The Agbiz/IDC Agribusiness Confidence Index (ACI) points to an increase of 10 points from the third quarter (Q3) to 58 points in Q4 in 2024.
According to Agbiz, this is the second consecutive improvement and places the ACI at its highest level since Q2 2022.
This level of the ACI implies that South African agribusinesses are still generally optimistic about business conditions in the country. The optimism is a result of a combination of factors, including favourable weather conditions, with expectations that La Niña rains will be supportive of the 2024/25 agricultural season.
The survey was conducted in the last week of November, covering businesses operating in all agriculture subsectors.
Despite the midsummer drought currently experienced in the summer rainfall areas and the fact that the livestock industry continuous to struggle in the Eastern Cape and KwaZulu-Natal, the stable energy supply, improvements in port efficiency, and the better political climate following the formation of the Government of National Unity are some of the key factors underpinning the optimism, Wandile Sihlobo, chief economist at Agbiz, pointed out.
“There are some green shoots in the agricultural economy that provide room for improvement in the sector,” he said.
“We should build on this optimism for the sector’s long-term growth. This will require collaborative efforts between business and government on pushing for the effectiveness of the network industries, better management of the municipalities, further efforts to open new export markets, and addressing biosecurity matters,” Sihlobo said.
Although being a BRICS member presents South Africa some hope and opportunities for export expansion, Sihlobo did, however, mention that rising protectionism in the countries to which South Africa exports products is a problem.
He also said that the changing geopolitical and global economic landscape necessitated that BRICS countries deepened economic co-operation and improved trade.
”Agriculture is one sector where the need for deepening regional economic interaction and trade is more urgent,” according to Sihlobo.
He stated that a focus on BRICS would be worth the trouble as South Africa’s export-oriented agriculture sector consistently needed to search for new markets. He also said Saudi Arabia should be seen as a priority market.
Sihlobo further advocated for continuous partnership with government, commodity associations, and researchers, and stressed that this was vital for supporting the industry.
@farmersweeklysa The Agbiz/IDC Agribusiness Confidence Index reveals that there’s optimism in the agriculture sector, says #wandilesihlobo chief economist at Agbiz. #FarmersWeeklySA #agriculturetiktok #farmingsouthafrica #agribusiness #agbiz #mediaday ♬ Education, science, technology, techno(835583) – zomap
