Agriculture, forestry and fishing bear fruit for SA GDP
THE AGRICULTURE, forestry and fishing industries increased at a rate of 18.5 percent, contributing a 0.6 percentage point to South Africa’s third quarter overall gross domestic product (GDP) increase.
The increase in the agriculture, forestry and fishing sectors was mainly due to increased production of field crops, horticultural and animal products.
Hamlet Hlomendlini, Absa Retail and Business AgriBusiness enablement manager, said yesterday that although the Covid-19 pandemic had brought economic activity to a near standstill for the better part of the year, the agricultural sector had been a silver lining given its anti-cyclical nature.
The sector experienced robust growth during the first half of the year, and continued its positive momentum during the third quarter, said Hlomendlini.
He said favourable market and weather conditions, which had led to improved harvests and sales of South African agricultural products – like maize, citrus, and deciduous fruit – had been the main contributing factors aiding the sector’s performance this year.
“Encouraged by these conditions and amid rising confidence in the sector, farmers are expected to increase the maize area planted by 5 percent year-on-year to 2.75 million hectares. If this materialises, South Africa could have yet another record-breaking harvest of over 16 million tons in 2021.
“Citrus and deciduous fruit (apples and pears) exports have performed exceptionally well, with year-to-date volumes already more than 13 percent higher than the 2017-2019 average,” said Hlomendlini.
He said from a macroeconomic perspective, this suggested that the agricultural sector would continue to show positive growth in 2021, although at a lower rate than the 10 percent yearon-year expansion expected this year.
Meanwhile, FNB Agri-Business senior agricultural economist Paul Makube described South Africa’s agriculture GDP numbers as being “impressive” in the third quarter 2020.
He said that again, field and horticulture crops, as well as animal products came out strongly in contribution to agriculture growth.
“A combination of strong exports, higher commodity prices and the huge summer crop harvest boosted revenues in the sub-sector. For example, total maize exports increased by 235 percent to 963 441 tons in the 3Q20 relative to the same period in 2019 and so far, 1.78 million tons have already been shipped for the current marketing season (May 2020 to April 2021), which is 159 percent higher,” said Makube.
Horticulture crops also saw strong exports with the total agriculture export earnings rising by 5 percent in the third quarter to $3.2 billion (R48bn).
Makube said after bucking the trend of seasonal declines during the winter period as well as the height of lockdown, livestock commodity prices remained resilient during the quarter and helped lift sub-sector performance, thereby, contributing positively to overall agriculture third quarter GDP.
Makube said with the new summer crop planting season and the harvest of the winter crops beginning in the fourth quarter of the year, they expected the 2020 agriculture performance to finish on a high note.
“The recent harvest estimates of the winter crops indicate a total record crop of 2.9 million tons, which is 46 percent up on 2019 levels. Wheat, the biggest winter crop, is estimated at being up 40 percent to 2.15 million tons, which will help reduce the country’s import bill as it is a net importer.”
Makube said on the back of a bullish weather outlook, agriculture’s outlook for the year ahead was even more positive.
“Good production conditions will boost all agriculture sub-sectors, thus another good year ahead,” said Makube.