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Johannesburg - While global food shortages and high prices could have a disastrous impact on poor communities, especially
in Africa, it offers third world countries an opportunity to rejuvenate their ailing agricultural industries.
These industries have for many years been hampered by low prices caused by large scale subsidies in the Western World, according to Crookes Brothers chairperson Fred Palmer.
"We believe too that this will offer development opportunities for CBL, possibly outside of South Africa in our neighbouring SADC countries," said Palmer.
However, he told the agricultural group's AGM on Friday that while admirable in principle, the present structure of land reform could pose a threat to the food security situation in South Africa.
"Current evidence suggests that small growers will be unable to
produce efficiently on small areas or in sufficient volumes to feed our growing population," he said.
He believed that Crookes Brothers had a part to play in addressing the shortage of skills in the agricultural sector and to provide support for community beneficiaries of land claims.
"Thus management are taking the bold step to establish joint venture schemes to assist new owners of land to remain highly productive in a sound and efficient manner."
Looking ahead Palmer said it was early in the year for management to make accurate profit projections especially as only three months of the financial year had passed.
Indications however were that sugar cane yields will be similar to last year, but that anticipated price increases will be
inadequate to overcome cost increases, resulting in a decrease in income from cane.
Viability of cane
He added that the impact of the increased input costs was particularly severe in the dryland cane farming areas of KwaZulu Natal, where it will seriously affect the economic viability of cane growing and exacerbate the problems posed by declining production and under-utilised mills.
Unless the sugar price increased substantially, a radical restructuring of the KZN industry was expected.
Palmer said the banana crop looked promising but prices in the local market were volatile.
"The volume of apples picked in the recent season exceeded
expectations, and high selling prices are expected to remain firm for the rest of the year.
"Grain is still in its early growth stage and with late winter rains, production is unlikely to reach last years levels, but prices are expected to remain higher, on average, than last year.
"In terms of citrus, excellent grapefruit yields have been achieved thus far in the season, but the average fruit size has been small with an adverse impact on the export pack-out.
Oranges are still to be picked and volumes are expected to be similar to last year. Indications are that good export prices will be achieved for citrus, and the company should benefit
from revised marketing arrangements," Palmer told shareholders.
"While JSE rules prevent me from making a forecast of next year's profit, shareholders should not expect surprises either positive or negative. We are on track to hold our own against the headwind of cost pressure," he added.
- I-Net Bridge