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Yellow corn deluges most in calendar month as rand weakens

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Yellow corn in South Africa, the continent’s biggest producer, rallied the most in a four weeks after the nation’s foreign money slumped the most in five years against the bill, making locally created grain more attractive relative to imports.

Yellow corn for December delivery climbed Three.2%, to R3 214 ($225) a full ton on the Southerly African Futures Transaction in Johannesburg. That had been the biggest increase considering October 11. The white variety for the exact same month advanced for just a third day, including 2.8% to R3 735 a large amount.

The currency of Africa’s main economy depreciated nearly 5.2% against the money on Thursday along with extended the lose today, leading a decline among emerging-market money together with the Mexican peso for expectations that United states president-elect Donald Trump’s spending ideas will boost inflation in the country, leading to soaring US Treasury yields together with undermining the case for more dangerous government debt.

“The less strong rand is the key driver within the market at the moment,In . Wandile Sihlobo, the head of economic and also agribusiness intelligence at the Pretoria-based Gardening Business Chamber, proclaimed in an e-mailed response to questions.

White corn, which Southern region Africans use to make a preference food called pap, has dropped 29% given that reaching a record on January 20. Charges have declined as analysts forecast your recovery in the plant, which has been hampered by simply two straight numerous insufficient rains.

Farmers will increase the area planted using corn by 27% within the 2017 season that ends in April as foresee showers relieve your worst drought regarding record, the Crop Estimates Committee stated October 26.

“With the particular expected shortfall within white-maize supplies later this current year, buyers are finding the current levels attractive,” Sihlobo said, using yet another term for corn.

? 2016 Bloomberg

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Industry

Lonmin buys out Amplats’ investment in Pandora

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Platinum mining company Lonmin Plc mentioned on Friday it’d buy Anglo American Platinum’azines (Amplats) stake in their partnership Pandora mine to get between R400 million and R1 billion.

The acquisition of Amplat’s 42.5% stake, and that is subject to regulatory consent, will give London-based Lonmin a 80.5% stake in the my verizon prepaid phone, leaving Northam Platinum Limited with 7.5%.

“Through out Anglo Platinum with the decision making process, it is usually easier to progress points for the asset,” Stem Hunt analyst Peter Mallin-Jones said.

The acquisition will probably be paid for with 20% associated with free cash flow within the Pandora mine within the next six many years, with the final price dependant upon platinum prices.

For Amplats, a transaction brings the idea closer to its goal of offloading its labour intensive mines to focus on mechanised mines. The business completed the profit of the Rustenburg mines to Sibanye Golden last week, with just just one mine left unsold.

“Amplats had not been going to go for the development plans for the asset because it had change assets to focus on,” Mallin-Jones stated.

A recovery in jewelry prices and cost pieces helped Lonmin, which was struck hard by a five-month income strike in 2016, to post a narrowed once-a-year loss in May.

Lonmin stocks, which have climbed 150% in 2010, fell 10% in London plus 11.78% in Johannesburg. Amplats shares were along 3.58% on the Gauteng Stock Exchange.

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Industry

State of Record is nonsense – Eskom

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Eskom came out swinging due to its embattled CEO, Brian Molefe, on Friday following suggestions made in the State of Seize report released from the Public Protector a week ago.?

“Regarding the continued innuendo that Eskom continues to be giving special wedding favours to Tegeta Exploration plus Resources, the Eskom Table stands firm through the processes undertaken by the company to conclude plug-ins of its coal present agreements with its providers. We are satisfied which will due process had been followed and we may be proud of the financial savings achieved by the professional team to date,In said Eskom Chair, Dr Baldwin Ngubane.??

Ngubane was joined for the dais by Dr Billy Naidoo, the lead independent non-executive overseer of the Eskom board, CFO Anoj Singh, along with company secretary, Suzanne Daniels. Mark Molefe sat in the target market but rose to pay specific questions the place necessary.?

Naidoo made a powerpoint presentation which addressed the problems that had?been raised around the Tegeta prepayment together with contracts?it possessed received to supply Majuba, Hendrina, Arnot as well as Komati power stations. Naidoo reported categorically that all long term contracts were awarded in step with Eskom’s procurement policies, where conflicts of interest been around between board customers and related get-togethers, the conflicts were definitely disclosed and sorted out. ??

While presenting Eskom’s side with the story – much of which we can only take during face value nevertheless there is no tangible way of verifying – Naidoo repeatedly explained they were here to present the facts so they could possibly get on with running the company.?

The irony is that this briefing exclusively came about because of a frightening report by the Open public Protector. So where has got Naidoo been hiding during the last five months? The place was Ngubane, as lounge chair of the board, whenever all of these accusations begun swirling in early June? Where was Molefe if your highly incriminating, almost comical, interview with Koko regarding Carte Blanche aired upon June 12? (Molefe solely responded to the issue almost a month later on the group’s annual results presentation when enquired by Moneyweb.)?

None of the table has intervened until now to address issues that have been in the populace domain for a few months, and which have deservingly or wrongly infected the reputation of a utility and the way it’s going about conducting it has the business.?

But back to the down sides. Despite being sent multiple times on the reason for the prepayment to help Tegeta, there were no satisfactory answers. “It was for fossil fuel,” was the conventional response.?

The need for financial help implies the service provider would have a problem providing coal Eskom sought while in the time frame they demanded C otherwise, why ask for it??

Eskom describes various examples in its website that demonstrated that is a common practice for that utility to undertake.?

Some for example: “During the 2016 emergency, Eskom Table approved advance bills to the value of R400 zillion to enable suppliers to execute projects needed to supply fossil fuel.” (We extra the emphasis).?

And: “Furthermore, any prepayment in the form of credit was provided to Liketh within 2016 to buy equipment to practice coal from the Kleinkopje Pit 5 West.Half inch?

Also: “Eskom has also entered into loan product agreements to assist Rand Mines regarding capital expenditure.”?

As you can see from your above, there was a given purpose for the prepayments. In case pressed on the issue, no-one from Eskom could demonstrate what the money mortgaged to Tegeta was actually used in.?

The other gaping hole in their narrative involves Koko (Eskom’s Head of Generation). When prepayment was this kind of common practice, the reason did he reject any transfer of money to Tegeta in his interview on Carte Blanche? He could have just said Eskom needed the fossil fuel, as soon as possible, and this has been standard practice. The silence from the constructed executives and mother board members on this place was deafening regarding Friday.?

It has since come to light by amaBhungane?the fact that prepayment made to Tegeta has been approved in a matter of time by the Eskom board simply just two days before the business had to pay R2.Fifteen billion to acquire Maximum. The amount of the loan lengthened corresponds neatly because there are many money Tegeta was small to meet the purchase price regarding Optimum.?

The circumstances resulting in the sale with Optimum by Glencore also are highly disputed. In line with the Public Protectors’ report, Eskom and Glencore had made excellent progress in dealing with the issue of the amount Optimum received for the coal it supplied to the Hendrina power station.?

As far back as This summer 2016, Optimum had written to be able to Eskom invoking the “Hardship clause” in its contract, stating that “the difference between the price tag to produce coal and also the selling price to Eskom is roughly R166.40 [per tonne]” C State with Capture (5.Hundred fifty eight b. pg 137).?

This began an operation of negotiation and also evaluation by the not one but two parties (described in the report) which included Eskom agreeing to a new price in accordance with the fact Eskom and its advisers had extensively audited Optimum’s charges (5. 169 of the survey).?

The process went so far down the road that Eskom’s Executive-Procurement Panel approved a new plan on March 25 2016, and advanced the item to the Eskom board to get final approval.

Concurrently, Bob Molefe was appointed behaving CEO of Eskom on April 17 2016.?

The full Eskom board met regarding April 23 2016 but declined to make a decision to the matter.??

On May 19 2016, in a meeting concerning Molefe and the CEO for Optimum – a month just after his appointment – Molefe advised Optimum “Eskom would not be deciding any deal with OCM in addition to would continue imposing the existing coal produce agreement.”?

Molefe later on cited the reasons for the about-turn. In a letter to be able to Optimum on August 10, he written, “considering Eskom’s current financial position, which can be public knowledge, most of us unfortunately cannot afford to help reset the contract selling price, to that proposed by Optimum Coal Mine.” The communication added later this “It remains priority pertaining to Eskom, to ensure the security with the coal supply that will Hendrina Power Station..In.?

At this point, Optimum received exhausted its accessible credit lines and ended up being requiring R100 million monthly to keep itself making money.?

An uninformed reading within the letter would suggest Eskom was not able to afford to increase the worth of coal, nor could possibly it afford any sort of interruptions in supply to Hendrina, given that the business was load-shedding at the time.?

So Moneyweb squeeze question to Molefe for Friday: why have he do an about turn from the recommendation of his very own people? He appeared to be, of course, fully qualified for, as the executive venture of the organisation that will overrule recommendations of employees, but he decreased to state the reasons pertaining to doing so. Instead, this individual replied by indicating this was a question that should have been put to your ex by the Public Parent.?

What he did make apparent in his presentation with Thursday, was this Glencore CEO Ivan Glasenberg had in result, “held a gun in our head” in the negotiations forwards and backwards parties. “He threatened to close down the operations except in cases where they received a better price,” stated Molefe. This is an accusation fiercely disputed by Glencore.?

Molefe likewise refused to discuss the causes for the 58 calls between himself in addition to AJ Gupta at the same time as he has been embarking on the u-turn with Glencore. Nor did he or she reply to any questions around the nature of their relationship with AJ Gupta and the broader family. But he is on the file as saying “they are usually nice people” and that he “has found them once or twice.”?

Eskom summarised Molefe’s conflicts of interest inside following way:

?

But he is a member of the plank, the same one that fulfilled and then refused that will agree to a new plan with Glencore. But then again, none are any of the Guptas police officers of the government or maybe members of cabinet. Consequently, perhaps Eskom is lost the point. They need to investigate the relationships between the Guptas, Molefe and also the Board to establish objective and whether there has been any undue affect.

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Industry

SA’s mining appropriate slot says court final decision limits power of basic safety inspectors

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South Africa’s Chamber regarding Mines said on Tuesday that any Labour Court judgement overturning a government-imposed security stoppage at an AngloGold Ashanti quarry placed limits around the power of state personnel.

The industry in the world’ersus top platinum manufacturer has for years reported that government inspectors have been imposing irrelavent work stoppages over safety, costing billions of rand in lost output and also putting mines and work on the line.

The ruling worried a Section 54 protection stoppage – named to your regulation they fit in – at AngloGold’s Kopanang my very own last month.

The judge discovered that the blanket blockage of the entire my very own because of infractions relevant to tramming and the storage associated with explosives in one section – Point 44 – was excessive and should have been given to just that area of the business.

“We believe that the Labour Court has, in cases like this, clarified the limits for the powers of the inspectorate,” This Chamber of Mines stated in a statement.

The marketplace has in the past wanted to persuade the Department of Mineral Assets to avoid what it calling “unjustified stoppages” that are compounding marketplace losses in a market struggling with a supplies price slump.

The department of mineral assets did not immediately respond to emails and phone demands its response to the court ruling, which was designed on Friday.

The mines ministry offers justified the sheet stoppages, saying on a lot of occasions that they are needed to save lives.

With a good unforgiving geology, South Africa is home to any world’s deepest mines where workers labour up to 4 km (2-1/2 mls) beneath the surface.

Nevertheless, the market had been making fantastic safety strides, along with mining deaths slipping for eight immediately years – until this current year, with a spike during deaths that has elevated red flags.

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Industry

Clothing retailers: modest Christmas cheer

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Consumer spending remains?inside the doldrums in SA, with climbing living costs extremely weighing on purse strings.

This has been obvious in the poor income updates posted simply by major retailers C ?with the clothing category demonstrating more strain than food.

In the second district of this year, genuine (inflation-adjusted) household consumption expenses C a key driver of monetary growth C grew by a pedestrian 1% after a contraction of 1.7% in the previous three months, latest figures in the Reserve Bank show. ?Household consumption increase, which accounts for a lot more than 50% of SA’s GDP, provides muddled along considering that the 2016 financial meltdown.

At duration, consumers’ disposable earnings continues to be eroded?using a pile of debts from unsecured lender to store accounts, typically felt by the lower-to-middle salary segment that is additionally facing rising being out of work. ? ?

Underscoring consumers’ love affair having credit is that domestic sector debt-to-disposable income proportion has risen since 1995 from 57% so that you can 76.6% for the primary quarter of 2016 C it is actually too high for convenience.

These are the consumer headwinds which retailers are up against as they quite simply attempt to eke out increase a worrying economic climate that is growing in the glacial pace.

As Chris Gilmour, a trade analyst at Absa Huge selection & Investment Management applies it: “Consumers are confronting intense pressure. Their own spending is under pressure, almost certainly more than ever.”

Fashion retailers suffer

Fashion vendors are more vulnerable throughout tough times as individuals typically prioritise the devote to food rather than optional income-dependent items such as clothes, furniture and appliances.

Although most clothing vendors grew sales, it is undermined when removing out inflation in addition to effects of new retailers, resulting in negative gross sales growth for many shelves.

Even market darling Woolworths, that has long been shielded from pessimistic retail times car without any wide range of merchandise that panders to several LSM groups, is starting to feel the pinch.

In any grim trading revise on Friday, Woolworths’ clothes and general product business increased income by 2% but can be negative when invoice factoring its selling price inflation (a key metric to measure the price movement of merchandise) of 7% and innovative store space development of 2.9% for 19 weeks of its economical year.

Sasfin Securities mature retail analyst Alec Abraham states Woolworths’ downbeat trading update had been expected given individual pressures. “Woolworths has used reasonably well because of the broad consumer aim. If you want to buy all the way down, you can stay at the exact same store network. In addition, it has high-end merchandise intended for higher LSM consumers,In Abraham tells Moneyweb.

Even retailers that will mainly target center to lower-end consumers including Mr Price feel the pain. The no-frills retailer is feeling any?pressure with pedestrian sales growth of 1.4% to R8.6 mil in the 26 days to October Just one. Excluding space continuing development of 2.2% and value inflation of Twelve.4%, sales fell by simply more than 10%.

CEO Stuart Bird, that has been at pains to explain Mr Price’s inadequate showing, blamed some sort of unseasonably warm winter in addition to aggressive discounting by opposition for humdrum profits growth.

Bird says given that April, its challengers have been discounting merchandise aggressively, sometimes by as much as 70% journey full price. Because of this, their competitors have profited at its expenditure.

The theory was that in tough economic instances, consumers would exchange down to Mr Price, putting the retail merchant in good stead as compared with its competitors.

“Mr Value slipped on it has the niche of having popular clothes at an affordable price, yet H&M and Silk cotton On have pressed into this area and are taking it has the market share,” says Abraham.

Credit sales

Other retailers have been reach by the turning credit ratings cycle. The Foschini Set (TFG) and Truworths International, which has been traditionally reliant on credit ranking sales, have been on the spine foot due to the Nation’s Credit Regulator’s new price assessments, which look to rein in uncaring lending to increasingly indebted consumers. Read more info on the regulations listed here.

TFG’s credit sales, human resources 40% of its total income, grew by A single.4%. On the other hand, Truworths saw their credit sales (accounting for 70% of total revenue) decrease by 1% for the first 18 many days to October 31.

Clothing retailers have been gaining from food retailers who have invested in price (any practice by merchants keeping prices lower and accepting decrease margins from power savings and supply chain efficiencies to remain cut-throat), resulting in consumers getting more disposable money to buy clothes, states Abraham.

“Everything has against merchants,” says self-sufficient analyst Syd Vianello, adding which will apparel retailers own run out of room to purchase price. “Retailers are going to higher price points his or her gross profit margins (even of profitability) are beginning to decline. If this pattern continues they are going to make losses. Greater prices for backpacks are the new normal,Inches says Vianello.

Crucial festive months?

?There are few signs that there will be a recovery inside the retail landscape even with the crucial festive months looming. As a staffer in the fashion retailer inside Sandton City explains: “Christmas accents at stores have been hung late, unfortunately we cannot see much encourage this year.” ?

Supporting that view is Stefan Salzer, spouse and managing director at The Boston Consulting Class, who says special occasions is always a time when “folks do the little optional spending they can continue to afford.”

“In that sensation we may see a little a catch up impact on discretionary spending above December. I be expecting many retailers are functioning on very competitive strategies for the christmas season. They may have loads of stock left and will also be looking to make up several lost ground of their annual results,” suggests?Salzer.?

In order to ride outside SA’s retail malaise?Salzer says retailers have to accommodating when it comes to factors like their very own pricing of goods, that operate their organizations and where their products are sourced. “It’s also important to remain clear about the exceptional proposition that they?supply to the?customer,” this individual adds.?

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Industry

Zuma’s waning power exposed by stalled SA fischer plan

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South Africa’s decision to booth plans championed by Leader Jacob Zuma to build fischer plants has uncovered his waning expert.

News of the delay came out Tuesday when the Department of Energy said additional fischer power won’t turn on stream until 2037 below its “base case” scenario, 15 years later than formerly projected. While Zuma states reactors are key to treating power constraints around Africa’s most-industrialized economy, Finance Reverend Pravin Gordhan, economists and evaluations companies warn this South Africa can’t afford these people now.

“Essentially the project continues to be indefinitely postponed and also the final decision on atomic power will only be utilized by Zuma’s successor,Inches?said Robert Schrire, a new politics professor with the University of Cpe Town. “This is a great success for economic rationality together with political expediency and mirrors the new political balance of a weakened Zuma management.”

Zuma is scheduled for you to step down because leader of the overseeing African National Our lawmakers next year and his secondly term as us president ends in 2019. Calls for them to quit have increased as political missteps and a feud with Gordhan in the tax collection agency roil markets. Compounding his particular woes is a top court ruling he violated his oath of office by refusing to repay individual funds spent on replacing his private property.?The nation’s investment-grade credit rating influences balance.

Zuma has at this point weathered the grievance because most members of a ANC’s National Executive Board remain loyal to your pet.

Gordhan’s victory
Gordhan won a win this month immediately after prosecutors withdrew fraud charges next to him for presumably approving a old age payment to a taxation agency official, two days before he was due to appear in courtroom. The Democratic Alliance, the leading opposition party, alleged that Zuma intended with all the court case as a pretext for firing Gordhan and in accomplishing this remove the biggest obstacle to his nuclear ambitions.

The party as well says that Zuma may have witout a doubt signed a technique nuclear power supply handle Russia and that the course would be used to advantage his own financial passions and those of his / her allies. The president plus the government deny your allegation.

The appointment involving Gordhan, itself, almost a year back was a major strike for Zuma. The president has been forced by his party and organization leaders to replace Plusieurs van Rooyen, a little-known lawmaker, merely four days right after his decision to him as pay for minister caused this rand and the nation’s includes to plunge. After that Zuma also acceded to Gordhan’s demand for a new board during state-owned South African Air route.

Revised plan
“The revised energy approach?will give some comfort to those concerned about the danger of reduced influence with institutions such as the Treasury in addition to central bank for a more presidential system,In . said Mark Bohlund, Africa economist with Bloomberg Intelligence working in.

Bongani Ngqulunga, Zuma’s spokesman, referred problems on the power want to the energy department. The blueprint wouldn’t have been launched without the government’s assistance, he said. ?

Energy Minister Tina Joemat-Pettersson advised reporters the power system was updated to reflect developments in the power industry, including variations in technology costs along with lower-than-anticipated demand.?The version plan will be selected next year.

Eskom Holdings SOC Limited., which supplies about Ninety percent of the nation’s electric power, isn’t shelving their nuclear plans but. The state utility will continue seeking requests for proposals to build brand new reactors?pending the completion of the energy plan, as it could ultimately determine they will be needed the moment 2025, Matshela Koko, its group govt for generation, advised reporters. It won’t be qualified to fund a quantity of nuclear reactors itself together with would need Treasury guarantees to advance them, according to Dennis Dykes, chief economist at Nedbank Group Ltd.

The dynamics of ability in South Africa are generally shifting, according to Keith Gottschalk, any political scientist on the University of the Western Cape in Cape Town.

Zuma is “still capable to out-vote and out-maneuver his opponents in the ANC, but the installation pressure has supposed he has not been able to always get his or her own way all the time,Inch he said. “He is in the process down like a slow-leaking hole.”
? 2016 Bloomberg L.P

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Win one of three R6 A thousand savings accounts

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Industry

Consolidate industry, says PPC CEO

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Darryll Castle, PPC Founder

South Africa’s cement industry could benefit from consolidation and there is too many players is bigger of the market, in line with Darryll Castle, the chief account manager officer of the state’s largest producer, Paid advertising Ltd.

The company is “keeping some sort of an eye on the whole market,” Castle claimed in a phone appointment on Wednesday, following declining to inquire into whether PPC is within talks with competing AfriSam Group Pty Ltd. The two main Johannesburg-based companies have revived discussions about a merging almost two years once talks were discontinued, people familiar with the matter said this week.

“There’s somewhat clear rules and regulations about when you need to state things, and there’s not even attempt to announce,” Citadel said. “In the longer term there’s no doubt that there needs to be some kind of loan combination in the industry and you can guarantee that as PPC may well benefit us for the reason that we are the big person.”

South Africa’s construction industry and also infrastructure spending is under pressure as Africa’s most industrialised economy heads for its weakest annual progress since 2016. There are all 5 producers operating in the united states, and consolidation is needed cut costs and develop efficiencies for the still left competitors, the Founder said.

A combination of PPC and AfriSam is likely to possess the support of the continent’s premier fund manager and AfriSam’s controlling shareholder, anyone Investment Corp., according to the men and women familiar with the matter, exactly who asked not to be identified because the deliberations usually are private.

Supporting margin
PPC is usually focusing on reducing charges to support its gain margin while it tidies up projects in Nigeria, Ethiopia and the Democratic Republic of Congo, A kind of fortification said. The company expects cement prices in order to bottom in its housing market and gradually surge in 2017.

First-half headline earnings in each share plunged 66% for you to R0.14 as funding costs increased, the company said in an early on statement. Sales received 15% to R5.2 billion ($364 million), while the debt-to-earnings just before interest, taxes, decline and amortisation ratio has been cut to 2.Half a dozen times from 3.8 times after a liberties issue.

The shares?sealed 2.04% higher from R6.00.

The earnings decrease caps a tumultuous a few months in which the company protected a R2 billion assets and guarantee capability and raised R4 billion dollars in a rights concern after S&P World Ratings cut it’s credit rating to useless, triggering early redemptions by just bondholders and raising assets concerns. The company’s personal debt had more than tripled over three years mainly because it poured money in new African projects while battling competitiveness, slowing economic progress and falling price tags in its home market.

“The effective completion of the legal rights issue allowed us to significantly cut down debt levels in addition to strengthen our sense of balance sheet against the cyclical character of our business,” Castle said inside statement.

? 2016 Bloomberg L.P

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Industry

JSE says concerns elevated about Mexican hammer toe

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Concerns about the quality for white corn imported by South Africa mainly from Mexico following worst drought inside recorded history were raised by the advisory committee to the JSE Limited, which runs the nation’s agricultural derivatives current market.

“One of the agenda items was discussing foreign product and unfamiliar delivery onto JSE agreements,” Chris Sturgess, the commodities derivatives movie director at the exchange, proclaimed in an interview for Wednesday. “There’s a mix. Quite a few millers welcome the product.”

The committee consists of traders, millers along with farmers, according to Sturgess.

In the marketing year this began May An individual South Africa has brought in 516 935 tons of white callus with 97% of that coming from Mexico. The whitened variety of the almond is used as a choice food in the country although yellow corn is principally fed to pets.

? 2016 Bloomberg

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Industry

SA provides R212m in famine relief to farm owners

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JOHANNESBURG – South Africa’s agriculture ministry said on Monday the Treasury has provided R212 mil ($16 million) in drought relief for puppy feed to be given in the last three months associated with 2016 to help livestock farmers hard hit with a devastating drought.

“This drought’s devastating effects are quite palpable and present a risk of community upheavals. While some parts of the country are receiving some rain, the continent in its entirety is receiving below average rainfall,” the ministry said in a statement.

($1 Equals R13.4600)?

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