Wandile Sihlobo, the chief economist at the Agricultural Business Chamber of SA (Agbiz), has identified several factors contributing to a more optimistic outlook for South Africa's agriculture. The Agbiz/IDC Agribusiness Confidence Index (ACI), a measure of sentiment in the agricultural sector, experienced a 10-point increase to 48 in the third quarter, indicating positive momentum despite being below the neutral 50-point mark. This improvement is partly due to a more stable electricity supply, which is crucial for horticultural production and irrigation-dependent field crops, as well as major energy consumers such as the livestock, poultry, dairy, and aquaculture industries.
Additionally, the onset of the 2024-25 summer season has seen a decrease in input costs, with fertilizer prices dropping by approximately 10% year-on-year in rands, and reductions in herbicide and insecticide costs by around 20% and 15% respectively, as of August 2024. These declines are supported by a stronger rand and global price reductions, reducing operational costs for farmers. Furthermore, lower fuel prices during the high-usage planting period and the potential for La Niña-induced rainfall contribute to a favorable agricultural outlook for the country.
Agbiz anticipates that improved agricultural production conditions will promote job creation in the sector and help stabilize consumer food prices into 2025. However, Sihlobo emphasizes that the long-term growth and job creation in South Africa's agriculture depend on the Government of National Unity's ability to tackle challenges in network industries, enhance municipal functions, manage animal diseases, and expand export markets in response to global trade dynamics.
Source: IOL