Star 2023-01-27

SA CANEGROWERS yesterday ratcheted up its call to Finance Minister Enoch Godongwana to eliminate the sugar levy when he delivers the National Budget on February 2. This after it issued a statement yesterday, saying data it had compiled showed that the South African sugar industry was set to lose R723 million in 2023 due to load shedding. Godongwana faces a tough Budget. Ratings agency Moody’s Investor Services said last week that gross domestic product in South Africa was now likely to track below their previously downwards growth forecast of 1% in 2023, as a result of severe power cuts which continue to cripple productivity. SA Canegrowers said load shedding affected 1 135 irrigated growers who employ more than 10 000 workers. “Growers need a minimum of six hours of continuous…

RICHARDS Bay Coal Terminal (RBCT) said yesterday that last year’s coal export volumes decreased to about 50 million tons, the lowest level in 30 years, due to cable theft, the Transnet strike and wagon derailments. Speaking at a presser to unpack RBCT’s performance, CEO Alan Waller said Transnet Freight Rail (TFR) managed to rail 50.43 million tons (Mt) of coal to the terminal last year, which is down from 58.1Mt in 2021. He said the terminal exported 50.35Mt, compared to 58.72Mt in 2021. RBCT had forecast that TFR would rail 70Mt last year. The total throughput capacity of the terminal has been 91Mt per year since 2010. It achieved its best performance in 2017 when it exported 76.5Mt of coal. Waller said the biggest factor affecting the terminal’s performance was…

Economists feel Reserve Bank may be coming to end of rate hiking cycle The COST of borrowing in South Africa has risen slightly higher again after interest rates rose again yesterday in spite of softening consumer price inflation and amidst the devastating rolling power cuts that have shrunk any prospects of economic growth. The South African Reserve Bank (SARB) raised its benchmark interest rate once again by 25 basis points to 7.25% in a split decision yesterday, although below market estimates of 7.5%. This marks the eighth consecutive rate hike since policy normalisation started in November 2021, and means that the prime lending rate on a base home loan will now increase from 10.5% to 10.75% per annum. The monthly loan repayments on a 20-year-long R1 million bond will now…

WESTERN countries have moved with speed to counter any possible influence of the Russian government in South Africa’s Just Energy Transition Programme (JETP) on the heels of Russia’s foreign affairs minister’s visit. This comes as US Treasury Secretary Janet Yellen and a delegation of the European Union (EU) met with South Africa’s government ministers to discuss the JETP yesterday. Yellen held bilateral talks with Finance Minister Enoch Godongwana and Energy and Mineral Resources Minister Gwede Mantashe early in the day, before speaking with President Cyril Ramaphosa in a closed meeting and visiting a US-owned Ford car plant in Pretoria. South Africa is the first country in the world with a Just Energy Transition Partnership which aims to wean it off fossil fuels and encourage investment into renewable energy, thus achieving…

OUTSURANCE Holdings (OHL), formerly Rand Merchant Investment Holdings, said yesterday its earnings for the six months to December 31 would primarily be derived from its 90%-held subsidiary and owner of OUTsurance South Africa, and the Youi Australia insurance operations. The results follow the group’s disposal of Hasting Group and the settlement of preference debt in 2021, and the unbundling of the interests in Discovery and Momentum Metropolitan Holdings in April, 2022. OHL said in a trading statement that normalised earnings per share (Neps) – from continuing and discontinued operations – was expected to be more than 20% lower than the Neps from continuing and discontinued operations of 125.5 cents per share reported in the comparative period. OHL said its performance for the six months included a significant increase in Youi’s…

Steel prices have fallen fast in the past few months, indicating difficult global economic conditions ahead and lower margins for local producers struggling against a range of issues such as the devastating impact of the ongoing load shedding. In response to Business Report questions about the implications of falling steel prices, the Steel and Engineering Industries Federation of SA (Seifsa) said while it did not bode well for the sustainability of local producers, the low prices also indicated low consumption which was, in turn, a function of the global economy. Factors intensifying global headwinds include a possible recession in the US, inflation which, while it had started levelling off, was stubbornly high, and tighter financing conditions. “Domestically, the issues of the energy crisis, which has major implications for steel producers,…