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The policy uncertainty created by the prices for exporting industries. Unfortunately, a
confusing statements about the future of the weaker rand also results in higher prices for
Reserve Bank combined with the global policy import-based farm requisites. Higher summer
uncertainty, mainly driven by Trump vs China grain prices caused by the lower US plantings
and Brexit, have already resulted in a flight and the weaker rand will affect the price of
away from South Africa. On 7 June, foreigners cotton by-products positively. Chances are
sold an all-time record R9,6 billion worth of that interest rates will remain at current levels
government bonds. In the current year capital or decrease slightly in coming months. Global
inflow for government bonds and to the JSE and local economic conditions are uncertain.
are still positive. However, the combination of Now is not the time to take big financial risks.
international and local uncertainty can result in Farmers should compile capital budgets with
a further serious outflow of capital. conservative income projections.
IMPLICATIONS FOR
AGRICULTURE
Weak retail demand will affect food prices
negatively. Lower global economic demand may
affect export demand. However, demand in the
huge Chinese and Indian markets will continue
to grow, driven by the new emerging middle Farmers should
class. The weaker rand will result in higher
compile capital budgets
with conservative income
projections.”
Volume 21 No 3 September 2019 | 17