmers planting fields which patently hadn’t been planted maybe in a few years.
What about load shedding? I imply, we consider a farmer and we consider somebody on the market of their tractor, and possibly in agriculture, in grains and the like energy provide could also be much less of a difficulty. I think about in livestock, significantly sorter……4:25 homes and the like, it’s extra necessary. How a lot does stage 4, stage six, simply this inconsistent energy impression and problem farming?
WANDILE SIHLOBO: At the second Simon, we’re at a stage the place are we going to be doing a full survey to grasp the complete impression throughout subsectors of agriculture, as a result of it is a main problem for the sector. You see it within the poultry sector. It’s a difficulty for colleagues who must irrigate within the horticulture [sector], but additionally within the grains. Remember, a few of them are working silos and also you do want energy in a few of the amenities there. So load shedding is a significant headache for everybody within the meals sector.
SIMON BROWN: A final query. We had some points in the direction of the tip of final 12 months round fruit exports out of the Western Cape into Europe. Those have been the sudden restrictions from the European Union. And [there were] another challenges, significantly round Transnet. Has that [situation] resolved itself, or are fruit exporters nonetheless discovering some challenges?
WANDILE SIHLOBO: That has been briefly resolved.
SIMON BROWN: We’ll go away that there. That was Wandile Sihlobo, chief economist at Agbiz. Wandile, as at all times, I recognize the early morning insights.
