SA’s Agriculture: Immediate, short, to medium-term view – 26 March 2018

South Africa’s agricultural sector is continuously influenced by global and local demand and supply conditions, weather patterns and exchange rate fluctuations.

This season, weather conditions are once again playing a bigger role with the drought in the Western Cape and the delayed onset of rainfall in Free State and North-West provinces which affected production negatively.

Meanwhile, the weak US dollar – which translates into rand strength – offset the impacts of farm input costs (most of which are imported, such as fuel, fertilizers and chemicals) on the one hand, while making the commodity exports less competitive on the international markets, on the other.

In net terms, unfavourable weather implies a decline in yields (and in turn, production) while exchange volatility points to shifts in profitability. Considering the collective impact of these variables, we make a succinct reflection on weather, local market conditions and trade in the agricultural sector for the current planting season.

Full report by Wandile Sihlobo available in the attachment.

SA agriculture_ immediate short to medium-term view 26 March 2018.