
Insights guiding our thinking about SA agricultural growth prospects in 2023
Over the coming months, we will receive various data releases to help guide our thinking about South Africa’s agricultural growth prospects in 2023. The available soft insights suggest that near-term growth prospects of South Africa’s agricultural economy look weak after subdued growth of 0,3% y/y in 2022.

Ample grains harvest
The Crop Estimates Committee’s data provides sufficient comfort that South Africa will have sufficient staple food supplies in the 2023/24 marketing year (which corresponds with the 2022/23 production season).

South Africa stands to gain from the extension of the Black Sea grain deal
Since the deal started, Ukraine has exported about 25-million tonnes of grains and vegetable oils. Global food prices have also moderated considerably over that period, partly for this reason. In February the Food and Agriculture Organisation (FAO) global food price index was at 130 points, down 8% from July, when the initial deal was reached.

Quick thoughts on SA’s consumer food price inflation data for February 2023
South Africa’s consumer food price inflation accelerated mildly to 14% y/y in February 2023 from 13,8% in the previous month. The food product prices that increased notably were meat; milk, eggs and cheese; vegetable; and sugar, sweets and desserts.

SA agricultural machinery sales
This year will likely be a pause from this robust sales period for several reasons. Chief amongst them is that the possible replacement rate of older machinery will likely be lower this year as the past three years saw increased new machinery sales. Moreover, the rising interest rates will continue to pressure farmers’ finances.

How South Africa may leverage the BRICS chair for agribusiness
Despite BRICS not being a trade bloc, its economic cooperation arrangement offers South Africa a strategic platform to advance its trade interests. The agricultural sector is interested in this grouping, mainly in advancing exports into China and India. These countries already import a sizable volume and value of agricultural products from the world market, and South African businesses want to join these suppliers.