South African agricultural sector showcases resilience in 2Q23

In 2Q23, South Africa’s agricultural sector demonstrated remarkable resilience, registering a growth rate of 17.9%, a significant recovery from the near 5% decline in 1Q23. The Bureau for Food and Agricultural Policy (BFAP) has highlighted this sector as the fastest-growing in the nation, contributing a 4.2% increase to the GDP, markedly higher than the national quarterly growth of 0.6%. This remarkable growth trajectory is chiefly attributed to the field crops subsector, which accounted for 47% of the total agricultural Gross Value of Production (GVP) in this period. Maize and soybeans saw substantial increases in production, while sunflower GVP experienced a decline. The sugarcane industry also benefitted from global dynamics including delayed harvests in Brazil and reduced outputs in India. Although the sector faces potential challenges including fluctuating exchange rates and Brent Crude oil price dynamics, it leverages opportunities such as the depreciating rand which has fostered growth in the horticulture subsector. Moving forward, the sector should anticipate a mixed outlook with constrained revenue gains in the animal products and horticulture sectors, and potential modest contraction in the annual agricultural GDP. The industry remains cautiously optimistic, capitalising on strengths while navigating persistent challenges.