Market Synopsis

Agri Market Synopsis Week 29/30 – China looks to self-sufficiency with pork

Gro Intelligence has repeated claims that China’s two-year run of huge pork imports was coming to an end. Despite the Asian giant experiencing challenges of African Swine Fever, last week, senior agri-economist at FNB Paul Makube said pork prices saw losses on the back of reduced import demand from China. 

Domestically, South African Pork Producers Organisation (SAPPO) said the purchasing price (excl. sows) averaged R25.54/kg (in nominal terms) during Week 30 of 2021, “decreasing by 0.8% from Week 29.” To exacerbate matters further, Gro Intelligence said the Chinese government was reserving two domestic pork purchases.  “The message is clear: Future pork purchases will favour producers within China.”

Last week, Transnet freight website experienced hacking which threatened to collapse operations at the Durban port harbour. However, by Friday, the website was up and running which consoled the Citrus Growers Association (CGA) as it had backlog of fruit across the citrus supply chain “causing temporary delays when it comes to fruit being exported to key markets.” 

For South African grain companies exporting maize to SADC region, there may be less demand for Mzansi’s maize by the neighbours. According to Agricultural Business Chamber (AgBiz), the region while a viewed as a typical maize importer, it had improved its maize production this season. “South Africa could export 2,6 million tonnes of maize in the 2021/22 marketing year (this marketing year corresponds with the 2020/21 production season). This, however, would be 10% below the previous season because of an anticipated decline in Southern African demand” said Wandile Sihlobo. Chief economist at AgBiz. 

The alcohol industry welcomed the statement by President Ramaphosa on payment of excise taxes by the alcohol sector which was “deferred for a period of three months, to ease the burden on the sector as it recovers.” However, upon receiving the Explanatory Note on Excise Deferment from National Treasury, it was not possible to grant a blanket deferment to the industry. Businesses will have to apply, “in terms of rule 105.01 to 105.4 for deferral of payment and each case will be considered on its merits. They could make an application for the next 3 months, if they can motivate why such and extension is needed. An application can be refused. If a client submits today and the application is approved, they would not be liable for penalties and interest.”

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