SA Graan September 2017

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ISSN 1814-1676
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Besoek Graan SA by of skandeer dié
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• Die menings van die skrywers van artikels in hierdie blad
is hul eie en verteenwoordig nie noodwendig die mening
van Graan SA nie.
• The opinions expressed by contributors are their own.
They do not necessarily express the opinion of Grain SA.
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inligting”-artikels feite kan bevat oor kommersiële produkte.
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ALLE regte van reproduksie van alle berigte, foto’s, teke-
ninge, advertensies en alle ander materiaal wat in hierdie
tydskrif gepubliseer word, word hiermee uitdruklik voorbe-
hou ingevolge die bepalings van Artikel 12(7) van die Wet
op Outeursreg Nr. 98 van 1978 en enige wysigings daarvan.
96 Prysrisikobestuur in ‘n neutedop:
Deel 3: Bemarkingsmoontlikhede om te oorweeg
98 Die effek van wisselbou op die opbrengs van mielies en ander gewasse
100 A closer look at the Fire Act
101 Graan SA pak sorghumkultivarproewe aan
103 Biologiese swamdoder kragtig in rygewasse
104 Jou boerderybesigheid en die pad vorentoe
106 Koring- en mielietariefberekeningsmetodiek deur ITAC hersien
108 My mielies val om: Hoekom?
AKTUEEL/ RELEVANT
109 Plaaslike wêreldklas tegnologiesentrum verbeter kultivarteling in Afrika
110 I salute the grain producers of South Africa
– Chris Sturgess, former director: Commodity Derivatives, JSE
112 Vooruitsigte vir die somerreënvalgebiede
114 Pannar Rugbyweek aangebied deur Fort Cox
116 Graan SA/Sasol fotokompetisie: Dis heerlike lente
118 Feeding the world
RUBRIEKE/ FEATURES
4 Graan SA Standpunt: Die verandering van ‘n seisoen
5 Grain SA Point of View: The changing of a season
7 Uit die Woord
7 Op die kantlyn
120 E-posse: Op las
Die foto van AGSUN 8251 is geneem in ‘n son-
neblomland naby Potchefstroom. AGSUN 8251
is een van die staatmaker sonneblomkultivars in
Agricol se veelsydige sonneblompakket.
Foto: Joubert Swanepoel
3
Voorblad/ Cover
2017
I salute the grain producers
of South Afri
–ChrisSturgess, formerdirector:CommodityDerivatives, JSE
After nearly 20 years at Safex,Mr Chris Sturgess (44) for-
mer director: Commodity Derivatives at the JSE, hand-
ed over the reins to Mr Raphael Karuaihe at the end of
June this year.About thisdecision tomoveon,he says the
following, ‘There comes a timewhen you need tomove on to allow
others tohave asmuch fun as youdid.’
He admits that his decision to step down wasmade easier by his
team thatcouldeasily stepupand takeover the reins.His successor,
Karuaihe, has been on board for the past five years and has been
mentored by Sturgess. Other star teammembers areMss Anelisa
Matutu (specialist: Commodities) who was part of the graduate
programme at the JSE and Mr Vuyo Mpumza (intern), the most
recent recruit.
A career atSafex
Sturgessgrew upon a small farm justoutsideMiddelburg,Mpuma-
langa.After completing his school career, he obtained a bachelor’s
degree in agriculturalmanagement (with economics asmain sub-
ject), at theUniversityofKwaZulu-Natal.Hehad always appreciated
the true trials and tribulations that come with farming and found
thisdegree tobe awell-rounded course in agriculture.
He travelled andworked abroad for a year before returning to the
family farm. After a season harvesting the potato andmaize crops
he heard about an opportunity to join Safex. Although it was not
well established at that time, hemetwithMr RodGravelet-Blondin
(previous senior general manager: Commodity Derivatives, JSE)
and realised thiswas anopportunityof a lifetime.
‘Either it was going to work and we would be pioneers establish-
ing the agricultural derivativesmarket in South Africa, or it would
not takeoff at all.’
Although theywere a small team, he started out at the bottom
and at the age of 24 was happy to do anything to ensure he
remained involved.Hewas able tomarket to and educate not
only producers andmillers, but anyone interested in under-
standinghow touse futures contracts tomanageprice risk.
To him highlightsof his career include the firstmillion con-
tracts traded, the opportunity to be directly involved in
every new product launched since inception, except for
thewhite and yellowmaize contracts, the agreementwith
the CMEGroup to allow SouthAfrica to trade their prod-
ucts and the opportunity to cross paths with a variety
ofSouthAfricans.
‘Regarding the challenges, it is never fun dealing with
market regulation cases of market abuse by clients of
registered traders, but the reality is they do happen,’ he says and
adds with a smile, ‘And then, when there are any technical issues
with the system, you know you areunderpressure!’
Althoughhedidnot receive any special accolades,hegot tobepart
of agroupof individuals committed tobuilding theonly commodity
derivatives exchange on the continent to be globally recognised for
its success.
‘One can never be sure of your career path when you start out.
However, throughyourownenthusiasm and commitment towork at
things, aperson canbepartof something very special.’
September 2017
RELEVANT
LOUISEKUNZ, SAGraan/Graincontributor
He enjoyed interacting with the diverse set of people from across
the agricultural sector and says these interactions taught him to lis-
ten to other opinions and views, but at the end of the day to strive
towhatwould be the best for the success of the derivativesmarket
inSouthAfrica.
Life after the JSE
Sturgess will continue his relationship with the JSE on a consul-
tancybasis toworkon someof thenewproducts likewool and lamb
aswell as the Zambian derivative contractswhichwill be a first to
be traded and settled in US dollars. Although his interaction with
the JSEwill continue on a regular basis, he now gets to spend time
away from the hustle and bustle of city life, by having relocated to
theGardenRoute.
He andhiswife, Jenny,whomhemet at aguesthouseduringoneof
his numerous visits to the NAMPO Harvest Day, are venturing into
the hospitality industry. They have purchased a guest farm in the
PlettenbergBay area.
‘Iwould not say itwas part of a lifelong dream, but it gives us the
opportunity to raise our two sons, Mark (10) and Luke (8), out in
the countryside. It is an added bonus that we get to stay close to
thebeach andmountains,’ he shares enthusiastically about this life-
style change.
Six questions to an industry leader
Howdoes theSouthAfrican commodity
tradingplatform compare internationally?
‘SouthAfrica is globally recognised for the successwe saw inmov-
ing froma regulated toa freemarket.With thesuccess in liquiditywe
have been able to attract setting up the derivativesmarket inSouth
Africa to such a degree that thiswas confirmed independently by a
study done by the UnitedNations Conference on Trade and Devel-
opment (UNCTAD) some years back. The success of the exchange
can be attributed mainly to the support and commitment from
ourmembers and clearingmembers, the solid banking systemwe
have in South Africa, the robust support and integrity of storage
operators to guarantee productson silo receipts and thenof course
committedpeople.’
Therehave alwaysbeen rumours about the
possibility formarketmanipulationwithin
the futures exchange system. In your opinion,
is there any truth to these rumours?
‘The dedicated resources at the JSE that solely focus on market
regulationmatters and the efforts of the Financial Services Board’s
directorateofmarketabusemustnotbe forgotten.Both these teams
work hard to ensure anymarket abuse is identified and penalised
accordingly.We have a clear set of cases that the FSB have pro-
cessed and those thatwere found guilty ofmarket abusewere pe-
nalised. This area remains a very important one for the JSE and for
the integrityof themarketplace.Clientswho feel theyhave a theory
around market abuse should rather contact the JSE’s regulation
department. They have access to all the derivatives data and can
accurately investigate any abuse claims.’
Locationdifferentials havebeen a conten-
tious topic in the agricultural industry.
Is it justified andwhat are theproducers’
biggestmisconception about it?
‘I think grain producers are fully aware ofmy opinions around this
as we have discussed this subject onmany a platform.My views
remain the same: The location differentialmodel iswell justified for
thederivativesmarket.Producers should ratherpaymore careful at-
tentiontothespotbasiscontractwe have inplace for access to any
Is thereaplace in the futureof thesoftcom-
modity tradingenvironment foralternativeex-
changes thatcanbecomecompetitors toSafex?‘Whenyou lookatanyexchange that issuccessful,yousee theyhave
managed toattract liquidityandso it iseasy toenterorexitpositions
on the exchange. I am not 100% sure the existing JSE Commodity
Derivativesmarket has really achieved that perfect liquidity state.
Earlier this yearwewere down 26% on contracts traded, so during
thisperioddaily liquidityonmostofour contractswould havebeen
lower. The big question is would another commodity derivatives
exchange inSouthAfrica add tomore liquidity or simply split it?At
the end of the daywe only have somuch underlying grain to trade.
Obviously, nothing prevents a competitor from starting up. I just
havemy concerns around thepotential liquidity impact.’
What canSouthAfricangrainproducersdo
tobecomemore competitivewith their
international peers?
‘I have always had the view that our grain producers are already
very competitive and best of breed. Just look how they haveman-
aged to increase yields and adopt the latest technologies.Whatwe
did see in the earlydaysof thederivativesbusiness inSouthAfrica,
ismanywould be speculators on themarket.Over the yearsmore
have turned to only use the market as hedgers, which obviously
is amore conservative but sustainable use of the derivativesmar-
ket instruments. I takemy hat off and salute the grain producers of
this country!’
Howdo you see the future of agriculture in
SouthAfrica andwhat is yourmessage to
SouthAfricanproducers?
‘This question is very similar to the one often asked aroundwhere
prices will go:We know prices will go up and will go down, I am
just not sure in what order, though. On amore serious note, I ap-
preciate therewill be good times and tough times for any industry
participant, butwe should never forgetwhywe do things. Farming
is in your blood – it is your passion.Make sure you are familiarwith
the instruments around you that can reduce your risks – just to be
clear, the JSEmarket can assist youwith yourprice risk.
‘I am an optimistic person by nature and remain optimistic that
South Africa and even select countries to the north of uswill con-
tinue to evolve and become even stronger grain producers. It has
been a special journey for me and a privilege to have interacted
with so many different grain producers, often organised through
Grain SA. The conversations have always been robust, often tense,
but I can saywe have alwaysmaintainedour respect for eachother.
Forthat Icanonlysaythankyou.’ Forme ityDerivatives at the JSE,
S ldliketoberememberedby
Chriswas a regular face at theNAMPOHarvestDay.DuringMay this
year the JSE team sharedmore about futures contracts for cattle
and sheep carcasses.AnelisaMatutu, Johannde Jager (visitor from
Gauteng) andChris’s successor,RaphaelKaruaihe,withChris.
ProÀle
PROFILE 110