Optimism in SA farming sector

However, tobacco and wine value chains feel financial aftershocks of Covid.

The latest results from the quarterly Agribusiness Confidence Index are a reflection of the general sense of optimism in the farming sector following a year of favourable production conditions for grain producers in the summer and winter rainfall regions.

Although current sentiments for South Africa’s agriculture sector are generally positive, parts of the sector, such as the tobacco and wine value chains, are now feeling the financial aftershocks of the Covid-19 pandemic and associated national and international lockdown restrictions.

The 61 points average of the latest quarterly Agbiz/IDC Agribusiness Confidence Index (Q4 2020 ACI) shows that the current optimism in South Africa’s agricultural value chain is the highest since the third quarter of 2014.

Agbiz’s chief economist, Wandile Sihlobo, attributed the present positive sentiment largely to the agriculture sector having been able to perform relatively well despite the pandemic; and to recent good rainfall across SA.

The Q4 2020 average total was 10 points up on the third quarter’s average total, and 22 points higher than the 39 points average total in the second quarter when SA was in the hard lockdown.

Sihlobo said the index comprised the perceptions of at least 25 agribusiness decision-makers on the 10 most important aspects influencing a business in SA’s agriculture sector. “[…] as we have consistently stated, the positive story of South Africa’s agriculture is only at the aggregate level.

“The impact of the ban on sales and interrupted exports of wine, tobacco and floriculture ... is beginning to show in the official jobs numbers in these specific subsectors and provinces where these subsectors are predominant.”

Agri SA president Pierre Vercueil agreed that sentiments were positive across the majority of the country where good summer rain had fallen.

“The mood in the farming sector is positive going into the festive season,” he said.

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