South African Agricultural Market Viewpoint: 04 February 2019

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South African Agricultural Market Viewpoint: 04 February 2019

Agriculture has featured prominently in policy debates as one of the sectors that can potentially yield employment-creating growth in rural areas in South Africa. This is under the assumption that there could be potential expansion in area planted to the horticulture and field crop subsectors.

The focus areas for potential expansion, which we have also argued for are KwaZulu-Natal, the Eastern Cape and Limpopo which still have roughly 1.6 million to 1.8 million hectares of underutilised land.

But expansion in human settlement in most rural areas of the aforementioned provinces might hinder potential expansion of agriculture.

In terms of grains and oilseeds, the recent preliminary planting data provided an encouraging picture of higher than expected plantings, but it is important to stress that these are initial estimates, there could be a revision next month and our view still leans towards a possible downward adjustment.

In production seasons where grains and oilseeds plantings have occurred during optimal periods, the weather would be a key focus between October and February. But this time around, the planting process was quite late in some areas which means the need for rainfall will extend beyond the typical February pollination period.

On 01 February 2019, the South African Weather Service indicated a likelihood of above-normal rainfall conditions over the summer rainfall regions during early autumn (Feb-Mar-Apr).

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Sourced: Agbiz, Agribusiness Research