INTRODUCTION OVERVIEW THE BUSINESS STRATEGIC & OPERATING CONTEXT be the norm in 2022 . This will most likely lead to higher interest rates and therefore “ cost of money ”.
• The Agbiz / IDC Agribusiness Confidence Index for quarter 1 of 2022 moderated by 12 points to 62 after reaching its second highest level on record in quarter 4 of 2021 ( graph 10 ). This means that agri-businesses remain optimistic about their operating conditions , but slightly less so than towards the end of 2021 . The most important factors for this moderation can be found in the following :
» Excessive rainfall during December 2021 ;
» Higher input costs for a large part of the client base ;
» Logistical challenges due to the deterioration of road , rail , pipeline and harbour infrastructure ;
» Corruption , mismanagement and no accountability at government level ; and
» Geopolitical tensions and its direct effect on agriculture and agri-business .
2 . OUR CUSTOMERS
While this is a complex and differentiated subject – when it comes to the food and fibre value chains globally - there are four major trends that dominate , namely :
2.1 . Rising awareness of consumers about how their food is being produced and the impact their choices have on current and future generations ( clarity , purity and traceability ).
2.2 . Meat is subjected to high levels of criticism because of its environmental footprint ( disruptive climate change , decarbonising business models and eco-friendly consumption ).
2.3 . Eating patterns with a stronger plant-based focus ( meat industry ’ s strategies to be more focused on sustainability ).
2.4 . Grain production with a much higher focus on the environment ( soil health , water systems focus and residue consciousness ).
Graph 5.1 : 1-year maize prices for South Africa
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White maize Yellow maize
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Graph 5.2 : 1-year oilseed prices for South Africa
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SAFEX prices in R / tonne Sunflower Soybeans
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Graph 5.3 : 1-year wheat prices for South Africa
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SAFEX prices in R / tonne
Wheat
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Graph 6 : SA producer price index ( PPI )
140,0 120,0 100,0 80,0 60,0 40,0 20,0
( Dec 2020 = 100 )
PPI value PPI % change ( y-o-y )
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0,0 % Apr-13 Apr-14 Apr-15 Apr-16 Apr-17 Apr-18 Apr-19 Apr-20 Apr-21 Apr-22
120 100 80 60 40 20 -
SAFEX prices in R / tonne
Graph 7 : World fertiliser application
kg / ha |
World fertiliser application ( kg / ha ) |
Average yield ( tonne / ha ) |
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1961 1967 1973 1979 1985 1991 1997 2003 2009 2015 2021
14,0 % 12,0 % 10,0 % 8,0 % 6,0 % 4,0 % 2,0 %
tonne / ha 4,50 4,00 3,50 3,00 2,50 2,00 1,50 1,00 0,50 -
40 Reimagine Agriculture