This is a quick commentary on South Africa’s agricultural economy performance in the third quarter of the year following the official release of the GDP data. I won’t endeavour to provide detailed analysis and an outlook going into 2021 as this is covered in the Business Day column here (I will post this on the blog in the coming days).

In brief, South Africa’s agriculture gross value-added expanded by 18.5 % q/q on a seasonally adjusted and annualised basis in the third quarter of 2020, much stronger than we anticipated. This follows an expansion of 19.6 % q/q in the second quarter and 35.9% q/q in the first quarter (both figures revised up). The generally good performance of the agricultural sector this year is, in part, because most of the sector was classified as essential and remained operational since the onset of the COVID-19-induced lockdown, whose effect extended to the second quarter.

However, this solid performance is mainly because 2020 is a recovery year in agricultural output across all subsectors (field crops, horticulture and livestock) following prolonged periods of drought in 2018 and 2019, and also a surge in exports this year.

To reiterate the point I’ve made in the previous notes, South Africa had its second-largest grains harvest in history this year and achieved a generally good performance in various field crops. In the case of horticulture, South Africa has mostly had a good fruit harvest this year, with the citrus industry recently noting a 13% year-on-year (y/y) increase in available supplies for export markets in 2020. There is also a broad recovery in the production of deciduous fruit with apple and pear production up by 5% y/y and 1% y/y respectively in 2020. There is also a general recovery in the livestock industry although this particular subsector was not as robust as other subsectors.

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Exhibit 1: South Africa’s agriculture
Source: Stats SA and Agbiz Research

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