Market News

4 / 01 / 2022 - Africa: One Year of the AfCFTA - What Has Worked and the Way Forward

Building on the gains for inclusive and harmonized agricultural trade
Some described it as a global game-changer. The African Continental Free Trade Area (AfCFTA), one of the world's largest international free trade areas, started trading under preferential arrangements on 1 January 2021.
With the COVID-induced recession subsiding as vaccination rates increase, there was great hope for the AfCFTA to show that it could live up to its hype. So, what has worked?
Since trading began on 1 January, some intra-African trade under AfCFTA arrangements based on anecdotal evidence has taken place, including alcoholic beverages and cosmetic products (recent data on trade flows are not yet fully available).
Although intra-African agricultural trade remains below 20 percent compared to more than 60 percent for Europe and Asia, trade is projected to grow once negotiations have come to an end and trade barriers are progressively rolled back.
To date, 42 out of 55 African countries have ratified the agreement, and 88 percent of the negotiations on product-specific rules of origin have been concluded, covering more than 70 percent of intra-African trade according to the AfCFTA Secretariat in 2021.
However, a significant shortcoming of the agreement is that many nutrition-sensitive goods may not be fully liberalized or progressively liberalized over longer periods, as indicated by ongoing negotiations on tariff offers. Examples of protected goods include live animals, meat, fish, milk and dairy products, fruit and vegetables, coffee, tea, spices, oilseeds and sugars.
Africa's agricultural commodities and raw materials have traditionally dominated trade with the rest of the world (cocoa, coffee, cotton, tobacco and spices) with a mix of processed goods (cane and beet sugar, prepared or preserved tunas, wine and other food preparations).
For the AfCFTA to reach its full potential by exploiting the full range of the agri-food value chain, including agro-processing, governments and development partners need to step up efforts to scale up intra-African trade by providing policy and capacity-building support to the private sector, programme development, knowledge management, and data collection and analysis.
The Food and Agriculture Organization of the United Nations (FAO) provides just such support to governments, the private sector, and smallholder farmers to take full advantage of what the agreement and pan-African trade have to offer.
In support of AfCFTA implementation, FAO, in collaboration with the African Union Commission, launched the Framework for Boosting Intra-African Trade in Agricultural Commodities and Services in April 2021 to guide policymakers, the private sector, and civil society to develop and expand sustainable, inclusive and resilient intra-African trade. This framework and other knowledge products produced by the Organization also serve as tools for advocacy, dialogue, analysis and policy implementation.
In the future, enhancing food control systems is a crucial part of growing and sustaining the expansion of intra-African agricultural trade. In this respect, FAO provides the necessary support to strengthen the capacity of countries to comply with food safety standards and facilitate trade.
The Organization also promotes inclusive agribusiness value chains to expand intra-African trade and improve food security and livelihoods, especially among vulnerable groups such as women and youth. Finally, an essential component to the success of the AfCFTA is readily accessible data. Market and trade data must be democratized and digitized to allow micro, small and medium enterprises to grow and maximize their trade potential.
FAO is working to build and integrate trade and market information systems at all levels of the agricultural value chain to ensure inclusive agri-food systems.
There's still work to be done, but with a year under its belt under less-than-ideal circumstances due to COVID-19, the AfCFTA has shown positive signs that give hope for a future where African trade rises as the global game-changer it is promised to be.
It is more important than ever that countries come together with development partners to consolidate the gains made in 2021 by building productive capacity, supporting investments in critical input and output market infrastructure, putting in place harmonized food controls, trade and market information systems, and ensuring inclusive markets that can lift the most vulnerable out of poverty.
Source: Africa Renewal

08 / 11 / 2021 - Africa: Finding Greener, More Climate-Resilient Ways of Producing Our Food

 
Food and Agriculture Organization of the United Nations (Rome)
Agriculture offers innovative solutions to the climate crisis ... for the globe and its own survival!
When we see the news reports on climate change, it often includes footage of factory chimneys and traffic jams. We may or may not realize that agriculture is also a key contributor. In fact, greenhouse gas (GHG) emissions from agri-food sectors - the systems by which our food is grown, produced and distributed - represent around 34 percent of total GHG emissions. But in hearing this, do we ever reflect on the fact that agriculture is also one of the areas most affected by climate change? Being both a source and a victim, the agricultural sector is in a unique position to offer solutions to this massive challenge.
With rising temperatures and unpredictable, extreme weather events, climate change is already threatening food security in many parts of the world.
In response, FAO is ramping up its work to help transform our agri-food systems to better respond to the climate crisis. One way of doing this is by spreading the use of green and climate-resilient agricultural techniques, which can help to reduce the negative impacts from the way our food is produced and reaches our plates.
Here are four examples of how FAO is helping farmers and food producers around the world to implement green and climate-resilient, innovative solutions:
1- Climate smart farming techniques in Sri Lanka
In Sri Lanka, the impact of climate change and environmental factors on agriculture is already quite clear. Fields are becoming unproductive due to heavy rains, excessive soil tillage and lack of nutrients. Reservoirs are silting up, affecting irrigation systems and hampering efficient use of water. All this leaves smallholders struggling to make a profit and often resorting to environmentally unsustainable farming methods to eke out a living from the land
Through the Save and Grow project, supported by the German Federal Ministry of Food and Agriculture, FAO trained over 1 130 farmers to optimize the use of water, agricultural inputs and labour. The training has helped smallholders who grow the island's main crops use 10 to 20 percent less water for irrigation, so they can store more for the next cropping season.
By preparing their land early instead of waiting for reservoirs to fill up, they can irrigate 15 percent more land in the dry season. Saving water during the growing season, planting early and making better use of rainwater means they have more water left after the dry season. They also learned how to apply fertilizer more precisely, reducing the amount used by 27 percent.
2- Reforestation in Paraguay
In areas of eastern Paraguay, deforestation and forest degradation are widespread, and climate change makes communities who are dependent on family farming for food production and livelihoods increasingly vulnerable.
FAO is responding to the needs of these communities as the lead agency implementing an ongoing Green Climate Fund (GCF) project in the area, which focuses on 87 000 people, many from indigenous communities. Farmers will receive Environmental Conditional Cash Transfers in exchange for undertaking climate-sensitive, agroforestry projects.
These initiatives include growing trees such as eucalyptus, citrus fruits and yerba mate plants and abandoning the practice of chopping down native forests for fuel. The cultivation will help provide shade, conserve soil, store CO2 and regulate water flows, helping small-scale farmers adapt to more frequent droughts and floods by diversifying from their traditional mainstays of cotton, beans, cassava, sesame and sugarcane.
3- Climate-resilient fishing in Malawi
In Malawi, the fisheries sector directly employs nearly 60 000 fishers and indirectly supports more than 500 000 people. The FAO project "Building Climate Change Resilience in the Fisheries Sector" especially focuses on the communities living on the shores of Malawi's heavily overfished Lake Malombe.
This Global Environment Facility (GEF)-supported project helps communities to make fish-farming less vulnerable to climate change through the promotion of deep pond technology. Deeper ponds are less at risk of drying out in times of drought, while the higher walls help to prevent fish escaping in floods. Fast-growing fish are also promoted so that they can be harvested before shallower ponds dry out.
4 - Climate-smart livestock rearing in Ecuador
In Ecuador, cattle production is one of the mainstays of the country's economy and social and economic structure. But its environmental impacts are causing concern, with emissions from livestock farming a major source of GHG.
Under a climate-smart livestock project funded by the GEF, FAO has worked with technicians from Ecuador's Ministry of Agriculture and Livestock to help promote climate-smart livestock management techniques among the country's farmers. These practices include better management of pastures and manure, paddock irrigation, fodder banks and rotational grazing, as well as improved techniques for milking and ensuring animals' health.
So far under the project, more than 1 000 farmers have adopted new, more climate-smart ways of livestock management. Not only has that helped bring GHG emissions down by more than 26 percent, but it has also helped them improve productivity and earn 17 percent more income.
Reversing biodiversity loss, reducing GHG emissions, enhancing agricultural adaptation and strengthening farmers' resilience are essential both to addressing climate change and combating poverty and hunger. FAO is working to deploy innovative solutions to these challenges by promoting greener and more climate-resilient ways of producing our food and reinventing agri-food systems to be more inclusive and sustainable.
In November 2021, FAO is raising awareness on this and promoting a "green and climate resilient agriculture" debate at COP26 in collaboration with key partners including the United States, China, the GCF and GEF. Green and climate-resilient agriculture is an important part of the solutions to providing nutritious food while preserving healthy ecosystems for future generations.
Source: FAO

08 / 11 / 2021 - Southern Africa: Climate Change Has Already Hit Southern Africa. Here's How We Know

Many people still think of climate change as a phenomenon that we will only face in the distant future. Perhaps that's partly because climate change projections about rising temperatures and extreme weather events are tied to future dates: 2030, 2050, or 2100, for instance.
But it's important to realize that we already are experiencing climate change, and have done so for some time now. Over the past century, global temperatures have increased by approximately 1°C. Sea level rise is already starting to affect certain low-lying coastal communities. The world is experiencing more frequent and intense extreme climate events.
The Intergovernmental Panel on Climate Change's (IPCC) 6th Assessment Report: Physical Science basis, released in September 2021, contains a comprehensive - and largely grim - assessment of the state of both recorded and projected climate change globally. The IPCC is the United Nations body for assessing science relating to climate change - a group of expert scientists from around the world, who author scientific reports on the state of the earth's climate and future climate change projections.
Its latest report compiles research from 1400 papers, and will serve as an important reference document for the COP26 meeting in Glasgow, Scotland, from October 31 to
November 12. It's there that science is turned into policy.
Such policy is critical for the whole world - and urgent for southern Africa, which is particularly vulnerable to climatic changes. The region has already been experiencing climate changes that are more rapid, and with impacts that are more severe than the global average. It also struggles with a low adaptive capacity: there's little capital available for investment in measures to protect against future climate hazards, and very pressing immediate human rights needs for a large proportion of the population.
There's no avoiding the reality that southern Africa is in the throes of a climate emergency. By identifying trends in the frequency of weather events happening and its intensity over a period of decades, and exploring changes in related biological systems in light of this, it's plain to see that the region has already been rocked by climate change and related effects.
An increase in extreme temperature
Extreme temperature events can be defined by the maximum temperature, the deviation from the norm, or the length of time of above-threshold temperatures. A number of indices have been developed by the World Meteorological Organization to identify and quantify these extreme temperature events.
Warm events, when they meet specific criteria, are termed heatwaves. These are particularly dangerous for people, animals and plants, and are a direct cause of deaths.
In southern Africa, there has been an increase in the severity and frequency of heatwave events over recent decades. Interestingly, for a few locations, there has also been an increase in the frequency of extreme cold events. While this is not a feature of climate warming, it is induced by changes in regional climate patterns, such as the number of cold fronts which move over South Africa.
Severe drought
Drought is defined as a significant and prolonged departure from mean rainfall totals. The most severe, and best known, drought in southern Africa in recent years was the "Day Zero" crisis in Cape Town. While increasing pressure for water in the City of Cape Town played a role in this, a longer-term poleward displacement in the winter-rain-bearing westerlies which bring the cold fronts and rain to Cape Town during the winter months was a significant contributor to this drought.
Southern Africa more broadly is also sensitive to El Niño induced droughts. El Niño refers to warmer than usual conditions in the Eastern Pacific that persist for a couple of months through to years, driven by a weakening of the Trade Winds, and a resultant reduction in the upwelling of colder water to the sea surface just off South America. This was the cause of the 2015-2016 drought in South Africa's Kruger Park, which resulted in the drying up of watering holes, and the widely publicized death of hippos and later culling of other large mammals.
High intensity tropical cyclones
The southern African subcontinent is relatively well protected from tropical cyclones by the island of Madagascar. However, some tropical cyclones do form in the Mozambique Channel, and occasionally some tropical cyclones move across Madagascar. These storms can - and do, as was seen most recently with Tropical Cyclones Idai, Kenneth and Eloise - make landfall on Mozambique.
Over recent decades, tropical cyclones in the Southwest Indian Ocean have increased in intensity; the first category 5 tropical cyclone for the sub-ocean basin was recorded in 1994. Tropical Cyclone Idai, which bordered in intensity between categories 3 and 4 on landfall, provides stark evidence of the damage wrought by high intensity tropical cyclones in populated areas. There is also evidence that tropical cyclones have expanded their range polewards over recent decades, affecting a larger region of southern Africa.
Changes in the timing of phenological events
In addition to the weather, we experience from the changing climate itself, climate change also has an impact on biological systems. Phenology, which refers to the timing of annually recurrent biological events, is one of the most sensitive bio-indicators of climate change.
In South Africa, scientists have recorded advances in the timing of apple and pear flowering in the southwestern Cape, and of Jacaranda flowering in the Gauteng City Region. Warmer sea surface temperatures have also resulted in a delay in the sardine run along the KwaZulu-Natal south coast.
These shifts have an impact on agriculture and tourism, but more importantly demonstrate that climate change is having an effect on the natural environment. These shifts in timing cannot continue indefinitely. Plants and animals have thresholds beyond which the stresses of climate change will result in at least local extinction.
The picture seems hopeless, but with mitigation and adaptation strategies and policies driven through, among other processes, COP26, southern Africa can reduce the impacts of climate change on local livelihoods. It is important at this stage to invest in adaptation to reduce the impacts of climate change, and to make every effort to reduce our reliance on carbon to slow down climate change
Source: Allafrica.com

08 / 11/ 2021 - Africa: How Covid-19 Responses Impacted Africa's Food System

Cape Town — When the Covid-19 hit, governments all over the world became responsible for curbing the spread of the virus. Leaders across Africa came up with regulations that have affected the livelihoods of small-scale fishers and farmers, but in different ways.
The pandemic along with climate change have exposed and multiplied the vulnerability of food systems across the globe, increasing food prices and food insecurity, but especially in African countries who are least equipped to handle the multiple, ongoing crises. One-in-four people globally - 1.9 billion - are moderately or severely food insecure, a number that is on the rise.
The term food system describes the interconnected systems that influence nutrition, food, health, community development and agriculture. Right from growing, harvesting, processing, packaging, transporting, marketing, consumption, distribution to the disposal of food and food-related items. And this highly complex system operates within and is influenced by a host of social, political, economic, and environmental factors.
A project following the impacts of Covid-19 responses and the political economy of the African food system looked at South Africa, Tanzania and Ghana, and was funded by the International Development Research Centre (IDRC) and the Institute for Poverty, Land and Agrarian Studies (PLAAS).
"We have focused on three countries with three different farming and food systems that have also adapted different policy and regulatory responses to Covid-19 and looked at how those different policy and regulatory responses have affected food systems that themselves are already differently structured. Tanzania is a very smallholder based food system in contrast to South Africa's, which is based primarily on large scale commercial farming, but with a very large small scale sector and similarly a very highly corporatised, centralised supermarket based retail sector. It contrasts very strongly with the sectors in Tanzania and Ghana," says South African Research Chairs Initiative (SARChI) Chair Professor Ruth Hall.
The partnership between activist organisations and university based researchers chose these three countries with a particular purpose in mind. South Africa has a very corporate-based food system whereas Tanzania has a food system dominated by small scale farmers and small scale fishers and Ghana is somewhere in between. Similarly they're extremely different in terms of regulatory responses to Covid-19.
"We did in-depth qualitative research in these three countries in three sites per country and in South Africa we have outlined our three sites where the West Coast, focuses on fishing in the Western Cape, secondly, fresh produce in parts of Kwazulu-Natal particularly focusing on small scale producers in communal areas supplying informal markets into Pietermaritzburg and then thirdly the fresh produce sector in Johannesburg and Gauteng, much of which sources from Johannesburg and a lot of that market produce comes from Limpopo.
Reporting on the South African component, PLAAS conducted a large number of in-depth interviews with food system actors.
"When we say food system, it's not just farmers and shops, but a range of actors from input suppliers to primary producers be they farmers or fishers. In some cases traders, wholesalers, fresh produce markets and street vendors," says Hall, adding that their focus was explicitly on the informal sector and the small scale sector and looking at how Covid-19 affected them.
"So what we are explicitly not doing is looking at overall aggregate food production within South Africa. We're also not looking at hunger which has been adequately covered in other studies. So the interest that we have is not just if there's enough food in the country but how the regulations have affected particularly people who already are in a relatively marginalised position within the informal sector in South Africa's food system. So South Africa has a peculiar food system in which even the poor are net consumers of food," the research reveals.
Hall further emphasizes how the small scale sector and the informal sector of the food system in South Africa is actually vast.
"So while a lot of the food we eat is produced by commercial farms, processed by big agribusinesses and sold by the big four or five supermarkets chains. In fact a huge number of people derive their livelihoods from small scale farming, small scale fishing and informal street trade. We got some of the stats here which are quite remarkable. 2,5 million small scale farmers at least part-time and about 250,000 black small scale farmers producing for markets, often these informal markets that were particularly hard-hit during Covid-19, about 80,000 small scale fishers and as many as 750,000 street traders, most of whom have some food that they are selling," she says.
"South Africa has had a long, hard and very restrictive type of lockdown over the past 18 months whereas Tanzania has had almost no restrictions other than some export restrictions and travel restrictions but largely has not locked down. While Ghana had medium level of lockdown that was then lifted after some time. So both in-terms of the food system, the political and regulatory responses by government, we see quite a spectrum of experiences so there's a lot to learn from here," Hall said.
The research shows very clearly that these different responses have really impacted on the flow of fish that have been caught and sold to local, regional and international markets, affected the prices of fish and the supply chains with some people managing to keep within the system and even benefiting and others being locked out.
In Ghana, 60% of their fish produce is imported from Namibia, South Africa, Europe and also from the U.S. according to Patricia Blankson Akakpo, an activist with the Network for Women's Rights in Ghana.
"Locally we only produce 40% and during the Covid-19 pandemic, though we did not record any reduction on the fish flow, there were issues with fish flow across regions so transporting the fish from the south to northern Ghana was a problem because there were partial lockdowns which affected the flow of fish in the market," Akakpo says, adding that not only regulations affected the flow of fish, but also people's choices and fears about where they go and the fear of contracting Covid-19.
Maia Nangle from Masifundise Development Trust says the fishing sector in South Africa is largely dominated by a few big fishing companies and yet there's a very important small scale fishing sector that many coastal communities are part of and rely on for their livelihoods.
"South African fisheries and the food system in general is very much dominated by the corporate sector but so many small scale fishers and fishing communities rely on this for their livelihoods and basic incomes. The government's strict response to Covid-19 and implementation of extremely harsh lockdown regulations led to the closure of export markets, tourism markets as well as the restaurant industry which completely crashed. Those are all very important markets for small scale fishers and because of the closure of all those markets, there was an oversupply of fish with minimal demand and this caused huge drops on the price of fish," Nangle says.
The government of South Africa also supported sales from small-scale fishers to industrial fisheries such as Oceana, an investment holding company with interests in fishing, cold storage and shipping, linking the informal market to the formal, says Nangle.
"The reason for that is that within small scale fishers, there isn't much of post harvest opportunities or processing of fish. As fish need to be sold fresh and small scale fishers don't have cold storage facilities, they had to sell their produce at very low prices that they get at the moment. They can't keep the fish for longer then sell it when the price is higher, whereas in selling it to industrial fisheries who have the facilities to do that and wait till the prices are better."
In Tanzania, a lot of the fish trade is cross-border, inland and also along the coast targeting the tourist industry, restaurants and of course, that was disrupted even though there wasn't a hard lockdown.
"Tanzania didn't have strong lockdown. However, that didn't stop some of the effects that came along with Covid-19 and particularly during the very early days where restrictions were put forward. This really interrupted the flow of fish within the country but also along the borders because we couldn't trade across the Great Lake area but also if you look at the coastal areas, tourists, hotels and the whole hospitality industry play a significant role," says Tanzanian activist Editrudith Lukanga from the Environmental Management for Economic Development Organization.
Lukanga says in the coastal areas, closing borders with other countries restricted tourists from coming in and this impacted significantly on the traders within these hotels that were serving the tourists. There was a significant drop, people lost their jobs, incomes were significantly reduced and the fish traders had to look at some alternatives. One of it has been the growth of the internal consumption through internal markets which contributed to increasing nutrition for the communities, but had its own downside for the trader.
"Normally in these tourist hotels, fish sell at higher prices but when sold locally, prices go down because now, the availability and supply is high and therefore it is the business people that are losing in a way because they are now selling the fish at a lower price," she says.
Coming to the Great Lakes region, restrictions that were put within the border-post increased the running costs and brought a bit of trouble for the traders as transportation of fish across the borders was close to impossible.
"It became difficult now for fish to be transported to other countries. You cannot pass through a border-post without testing for Covid-19 and that adds on the cost, takes longer and therefor it puts the fish itself as a product at risk because it's perishable, so the business people where losing on that."
To the traders this meant to they had to look for alternatives.
"There's a Congolese trader who is based in Mwanza, working at Kirumba International fish market who had an interesting story. She says because of what has been happening at these borders, they had to look for an alternative route. Now instead of going through the normal route, they now had to travel by road from Mwanza to Kigoma where there's Lake Tanganyika, then board the boat from the lake across going to Congo. So that route
again, doesn't come without complications. It took longer and there are times when upon arrival in Congo, the fish has been spoiled, gone bad. Then the health officials would confiscate and then it would end up being wasted," says Lukanga. These are just some of the challenges the traders have been experiencing and how Covid-19 has really disrupted the fishery value chain.
While many have lost out, the effects vary between classes of boat owners, crew, processors, and traders - and each of these roles is highly gendered, with women playing dominant roles in fish processing and fish trade. Restrictions on mobility, cross-border trade and the collapse of tourism meant loss of markets in both Ghana and Tanzania, with school closures adding to women's reproductive burden at the same time that market opportunities were foreclosed.
Moderate or severe food insecurity has been climbing slowly for six years and now affects more than 30% of the world population, according to the Food and Agriculture Organization of the United Nations (FAO). And by 2050 the world will need to feed an estimated 9.7 billion people, all while protecting natural resources and biodiversity.
Source: Allafrica.com

05 / 11 / 2021 - World food prices reach new peak since July 2011 Global cereal production poised to hit an all-time high, stocks set to decline

The world food price barometer surged to a new peak reaching its highest level since July 2011, the Food and Agriculture Organization of the United Nations (FAO) reported today.
The FAO Food Price Index, which tracks monthly changes in the international prices of a basket of food commodities, averaged 133.2 points in October, up 3 percent from September, rising for a third consecutive month.
The FAO Cereal Price Index in October increased by 3.2 percent from the previous month, with world wheat prices rising by 5 percent amid tightening global availabilities due to reduced harvests in major exporters, including Canada, the Russian Federation and the United States of America. International prices of all other major cereals also increased month-on-month.
The FAO Vegetable Oil Price Index went up 9.6 percent in October, hitting an all-time high. The increase was driven by firmer price quotations for palm, soy, sunflower and rapeseed oils. Palm oil prices rose for a fourth consecutive month in October, largely underpinned by persisting concerns over subdued output in Malaysia due to ongoing migrant labour shortages.
The FAO Dairy Price Index rose by 2.6 points from September, influenced by generally firmer global import demand for butter, skim milk powder and whole milk powder amid buyers’ efforts to secure supplies to build stocks. By contrast, cheese prices remained largely stable, as supplies from major producing countries were adequate to meet global import demand.
The FAO Meat Price Index slipped 0.7 percent from its revised value in September, marking the third monthly decline. International quotations for pig and bovine meats fell amid reduced purchases from China of the former and a sharp decline in quotations for supplies from Brazil of the latter. By contrast, poultry and ovine meat prices rose, boosted by high global demand and low production expansion prospects.
The FAO Sugar Price Index dropped by 1.8 percent from September, marking the first decline after six consecutive monthly increases. The decline was mainly the result of limited global import demand and prospects of large exportable supplies from India and Thailand as well as a weakening of the Brazilian Real against the US dollar.
Source: FAO
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