Business confidence in the agricultural sector took a knock between the second and third quarters of 2011.
This is according to Lindi Stroebel, economic intelligence manager at the Agricultural Business Chamber, who spoke at the chamber’s Eastern Cape branch in Port Elizabeth recently. Confidence slumped by 9% between the two quarters.
“It is very difficult to forecast confidence, because global economic concerns dampen the overall investment climate. While local and international uncertainties persist, businesses will remain cautious about where to put their money. I expect a further flattening out of confidence toward the end of 2011 and early 2012,” Stroebel said.
She said agribusinesses and agricultural industries should improve their competitiveness and become more efficient in production, transport and supply chain management. “We should open up markets and create greater demand for our products, both locally and internationally. This you can only do if your products are affordable, of good quality and are well marketed. Currently, our biggest challenge is the high cost of doing business in South Africa.
Agribusiness confidence is, however, still growing in Eastern Cape, chairperson of the local chamber, Henk Aggenbach, said at the meeting. He added that food prices are good and production areas had some of the best rain in a long time.
“The main challenge is how to reduce the impact of rising energy prices. Low milk prices are still a big problem and the current high maize prices will be followed by an increase in the milk price. An increase in the fuel rebate will help contain rising costs,” Aggenbach said. – Lourens Schoeman
