Markets are overly optimistic about a volatile ceasefire
After 38 days of war and an oil price that had climbed roughly a third above preconflict levels, markets were primed for any good news. The announced ceasefire thus understandably triggered a relief rally on the JSE on Wednesday (“Iran ceasefire triggers JSE buying spree”, April 9). However, the scale of the bounce reflects a degree of optimism that is not warranted by the terms of the ceasefire.
The ceasefire announced on April 7 is a two-week pause, not a settlement, and the distance between those two things is considerable. Iran’s 10-point counterproposal includes demands for Iranian oversight of the Strait of Hormuz, the full withdrawal of US combat forces from the region, the lifting of all primary and secondary sanctions and compensation for war damages.
Within 24 hours of the ceasefire announcement, a discrepancy emerged between the Persian and English versions of Iran’s own proposal. The Persian text included the phrase “acceptance of enrichment” regarding uranium, language that was absent from the English versions shared by Iranian diplomats with journalists.
Throughout the first day of the ceasefire the Strait of Hormuz remained largely blocked, with sporadic fighting continuing across the region. Israel has stated the ceasefire does not apply to Lebanon, where it remained engaged in an active ground campaign and Hezbollah recorded its highest single-day attack volume since the conflict began on the day the ceasefire was declared.
The market’s read of the energy situation is incomplete. Oil at about $100 per barrel is not normalised, it is still a third above its prewar level. Energy infrastructure damage across the region is severe. The export capacity of the Ras Laffan LNG hub in Qatar, which produces roughly a fifth of the world’s liquefied natural gas, was reduced 17% in mid-March strikes, with full repairs expected to take five years. These structural capacity reductions will translate to long-term inflationary consequences regardless of the outcome of the Islamabad talks.
Iran’s own ceasefire acceptance statement was explicit that the agreement does not constitute the termination of the war. Markets appear to have read the headline and stopped there.
South African investors have good reason to hope for stability in the Middle East. The JSE’s sensitivity to oil-driven inflation and rand pressure is well understood, and a genuine, durable settlement would be consequential for our economy.
However, Wednesday’s rally priced in a resolution that has not yet occurred, on terms that have not yet been agreed, between parties whose stated positions remain irreconcilable on the most fundamental questions. The ceasefire is a volatile pause in an unresolved conflict.
Ofentse Donald Davhie
Centre for Risk Analysis
Investors face hurdles from energy costs, policy setbacks and red tape
Duma Gqubule’s article refers (“In Ramaphosa’s ‘business friendly’ era investment has plunged”, April 7).
Investments such as Medupi and Kusile that come in at about seven times higher cost than the equivalent station build in India? Wonderful.
Meanwhile, because President Cyril Ramaphosa stated he was business-friendly doesn’t mean his government is net business-friendly. Most foreign observers would consider much government policy from 2018 in aggregate as nett regressive, even adjusted for the very necessary Operation Vulindlela contribution.
In addition, South Africa’s credit rating drop, substantially caused by Jacob Zuma’s presidency, choked off investment through higher rates.
Gross fixed capital formation has started to rise again since the passing of the 2025 budget signalled the maturation of the government of national unity. No-one thought it had legs until that point.
Gqubule is right to mention GDP per capita, though. The World Bank’s GDP per capita purchasing power parity (in constant 2021 international dollars) has not done well since 2008, has it?
That is true even compared to the most boring of comparative low growers. We all know what “broad church” caused that.
Warwick Lucas
Via Business Day online
Ill-considered environmental campaigns and lawfare cripple SA
Tristen Taylor’s article refers (“Neglect is at the heart of SA’s industrial collapse”, April 8).
Since the author is an “environmental ethics” academic, he should reflect on the damage caused by ill-considered environmental campaigns and lawfare that have:
- Greatly increased the cost, complexity and implementation time for major electricity projects.
- Blocked attempts to develop low-cost domestic gas resources.
- Ensured Sasol will no longer be viable since the cost of imported liquefied natural gas will be way beyond what makes commercial sense.
- Made South Africa dependent on imported energy technologies for the next three decades while reducing our ability to fund the forex required by, inter alia, opposing mining development.
The virtuous, self-satisfied greens have done just as much damage as corrupt and inept politicians and state officials, yet continue to claim the moral high ground. Sies.
Mike Muller
Johannesburg
Livestock sector struggles while fruit and grain thrive
Stella Mapenzauswa’s article about South Africa’s citrus export forecasts (“SA citrus exports could grow 3%-5% this year”, April 7) was an uplifting story.
We have experienced a good season across various fruits, vegetables, grains and oilseeds, increasing potential exports. The only subsector of agriculture that continues to struggle is livestock, mainly cattle, due to foot-and-mouth disease. We also face challenges in the pig industry because of African swine fever. Apart from these issues, the production conditions in the sector remain favourable.
Regarding citrus, it is indeed encouraging to read that South Africa’s total citrus exports across all varieties are expected to rise 3%-5%, reaching 210-million to 215-million 15kg cartons. Citrus remains the leading agricultural export product, accounting for 17% of South Africa’s agricultural exports of $15.1bn in 2025. Our markets include Africa, Asia, the UK, the Middle East, the Black Sea, Europe and the Americas.
The ongoing conflict in the Middle East is causing significant difficulties for our exports to that region, especially now as we also anticipate increased competition from abundant citrus volumes from South America. Yet, with port efficiencies and ongoing efforts to open more markets in Asia, we may achieve the export target of 215-million 15kg cartons.
Higher fuel prices continue to pressure the industry during this harvesting period. However, the sentiment among citrus stakeholders is generally positive, and they remain focused on working with the government to expand export markets.
This export-focused approach remains vital to all our fruit, wine and red meat industries. The Middle East crisis reminds us of the value of having diverse export markets. We need deeper access in Asia, an area I will continue to work on. The Middle East has not suddenly become irrelevant to our exports; it remains vital in the long term.
What we hear from citrus growers reflects what we can expect from other fruits, vegetables, grains, and oilseeds. The agricultural production conditions in the 2025/26 season have generally been positive in our country, thanks to La Niña rains.
Wandile Sihlobo
Presidential envoy on agriculture and land reform
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