SA’s agribusiness confidence edged lower in the third quarter, weighed down by disease outbreaks and trade frictions but industry leaders remain broadly optimistic, thanks to strong rains and improving export logistics.
The Agbiz/IDC Agribusiness Confidence Index (ACI) slipped by two points to 63 in the three months to September, marking a second consecutive quarterly decline, according to data released on Monday.
Most respondents pointed to the negative effect of foot-and-mouth disease and trade tensions with the US as top concerns. In addition, long-standing structural challenges, including inadequate municipal services and delays in issuing title deeds to land reform beneficiaries, were seen as obstacles to expanding the sector.
This survey was conducted during the last two weeks of August, covering agribusinesses operating in all agricultural subsectors nationwide.
The headline decline in the third quarter masks sharp divergences across subcomponents.
Export volumes sentiment fell 17 points to 43, reflecting industry anxiety over tensions with the US. Similarly, confidence in general agricultural conditions dropped 13 points to 67 as diseases continued to weigh on the livestock sector.
Employment conditions mirrored the broader economy, with the subindex slipping five points to 50. Farm jobs declined by 3% in the second quarter, with losses concentrated in livestock, some field crops and aquaculture.
Capital investment intentions also softened, falling eight points to 67. “The decline is somewhat surprising as the high-frequency data, such as tractor and combine harvester sales, have remained strong since the start of the year,” the report said.
By contrast, turnover sentiment surged 20 points to 75, driven by bumper summer and winter grain harvests and improved performance in agribusiness-linked financial services.
The crop estimates committee’s (CEC) seventh summer production forecast supports this. Last week’s CEC data showed SA’s summer grains and oilseed harvest is up by 4% from the July estimate to an expected 19.55-million tonnes. This marks a 26% improvement from last year, supported by good summer rainfall and adequate planting conditions.
Net operating income confidence also strengthened, rising six points to 71.
Perhaps most strikingly, perceptions of the broader economy improved, with the subindex climbing to 58 — reflecting easing inflation and lower interest rates.
The dominance of geopolitical concerns in respondents’ views illustrates the strong dependence of SA’s agricultural sector on export markets and the need to diversify these markets.
— Wandile Sihlobo, Agbiz chief economist
“What we take from these results is that the recovery of SA’s farming sector will likely be uneven in 2025, with the livestock subsector under pressure, while other subsectors seem likely to grow,” said Agbiz chief economist Wandile Sihlobo.
“Moreover, the dominance of geopolitical concerns in respondents’ views illustrates the strong dependence of SA’s agricultural sector on export markets and the need to diversify these markets.”
Sihlobo noted that Brics countries, China, India and Saudi Arabia, for example, represented important growth markets for SA agricultural exports.
However, he cautioned that as efforts to diversify trade intensified, it remained crucial to protect existing access to key markets across the EU, UK, Africa, Asia, the Middle East and the Americas.
“Also important is the collaborative efforts between business and government on addressing the biosecurity issues in SA’s agriculture, along with pushing for better management of the municipalities, and the release of the government-owned land to appropriately selected beneficiaries. This is key for long-term expansion in the sector,” said Sihlobo.
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