Agricultural Market Viewpoint with Wandile Sihlobo

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Optimism in South Africa’s agriculture
South African farmers and agribusinesses continue to exhibit resilience and optimism. The Agbiz/IDC Agribusiness Confidence Index (ACI) -- a sentiment indicator of business conditions in the sector -- although declining from the high levels it reached at the start of this year, remains at encouraging levels. After a notable uptick in the first quarter of 2025, the ACI fell by 5 points in the second quarter of the year to 65. Any level of the ACI that is above the 50-neutral point signals optimism. Regarding the slight decline, most respondents identified the uncertain global trade environment, lingering geopolitical tensions, and the domestic animal disease challenge as key factors constraining the sector. Despite the slight quarterly decline, the current level of the ACI implies that South African agribusinesses remain optimistic about business conditions in the country. The better summer rains and improvements at the ports, which have enabled exports with minimal interruptions, are among the positives. This survey was conducted in the second week of June, covering various agribusinesses operating in all agricultural subsectors across South Africa. A crucial point to remember when reviewing the Index is that sustained optimism, at levels above the 50-neutral market, is fundamental, especially in the long run, for fixed investment in the agriculture and agribusiness sectors. The ACI also serves as a leading indicator of agricultural growth prospects over time. We can thus expect slightly better farming output data for the second quarter of the year. The favourable production conditions for field crops, wine grapes, and various fruits and vegetables will be the primary drivers of the sector's performance. Indeed, we are yet to see the full impact of the Foot and Mouth Disease that is currently challenging the sector. This has started to impact the sentiment and is likely to continue in the coming months. In essence, the ACI results for the second quarter of 2025 indicate that the sector's mood remains upbeat about the recovery this year. Still, the results also show that the recovery will likely be uneven as some key subsectors struggle with animal disease. Notably, the dominance of geopolitical concerns in respondents' views illustrates the strong dependence of South Africa's agricultural sector on export markets and the need to diversify these markets. China, India, Saudi Arabia, and Egypt are among the key markets we should target for expansion. Still, as we drive diversification, we must work vigorously to retain access in various markets across the EU, UK, Africa, Asia, the Middle East, and the Americas, among others. Also significant are the collaborative efforts between business and government in addressing biosecurity issues in South Africa's agriculture, as well as efforts to promote more efficient network industries, better municipal management, and the implementation of the Agriculture and Agro-processing Master Plan, which is crucial to the long-term growth of the sector. Listen to the podcast for more insights. Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website
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11:33
Will China open up for more agricultural products from South Africa?
We are yet to receive more details on China's intentions to lower import tariffs for various African countries. What is worth emphasising for now is that, from a South African agricultural perspective, this would be a welcome development. China has profound importance in global agriculture. In 2023, China was a leading importer, accounting for 11% of global agricultural imports, with imports valued at US$218 billion. The leading suppliers of farm products to China are Brazil, the U.S., Thailand, Australia, New Zealand, Indonesia, Canada, Vietnam, France, Russia, Argentina, Chile, Ukraine, the Netherlands, and Malaysia. However, China has been on a journey to diversify its agricultural exports beyond these suppliers, which has accelerated following the U.S. initial tariffs in 2018 and is ongoing in 2025. South and Latin American countries, as well as Australia, have been the primary beneficiaries of China's diversification strategy so far. But South Africa must also be part of this conversation. And what the Chinese authorities have signalled is a starting point for a deeper conversation on agricultural trade. The first step will have to be for South African authorities to approach China to present a range of products that can be exported, and then build from there. South Africa remains a negligible player in the Chinese agricultural market, accounting for a mere 0.4% (US$979 million) of China's agricultural imports of US$218 billion in 2023. These exports include a variety of fruits, wine, red meat, nuts, maize, soybeans, and wool. However, there is room for more ambitious agricultural export efforts. The South African agricultural sector, comprising organised agriculture and researchers, consistently emphasises the need to lower import tariffs in China and remove phytosanitary constraints on various products. There is now a pathway to have a productive conversation about this matter and move with speed. Of course, once more details are available on tariffs, we will also need to examine the phytosanitary issues related to agriculture. Overall, this is welcome news. Listen to the podcast for more insights. Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website
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10:32
South Africa's agricultural exports up 10% in the first quarter of 2025
In a year where trade has dominated the headlines since the U.S. started imposing higher tariffs against its trading partners, agricultural export activity is worth paying close attention to. Encouragingly, the start of the year has remained positive for the sector. In the first quarter of 2025, South Africa's agricultural exports totalled US$ 3.36 billion, up 10% from the same period a year ago. This is a function of both higher volumes of various product exports and better commodity prices. The products that dominated the exports list in the first quarter were mainly grapes, maize, apples, pears, apricots, cherries, peaches, wine, wool, fruit juices, nuts, dates, avocados, pineapples, and beef, among other products. While the ports remain a challenge and require further improvement and investment, the agricultural export season in the first quarter experienced less friction than in the recent past.. South Africa does not engage in one-way trade. The country imports various agricultural products. In the first quarter of 2025, South Africa's agricultural imports totalled US$ 1.94 billion, a 19% increase year-over-year. The increase resulted from higher value and volume of major products South Africa imports, such as wheat, palm oil, rice, poultry, and whiskies. Listen to the podcast for more insights. Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website
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10:55
Southern Africa's grain production rebounds
The Southern Africa region is far better regarding food supplies today than a year ago. For example, Zambia's 2024-25 maize crop has bounced back. The government forecasts the harvest to be 3,66 million tonnes, up from 1,5 million tonnes the previous season. This is because of favourable weather conditions and the decent area plantings. The harvest is underway in the country, and the message we are hearing about the quality of the crop remains encouraging. This also means Zambia could return to being a net exporter of maize as its domestic maize consumption is about 2,8 million tonnes, far surpassed by the expected harvest of 3,66 million tonnes. Importantly, one can expect the domestic maize prices to continue moderating as the harvest continues, thus easing the general food price inflation. Zambia is also not the only fortunate country in the Southern Africa region. The entire region received better rains, even excessive rains in some areas. We continue to hear encouraging news of the better grain harvest in Zimbabwe. For example, Zimbabwean farmers likely planted 1.7 million hectares of maize this year, slightly lower than last year but decent. We will know more about the yields in the coming weeks and months. What is clear at the moment is that Zimbabwe will, too, have a better maize harvest compared to the 2023-24 drought year. The South African story is even more optimistic. For example, South Africa's 2024-25 maize harvest is forecast at 14,66 million tonnes. There is an increase in white and yellow maize, with harvests now at 7,75 million tonnes and 6,91 million tonnes, respectively. Overall, the maize harvest of 14,66 million tonnes is up 14% year-on-year, primarily benefiting from expected yield improvements on an annual basis. Importantly, these forecasts are well above South Africa's yearly maize needs of about 11,8 million tonnes, which implies that South Africa will have a surplus and remain a net exporter of maize. The 2024-25 season is a positive change for Southern Africa's staple crop, maize. Importantly, it is encouraging to see Zambia bounce back. This country is vital in maize supplies to the region as the second largest producer after South Africa. Listen to the podcast for more insights. Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website
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12:05
South African farms are not under siege
One of the themes that dominated the White House Press session this evening was agriculture – the idea that the farming sector in South Africa is under siege and people are running away. But this could be no further than reality. The South African farming sector or farming community is not under siege. And yes, the country has devastating crime incidents, which should remain a major worry for all. However, it is necessary to state that there is no land expropriation without compensation in the country, that the recent Expropriation Act has been massively misrepresented, and that property rights remain intact. Land Reform is still under the market principles of the willing buyer-willing seller. The agricultural sector, which some have portrayed as a victim, has actually made enormous progress over time, contributing significantly to the country's overall economic growth. The sector has more than doubled in value and volume terms since 1994. This expansion was broadly shared across all major subsectors of the South African farming economy, including horticulture, field crops, and livestock. South Africa has seen growth in its agricultural exports over time, reaching a record US$13,7 billion in 2024. South Africa is now ranked the world's 32nd largest agricultural exporter, the only African country in the top 40 in terms of value. Listen to the podcast for more insights. Richard Humphries and Sam Mkokeli produce this podcast. Wandile Sihlobo website
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12:41