The Agricultural Business Chamber (Agbiz) has announced that its bi-yearly Grain Symposium will take place over four days virtually in September 2023.

Agbiz Grain GM Wessel Lemmer told journalists during Agbiz’s Media Day, on December 1, that each day of the symposium would be limited to between two and three hours to allow for maximum attendance of those involved in the grain handling and storage sector and their clients.

In the run-up to the event, Agbiz has approved projects to allow for thought-leading content focusing on the issues in the grain handling and storage sector.

The members of Agbiz Grain handle and store about 70% of all the grain and oilseeds produced in South Africa.

The division’s main areas of concern at the moment involve market-related conditions, food safety and quality and the economics of grain storage.

Lemmer explained that, because storage operators play such a vital role in the functioning of the market, it is important for clients to have access to stock for out-loading and to ensure price convergence between the cash price and the futures price upon expiry.

To this end, Agbiz Grain is engaging with the JSE to find practical cost efficient solutions to a problem faced by all market participants.

Lemmer elaborated that planting happens in November 2022, for example, and flowering by February 2023, harvesting by July 2023 and delivery to silos by end-July. Effectively, clients pay a certain price in March 2023 for despatch that only happens later in the year.

“If a producer cannot out-load at a certain point, costs go up and deliveries are late. We are constantly negotiating from a storage point of view with the JSE to see what can practically be done to improve the access to stock to the rest of the market.”

Additionally, Agbiz Grain has embarked on an initiative to address the unintended impact of market power that stifles the competitive environment of the storage sector. Agbiz has consulted legal expertise in competition law and says it is ready to address this concern to keep productivity high and increase competition in the handling and storage of grains.

Lemmer said the organisation aimed to discuss the outcomes of all initiatives during the symposium.

Moreover, he explained that Agbiz was focusing of the economy of the grain storage sector to improve competitiveness and the productivity of silo complexes. Lemmer said the Producer Price Index (PPI) is a leading indicator of the year-on-year changes in JSE storage rates and this serves as a leading indicator of storage rates in the physical market, however, the storage sector operators in the rural economy face unique cost factors and service delivery challenges in the countryside.

The basket of storage costs is, according to Agbiz Grain, unique and not comparable to the basket of items making up the PPI. Instead, Agbiz Grain has started measuring and benchmarking costs through third-party research to understand where the productivity gains are, to improve the sustainability of the sector.

Lemmer said it was in the interest of all market participants to address the concerns that limit investment in silo infrastructure on the one hand, and drive costs higher on the other hand.

Meanwhile Agbiz Grain is also in the process of developing a standard operating procedure as to an appropriate sampling apparatus that will fit the need of all stakeholders involved in sampling of grain in the value chain, towards greater food safety and quality in the grain sector.

Lemmer confirmed that the outcome and impact of this initiative would also be shared during the symposium next year.