SA agriculture sector remains in recession

Recent Gross Domestic Product (GDP) data points to a negative growth of a seasonally adjusted and annualised rate of -0,3% quarter-on-quarter in the third quarter of 2016…

SA agriculture sector remains in recession
- Advertisement -

The results come as no surprise as the sector continues to suffer the effects of the drought, said Agbiz.

“Overall, the significant shock came from summer crops, particularly grains and oilseeds. South Africa’s summer crops production fell by 23% year-on-year in 2016, recording a total output of 9,16 million tons.”

This figure was a further decline after 2015 total summer crops output fell 27% year-on-year to 11,94 million tons from the 16,45 million tons total production achieved in the normal rainfall year of 2014.

- Advertisement -

READ Namibia’s devastating drought in pictures

Agbiz said that although other agriculture subsectors, including horticulture, dairy and livestock, also felt the impact of the 2015/2016 drought, overall output and export activity from these subsectors had not declined as sharply as happened with grains and oilseeds.

“Encouragingly, there are signs of recovery across the sector and summer crop farmers intend to increase the area plantings by 15% year-on-year to 3,75 million hectares; slightly below the normal area of 4,1 million hectares,” said Agbiz.

It added that the Agbiz/Industrial Development Corporation Agribusiness Confidence Index, which signals how SA’s agricultural GDP could perform in successive quarters, was trending above 50 index points in the third and fourth quarters of 2016.

“This suggests that there is growing optimism in the agriculture sector. Overall, weather will be the key determinant of the performance of South Africa’s agriculture sector over the next couple of quarters,” said Agbiz.