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Agricultural sector on the mend

THE South African agricultural sector is recovering, as shown by the agricultural indices of the Sake24 and BoE Private Clients' provincial barometers.

Where there has been a decline in activity, this was mainly owing to natural phenomena like drought and animal diseases.

Mike Schüssler, chief economist of Economists.co.za, said when interpreting the agricultural index one should keep in mind that the sector can be volatile in the short term and, for that reason, it is better to work with longer moving averages.

KwaZulu-Natal’s agricultural sector would appear to have suffered most from drought conditions and the outbreak of foot and mouth, especially in the northern parts of the province. In January the province’s index fell 4.8% year-on-year (y/y).

The contribution of beef to the index declined 50.7% and that of sugar 7.8%.

The Western Cape agricultural index fell 1.5% over that period and there were slight adjustments in the wine and food industries. Wheat did well and mutton improved by 10%.

The Eastern Cape agricultural index fell on both an annual and a three-year basis, but information points to a turnaround. Several subsectors show improvement after the recent erratic weather.

The index for vegetable and fruit cultivation – a large part of the agricultural sector – declined only 2% y/y.

The index for crops like maize, sunflowers, wheat and sorghum however dropped 9% and various vegetable subsectors show slight improvement.

The Free State agricultural barometer shows a decline in activity on a one-year and three-year basis. This can be attributed to delayed delivery of grain, especially wheat, and the impact of Rift Valley fever, which affected sheep.


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