growth expected to exceed 9 per cent. it is interesting to note that whereas previous crises have often originated from emergingmarket economies, these economies have so far proven to be relatively resilient in the face of the current financial market turmoil. improved fundamentals, abundant reserves and strong growth rates have all helped to sustain flows into emerging market assets. however, there are macroeconomic vulnerabilities in a number of countries that make them susceptible to a deterioration in the external environment – in particular countries with current account deficits financed by private debt or portfolio flows, and countries in which domestic credit has grown rapidly. emerging markets are, therefore, by no means isolated from the turmoil in developed markets. the de - coupling hypo thesis is not supported. real gdp growth in africa is expected to be a relatively robust 6, 3 per cent. the african continent accounted for some 3, 7 per cent of the export value of the deciduous fruit industry in 2007, while the united kingdom and northern europe accounted jointly for some 75 per cent of industry exports. given the proximity of africa, also in comparison to our major competitors in the fruit export business, there is no reason why exports to africa cannot increase considerably in coming years. increasing such exports is one of the near - term challenges facing the industry, as african countries share the concerns of developed countries about sustained food supply. global commodity and food price developments in addition to financial market and growth uncertainties in certain parts of the world, we currently also see substantial increases in commodity prices, particularly oil and food. international oil prices have more than quadrupled since the beginning of 2004, and in fact world economic outlook, april 2008, washington. have more than doubled since january 2007 when north sea brent crude averaged a little above us $ 50 per barrel following a 2006 peak of around us $ 70 per barrel. this is clearly not good news for anyone except those who are making massive profits. agriculture is directly affected through the increased costs of diesel and fertilisers ( input costs ). this relative price increase is not expected to be reversed significantly any time soon, and most analysts expect international oil prices to remain elevated. we in south africa have the additional impact of movements in the rand exchange rate which has exacerbated the impact. however there is good news for the agricultural sector in that the commodity boom has extended to agricultural prices as well, albeit with a lag. the rising trend in international food prices accelerated in 2008. according to a recent world bank

of hundreds of millions of people in some of the world's poorest developing countries where the sale of commodities is often the only source of cash ”. 4 clearly there has to be a balance between food supply sustainability and affordability. rising food prices : policy options and world bank responses : background note for the development committee meeting, april 2008. fao press release ( 15 february 2005 ) of the fao publication : the state of agricultural commodity markets ( soco 2004 ), geneva. global and domestic inflation until recently, global inflation appeared to be relatively under control despite the food and energy price developments. according to the imf, world inflation averaged 4 per cent in 2007 and is expected to increase to 4, 8 per cent this year, although many analysts expect this to be higher. however emerging market economies are expected to experience even higher inflation because of the higher weight of food in their consumption baskets. inflation is therefore expected to increase to average 7. 4 per cent in the developing economies. food price inflation is much higher than overall headline inflation in many countries, including south africa. world - wide inflation has been accelerating over the past year in the midst of slower global economic growth. in the 1970s similar conditions of slower growth combined with accelerating inflation resulted in stagflation – despite recessionary conditions, many economies suffered inflation. one current challenge facing many economies is to prevent the development of similar unfavourable conditions. for this reason we have seen divergent policy responses. in some countries, such as the us, canada and the united kingdom, interest rates have been decreased recent months. however the higher inflation has seen a tighter monetary policy stance in a number of countries including sweden, china, russia, brazil, iceland, australia and south africa. over the next few months we are likely to see increasing numbers of countries trying to contend with higher inflation pressures and lower growth. the road ahead is going to be bumpy. domestically, year - on - year cpix inflation has accelerated during the past few months, and reached 10, 4 per cent in april of this year. in response, the monetary policy committee of the bank has increased interest rates by a cumulative 450 basis points since june 2006. food and petrol prices are the main contributors to inflation, but in recent months, more generalised price pressures have emerged as well. food prices increased at a year - on - year rate of 15, 9 per cent in april, while petrol prices increased by around 30 per cent. according to our